Trading system in serious crisis, says G77 chair

In his opening speech to the Summit, the chairman of the G77 warned that the multilateral trading system under the aegis of the World Trade Organisation (WTO) was in serious crisis. Criticising the industrialised countries for their failure to take into consideration the legitimate interests of the developing countries, he called on them to demonstrate their commitment to genuine partnership with the South 'in practice and deeds, not just in words'.

Martin Khor

THE world trading system is in crisis and the South should put forward fresh approaches to equitably manage global trade relations.

This was stated by Nigerian President Olusegun Obasanjo in his capacity as chairman of the Group of 77 in his opening speech at the South Summit of the G77 on 12 April.

'The increasing importance of trade and the dominance of the WTO in shaping the international economic order demand our special attention,' he said.

'The multilateral rule-based trading system, anchored on the Uruguay Round agreements, is in serious crisis, as manifested by the failure of the Seattle conference. The enthusiasm and high expectations which motivated developing countries to sign the Uruguay Round agreements have been shattered by the inability of the WTO to take into consideration the legitimate interests of the countries of the South, especially Africa.

'Given the failure in Seattle, we should at this Summit evolve fresh approaches for the equitable management of global trade relations that would be supportive of development and prosperity for all.

'In this regard I strongly recommend that this Summit agree on a common platform of action for our Trade Ministers to facilitate the attainment of the implementation of the development dimensions in the various WTO agreements.'

Tracing the origins of the G77, Obasanjo said 'collectively we saw ourselves as being in the same boat within the international economic order and we resolved to act in unison to tackle common difficulties and promote mutual interests.'

'There will be those who say this Summit is a talk about talks. Others will wonder about the purpose of a South Summit after decades of slumber with most of the South falling behind. The truth is there is need for self-examination. Only then can we point out the failures of the North.'

The G77 chairman paid tribute to the former Tanzanian President Julius Nyerere, a 'truly great son of Africa and eminent international statesman', who passed away last year. The hall observed a minute of silence as a mark of respect.

Obasanjo said the G77 has been an effective negotiating force in the UN 'but we must acknowledge in frustration that most resolutions remain dead letter, that most important issues (have been) shifted to fora outside the UN and we have a weakening role for the UN in vital areas of war and peace and global economic decision-making.'

He added that globalisation had brought mixed blessings. The prosperity it engenders is unevenly shared, with rich countries the major beneficiaries. 'Globalisation has failed to spur economic recovery, faster growth, greater employment and poverty eradication in developing countries.

'Rather it has a tendency to accentuate income and welfare gaps, and never has the world witnessed such massive disparities.'

He added that the financial crisis in South-East Asia brought to light a dark side of globalisation. The crisis revealed the exposure of even the best-performing developing economies to globalisation.

'This Summit should underscore the urgent need for decisive international actions to reduce the incidence of financial volatility associated especially with short-term speculative capital flows...We must make a decisive contribution to the debate on reform of international financial institutions, in designing a new financial architecture.'

He also called on the North to agree to effective and speedy debt remission beyond the onerous and protracted conditions under the Heavily Indebted Poor Countries (HIPC) debt relief initiative. 'The categorisation of indebtedness into HIPC and others is itself arbitrary and without relevance to realities of the indebted. Developed countries should also consider a debt moratorium, to lift the burden immediately from developing countries.'

'Let us send a clear message from Havana to the industrialised countries, that their reluctance to change institutional arrangements, policies and practices that maintain North-South disparities constitutes a major threat to peace and security; and that they must demonstrate their commitment to genuine partnership with the South, in practice and deeds, not just in words.'

UN Secretary-General Kofi Annan said that the South Summit was being held at a good period as its results could be input into the UN's Millennium Assembly. (This year's UN General Assembly meeting in New York is to be kicked off by the so-called Millennium Summit of heads of state and government in September.)

He said in the last resort, 'our taking part in world affairs depends on ourselves.' That belief guides the G77.

He praised the achievements of Cuba, which, though poor, had high standards of human development. Since the 60s, developing countries have formed the majority of the UN; the UN Development Programme (UNDP) has a special unit for Technical Cooperation among Developing Countries (TCDC) and now UNDP is making South-South cooperation its main goal, Annan said. 'Cuba has set an example we can learn from,' he added.

Thabo Mbeki, South African President and chair of the Non-Aligned Movement (NAM), put forward several tasks that lie ahead for the South. 'We have to fight to ensure democratisation of the international institutions, including the UN and Bretton Woods institutions.

'We must work to mobilise the masses of the North countries to sensitise them to the imperative of eliminating global poverty. We have to add our weight to the campaign to address the debt question.

'We have to work together to ensure the current round of WTO negotiations addresses the development issues which confront our countries. We must work together to give practical meaning to South-South cooperation.' - May 2000

About the writer: Martin Khor is Director of the Third World Network.