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Info Service on Finance and Development (Jun24/04) Geneva, 13 Jun (D. Ravi Kanth) — The United Nations Secretary-General (UNSG), Mr Antonio Guterres, praised several achievements of the United Nations Conference on Trade and Development (UNCTAD) as it celebrated its 60th anniversary on 12 June, particularly in “contributing to discussions on reforming the international financial architecture.” However, several rather troubling developments appear to cast a dark shadow on the future of the organization as it attempts to “re-brand” itself as a “forward-looking” trade and development body, said people familiar with the development. In his address at the 60th anniversary of UN Trade and Development (formerly known as UNCTAD) on 12 June, the UN chief acknowledged that “UNCTAD’s work has not only created a legacy” but that “it continues to be an inspiration for today’s debates and decisions.” The UNSG said the first Secretary-General of UNCTAD, the renowned Argentine economist Raul Prebisch, once remarked that UNCTAD could not be neutral on development problems – just as the World Health Organization could not be neutral on malaria. Rising “geopolitical divisions”, growing “inequalities”, and the worsening existential challenges stemming from the “climate crisis”, are hitting many developing countries hard, Mr Guterres observed. Aside from these destabilising developments, he said “global debt has soared while key development indicators, including poverty and hunger, have regressed.” The UN chief pointedly observed that “the international financial architecture has been exposed as outdated, dysfunctional, and unjust.” According to Mr Guterres, “it has failed to provide a safety net for developing countries mired in debt.” He also said the international trading system, which is being “challenged on all sides”, is “teetering on the verge of fragmentation.” On the day that the European Union slapped countervailing duty measures to the tune of $2 billion on imports of Chinese electric vehicles, the UNSG pointed out that “trade has become a double-edged sword: a source of both prosperity and inequality; interconnection and dependence; economic innovation and environmental degradation.” “In this context,” Mr Guterres said, “I welcome the reforms to UNCTAD initiated by Secretary-General Rebeca Grynspan.” “Your new branding – UN Trade and Development – reflects a renewed commitment to expanding your reach and amplifying advocacy for developing countries,” the UN chief said. He said above all, “UN Trade and Development remains faithful to your core principle of promoting inclusive and sustainable development through trade and investment.” According to the Secretary-General, “the world cannot afford splits into rival blocs,” and “the implementation of the SDGs, and the need to ensure peace and security makes it essential to have one global market and one global economy, in which there is no place for poverty and hunger.” Mr Guterres said that “the elimination of poverty remains the primary objective of sustainable development.” He cited International Monetary Fund (IMF) estimates that suggest that “increased international trade restrictions could reduce global economic output by more than $7 trillion US dollars in the long term – three times the annual output of sub-Saharan Africa.” In this context, Mr Guterres mentioned that “the Summit of the Future in New York in September will seek concrete progress and political momentum on these issues.” “This will be a unique opportunity to forge a new global consensus around addressing the complex economic and development challenges we face, and turbocharging investment in the Sustainable Development Goals,” he said. In short, he said “we must channel the courage and wisdom of those who built UNCTAD, to re-imagine a world where trade is a force for shared prosperity – not geopolitical rivalry; where global supply chains are a source of green innovation and climate action – not environmental damage; where sustainable development is a central goal – not an afterthought; and where networked inclusive multilateralism, drawing on the expertise of the corporate sector, academia and civil society, is a means to realizing our shared ambitions – not a relic of the past.” The UN chief said, “UN Trade and Development has an essential role in that world.” UNCTAD’S 60-YEAR HISTORY UNCTAD’s long history of 60 years broadly falls into three chapters. An initial series of “soft” reforms in the areas of trade and finance were pushed, notably to counter the adverse trends in the global financial order. However, the limited development benefits from the Kennedy Round of trade negotiations launched in Geneva, during 1964-67, under the auspices of GATT (General Agreement on Tariffs and Trade) and the unilateral US decision to end the Bretton Woods arrangement in 1971 exposed the persistent asymmetries and biases in the existing global governance architecture. A second chapter followed in pursuit of more systemic reforms, with UNCTAD backstopping the developing countries’ call for a “new international economic order (NIEO)”. That chapter closed with the then US Fed chair Paul Volker’s ultra-aggressive interest rate hike and the resulting developing-country debt crisis which helped open the floodgates for private capital flows and the reassertion of the US dollar hegemony. The decade ended with the collapse of the Soviet Union and the triumph of neoliberalism. That opened a third chapter for UNCTAD as a vocal critic of the Washington Consensus and its free trade off-shoot in the World Trade Organization, exposing the damage to developing countries and the alleged hypocrisy of Northern governments whose positions were often replete with double standards. +
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