TWN Info Service on UN Sustainable Development (Oct18/01)
8 October 2018
Third World Network

United Nations: Crisis in multilateralism unfolding since UNCTAD-14
Published in SUNS #8767 dated 5 October 2018

Geneva, 4 Oct (Kanaga Raja) -- A crisis in "multilateralism for trade" has been unfolding in the two years since the fourteenth ministerial meeting of the United Nations Conference on Trade and Development (UNCTAD), the head of the organisation, Dr Mukhisa Kituyi, has said.

"One of the casualties appears to be progress at the WTO," he added.

This came at a meeting of UNCTAD's Trade and Development Board (TDB) on 1 October, where Dr Kituyi, the Secretary-General of UNCTAD, presented the mid-term review report on the implementation of the Nairobi Maafikiano, the mandate that UNCTAD was given at UNCTAD-14 which took place in Nairobi, Kenya in July 2016.

Dr Kituyi told members attending the TDB meeting that for UNCTAD as an organisation, their deliberations summarised as the mid-term review represent a very important moment, taking stock of what has been happening since Nairobi and helping to "cast ourselves on the way towards UNCTAD-15."

The Secretary-General recalled that the Maafikiano gave UNCTAD a unified mandate - cutting across divisional boundaries, calling us to work more closely with each other, and with other entities.

It was a first in the UN system in terms of setting a work programme on SDG implementation and the actions it spells out clearly define UNCTAD's strengthened role, supporting gainful economic growth, multilateralism for trade and development, productive capacities for structural transformation, and implementation of the Agenda 2030.

These four Maafikiano sub-themes speak respectively to four principal SDGs - on inequality, on growth, on industry, innovation and infrastructure, and on renewed global leadership.

"As [it has] been known to many of you, a crisis in multilateralism for trade has been unfolding in the two years since Nairobi," said Dr Kituyi.

"While we spoke in hushed whispers about the Brexit vote in the corridors of KICC in Nairobi in July 2016 [venue of UNCTAD-14], today we speak more openly about an escalating trade war that has consumed many of the major trading nations and threatens to harm the prospects for prosperity facing the most vulnerable among us."

"One of the casualties appears to be progress at the WTO," said Dr Kituyi.

Today we face a looming debt crisis. Global debt has ballooned to $250 trillion, three times the equivalent of global GDP, he pointed out.

Private corporate debt has exploded, especially in emerging markets and developing countries who now account for more than a quarter of global debt stocks.

"This year alone we've seen the value of many currencies drop dramatically, from Argentina to Turkey, from Angola to Brazil, from South Africa to Russia," said Dr Kituyi.

As interest rates rise as well, the spectre of damaging capital outflows is very real for the developing and emerging world, he cautioned.

He said besides the tit-for-tat tariffs, debt-fueled tepid growth, and growing risk of capital flight, we also must acknowledge that at the root of the "trade war" is a global showdown over leadership, not just in trade but also in the technology frontier.

This difficult environment affects UNCTAD, said Dr Kituyi, emphasising however that UNCTAD is prepared to weather this storm.

The difficult international environment impacts on the United Nations as a whole directly, as some of us witnessed in New York in the past one week, he noted.

"But while some may laugh at boastful declarations of self-interest, this laughter is at our own peril," he said.

The global mood is souring towards the liberal international economic order, and confidence in global solutions is waning, leading to a difficult road ahead for work to support development.

"While the Maafikiano has strengthened UNCTAD, it has been within the limits of existing resources, which as some of you are aware, are not only constant but actually shrinking," said the Secretary-General.

He pointed out that in the past two months, all secretariat agencies of the United Nations have surrendered 10% of their regular budget to headquarters.

"That has affected us and our delivery," he said.

According to Dr Kituyi, this has led to mixed progress in the implementation of some of the work agreed in the Maafikiano, most notably the pledge for strengthening assistance to the Palestinian people, and strengthened workstreams on the digital economy, "where we are not able to meet the massive demand for our advisory services."

Since Nairobi, the United Nations embarked on an ambitious reform agenda to better deliver as one in support of the Agenda 2030.

Dr Kituyi said that UNCTAD has been doing its part in this process, translating into practice its strengths and advantages, as outlined in his document "From Actions to Results" shared with members last December.

As called for in the Maafikiano, and as spelled out in the reforms, UNCTAD has deepened its engagement with United Nations development system entities, and has increased its footprint on the ground in line with the reform, in close partnership with other agencies.

For example, the Secretary-General highlighted the recently launched Angola Train for Trade II programme which is UNCTAD's largest country programme ever, and represents a very practical way of delivering on the ground.

Similarly, UNCTAD continues to engage with other UN regional entities. "Also in line with the reforms, we've embraced a new way of working, growing our cross-divisional cooperation."

"We have similarly strengthened our internal collaboration in statistics, on gender, financing for development and on South-South Cooperation," said Dr Kituyi.

"And we have further implemented results-based management and the mainstreaming of gender equality in line with both the Maafikiano and UN-wide reform efforts."

"In spite of the gloomy picture that we may have cast, it is important to also note that there are some glimmers of hope," he said.

For example, he pointed to the signing of the African Continental Free Trade Agreement (AfCFTA) in March this year.

The work of UNCTAD has played a major role in the success so far of the negotiations. But there is much more work ahead and we expect that our office in Addis Ababa will rise to the challenge and assist the African Union Commission in the implementation of the mandate before them, he said.

Dr Kituyi also said the digital economy continues to grow and expand offering hope for new markets to revitalize globalization, notwithstanding the challenge that this poses in terms of concentration of market power and disruption to labour and product markets.

"These challenges make our own work on competition policy and consumer protection as well as on e-Trade readiness and digital entrepreneurship all the more urgent."

The Secretary-General also pointed out that due to the unprecedented growth in popularity of UNCTAD's annual e-Commerce Week, this coming December, Africa will play host to the first Regional e-Commerce Week to work towards practical ways in which Africa's rejection of insularity, and its embrace of new technologies can help move beyond the challenges we face today.

He also noted that in just a few short weeks UNCTAD will welcome 5,000 investment stakeholders including 14 heads of state and government to the Palais des Nations for the 2018 World Investment Forum.

"It is my hope this Mid-Term Review will re-assure that we are on the right track, despite the difficulties that have arisen since Nairobi. It is also my intention that we can now begin preparations for UNCTAD-15, taking stock of where we are and identifying new momentum that can realise our contribution to Agenda 2030," Dr Kituyi concluded.

Meanwhile, an UNCTAD Secretariat Note (TD/B/65(2)/CRP. 1) on mid-term review of the Nairobi Maafikiano summarised that midway through the delivery of the Nairobi Maafikiano and the Nairobi Azimio, much has been accomplished, but much remains to be done.

According to the document, persistent challenges to the gainful integration of developing countries into the global economy, such as the uneven global divisions between poverty and plenty, remain unresolved more than 50 years after the establishment of UNCTAD.

At the same time, new challenges continue to emerge, such as the widening digital divide and the transport connectivity divide, which threaten to leave developing countries even further behind.

Opportunities to address both persistent and emerging challenges are multiple; only the ambition of the international community holds back the resolution of many of these issues.

According to the document, UNCTAD will continue to deliver on the work programme agreed at UNCTAD XIV with the aspiration that further progress can be reached by 2020, in particular with regard to early-harvest targets under the Goals, such as the prohibition of certain forms of fisheries subsidies. +