Attempts to further constrain South’s policy space

Egypt’s Ambassador in Geneva, H.E. Mr. Walid Mahmoud Abdelnasser, agreed with previous speakers about the weakness of the international economy, which he saw still suffers from global imbalances and structural complexities. Several years after the onset of the financial crisis, Ambassador Abdelnasser noted, the world economy remains in a state of disorder.  The burden of adjustment of the global imbalances, which contributed to the outbreak of the financial crisis, remains with the developing countries. In 2008 and 2009, there have been calls and willingness worldwide for urgent reforms of the international monetary and financial system, however, the issue disappeared from the international agenda, he recalled.

Ambassador Abdelnasser was of the opinion that the outlook for the global economy and for the international environment enabling development continues to be highly uncertain. The expansion of the world economy, though favorable for many developing countries, was based on unsustainable global demand and financing patterns, he added. Within this state of uncertainty and volatility of the international economic environment, the developing countries that adopted the export-oriented growth model began to suffer due to unilateral economic measures taken by some developed countries, he added.

Ambassador Abdelnasser stated that “development is not properly addressed in the international economic context”. He added that “there are attempts to divert the responsibility regarding development from the international scene to be confined only within the national levels, while ignoring the global imbalance and the international constraints that limit the policy space for the developing countries to identify their priorities”. As an example he mentioned the case of a developing country that would like to formulate industrial policy to enhance its productive capacity in an infant industry. He considered that such a country could be challenged by its international commitments stipulated in the multilateral trade agreements that often shrink the policy space required for development needs.

Ambassador Abdelnasser added that the attempts to further constrain this policy space are incessant. The developed countries are trying to establish norms that go beyond the development priorities of the South, he noted. Those attempts are clear in the multilateral negotiations in all issue-areas, including trade, climate change, intellectual property, investment, among others. In this context, the norm setting in various regimes focuses on establishing global rules and high standards without paying a real attention to the various developmental needs of the developing countries, Ambassador Abdelnasser cautioned.

For example, in the area of intellectual property, the focus remains on the protection and enforcement of intellectual property and not on the technology transfer and the equitable benefit sharing. It is ironic that some developing countries, such as India, are being criticized for formulating development-oriented intellectual property policy, Ambassador Abdelnasser stressed. In the climate change area, Ambassador Abdelnasser recalled the backtracking on the previously well-established principle of ‘common but differentiated responsibilities’, whereby the developing countries are being asked to pay for the historical mistakes of the others.

In the area of trade, the Doha Development Agenda has not yet been implemented after 13 years of stalemate, and there is no certainty that the previously expected developmental gains will be harvested, Ambassador Abdelnasser noted. He stated that “instead, the narrative that is being promoted in trade policy is that globalization and interdependence are driven by Global Value Chains, and the only way for any country to secure its share in the Global Value Chains is through extensive trade liberalization”. However, he added, “this approach neglects the reality that the global imbalances made the distribution of shares in Global Value Chains entirely asymmetrical”.

Ambassador Abdelnasser recalled UNCTAD’s breakdown of the distribution of the global valued-added in 2013 using OECD-WTO database, which shows the following: 67% accrue to OECD countries, 8% from Newly Industrialized Countries I (Singapore, Hong Kong, Taiwan, Korea), 3% from Newly Industrialized Countries II (Malaysia, Thailand, the Philippines), 9% from China, 5% for other BRICS (India, South Africa, Brazil, Russia), 8% for all other developing countries and LDCs. Those indicators clearly demonstrate the structural constraints faced by the small players within the Global Value Chains, Ambassador Abdelnasser stressed.

Ambassador Abdelnasser concluded that the global economy needs systemic reform to address the global imbalances. Furthermore, development must be placed at the core of the multilateral negotiations in all issue-areas.


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