Some highlights of UNCTAD XIV
The UNCTAD XIV Opening Ceremony on 17 July saw speeches by Kenyan President Uhuru Kenyatta, UN Secretary General Mr. Ban Ki Moon and UNCTAD Secretary General Dr. Mukhisa Kituyi. On 18 July at a special session for political leaders, President Hage Geingob of Namibia spoke on the role of the UNCTAD, warning of attempts by some countries to transfer its mandate to other organisations.
At the General Debate, Ministers and senior officials of many developing countries spoke of the need for policy space, a central theme in the negotiations. They also reaffirmed their strong support for UNCTAD’s work.
Below is a report of these sessions, which constitute some of the highlights of UNCTAD XIV.
By Adriano José Timossi
Opening: Political leaders and UN heads on world economy and UNCTAD
At the opening ceremony of UNCTAD XIV on 17 July, Dr. Mukhisa Kituyi, Secretary General of UNCTAD, recalled that 40 years ago the UNCTAD membership for the first time had chosen to host its conference in Africa. Kenya hosted UNCTAD IV in 1976. And today Kenya is the first developing country to host an UNCTAD conference for a second time.
Kituyi said that forty years ago UNCTAD IV was marked by an expression of solidarity. Today, the three agreements adopted in 2015 — the Addis Ababa Financing for Development, the Agenda 2030 and Sustainable Development Goals and the Paris Agreement — give a message of optimism but we need to move from promises in 2015 to actions and implementation, he stated.
UN Secretary General Ban Ki-moon, who was attending his third UNCTAD conference said that much has changed in 40 years, but many of the challenges raised at UNCTAD IV remain on the international agenda. The vulnerability of developing countries to volatile commodity markets was a main focus at UNCTAD IV, he said. “Today, with a global trade slowdown and declines in commodity prices, this issue is again a hot button development issue”. But beyond trade, a bigger and more complex set of questions challenges the international community, he noted. Vulnerability today derives not only from volatile markets, or from social instability, but also from a fragile global environment weakened by climate change.
There are worrying signs that people around the world are increasingly unhappy with the state of the global economy, he said. “High inequality, stagnant incomes, not enough jobs – especially for youth — and too little cause for optimism stoke legitimate fears for the future for many in all regions”. Trade, he said, must provide prosperity in ways that work for people and planet and respond to the challenges of climate change. Trade, finance, technology and investment can be positive forces to end poverty. Used wisely, they can ensure that we leave no one behind, he noted. The Sustainable Development Goals (SDGs) represent the change we need to restore people’s trust in the global economy.
President Uhuru Kenyatta of Kenya argued for the strengthening of UNCTAD “so that it can play a more meaningful role in the implementation of the new global agenda”. Since UNCTAD IV in 1976, there have been momentous changes in the world economy. Many of the issues then still demand our attention.
Now, as then, commodities is a central issue. Since 1976, most countries have undergone socio-economic and political transformation. “The huge responsibilities with which we members entrusted UNCTAD in 1964 are more relevant today than before. Let our commitment to this organization therefore grow, rather than diminish” he stated. He also called for a global partnership for development that will surely be able to “achieve the targets we have set in Agenda 2030”.
Namibian President: Oppose attempts to downgrade UNCTAD
At the World Leaders Summit on July 18, Mr. Hage Geingob, President of Namibia, the country representing the African Group in UNCTAD negotiations, said that UNCTAD has been thinking for decades about the plight of the developing world and has led the debate about constraints that developing nations are confronted with in a globalized world. “The organization played a leading role in pointing out that the global trading system was unfair towards developing nations”. During the past two decades, we have been dealing with the Millennium Development Goals [MDGs] and UNCTAD has contributed enormously during the review of the MDGs, and in particular brought to fore the importance of inclusivity and true partnership.
We have now the Sustainable Development Goals that are more structured, inclusive and reflective of true partnership, he said. At a continental level the Africa Union has also agreed on Agenda 2063, which is a multi-faceted development path with targets to be achieved by 2063. While developing countries, in particular African nations, have done much to put in place sound macro-economic fundamentals, by pursuing prudent and disciplined fiscal and monetary policies, “sadly our efforts continue to be frustrated by an unjust global trading and financial system,” remarked the President.
The current system makes it extremely difficult for developing countries to industrialize, he said. “However, no developed nation today can claim that it is where it is without having industrialized. In the process of industrialization, developed countries preach fair play, but in actual practice do not play fair when they are negotiating with developing countries. The playing field is always in their favour. Why should developing countries be denied similar opportunities, why kick away the ladder?”
President Geingob added: “We should be vigilant against attempts by some countries to downgrade the mandate of UNCTAD or outsource its responsibilities to other multilateral agencies such as the World Bank and IMF that are famous for their destructive structural adjustment programs in African countries”.
General Debate: Developing Countries Call for UNCTAD’s Strengthening
At the UNCTAD XIV General Debate, the Ministers and senior officials of many developing countries spoke of the need for policy space, which had been a central theme in the UNCTAD XIV negotiations. They also reaffirmed their strong support for UNCTAD’s work, including giving it a strengthened mandate on debt restructuring and management; a bigger voice on key issues such as tax evasion and tax avoidance; and the strengthening of research and analysis, particularly on economic and financial issues of importance for developing countries.
South Africa’s Minister of Trade and Industry Rob Davies stated that UNCTAD XIV was taking place in the midst of a deepening global crisis. The sharply depressed commodity prices are having a significant impact on developing countries, including in Africa. Many developing countries remain confined in the low value added parts of Global Value Chains as suppliers of primary products and commodities. He called for intensification of efforts to diversify developing countries’ economies away from an over reliance on primary, unprocessed products, and move up the value chains through pursuing industrialization. A development integration agenda is being pursued in the African continent combining market integration, infrastructure and industrial development.
In light of these dynamics, UNCTAD must continue to play an active role in assisting developing countries to understand profound developments underway in the world economy and issues of trade, finance, investment, macroeconomics, and technology that affect the development prospects of developing countries. “At the heart of UNCTAD’s mandate is a development-centred approach that eschews a one-size-fits-all approach”, the Minister stated. The global economic, financial and trading systems remain unbalanced and the current economic crisis has had significant impacts on the ability of developing countries to implement measures to address the consequences of sustained economic turbulence.
The Minister for Foreign Affairs of Argentina, Susana Malcorra, highlighted the importance of UNCTAD XIV as the first UN conference in the Post-2015 era, thus it will contribute to transforming into specific action plans the significant international multilateral agreements adopted in 2015. She called for an ambitious mandate for UNCTAD in its three pillars.
UNCTAD has contributed with invaluable work in support of countries in their search for development. Developed countries should comply with their commitments in ODA and transfer of technologies on favourable terms. Argentina welcomed UNCTAD’s important work on trade issues. The WTO decision on eradicating export subsidies on agricultural products was an important first step, she said, for a fundamental reform in agriculture, a key sector for many developing countries.
Brazil emphasized the crucial role of UNCTAD since its inception in providing analysis ahead of the curve in anticipating the problems of developing countries. Eight years after the outbreak of the financial crisis we have still failed to achieve a robust recovery, there are concerns about a “secular stagnation” and there is a lot of talk about a so-called “new normal.” “Well, let us collectively make sure that the new normal is not just more of the same old patterns of inequality and asymmetrical trends of development,” he said.
Brazil said in light of the 2008 financial crisis, the advanced economies resorted to unorthodox monetary policies. These led to the depreciation of their currencies and a surge in global liquidity levels and are keeping interest rates at low levels. Such policy options are simply not available for developing countries. These asymmetries highlight the importance of safeguarding policy space for developing countries and the need to recognize the different levels of development and capacities. “UNCTAD has a responsibility in the implementation of the new development agenda and we have an obligation to create the enabling conditions for the Organization to fulfil this task,” he said, also stressing the value of UNCTAD’s expertise in measuring and analysing flows associated with tax avoidance.
Bolivia said that the proliferation of plurilateral agreements of trade, the financialization of the economy, high volatility of the international financial system, fiscal evasion and avoidance, lack of an equitable system of restructuring debt and the practices of vulture funds among others have resulted in an exacerbation of inequality among countries and the concentration of wealth in the hands of a very few. Bolivia called for a strengthened UNCTAD in its three pillars.
Areas of importance for UNCTAD’s work include the analysis of trends of globalization, international economic governance, reform of bilateral agreements of investments in order to guarantee a balance between the rights and responsibilities of investors and respect for policy space of the host countries. Others are debt management and restructuring; technology transfer; financing for development; tax evasion and avoidance; diversification and industrialization; monitoring the impact of unilateral measures and the economic impacts of the occupation of Palestine.
Pakistan, speaking on behalf of the Asian Group, said that the current international economic landscape poses acute challenges especially to developing countries. Rising inequality among and within countries, unequal participation of developing countries in international economic and financial decision making, persistent debt burdens, commodity dependence, difficulties in accessing technologies, and unilateral coercive measures demand the immediate attention of the international community, he stated.
UNCTAD, being the focal point in the UN system for trade, development and interrelated issues of finance, technology, investment and sustainable development, should be strengthened to address these grave challenges. “But, we note with concern that this is being resisted”, he said. Issues that are of critical importance to developing countries are being ignored, and there is an effort to erode UNCTAD’s ability to meaningfully address these issues. “We are witnessing an alarming fraying of consensus on the fundamental norms underpinning the global economy”, said Pakistan. The uneven benefits of globalization, deepening inequalities, and a dogmatic insistence on austerity-led policies, are giving rise to intense political demands for changes in trade and economic policies. These demands need to be heard. Policies need to be reviewed. Measures need to be taken to ensure broad based prosperity, and equitable and inclusive growth.
UNCTAD, with its expertise on economic, trade and development issues, is a key international forum for consensus building. This consensus building should be guided by two considerations: it should proceed on the basis of accepted principles including ensuring equitable and inclusive growth, allowing policy space, and providing special and differential treatment; and issues of special concern to developing countries, such as technology transfer, debt management, tax avoidance/tax evasion and volatile commodity prices, should be seriously addressed.
The Minister for Commerce of Bangladesh, H.E. Mr. Tofail Ahmed, delivered a statement on behalf of the LDCs. He said the LDC group reaffirmed the importance of policy space and Special and Differential Treatment in all multilateral agreements targeting development. It is also important that the Right to Development of the developing countries, including the LDCs, is recognized. It is crucial for the LDC Group that UNCTAD continues to provide support for enabling graduation of half of the LDCs from the LDC category by 2020, which is a target of the Istanbul Programme of Action for LDCs.
On WTO issues, the outcome and decisions of the 9th and 10th WTO Ministerial conferences must be implemented. It is utmost important that the concerns and request of the LDCs relating to substantial reduction of domestic support for cotton be addressed with the view to their elimination. UNCTAD’s work on LDCs needs further strengthening, he concluded.
Indonesia said the rapid expansion of trade and new technologies help to spur economic growth but growth does not necessarily translate directly into sustained and equitable development. Progress has been uneven, fuelling disenchantment. Inequalities persist and many small and vulnerable economies remain peripheral. Poverty and inequality, both between and within nations, remain a pervasive challenge.
Indonesia stressed that we should not allow the downgrading of the broad mandate of UNCTAD. The organization is a crucial element of the UN system in empowering developing countries to respond to multifaceted problems. UNCTAD XIV must deal with issues critical to most developing countries such as sovereign debt crisis prevention and resolution, tax evasion and tax avoidance, and the reform of international investment agreements.
Indonesia highlighted three key issues that UNCTAD needs to address. First, there are systemic issues, and many policies of developed countries have major impacts on developing countries. Secondly, inadequate participation of developing countries in international economic decision making, norm-setting and global economic governance. Third, almost all countries, in particular developing countries, are vulnerable to external shocks due to their integration into an international economic and financial system that is prone to instability.
Mr. Wang Shouwen, Vice Minister of Commerce of China, said that the world economy is still struggling for recovery, with sluggish trade growth and uncertain prospects of global FDI flows. In recent years, we have seen the lingering unbalanced development between North and South, and poverty eradication remains the top priority of developing countries.
China enumerated three main actions that are needed. Firstly, we need to take actions to ensure equitable development for all. Countries are at different stages of economic development. Therefore, when pursuing shared objectives, they should bear common but differentiated responsibilities. Assistance should be given to developing countries to strengthen their development capacity. It is of crucial importance to improve global economic and financial governance and increase the representation and voice of developing countries, and give all countries equal rights to participate in international rule-making.
Secondly, we need to take actions to ensure open development to deliver benefits to all. Countries should oppose all forms of protectionism, uphold a free, open and non-discriminative multilateral trading system, explore ways to improve global investment rules, build an open world economy and come to share development benefits through mutual consultation and joint collaboration.
Thirdly, due to economic globalization, the development of all countries is increasingly interlinked. No country can maintain growth with its own effort, and no country can achieve development out of other countries’ underdevelopment. Thus, we need to build a global community of common destiny and shared interest and support the development of other countries.
Fourthly, we need to take actions to ensure innovative development. Innovation is a driving force for development and growth will be unsustainable if it merely relies on financial incentive measures or unconventional monetary policies. In addition, the growth gained from excessive resource consumption and environmental pollution cannot make up for the losses.
The Minister of Commerce of Algeria, Bakhti Belaib, said that the current economic and social situation remains worrying. Instability of prices of raw materials, reduction in financing for development and increasing of developing countries’ debt threat are reducing the already small successes made in the realization of the MDGs. “The creation of wealth is increasing and, at the same time, inequality has never been so high,” he stressed. The fundamental principles recognized in the Declaration of Algiers, which was adopted on the occasion of the First Ministerial Meeting of the Group of 77, still remain valid, as it was 50 years ago.
UNCTAD must be assured of resources to continue implementing its mandate to promote the right conditions to reduce socio-economic disparities between north and south and, to install an international society that is more equal. Algeria expressed concern also over the weakening of multilateralism in favour of bilateral and plurilateral preferential trade agreements.
The Secretary of Commerce of India, Rita A. Teaotia, said that since its inception UNCTAD was the focal point for an integrated and holistic management of all trade and related development challenges. It has been a useful forum for challenging conventional wisdom and, thereby, providing policy analysis to help transform and democratize international economic relations. Policy space for all countries should be preserved as we move towards achieving SDGs, she asserted. “This freedom of choice is especially important for developing countries because their public policies and national development strategies are still evolving”.
For India, the multilateral trading system is particularly crucial in the current global economic slowdown. It is also important that trade remains inclusive and is able to support countries’ development initiatives. The implementation of the Bali and Nairobi Ministerial decisions would produce positive outcomes and restore the credibility of the WTO. “Advancing negotiations on the remaining Doha issues, including in the area of agriculture, should remain a priority for the multilateral trading system”. She said India had provided zero tariff market access for LDCs for up to 98.2% of its tariff lines and its services sector has also been considerably liberalized for LDCs.
Adriano José Timossi is Senior Programme Officer of the Global Governance for Development Programme (GGDP) of the South Centre.
