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     May 1, 2012


Draw at Doha
By Vijay Prashad

Last Thursday. the delegates at the United Nations Conference on Trade and Development (UNCTAD) came to the closing ceremony. It was delayed by a few hours because the final document needed to be translated. A short delay was acceptable. Far worse would have been deadlock on the final declaration. It would have delivered a victory to those who want to see UNCTAD's ability to continue doing its work curtailed.

Shaking off the momentary lack of confidence because of the recession, the Global North has pushed to reclaim its primacy in financial and trade matters. Its emissaries set their sights at three conference, UNCTAD XIII (April), Group of 20 (June) and Rio+20 (June).

At these venues, the Global North intends to assert its responsibility for finance - none of the Southern countries, not

 

even the BRICS states - Brazil Russia, India, China and South Africa - would be permitted to have oversight of the financial sector.

Such matters as financial sector "reform" have to be left to the agencies controlled by the North (the International Monetary Fund, the World Bank and the World Trade Organization) and the agency of the North (the Organization for Economic Cooperation and Development, or OECD).

Despite the pretensions of the BRICS to be members of the G-20, it was the WTO and the OECD that have appropriated the right to set the agenda for the G-20 meeting. The BRICS states, Indonesia and Turkey seem to be simply colorful additions to the proceedings.

At UNCTAD, the Global North, led by the United States and Switzerland, tried to forbid this multilateral agency from its investigations of finance's domination over social life. Still beholden to the 192 members of the United Nations, UNCTAD is not under the thumb of the Global North. It has therefore been critical of parts of the financial architecture. It criticizes not only the ideology of neo-liberalism but also the institutions that benefit the kind of jobless growth that sustains the otherwise hollowed out economies of the North Atlantic.

At the Doha meeting, UNCTAD released a report (Trade and Development Report, 1981-2011) that illustrated the excellent work done by this UN agency over the past three decades. The Global North argued that UNCTAD could deal with finance, but only the effects of the financial crisis in the "emerging and developing nations". What it was not to do was to explore the causes of the crisis, which would take it into an investigation of the banking sector and the role of monetary policy of the Northern states. This was unacceptable.

A strong statement by former UNCTAD staff members stiffened the spine of the negotiating bloc of the South, the G-77+China (the G-77, so called for historic reasons, now represents 132 countries). John Burley, a former senior UNCTAD official, told me that because of this statement, which he helped coordinate, "and a rigorous campaign in the media and by civil society organizations, developing countries were successful in ensuring that there will continue to be plurality of views in the international system on the causes of the present economic crisis and in the search for sustainable ways out of it. Fortunately, neither the message, nor the messenger, was silenced at Doha."

Deborah James of the "Our World is Not For Sale" network, which played a key role in Doha, concurs. She told me, "The combined pressure of an outraged civil society, a reinvigorated G-77, and skilled BRICS negotiating support, delivered an outcome that mandates the continuance of UNCTAD's excellent research on macroeconomic policy and the global financial and economic crises. Not only did rich country overreach contribute to this outcome, it also helped increase public awareness of the value of UNCTAD's analytical contributions, as they challenge the status quo in economic orthodoxy."

By "rich country overreach", James refers to the role of the Swiss ambassador and US government officials, both of whom proved that brusqueness would no longer be appreciated by an increasingly self-confident South. This correspondent tried several times to arrange an interview with the Swiss ambassador to UNCTAD, Luzius Wasescha, but even after set interview times did not get to speak to him. At one session, the US delegate said, "We don't want UNCTAD engaging in intellectual competition" with the IMF and World Bank. Such arrogance was not taken lightly.

While the negotiations took place behind the scenes, the seminar rooms filled up as delegates listened to UNCTAD staff and their guests talk about a variety of issues. Jayati Ghosh, professor at Jawaharlal Nehru University in Delhi, spoke at a number of sessions. She told me that UNCTAD XIII dealt with issues that are precisely of interest to large and small developing countries, such as development banking, regional trade agreements, the nature of financial regulation, industrial policy, implications of the rise of the BRICS, energy alternatives for development, and the relation between development and gender.

"The high quality of most discussions showed how much interest there is amongst policy makers and others from the developing South," Ghosh said.

UNCTAD XIII's Doha Mandate underlined the agency's ability to "continue, as a contribution to the work of the UN, research and analysis on the prospects of, and impact on, developing countries in matters of trade and development, in light of the global economic and financial crisis" (paragraph 17, d). Such a mild formulation was precisely what the North had wanted to prevent.

But, as the Third World Networks' Sanya Reid-Smith told me, "given the circumstances, the South managed to get almost everything they wanted, including a renewal of UNCTAD's mandate to enable it to continue its excellent analysis (challenging the orthodoxy of the IMF and World Bank which has been consistently proven wrong) of the financial crisis that it has done for the past four years."

Unable to hold back the tide from the G-77, the Swiss ambassador tried out an exogenous tactic. He pointed out that if the G-77 gave up the paragraphs on Cuba and Palestine, the North would agree to the G-77's phrasing on finance. The North hoped that dissension in the South over their political entanglements around Cuba and Palestine would sink the unity of the G-77.

This did not happen. The Palestinian delegate and the Israelis had already agreed on the paragraph, and it was not enough to raise the bogey of Cuba (which is what deadlocked the Sixth Summit of the Americas in Cartagena, Colombia in the middle of April). As Deborah James remembers it, "the Swiss negotiator looked crushed." It was checkmate for the North.

"The result of UNCTAD XIII was positive in the end," noted Reid-Smith, "especially in comparison to other multilateral negotiations [such as Rio+20, the World Trade Organization's Doha Round and climate change]".

At those other venues, Reid-Smith said, the North has been unwilling to meet their various obligations. She is correct. But the Doha Mandate sets a very low bar. UNCTAD XIII at Doha was not a victory for the South. It was more like a draw. The message it sends to the Group of Eight and Switzerland is that the BRICS might not be as seduced by their seats in the G-20 as to forget their affiliations with the G-77.

Heiner Flassbeck, director of UNCTAD's Division of Globalization and Development Strategies, said that the Doha Mandate affirmed "more ahead of the curve analytical work by UNCTAD" on the global financial crisis. This will "strengthen our role within the UN system," Flassbeck said, and perhaps put some informed pressure on the other agencies.

Raja Khalidi, a senior economist at UNCTAD, concurred. UNCTAD XIII "noted the global economic realities and UNCTAD's role in providing critical analysis of their implications." The Swiss Ambassador had a more measured response, telling Bloomberg that the agreement "gives more precision" to UNCTAD's mandate so they "can't just do anything".

But thus far UNCTAD has not been able to "just do anything". Despite its many achievements, sections of UNCTAD have been smitten with elements of neo-liberal policy, such as carbon trading as a response to climate change. The carbon-trading model avoids the core problem, namely the North's energy waste and the South's lack of seriousness about alternative energy. There has been little concern for how the UN's Clean Development Mechanism is destroying forests and livelihoods.

There is also little evaluation of the mandate of UNCTAD's Center for Transnational Corporations, whose original mandate - to monitor corporations and create a Code of Conduct for them - had been transformed to reflect "the changing times and become more focused on the positive, rather than the negative, effects of Foreign Direct Investment and Transnational Corporations".

These elements of UNCTAD require some more self-scrutiny. The fierce opposition to UNCTAD from the North makes any serious self-criticism far harder to tackle.

Bankers need not worry yet. UNCTAD's reports do not threaten them. They do, however, irritate their counterparts at the IMF, the World Bank and the OECD. Challenges to their empirical claims and their theoretical blindness shall continue to fly out of the UNCTAD offices.

Vijay Prashad is Professor and Director of International Studies at Trinity College, Hartford, United States. This spring he will publish two books: Arab Spring, Libyan Winter (AK Press) and Uncle Swami: South Asians in America Today (New Press). He is the author of Darker Nations: A People's History of the Third World (New Press), which won the 2009 Muzaffar Ahmed Book Prize.

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