Asia Times: Unctad earns more clout but less cash



	February 23, 2000	atimes.com

Global Economy

Unctad earns more clout but less cash
By Ranjit Dev Raj

BANGKOK - The United Nations Conference on Trade and Development (Unctad) emerged from its tenth conference here on Saturday with a greatly enhanced role for itself in international finance and development, but ironically short of funds to implement its own ambitious agenda.

Unctad was also able to secure through the Bangkok Declaration agreement that the benefits of trade liberalization and globalization must be more widely distributed and market access for the products of least developed countries (LDCs) increased.

The declaration and plan of action adopted by Unctad's 190 member states comes at a time when the credibility of multilateral institutions like the World Trade Organization (WTO) and the International Monetary Fund (IMF) are under severe test amid doubts about the benefits of wide-open markets.

''A series of financial crises, including the recent Asian crisis, has highlighted the need to strengthen international cooperation efforts to improve the existing international financial system, with the view to preventing recurrence of crises, providing better mechanisms for crisis management and making it more conducive to trade and development,'' the plan of action said.

At a press conference soon after the adoption of the Bangkok Declaration and plan of action, Unctad secretary-general Rubens Ricupero said he trusted the Geneva-based organization's reputation to draw funds. The quality of Unctad's work has been such as to attract to it the support of the developing world, Ricupero said, but he also expressed hope that it could get more funds from the regular budget of the United Nations.

Ricupero said Unctad, which held its 10th session here from February 12-19, had been penalized with reductions to its budget of a kind no other UN body had been subjected to. Clearly, Unctad is now hoping that its added mandate and clout will bring with it the ability to harness more funds to do its work.

Thailand's deputy prime minister and conference president Supachai Panitchpakdi said requests would now be made to middle-income countries for additional funding. More than 300 projects are currently being implemented in more than 100 countries for an annual delivery of some $24 million, but the new plan of action could more than double this figure, an Unctad official said.

Asked if countries like the United States would now act to undermine Unctad's new role by limiting funds to it, Ricupero said he had faith that all countries would cooperate with the Bangkok verdict. The US has not been one of Unctad's avid supporters. In fact, it had at one time called for the abolition of the UN organization dubbed the closest in spirit to the developing countries, for whom it had secured significant trade terms in earlier decades.

Now Unctad has been boosted by a mandate from members to help look into the shape of a new economic system, after seeing the costs of overly hasty liberalization of markets on the developing world, not least the Asian crisis and trade marginalization of Africa.

Under the plan of action, Unctad would contribute to the strengthening and reform of international financial institutions ''including the enhancing of early warning and response capabilities for dealing with the emergence and spread of financial crises''. According to Supachai, such a surveillance system could be in the form of regional ''sister'' banks on the model of the Manila-based Asian Development Bank (ADB), with rules and regulations of similar or higher standards. The ADB has put up a regional surveillance mechanism in the wake of the 1997 Asian financial crisis.

The week-long conference has been able to secure significant headway in starting a process which Ricupero was hopeful would culminate in a zero-duty, quota-free trade regime for poor countries, which Unctad has long been advocating. The plan of action calls on Unctad to work toward ''maximizing market access benefits for the least developed countries, for example by granting duty free and quota-free treatment for essentially all products originating in the LDCs''.

This sentence had been subject of tough negotiations between LDCs and industrialized countries wary of agreeing to anything in the Unctad conference's documents that might limit their negotiating positions at actual trade negotiations in the future. LDCs had wanted the Unctad document to call for duty and quota-free access to ''all'' exports instead of just ''essentially all'' products, phraseology that would allow importing nations to keep out crucial exports like textiles and agricultural products.

But Ricupero said Unctad saw beyond a zero-duty, quota-free regime and would like, for instance, to have removed the ''rules-of-origin'' obstacle which was detrimental to countries like Cambodia.

According to Supachai, the greatest achievement of Unctad X was that it helped in confidence-building in the wake of the failure of the WTO meeting in Seattle in November. Non-government organizations generally welcomed the outcome of Unctad X and said the UN body has been greatly enhanced in prestige and has now found recognition for its valued annual, trade and development reports.

''Unctad has received a fresh mandate but should now act boldly in implementing it,'' said Martin Khor of the Malaysia-based Third World Network. Jayanti Durai of the UK-based Consumers International said that while the need to reform the multilateral trading system was acknowledged, more concrete proposals were needed or the poor would end up having received only lip service at Bangkok.

Khor said the developing countries should now collect funds to ensure that Unctad continued to do its work. ''It would be good investment,'' he said.

(Inter Press Service)

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