[The following is excerpted from Focus on Trade #44, written by Walden Bello. His ideas on trade subsidiarity and its relationship to "ecological and feminist economics" suggests there might be a substantial common ground between first world environmentalists and third world developmentalists. If anyone could tell me where he develops these ideas at greater length (most of these FoT newsletters seems to be excerpted from his longer articles), I'd be most grateful.]
[BTW, this excerpt is preceded by a long and very good story of the rise and fall of UNCTAD, and how the WTO represents the culmination of the North's battle to roll back the gains of the South, which is largely excerpted from his article "WTO: The Iron Cage." You can subscribe to the Focus on Trade newletter through Topica at www.topica.com Search "focus-apec."]
Opportunity Awaits Seizure
The collapse of the Third WTO Ministerial in Seattle provides an opportunity for UNCTAD to reclaim a central role in setting the rules for global trade and development. But this cannot be on the basis of the old paradigm and old practices that have marked the UNCTAD approach. For example, the old assumption that underlay the Prebischian model that full integration of the developing countries into the world economy is the way to prosperity must be questioned in light of the many negative consequences of globalization which have become painfully evident, including the dangers that accompany the loss of self-reliance in agricultural and industrial producti on owing to the volatility of the global economy, such as the erosion of food security in developing countries where agriculture focuses on export-oriented production.
This is related to the need for UNCTAD to incorporate many of the insights of ecological economics, which sees global trade, whether managed or free, as one of the key factors destabilizing the national and global environment. It must give serious consideration to the principle of subsidiarity in production and trade-that whatever can be produced locally with reasonable cost should be produced and traded locally--as a way of preserving or enhancing the health of both environment and society.
Ecological economics and feminist economics drive home the point that "efficiency" or the pursuit of reduction of unit cost--the driving value of neoclassical economics--must be questioned, if not displaced, and UNCTAD must elaborate a different paradigm that subordinates narrow efficiency to the values of social solidarity, social equity, gender equity, and environmental integrity. UNCTAD's analysis must also move away from an overwhelming focus on international trade as the key factor in development and pay greater attention to both the economic and social measures that would allow for greater reliance on the internal market, including asset and income redistribution, such as land reform, that would create the economically empowered citizen consumers that would serve as the engine of the local economy. The indispensable and necessary links between growth, national sovereignty, and social reform must be placed at the center of trade and development policy.
The absence of serious attention to internal social reform owes itself to a simplistic North-South view of international economic relations. But equally important, UNCTAD has been too long a club of Southern governments and states that are uncomfortable at the examination of their internal political and economic arrangements. UNCTAD, in other words, must see that its constituency goes beyond governments to include, more fundamentally, t heir citizens. Thus, UNCTAD must not only solicit input from civil society and non-governmental organizations but also open up its decision-making processes to them.
In this regard, the words of Rubens Ricupero, UNCTAD's managing director, apply not only to the WTO but to the organization he leads. Decrying the "persisitent inability" of international organizations to engage civil so ciety, he warns that,
"the net result is that frustration, fears, and concerns finally find expression in a confrontational and sometimes violent attitude, often leading to disruption and a feeling of confusion. There is a clear need to reach out to the concerned individuals and organizations, to offer them an opportunity to be heard by governments not only when they march and protest in the streets, to start a process of ordered and respected dialogue with t hose who want to debate the central issues related to trade, investment, financial crisis, job insecurity, growing inequality inside nations and among them." (14)
Moving to Center-stage
Institutional and analytical reinvigoration is essential if UNCTAD is to break out of the cage that the rich countries have fashioned for it and carve out a much more powerful role in trade and development issues. Also essential is the will and the vision to accompany this process.
In this regard, both the draft "Plan of Action" and "Bangkok Consensus" are disappointing. Both documents broadly adhere to the North's limiting UNCTAD's mandate to "research and policy analysis; consensus-building; and the provision of policy advice and technical assistance aimed primarily at capacity building." (15) Such an approach does not go beyond the "positive agenda" of the last few years, which put the emphasis on enhancing, via technical advice, the capacity of developing countries in the context of WTO negotiations. That role was essentially one of holding the hands of developing countries as they integrated into the WTO. It was also a role that led to UNCTAD being deployed as a "fixer" for the WTO in controversial issues, such as the way it was recruited to become part of a WTO working party on investment during the Singapore Ministerial in 1996 in order to legitimize the process of bringing investment into the jurisdiction of the WTO.
What UNCTAD should be doing, in the aftermath of Seattle, is challenging the role of the WTO as the ultimate arbiter of trade and development issues. UNCTAD should instead be putting forward an arrangement where trade, d evelopment, and environment issues must formulated and interpreted by a wider body of global organizations, including UNCTAD, ILO, the implementing bodies of multilateral environmental agreements, and regional economic bl ocs, interacting as equals to clarify, define, and implement international economic policies.
UNCTAD, in particular, should push to become not just a forum for the discussion of policies. UNCTAD should become, as Secretary General Ricupero put it recently in Berlin, a "world parliament on globalization."(16) But this should be a parliament with teeth, with actual legislative power and executive power in the nexus of trade, finance, development, and environment. It was under the aegis of UNCTAD that international agreements on st abilizing commodity prices and setting up a Common Fund to support countries suffering from price fluctuations for their exports were forged in the seventies. It was also negotiations carried out under the UNCTAD umbrell a that led to the establishment of GSPs or preferential systems for Third World imports. This activist, decision-making role is one that UNCTAD must reclaim.
There are many areas that demand UNCTAD intervention, but three in particular urgently demand broad global agreements:
* There is an urgent need for such an agreement on the "Special and Differential Treatment" that must be accorded to developing countries in global trade, investment, and finance. Such an agreement would specify both pos itive and negative measures to protect developing economies from the perils of indiscriminate liberalization, support their efforts to develop or industrialize through the use of trade and investment policy, and secure th eir preferential access to Northern markets. Such an UNCTAD-sponsored agreement would serve as overarching convention that would guide the actions of the WTO, IMF, European Union and all other major international economic actors.
* UNCTAD could also play a key role in addressing the critical nexus of trade and environment. Together with the UN Environmental Program and UNDP, UNCTAD could lead in drafting an agreement specifying broad but binding guidelines and a pluralistic mechanism, involving civil society actors, that would judge on the conflicting claims of the WTO, multilateral environmental agreements, governments, and NGOs.
* In light of the failure of the G-7 to seriously respond to the crying need for a reformed global financial, UNCTAD should seize leadership in this area and forge an agreement among its 180-plus member countries that would put such a system in place. Such a system could involve Tobin taxes, regional capital controls, and national capital controls, and a pluralistic set of regulatory institutions-innovations that are necessary for global financial stability but which are resisted by the banks, hedge funds, the IMF, and the US Treasury Department.
* UNCTAD could also lead in forging a "New Deal" for agriculture in developing countries. The emphasis of such a convention would not be the integration of agriculture into world trade but the integration of trade into a development strategy that will put the emphasis on raising incomes and employment in the agricultural sector, achieving food security through a significant degree of food self-sufficiency, and promoting ecologically sust ainable production.
UNCTAD in a Pluralistic System of Global Economic Governance All this is not to suggest replacing the WTO and the IMF with UNCTAD. But it does mean UNCTAD taking an active role in a process of reducing the powers of the WTO and the IMF.
It is not surprising that both the WTO and IMF are currently mired in a severe crisis of legitimacy. Both are highly centralized, highly unaccountable, highly non-transparent global institutions that seek to subjugate, c ontrol, or harness vast swathes of global economic, social, political, and environmental processes to the needs and interests of a global minority of states, elites, and TNCs. The dynamics of such institutions clash with the burgeoning democratic aspirations of peoples, countries, and communities in both the North and the South. The centralizing thrust of these institutions clash with the efforts of communities and nations to regain con trol of their fate and achieve a modicum of security by deconcentrating and decentralizing economic and political power. In other words, these are Jurassic institutions in an age of participatory political and economic d emocracy.
UNCTAD may not have the material resources of these institutions, but it has something that the billions of dollars of the World Bank and IMF could not buy: legitimacy among developing countries. A vigorous UNCTAD that competes in the process of defining global rules for trade, finance, investment, and sustainable development is essential in a pluralistic global economic regime where global institutions, organizat ions, and agreements complement as well as check one another. It is in such a more fluid, less structured, more pluralistic world with multiple checks and balances that the nations and communities of the South will be ab le to carve out the space to develop based on their values, their rhythms, and the strategies of their choice. UNCTAD has a critical contribution to make in the emergence of such a system of global governance.
* Dr. Walden Bello is professor of sociology and public administration at the University of the Philippines as well as the executive director of Focus on the Global South, a program of research, analysis, and advocacy bas ed at the Chulalongkorn University in Bangkok. He is the author or co-author of 10 books and numerous articles on global and Asian economics and politics, including Iron Cage: The WTO, the Bretton Woods Institutions, and the South (Bangkok: Focus on the Global South, 1999).
Focus on the Global South (FOCUS) c/o CUSRI, Chulalongkorn University Bangkok 10330 THAILAND Tel: 662 218 7363/7364/7365 Fax: 662 255 9976 E-mail: admin at focusweb.org Web Page http://www.focusweb.org
_____________________________________________________________ Check out the new and improved Topica site! http://www.topica.com/t/13