United Nations Conference on Trade and Development (UNCTAD XIII) was held in Doha, Qatar, against the backdrop of a struggle between the North and the South over the mandate and future of the organization.
UNCTAD has, since its creation in 1964, been a flashpoint of debate between North and South over the management of the global economy. In its first decade, under the leadership of Raul Prebisch, its first Secretary-General, it was at the forefront of the demand for a New International Economic Order(NIEO) —in which the rules for international trade, investment flows and aid would be designed to support, rather than undermine, developing countries’ efforts to grow, diversify their production, prosper and reduce poverty.
Nowadays the NIEO is seldom mentioned. And at the time it was viewed, at best, apprehensively, by many Northern authorities. But there were some in the North – including leaders such as Willy Brandt in Germany and Canada’s Pierre Trudeau – who embraced a “North-South dialogue” that would improve global understanding and accommodation. Many civil society organizations also actively supported the goal of an international trade, investment and aid system that would be much fairer for developing countries, many of them still newly independent.
The NIEO debate continued into the 1970s, when two major oil price shocks occurred thanks to embargoes imposed by oil-producing countries. These actions, which went far beyond talk, provoked the eventual counter-attack on UNCTAD by Prime Minister Margaret Thatcher and Ronald Reagan and others. By 1982 the North-South dialogue was dead. Financial liberalization and cross-border capital flows were being heavily promoted in its place. Then the first major debt crisis erupted in Mexico, and the era of the Washington Consensus dawned. The shoe was now definitely on the Northern foot.
Despite this, UNCTAD thrived as an organization, holding its quadrennial conferences to address the key development issues of the day. These conferences, along with the UNCTAD secretariat’s ongoing work on trade, development, and increasingly on technology, debt and finance issues, elicited growing support and appreciation from developing countries. UNCTAD has always echoed the concerns of developing countries and their desire for a policy space to promote their development goals. This was in stark contrast to the relationship developing countries had with the Bretton Woods Institutions (BWIs) - typically laden with policy conditionalities that undermined their own efforts at development and poverty reduction. While UNCTAD provided analysis and scope for dialogue on vital development issues of interest to developing countries, the World Bank and IMF talked about policy commitments, with little dialogue and even less negotiation. But with this one-sided talk came financing (and hence Bank and Fund influence) for countries with urgent needs – something that UNCTAD has neither had nor sought.
The upshot of the differences in both the mandates and lending capabilities between the BWIs and UNCTAD resulted in two sets of organizations sometimes offering parallel sets of policy advice. In particular, UNCTAD became increasingly critical of liberalization and deregulation policies and warned of the possible dire consequences, while the BWIs actively promoted such policies. Most of the time this caused annoyance in Northern capitals that a UN organization had the temerity to question the wisdom of the World Bank, International Monetary Fund, or – during the days of world trade negotiations – the GATT and eventually the World Trade Organization (WTO). (While the trade organizations didn’t dispense funding, they did offer the possibility of greater developing country access to Northern markets, and hence greater export earnings.) But since the BWIs and the GATT/WTO ultimately had decisive influence over developing country policies, UNCTAD’s dissonant voice could safely be ignored.
There have been occasions in the last two decades when the Northern members of the UN became sufficiently incensed that they sought to constrain UNCTAD’s activities or even—as in the early 1990s—to shut it down. That episode, after the fall of the Berlin Wall, provided scope for those who believed the “end of history” had arrived. In their view the world must now coalesce around the policies espoused by the victors in the Cold War—which in effect meant the industrial powers of the North, who were also the majority shareholders in the BWIs. Happily, on that occasion the developing countries rallied to UNCTAD’s defence.
The last conference held in Accra in 2008 (UNCTAD XII), as a global financial crisis was looming , affirmed an active role for UNCTAD in analysis and advice for developing countries.
Pre-financial crisis, UNCTAD’s membership had reaffirmed the institution as an agency with a purpose. Would a post global financial meltdown reaffirm their resolve?