UNCTAD presses for economic governance reform

Substantial reforms – more than mere "window dressing" – should be pursued nationally and internationally to prevent opaque financial instruments, speculation, and the build-up of large financial imbalances between countries from causing a repeat of the current global recession, UNCTAD's Secretary-General urged last weekend. Secretary-General Supachai Panitchpakdi told the 122nd Assembly of the Inter-Parliamentary Union (IPU) that "the crisis provides a rare opportunity to forge a more balanced and inclusive global economy through two channels: measured government intervention and strategic policy action at the national level, and better coordinated and more inclusive economic decision-making at the international level."

In a statement Supachai said UNCTAD is concerned that with the worst of the financial crisis apparently over, "talk of reforming the financial sector, particularly at the international level, has become a good deal more muted. UNCTAD strongly believes that the crisis could have been prevented if there had been stronger governance mechanisms to regulate financial innovation and the build-up of various imbalances at the national and international levels. Moving forward on this reform agenda to create a new pattern of balanced and sustainable growth will require bold thinking."

Well-defined rules, with a transparent and fair system for judging infractions, should be "orthodoxy" for the international financial system as they are for the international trading system, Supachai said. "[I]t is … imperative to provide for an institutional framework for better international coordination of financial regulation and supervision… Such an agreement would hopefully address the current potential for regulatory arbitrage," he added. "Equally important is to reshape international monetary arrangements that help avoid the build-up of large current-account imbalances and their counterpart – large unbalanced asset positions across countries."

Supachai said that continued global dependence on a single reserve currency is becoming a concern, reviving the idea that an equitable system of special drawing rights (SDRs) might eliminate the need for developing countries to hold vast reserves of dollars as protection against reverses in their capital flows. These reserves "now represent a considerable opportunity cost for development," the Secretary-General said. Countries also could tackle large build-ups of reserves through regional arrangements such as the Chiang Mai Initiative, whose multilateralized currency swap agreement came into effect on 24 March. He also called for reform at the IMF "so that it can focus most properly on what its founders intended: the avoidance of contractionary macroeconomic responses to financial shocks and instability."

ActionAid: UNCTAD must be allowed to fully act on its mandate

According to ActionAid, UNCTAD as the apex trade and development body at the UN must be allowed to fully deliver its mandate without any hindrance from the developed countries. The pursuit of deliberate policies by the developed world through institutions such as the World Bank and the International Monetary Fund and the WTO over the years has relegated UNCTAD role of working to secure just trade and development policies for developing countries.

ActionAid condemns moves by the EU and the USA at this conference to further marginalise UNCTAD from the international trade and development agenda. For instance these countries are resisting G77 (Group of Developing Countries) demands to create a commission on globalisation. “UNCTAD XII must at the end of this conference be able to provide practical solutions that can be used to end the miseries of commodity dependent farmers, particularly in Africa”, says Aftab Alam Khan ,ActionAid’s international coordinator on Trade policy. “This would immensely contribute to the development of the commodity dependent Nations who are also among the Highly Indebted and Poor Countries (HIPC)”, he adds.

Amina Salifu, a woman farmer from Northern Ghana says, “The government must put in policies to ensure that the commodity boards are made stronger and where we have none they be set up to prevent us from losing our only source of livelihood”. In addition, to help stem the rising food prices, food aid needs to be increased and sourced locally or regionally, added the NGO. Countries need to be assisted to build up staple food stocks, procuring them from poor farmers in country, where possible. ActionAid believes a lasting solution to the pressures on food supply must include increased investment in smallholder agriculture, and action to reduce the devastating effects of climate change on developing country food production.

Trade unions on UNCTAD XII: Decent work and development

As trade ministers and Heads of State come together in Accra, Ghana to decide on the priorities for the UN’s Conference on Trade and Development (UNCTAD) for the next four years, trade unionists are calling for the UNCTAD XII Conference to endorse a strong UNCTAD agency as the main forum where discussions on the interlinkage between trade and development take place. “The development gains of trade depend largely on positive linkages between trade and employment, and on the capacity of trade to create decent jobs for people that currently are deprived from access to employment that provides a decent living”, said ITUC General Secretary Guy Ryder. “UNCTAD should put full and productive employment and decent work at the heart of the trade and development discussion. Mainstreaming decent work in UNCTAD’s work would be a logical follow-up to the UN’s earlier commitments to prioritise decent work, and a first step towards providing essential policy coherence between UN agencies.”

A trade union delegation will participate in the meetings and will be lobbying for the key issues that should be taken up in UNCTAD’s future work programme, as summarised in an ITUC statement. The statement says that especially in a time where the benefits of trade and globalisation and the distribution of these benefits are being questioned, UNCTAD constitutes a crucial forum that needs to be strengthened. In particular, the statement calls for a reinforcement of the analytical strength and the independent research capacity of UNCTAD.

The ITUC strongly supports the creation of an UNCTAD Commission on Globalisation, which could take up numerous vital issues related to globalisation and development. These include employment impact assessments of trade liberalisation; the problems created by Export Processing Zones with regard to competition on the basis of labour standards; the gender impacts of trade liberalisation; and the policies that need to be developed to address income inequalities.