At 50 years UNCTAD struggles to stay relevant

UNCTAD

UNCTAD has been essential to setting the economic agenda of developing countries for much of the past half century. Yet, in the face of globalization and difficulties in consensus-building, it fights to stay relevant.

To most people, UNCTAD is merely another acronym, part of the bureaucratic alphabet soup of UN organizations – some notable, others redundant.

But to most developing states, as well as to analysts of trade, investment, and development, the United Nations Conference on Trade and Development has played a key behind-the-scenes role in the international arena. As the Geneva-based body gears up for its fiftieth anniversary this June, it can look back on an often controversial yet momentous half century of technical skills transfer, capacity building, and increased cooperation across the Global South.

Conceived of as a one-time meeting of developing countries from March to June of 1964 uneasy at their declining terms of trade and growing economic disparities vis-à-vis developed nations, UNCTAD almost immediately became a permanent UN agency chaired by Argentinean Raúl Prebisch of the famed Singer-Prebisch thesis.

These were turbulent times for most of the developing world. It was a world in the middle of decolonization. It was a world attempting to chart its own path through the recently formed Non-Aligned Movement. And it was a world enraged at the growing economic inequality between rich and poor countries, one that was fertile ground for Marxist-influenced ideas like Dependency Theory and Import Substitution Industrialization (ISI) to take hold.

Such theories helped developing countries cement a unified negotiating front on vital issues through the newfound grouping. Major UNCTAD accomplishments include the creation of the Group of 77 alliance (G-77), the Generalized System of Preferences, which boosted poor country exports, the New International Economic Order, and a number of international commodity agreements, which for a time raised the price of key primary goods that were mainly exported by the South.

UNCTAD has also been at the forefront of advocacy for poor country debt relief, wide-ranging technical assistance initiatives in domains such as customs and public sector debt management, and capacity building programs for developing country trade, investment, and environmental officials.

While all UN member states are automatically part of UNCTAD, the organ has always been steered by developing nations. Its quadrennial conferences may generate the most international attention, but its Trade and Development Board, various commissions, working groups, and expert meetings convene prodigiously throughout the year and create a forum where the concerns of emerging countries are consolidated and given much weight.

Moreover, UNCTAD has been a haven for researchers and statisticians. Its free economic and development-related indicators and time series are arguably its most unheralded triumph. And some of its flagship annual deliverables include the World Investment Report, Trade and Development Report, and Review of Maritime Transport.

However, questions of UNCTAD’s relevancy have never gone away, particularly in the years after its early 1970s heyday (see 1972 Charter of Economic Rights and Duties of States). Now, they are perhaps more cogent than ever.

Rifts within the G-77 (the most influential bloc in the body) became apparent in the 1970s. As many of the oil-producing states were profiting handsomely from their embargos and oil shocks, their non-oil developing country counterparts often suffered (though the pain was assuaged by OPEC aid and petrodollar recycling). This led to massive debt burdens and Structural Adjustment Programs from the Bretton Woods institutions, not to mention ushered in a “Lost Decade” in Latin America and elsewhere.

These divisions were mirrored within UNCTAD, as developing countries started realizing that their once-beloved Dependencia and ISI had largely failed to foster economic integration and growth.

As the Cold War ended, free market ideology spread among the ranks of developing countries and the band of issues that once tied much of the Global South together began to unravel. The US in arrears to the UN to the tune of $1 billion (which had a large effect on UNCTAD’s operations), as well as its threat to “kill UNCTAD” did not help.

Finally, procedural changes, financial challenges, and contested negotiation remits have further taken their toll on UNCTAD’s relevancy.

The 1980s saw UNCTAD’s radicalism wane in part due to a change in decision-making from majority voting to consensus. Moreover, the poorer developing country delegations tend to be understaffed and unprepared, and even wealthier states’ missions routinely send only interns to UNCTAD meetings.

In addition, there now exist a multiplicity of UN implementation arms and external negotiating fora, which cover many of the same investment, trade, and development issues that are discussed in UNCTAD. Some examples include the UNDP, IFAD, UNIDO, UNEP, G20, OECD, World Bank, IMF, WTO, and many regional economic groupings.

One study even captured an UNCTAD delegate remarking that “one of the main challenges for UNCTAD is that it produces too many documents and arranges meetings that there is no real demand for.”

Yet, UNCTAD does have its place within the potpourri of international organizations. Efforts to cut critical examinations of financial globalization from its research mandate in the run up to the 2012 Conference in Doha were widely criticized and ultimately spurned. Furthermore, there is some agreement that although many of UNCTAD’s timely analyses are indeed ignored by Western policymakers, they have all but predicted previous economic crises.

Prebisch and ISI-like economic policies may be dead, but the need to address developing country economic grievances is very much alive. As it wraps up a half century of work and begins another, UNCTAD’s new mission must therefore be one of discovery: given its tight budget, figuring out what combination of research, advocacy, and skills transfer it requires to stay relevant and useful to the Global South.

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Categories: Economics, International

Author:Kevin Amirehsani

I am a former manager for a solar energy social venture in West Africa, science and business educator, and policy researcher, particularly where the fields of international trade, investment, and development intersect. I have a long-held interest in MENA and sub-Saharan African affairs, the latter honed through internship stints with the Institute of Democratic Governance in Accra and with the Department of Commerce in Cape Town. I am a proud Returned Peace Corps Volunteer (Cameroon '11), and hold an MSc. in International Political Economy from LSE, as well as a B.S. and B.A. in Industrial Engineering and Political Science, respectively, from UC Berkeley (Go Bears!).

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