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April 13, 2012

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April 13, 2012

Why are rich countries trying to silence alternative economic voices at the UN?

April 13, 2012
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The UN system is normally a terribly polite sort of place, but something is seriously amiss at UNCTAD. Despite its name (The UN UNCTAD_logoConference on Trade and Development), UNCTAD is a permanent body founded in 1964, which even at the height of Washington Consensus orthodoxy, provided developing countries with an invaluable source of thinking on alternative, heterodox policies on trade and finance (see my recent post on its latest hard-hitting report).

Now, it is under threat in the run-up to its big once-every-four-years conference, which kicks off in Qatar on 21st April. Developed countries stand accused of trying to narrow its mandate and effectively shut down its role as an alternative voice. On Wednesday, a phalanx of former senior staff and other big economic cheeses like Dani Rodrik went public with a press conference in Geneva and presented the following statement.

“Statement by former staff members of UNCTAD, Geneva, 11 April 2012

Silencing the message or the messenger …. or both?

Since its establishment almost 50 years ago at the instigation of developing countries UNCTAD has always been a thorn in the flesh of economic orthodoxy. Its analyses of global macro-economic issues from a development perspective have regularly provided an alternative view to that offered by the World Bank and the IMF controlled by the west.

Now efforts are afoot to silence that voice. It might be understandable if this analysis was being eliminated because it duplicated the work and views of other international organizations, but the opposite is the case – a few countries want to suppress any dissent with the prevailing orthodoxy.

No multilateral institution is perfect, but UNCTAD’s track-record of analysis and warnings on global trends and problems certainly stands up to those of other organisations. As otherwise unfavourable commentators have occasionally admitted, UNCTAD was ahead of the curve in its warnings of how global finance was trumping the real economy, both nationally and internationally. It forecast the Mexican tequila crisis of 1994/5. It warned of the East Asian crisis of 1997 and the Argentinian crisis of 2001. It has consistently sounded the alarm of the dangers of excessive deregulation of financial markets. It has stressed the perils of rapid, non-reciprocal trade liberalization by developing countries. UNCTAD economists have not had to suffer the psychology of denial so prevalent in other organisations.

So why is the UNCTAD message so unwelcome? The fact that UNCTAD has no formal responsibility for the global management of the international economy and none of its own funds to dispense means that its analysis is free of vested interests. No organisation correctly foresaw the current crisis, and no organisation has a magic wand to deal with present difficulties. But it is unquestionable that the crisis originated in and is widespread among the countries that now wish to stifle debate about global economic policies, despite their own manifest failings in this area.

Because of the crisis, we do now have a better explanation of the inter-relationships between the real economy and the world of finance. Those explanations are now a good deal closer to what UNCTAD has been saying for nigh on three decades about the dangers of finance-driven globalization. And it is precisely in its analysis of interdependence that UNCTAD brings added value to an understanding of how the functioning of the global economy impacts on the majority of the world’s population who live in developing countries. Given the current pressure on the organisation and its secretariat, that contribution could now be gone for good.

Why now? UNCTAD is about to have its next quadrennial conference (Doha, 21-26 April). UNCTAD conferences are a shadow of their past, being now simply a time to agree on secretariat work programme priorities for the next four years. But that is precisely what is at stake.

Developing countries in Geneva, again, are struggling to resist the strong pressure piled on them by OECD countries and to defend the organisation to which they had been “umbilically” tied. They are not fully succeeding, in spite of the BRICS pledge of support manifested at its recent summit. So the developed countries in Geneva have seized the occasion to stifle UNCTAD’s capacity to think outside the box. This is neither a cost-saving measure nor an attempt to “eliminate duplication” as some would claim. The budget for UNCTAD’s research work is peanuts and disparate views on economic policy are needed today more than ever as the world clamours for new economic thinking as a sustainable way out of the current crisis. No, it is rather – if you cannot kill the message, at least kill the messenger.

All of the undersigned have worked as senior officials for UNCTAD at one time or another. Individually, we may not necessarily have agreed with what UNCTAD was saying on specific issues. We have no vested interest in this matter except that we all fervently believe in the value of maintaining an independent research capability that serves to focus inter-governmental debates on how the workings of the global economy affect developing countries.

At time when pluralism is finally being meaningfully discussed in the election of the President of the World Bank, it is ironic that OECD countries are endeavouring to stifle freedom of speech within another multilateral organization.

If those who were proud to work for UNCTAD do not speak out now, who will?”

cartoon_truth to powerIf true (and the signatories are serious people), the attack on UNCTAD feels more like some G8-led skirmish from the 1990s than a response to a global economy in turmoil. Surely now, more than ever, we need new thinking, and power and voice needs to shift to the developing countries? I’m genuinely baffled by why thisis happening now – if anyone from DFID or elsewhere cares to explain, feel free. More background in the Guardian from the LSE’s Robert Wade.

3 comments

  1. I agree fully that Unctad has sometimes provided a useful critique of the Washington Consensus and that second opinions are important. We definitely need new thinking at a time when the prevailing economic model has failed.

    But as a former staffer I can say without reservation that Unctad is the worst place i’ve ever worked. People at other development agencies snigger about its bureaucracy and waste of talent. Even within its ranks, i’d say it is almost common knowledge that it is dreadfully organised.

    It’s also horribly political, and lots of internal divisions don’t speak to each other. Neither is it uniformly anti Washington-Consensus. Some bits are quite neoliberal; others statist.

    All in all a hodge-podge of views, with some quality (and some excellent staff) and some inconsistency. Even if reform is not in the direction proposed, managerial and organisational change is needed. There’s a need for an Unctad, just not this Unctad.

  2. I’m not UNCTAD staff, but rather an academic who has spent nearly a year gaining access to trade data that UNCTAD has, but refuses to share. I can’t begin to say how frustrating it is that this UN organization won’t share data.

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