Comments On Strengthening UNCTAD

1. Comments On Strengthening UNCTAD Atiur Rahman Professor, Department of Development Studies, University of Dhaka Chairman, Unnayan Shamannay, Dhaka E-mail: atiur@sdnbd.org March 7, 2008 Hanoi, Vietnam

2. Overview • UNCTAD was once the main international organization focused on an integrated approach to international development co-operation. • Its biggest challenge at present is to regain that status. • In this regard, it must overcome resistance from developed countries. • It must also convince developing countries that it is the main forum for the discussion of matters related to trade and development, particularly with regards to challenging the existing world order.

3. Overview • UNCTAD should seek to enhance its research capabilities so that it is the authority on issues related to international financial flows, trade between developing countries, and all problems related to development. • ‘Trade and liberalization’ have become synonymous with ‘development’ in the modern era – this is a misconception. The first and foremost focus of UNCTAD should be issues related to development rather than just trade and market liberalization.

4. Overview • UNCTAD should not confine itself to just providing technical assistance to developing countries in order to ease their integration into the world market. • It should also explicitly highlight why the status quo presents so many problems for developing countries seeking to reap benefits from increased trade and market liberalization. In this regard, UNCTAD can expect the support of CSOs and NGOs throughout the world who are disenchanted with the status quo. • The focus should be on providing alternatives to the views of the Bretton Woods organizations. To accomplish this, UNCTAD must first greatly enhance its research capacity.

5. Major Challenges Facing UNCTAD • In recent times, world agricultural trade has undergone a massive transformation • High price of petroleum has led to high prices for derivative products such as plastic, latex, synthetic rubber, etc. • Increased subsidies for biofuels has led many farmers in the developed world to switch from other crops such as cotton. • This has led to a rise in the demand for natural substitutes such as cardboard/paper, natural rubber, etc. and higher prices for commodities such as cotton. Farmers in LDCs who are engaged in the production of these commodities stand to gain from these changes.

6. Major Challenges Facing UNCTAD • Till now, UNCTAD has mostly worked with the manufacturing and service sectors in developing countries. • Its present challenge is to address the current issues in world agricultural trade by giving more time, money and other resources to farmers in developing countries. • As the majority of the world’s poor are involved in agriculture as marginal farmers or laborers, UNCTAD has the opportunity to play a major part in boosting their welfare.

7. Bangkok Plan of Action • Free trade, globalization and sustainable economic development were highlighted in the Bangkok Plan of Action. But social development was, to some extent, overlooked. • In particular, UNCTAD must address the issue of exploitation of labor in labor intensive industries with more intensity and focus on the Bretton Woods organizations.

8. Sao Paulo Consensus • UNCTAD should convince developing countries that it is the appropriate forum for the discussion of issues related to development, trade, globalization, etc. as pertaining to developing countries. • Developing countries should be encouraged to bring these issues to UNCTAD rather than the WTO, which has a different focus and mandate. The Group of 77 and China have already expressed interest in enchancing their involvment with UNCTAD. • UNCTAD should work with the most advanced developing countries, such as Brazil, China and India, in rallying other developing countries behind the cause of enhancing UNCTAD’s status as an organization that acts on their behalf.

9. UNCTAD and Other Organizations • UNCTAD needs to work with FAO, UNDP, IRRI, CYMMIT and regional trade bodies to formulate a strategy for ensuring food security in developing countries, in light of recent high world prices for food. • UNCTAD could also invite representatives from various farmer’s associations, agro processing companies and civil society organizations from the developing world to discuss food security and environmental sustainability. • UNCTAD should also monitor aid effectiveness in LDCs, particularly from the people’s perspective on trade and development.

10. Conclusion • Currently, international trade negotiations are at an impasse and progress is slow at best on trade disputes between the developed and developing world. There is a need for alternative approaches to current international economic problems and relations. • The time is now right for UNCTAD to step forward and convince developing countries that it is willing and able to deliver the resources and expertise needed to transform the existing world economic order and ensure fair and equitable development for all.