UNCTAD14: A mirage of distorting mirrors

12 September by Yash Tandon

CC - Flickr - UNCTAD

People not versed in the complexities of the diplomatic world of distorted mirror images in Geneva or Accra or Nairobi may wonder in awe at the agreements negotiated in their name by their representatives in multilateral forums like UNCTAD UNCTAD
United Nations Conference on Trade and Development
This was established in 1964, after pressure from the developing countries, to offset the GATT effects.

http://unctad.org
. But, truth be told, UNCTAD is in no position to deliver the mandate that it got in Nairobi.

“I’m delighted that our 194 member states have been able to reach this consensus, giving a central role to UNCTAD UNCTAD
United Nations Conference on Trade and Development
This was established in 1964, after pressure from the developing countries, to offset the GATT effects.

http://unctad.org
in delivering the sustainable development goals,” said UNCTAD’s Secretary General Mukhisa Kituyi on the fourteenth session of the United Nations Conference on Trade and Development that took place in Nairobi from 17 to 22 July 2016.

This optimistic reaction from Kituyi as head of the institution is understandable. The diplomatic force majeure that weighs down on Kituyi goes with the institutional hat that he wears.

However, it begs the question: Is UNCTAD really able to deliver?


Diplomatic versus existential truths

At the end of the thirteenth UNCTAD conference in Accra on 20-25 April, 2008, where I was present as part of the delegation from the South Centre, I wrote the following:

“Multilateralism comes with the price that any text within the UN framework, such as the text that will be negotiated at UNCTAD XIII, has to be negotiated between member states. Here, power, resources and access to knowledge are significant factors that influence the outcome of negotiations. … it is the underlying power structures (and this includes not only political and economic power but also power over knowledge and knowledge production) that determine the outcome of the negotiations. The resultant outcomes are what may be called ‘diplomatic truths’.”

Diplomatic truths, in other words, are truths as negotiated between states in the global system of asymmetrically positioned power relationships. These truths may have little or only partial correspondence with existential truths about reality on the ground. …. Existential and diplomatic truths are two different things.

Ordinary people not versed in the complexities of the diplomatic world of distorted mirror images in Geneva or Accra or Nairobi may wonder in awe at the agreements negotiated in their name by their representatives in multilateral forums like UNCTAD. I have worked in Geneva for nearly five years as head of the South Centre – a policy and research-based think tank of the global South. I had an opportunity to experience the diplomatic games played out in the surreal atmosphere of Geneva in the inner sanctums of organisations like the World Trade Organisation WTO
World Trade Organisation
The WTO, founded on 1st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.

http://wto.org
(WTO), the World Intellectual Property Organisation (WIPO) and of course UNCTAD.

I am now no longer head of the South Centre; that liberates me from institutional encumbrances. In my view, if truth be told, the UNCTAD is in no position to deliver the mandate that it got in Nairobi. The illusions created by distorting mirrors of the Geneva-based institutions such as the UNCTAD are a mirage, a fantasy.

Am I too harsh in my judgement? Were the sleepless nights that our emissaries spent hacking out a contentious text in Geneva all in vain?

Maybe I am too harsh in my assessment. But allow me to explain.


The existential reality of our times

I referred to the Accra session of UNCTAD in April 2008. It took place under the shadow of the meltdown of the global financial system that most observers would agree was the worst since the “Great Recession” of the 1930s.

The Nairobi session of UNCTAD – eight years later – took place not only in the lingering financial crisis (for there appears to be no end to it), but, in addition, under the shadow of a much bigger crisis – the meltdown of the Western imperial system.

This is no exaggeration.

Of course, financial meltdowns and market failures are nothing new; these are built into the very system of capitalism. However, the capitalist logic of the rationality of the consumer does not make sense anymore; corporations are using psychometric algorithms to understand the irrationality of consumer behaviour in the market so that they can sell their products.

I have studied the World Trade Organisation (WTO) from its very creation to date and I can say without fear of contradiction that it is an organisation built on Western double standards and hypocrisy. Since 2003, for example, the cotton producing countries of Benin, Burkina Faso, Chad and Mali (so-called “Cotton Four”) have been raising the issue of the serious damage caused to their economies by American subsidies on cotton, which are a complete violation of international trade law. Literally hundreds of thousands of people in these countries are deprived of their livelihoods because of these subsidies. The US is unmoved. And yet, it talks disingenuously about “helping” the poor in Africa to attain “sustainable development goals”. There is not even a sense of embarrassment in creating such deceptions. Sadly, in Nairobi the UNCTAD too did not raise the matter of the Cotton Four. Such is the reality of diplomatic world.

In his analysis of UNCTAD14 the Executive Director of the South Centre, Martin Khor says: “… the developed countries are now much more reluctant to give concessions to the developing countries, thus showing up the present shaky state of North-South relations and of development cooperation… Principles or even phrases that have long been agreed to as part of global cooperation are now challenged or even made taboo by the developed countries”. |1|

Khor is right.

But let me add another dimension – a political dimension – to explain why the West has become so protective of its interests in the institutions of global governance. The West is facing a deep moral and epistemic crisis – epistemic, because the people in the West, including most of the academia and the media, do not have adequate conceptual or methodological tools to comprehend the underlying causes of the multiple crises they are facing – the phenomena of massive influx of immigrants (asylum seekers and refugees) and the terrifying occurrence of terrorism. Again, these are not new in history. No, but what is happening in our times is almost unfathomable. People in the West, especially in Western Europe, live in fear of the “Muslim jihadists”, many of them home-grown young radicals.

The policy makers and the media in the West jump from description (refugee influx) to prescription (keep them out; bomb them), without carrying out a proper diagnosis of the causes of these events. They refuse to face the truth which boils down, essentially, to their interventionist “regime change” foreign policy. Few have thought that there is a veritable civilizational backlash that goes back to the middle ages of Christian Crusades against the Islamic world. Was Huntington right after all? |2|

Added to this is that the Europeans are going through an identity crisis: who is a European, who is English, Scottish, or Belgian? The referendum on Brexit has brought to the fore raw emotions in England, Scotland, Ireland and Wales on this question. |3| The Americans seem to be faring better than the Europeans on the question of identity, but here too the “Black Lives Matter” movement has given a lie to the make belief that America is a land of freedom and justice. Clearly, it is not. The political landscape has changed – the “establishment” is under attack. Who could have believed that a man could stand on the podium – Bernie Sanders – and declare himself a “socialist”? During the McCarthy era in the 1950s, anybody publicly proclaiming to be a “socialist” would have been tried for treason. |4| And who could have imagined Donald Trump to have emerged as the Republican Party’s most popular presidential candidate?

Why, one might ask, should one talk about these things when the subject of this piece is UNCTAD14? The reason, to use a simile, is that what is cooked in the kitchen is not decided in the kitchen. That is why it is necessary to get out of UNCTAD and survey the broader landscape.


The outdated institutions of global governance

A close examination of the weeks of negotiations that took place in Geneva preceding the UNCTAD14 brings out one clear fact: the West is clinging on to institutions of global governance that no longer fit the radically changed political economy and geopolitics. Consider the Security Council of the UN: among its five permanent members are Britain and France! It is a farce. Based on GDP GDP
Gross Domestic Product
Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.
adjusted purchasing power (let alone population), the permanent members of the Security Council should be seven: US, China, India, Japan, Russia, Germany and Brazil. Consider the World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 180 members in 1997), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

http://worldbank.org
: in a world of finance where China is fast outstripping the United Sates, it has 4.62 percent of the voting rights compared to US’s 16.56 percent. This, too, is farcical. The current institutions of global governance have become obsolete.


So where do we go from here?

This is a big subject. I suggest two courses open to the countries of the South.

  • Whilst they continue to try to reform the Empire-led existing institutions (reform, which in my view is almost impossible) the global South must continue with what they have been doing for some time now – namely, setting up parallel trade and financial institutions of their own. I give only two examples of these initiatives from the global South (which, ironically includes Russia – because of Western open hostility towards it). One: China and Russia are increasingly cooperating on several levels – military-security, economic-financial, technological, energy, etc. Two: Brazil, Russia, India, China and South Africa (BRICS) are engaged in developing parallel structures on various fronts – including the creation of the BRICS Development Bank. These might not amount to much right now, but we are in the midst of an evolving situation. For example, it is a matter of time that the Chinese Yuan would become an international currency to rival the US dollar.
  • The UNCTAD, as I said earlier, should have no illusions that it will be able to deliver the “sustainable development goals” mandated at its fourteenth conference because of the constraints of the existing institutional power politics. Nonetheless, it offers a good forum for debating; it enables the Global South to let off steam; and it is a good opportunity for the civil society NGOs to get together and understand why things are not moving in the direction of a fair and just international economic order.

Another world is not only possible, but is gradually taking shape – with or without the West.


Source: Pambazuka

Yash Tandon’s latest book is ‘Trade is War.’ Visit his website, where this article first appeared.

Footnotes

|1| Martin Khor, UNCTAD’s Roles Reaffirmed, after Significant Wrangling, SouthViews No. 128, 5 August 2016

|2| In his book, “The Clash of Civilizations” (1996) Samuel Huntington argued that people’s cultural and religious identities – in particular between Western civilization and Islam – will be the primary source of conflict in the post-Cold War world.

|3| See my blog “BREXIT and the future of EPA” http://yashtandon.com/brexit-and-th...

|4| See https://en.wikipedia.org/wiki/McCar...

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