No. 30 January - February 2000
Debacle in Seattle Raises Stakes for UNCTAD X ooo FAO, Free Trade and Food ooo 'Financing for Development' PrepCom Starts ooo Ensuring Employment ooo Environmentalists' 'Emerging Issues' ooo E-commerce Conference ooo Social Policies Loom Larger ooo New Economic Platform for the South ooo 'Development Account' Materializes ooo Calendar
Challenge for multilateralism
after failure of WTO negotiations in December
Debacle in Seattle raises stakes for UNCTAD X
The vacuum left after the collapse of trade negotiations in Seattle adds to the potential impact of multilateral forums that place hard-core economic issues in wider development and social contexts, and also give serious consideration to the views of the developing countries. On the UN calendar, these meetings include the tenth convocation of the UN Conference on Trade and Development (UNCTAD), in mid-February in Bangkok, Thailand; preparations for a June UN General Assembly review of the Social Summit in Geneva; and a conference on "financing for development" (see article below) in the year 2001.
The UN talks will take place in a period of continuing and contentious reappraisals -- surfacing dramatically in Seattle, but in fact rising in intensity since the global financial crises of 1997-98 -- not only of the need to liberalize trade, but also as to the ultimate benefit of globalization, the role of civil society organizations and the proper functioning of multilateral institutions.
The UNCTAD conference will afford the first opportunity for ministerial-level discussions at which fallout from the World Trade Organization meeting, held in Seattle only a few months earlier, can be assessed, points out Nacer Touimi Benjelloun, Moroccan Ambassador to the WTO and to UNCTAD. Ambassador Benjelloun led the Group of 77 developing countries (G-77) at preparatory meetings for UNCTAD X, and he also chaired 1999 meetings in Marrakech at which the developing countries prepared their positions for WTO negotiations.
The UNCTAD meeting is assigned by Governments of its 145-member Trade and Development Board to assess the impact of globalization on development, marginalization and financial volatility, to review relevant policies and institutional frameworks and to consider corrective strategies.
The need for a new round of comprehensive trade negotiations, and increased tensions after the failure to launch a round in Seattle in December, is likely to lead to a higher-profile for UNCTAD, which is mandated to prepare developing countries for multilateral trade negotiations, and in general to help them contend with the newly unleashed forces of globalization and liberalization, Ambassador Benjelloun said in an interview with Development Update.
The potential significance of discussions was heightened after UNCTAD was named, in a proposal floated in Seattle, as one of a handful of organizations recommended to grapple with the controversial issue of labour standards. Discord over labour standards was among the most important causes of the breakdown in the WTO effort to launch a "millennium round" of trade liberalization.
The isolation of the majority of countries from significant negotiations
in Seattle was so palpable that a proposal for developing countries to
abstain from any potential consensus was initiated by the Latin American
countries -- which on substantive issues are far more favourable to trade
liberalization and core WTO principles than are Africa and Asia. Delegates
from Africa and from the Caribbean followed the Latin American suit by
circulating a similar proposal to abstain from
consensus.
"If the WTO loses too much credibility after Seattle, we may see an implosion of multilateral issues in general", a trade negotiator from Chile -- one of the leaders of the Latin American revolt -- told Development Update. "The ideas of free trade and multilateralism are not in jeopardy, but there is a crisis."
In a speech distributed to the WTO (but not delivered in person, due to the cancellation of the opening ceremonies when protestors took over the streets in Seattle), UN Secretary-General Kofi Annan said that demonstrators from trade unions and public interest groups were right to be concerned about the impact of globalization on jobs, working conditions, environmental protection, human rights and the commercialization of scientific and medical research.
But for their part, developing countries have grounds to fear that use of trade policy to advance such causes would become a new form of disguised protectionism, he said. The Secretary-General noted that developing countries have acceded to pressures from the rich countries to open their markets to foreign competition, yet many high tariffs and trade barriers against developing country exports remain in place, under a number of pretexts, in these economically advanced nations.
Globalization, with its potential to promote economic growth and efficiency and raise living standards around the world, should not be used as a "scapegoat" for domestic policy failures, he maintained.
Rather, governments should exert greater determination in the social realm at the national level. At the international level, he said, UN institutions such as the International Labour Organization (ILO), the UN Environment Programme and the Office of the High Commissioner for Human Rights should receive the funds and the authority needed to fulfill their mandates. These bodies are better adapted to tackle complex social and environmental issues than the WTO, which is designed to negotiate trade agreements.
Developing countries had successfully fought off earlier attempts to place labour standards on the WTO agenda, and international consensus at the 1996 WTO ministerial meeting in Singapore assigned responsibility for raising standards to ILO monitoring and technical assistance. This decision was ratified by member Governments of the ILO in 1998, along with an addendum that labour standards are not to be used as a pretext for protectionism (see Development Update #24).
To defuse the impact of the Clinton speech on already endangered negotiations, the European Union proposed a "stand-alone" forum to deal with labour issues, comprising representation from the WTO and the UN-affiliated ILO.
Responding to the EU proposal as an "imaginative attempt to bridge the US - G-77 gap", some developing countries that are among the most open to globalization weighed in with a call for a forum that would also include UNCTAD and the World Bank, Ambassador Benjelloun told Development Update.
Inclusion of these agencies flows from the position that improvement of wages and labour standards needs to be addressed as a development issue, not as an adjunct to trade talks, he said. The Ambassador stressed that the G-77 regards even a quad-partite labour forum as a concession that they would support only as a trade-off for return concessions.
A constructive alternative, he recommended, would be to pursue labour issues in the context of agreements made five years ago by the Heads of State of 117 countries in Copenhagen, at the World Summit for Social Development.
o In New York, John Langmore, chief of the UN Division on Social Policy and Development, said in a statement that the Social Summit + 5 review, set to take place in Geneva next June, presents an opportunity for countries to "raise the bar" on international standards for labour rights, access to health and education, and for promoting full employment without resorting to measures that smack of protectionism.
According to Mr. Langmore, the international consensus forged in Copenhagen has already made a strong impact on the social policies of major global financial institutions (see article on social policies). He said that a forward-looking agreement in Geneva could address key areas of concern, such as labour standards and the responsibilities of the private sector in a world with expanding market opportunities.
o In Seattle, midway through the WTO talks, ILO Director-General Juan Somavia issued a call for "a new multilateral initiative to address the social implications of globalization involving all the organizations dealing with the international aspects of economic and social policy.
"As part of its agenda, the international community has to develop more effective ways of encompassing the interdependence of social and labour objectives on the one hand, and the dynamics of the global economy on the other", he said. "The frameworks which govern and regulate the global economy -- whether they concern trade, international capital flows, international migration, communications or intellectual property -- cannot be interpreted only in economic terms."
Proposals made at Seattle in regard to a multi-institutional forum on labour standards are of course officially moot at this point, as the WTO talks ended without any agreed declaration, an ILO spokesman noted. Creation of such a body, he pointed out, would necessarily await a re-opening of WTO trade talks. In the meantime, he told Development Update in a post-Seattle interview, the ILO call for inter-organizational study and analysis, and for policy packages at the national level, is the most that realistically can be attempted while political viewpoints on the labour issue remain inflamed.
Negotiations on liberalization of agricultural trade should begin in January 2000, as mandated by the Marrakech Accord concluding the Uruguay Round of trade agreements. One fundamental component of the negotiations is further reduction in farm subsidies, and all major countries that place subsidies on their farm products have endorsed this principle. But it is unlikely that this offer -- tabled by the European Union, among others, at the failed effort to launch a new round in Seattle in December 1999 -- will be repeated until there is a chance to trade for return concessions, the FAO's Hartwig de Haen told Development Update. A new comprehensive round of trade negotiations, not yet scheduled, would offer such an opportunity.
The FAO delegation, led by Assistant Director-General de Haen, went to Seattle to deliver the message that subsidies and other trade barriers in some industrialized countries are hurting agriculture in many developing countries, by depressing commodity prices and undermining investment in improved productivity.
Mr. de Haen noted that post-Uruguay Round progress has been made
in reducing tariff barriers on tropical commodities like coffee, tea, cocoa
and tropical fruits. But similar improvements have not been made for temperate-zone
products such as sugar, cereals, milk and meat, nor for processed foods.
Even in the case of tropical products, he noted, the improvement was at
best marginal, as pre-existing tariffs were already very low.
| "Low prices on food imports are leading too many countries to neglect
their agricultural sectors."
Hartwig de Haen
FAO Assistant Director-General |
"We have a differentiated view on protectionism", Mr. de Haen stressed, in a post-Seattle interview. "The FAO recognizes that subsidies in major food-exporting countries have helped some of the poor food-importing countries, by making imports cheaper. But low prices on food imports also are leading too many countries to neglect their agricultural sectors. And as liberalization progresses, as it almost inevitably will, prices will go up, leaving these countries vulnerable. We therefore strongly advise measures to reduce import dependence."
A strengthened agricultural sector generates additional rural income and jobs, bolsters foreign exchange through increased exports, and increases food supplies that are not affected by foreign exchange fluctuations, according to the FAO.
Due to inexperience in trade negotiations, many poor countries unnecessarily accepted Uruguay Round limitations on measures to support their own agricultural sectors, Mr. de Haen said. The 1996 Food Summit mandates the FAO to counsel developing countries on international trade negotiations, and the Organization will continue training and capacity building programmes in the run-up to the next round of trade agreements.
The meeting, to take place in 2001, will involve policy makers at the ministerial level or higher in talks on the strength and stability of international financial systems and on measures to be taken at the national and international levels to carry out action plans agreed to at UN conferences of the 1990s.
Under the terms of an agreement hammered out in the Second Committee of the General Assembly in December, representatives of the UN Secretariat are meeting with counterparts from the WTO, the IMF and the Bank to come up with recommendations on how the respective institutions would be represented in the drafting of an 'outcome' document and at the event itself. The results of these consultations are being reported to the first organizational meeting of the "financing for development" preparatory committee, in late January.
"We are entering uncharted waters", summarized Mauricio Escanero (Mexico), who facilitated informal Second Committee discussions at which agreement on the plan was negotiated, in an interview with Development Update. "The venue, exact date, specific agenda and modalities of institutional participation remain unknown. But decisions on these questions will be taking shape in the next few months."
The first resumed session of the PrepCom is scheduled for March 2000. Between January and March, a 15-country Bureau of the PrepCom is mandated to continue consultations with all relevant stakeholders, including UN regional economic commissions, the UN Conference on Trade and Development, non-governmental organizations and the private sector, as well as the three international financial institutions.
A proposal for a world conference on development finance was originally advanced by the Group of 77 developing countries and China. Falling levels of official development assistance and the marginalization of many poor countries from private foreign investment were primary concerns.
Proponents expressed surprise when the United States and other developed countries responded positively in late 1998 (see Development Update #28), given that these countries generally have referred discussion of economic issues to the Bretton Woods institutions (the IMF and the World Bank).
These reservations have not been entirely allayed. Although joining the consensus by which the resolution on "financing for development" was approved on 23 December by the General Assembly, the US entered a note of explanation that qualified the extent it believed the UN should be involved in financial affairs. On the same day, the US voted against a General Assembly resolution on international financial flows because it overstepped the UN's authority and might interfere with IMF jurisdiction. (The resolution passed by 155 -1).
Nevertheless, the depth of international concerns about financial stability in the aftermath of the crises of 1997 - 98, and the aligned realization that social and economic factors need to be integrated in decision making, swung support towards holding a UN meeting with a financial theme.
"This meeting will have the potential of building bridges, not only between Washington [home of the Bretton Woods institutions] and New York [where the UN is headquartered], but also within countries, between the ministries of finance, development and foreign affairs", Mr Escanero said. "To do this, we need the active involvement of Bretton Woods."
1998
April: Following completion of the IMF-World Bank annual meeting in Washington, D.C., IMF Managing-Director Michel Camdessus and finance ministers fly to New York to discuss global financial integration and root causes of recent financial instability in a first-ever meeting with the UN Economic and Social Council (ECOSOC).
May: ECOSOC ambassadors meet formally for the first time with the World Bank Executive Board, in Washington, D.C.
July: Cooperation between multilateral institutions is promoted by UN Secretary-General Kofi Annan, Michel Camdessus, World Bank President James Wolfensohn and UNCTAD Secretary-General Rubens Ricupero at ECOSOC's high-level segment in New York. The ECOSOC communique urges Governments to keep world markets open in the face of financial instability and economic slowdowns.
September: High-level meeting of the UN General Assembly on the themes of the social and economic impact of globalization.
1999
January: UN Executive Committee for Economic and Social Affairs issues a paper, "Towards a new financial architecture", which makes wide-ranging recommendations on international financial institutions and on policies to prevent financial contagion.
February: World Bank board members and President Wolfensohn pay a return visit to ECOSOC.
April: The second ECOSOC-Bretton Woods meeting takes place, with an emphasis on the need to have social support measures in place when dealing with financial crises and recessions.
May: ECOSOC Ambassadors pay a first-ever call on IMF board members in Washington, D.C. The IMF board is invited to a return visit to New York later in the year.
May: UN Secretary-General Kofi Annan sends a letter to the Group of 8 summit meeting, urging the leading industrialized countries to take steps to speed up world economic growth, increase official development assistance and intensify debt relief for the world's poorest countries.
November: UN Secretary-General Kofi Annan calls for better market access for developing countries and an international trade regimen that is "fair as well as free" in a speech distributed to the Seattle meeting of the World Trade Organization (see article on Seattle meeting). The occasion marks the first time that a UN Secretary-General has been invited to address a ministerial-level meeting on trade negotiations.
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The year 2000 is the first year that the human
race enters with a population of more than six billion.
Just about five billion of us are living in the developing countries and those with transition economies. Those five billion are on average about 13 years younger than the one billion in the richer, industrialized countries: the median age in the less developed world is 24.4 years; in the developed countries, it is 37.5.
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The large numbers of people in the world who are entering life and entering adulthood should be a source of great hope. Among their ranks are individuals with the potential to build new industries, eradicate diseases, discover new truths, reach into outer space. They possess in huge amount the simple capability of making the world a more surprising, interesting and dramatic place. They are the new blood of a new millennium that is succeeding a tired-out twentieth century.
But if the required classrooms and jobs do not materialize in the first decades of the new millennium, the picture darkens.
In a study prepared for the five-year review of the World Summit for Social Development (taking place in June of this year), the International Labour Organization estimates that in 1999 there already were more than 150 million unemployed (of which only about 40 million were in the developed countries). That does not sound so bad; but the ILO also finds that there are more than 750 million underemployed, worldwide. The ILO reported a worsening employment situation in 1999 in Latin America, due to the after-effects of the 1997-98 financial crisis; and in Africa, as declining commodity prices slowed economic activity. East Asia was the only major region of the developing world where substantial job growth was noticeable in 1999. But even that growth constitutes a rebound from the 1997 - 98 catastrophe, during which the loss of jobs in the region has been judged to be as high as 25 million.
In summary, there is an immediate need for one billion new jobs, while the demographics noted above will create the demand among young people for an additional billion jobs over the next quarter century.
If jobs or education are not available, they will seek other ways to survive.
The "survival jobs" that people will find will be in organized crime, drug trafficking, in armed bands and militia, in prostitution, in corruption rake-offs and swindles.
Or people will migrate, legally or illegally, from the countries without jobs to those with better prospects. Migration, of course, is not necessarily a bad thing. Immigrants most often are net contributors to the societies in which they settle, and provide a source of new skills and ideas. But immigration is often a source of social tension, and does not provide a comprehensive and long-term solution to the problem of a lack of employment opportunity.
Addressing these concerns at the most recent annual meeting of the International Monetary Fund and the World Bank, UN Secretary-General Kofi Annan issued a challenge:
In the developing countries, where farming engages 70 per cent of the working population, higher priority needs to be given to upgrading the agricultural sector. In general these countries need to spend more on education and health, and less on their militaries, the Secretary-General said, and must do more to mobilize domestic resources for investment. If the latter is accomplished through stronger regulatory and financial systems and improved governance, investment from overseas is likely to increase.
The most important contribution the developed countries can make, he said, would be to achieve and sustain higher rates of economic growth. But these countries also need to take action to reduce the volatility of international financial flows, to increase the long-term flow of concessional-rate capital to the poorer countries, to honour commitments to open their markets to the developing countries (see article on Seattle meeting) and to fulfill the long-promised goal of decisive debt relief for the poorest countries.
Leaders of the world's nations meeting at the Social Summit in Copenhagen in 1995 placed job creation at the centre of their stated goals. The United Nations itself has made poverty eradication its central development task, and there is no more effective or surefire means of elimination poverty than allowing the poor the chance to work for a decent living.
| At the top of a list of "emerging issues" which environmentalists
say are likely to blindside policy makers in the twentieth-first century
are concerns about climate change and the quantity and quality of available
freshwater (see chart at right).
Climate change was mentioned by 51 per cent of respondents to a survey conducted by SCOPE (Scientific Committee on Problems of the Environment) for use in Global Environment Outlook 2000,* a comprehensive study published in 1999 by the UN Environment Programme (UNEP). Concern over freshwater scarcity and freshwater pollution surfaced in 57 per cent of the responses (29 per cent and 27 per cent, respectively). More than 200 SCOPE members were asked at the close of the 1990s to name the problems not receiving ample public attention that were likely to pose the greatest threats to well-being in the next century. The respondents -- who include a Nobel Prize winner -- were not asked to pick from a pre-selected list, but rather were free to name their own issues. An additional group of scientists regularly consulted by UNEP were also included in the survey. Responses were categorized by issue by SCOPE (a committee of the International
Council for Science).
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* GEO-2000, published for UNEP by Earthscan Publications, London.
In the meantime, the UN Working Group on Informatics (subsidiary to ECOSOC) is focusing on three IT issues: e-commerce, Internet domain names (see Development Update #28) and security against cyberterrorism. The Group completed productive years in 1998 and 1999, when it initiated comprehensive Internet access to UN documents by missions to the UN and also organized a series of global consultations on the Y2K computer bug.
Ambassador Percy Mangoaela (Lesotho), chairman of the working group, told Development Update that he has already begun consultations with partners among UN agencies and the private sector regarding a possible global meeting on e-commerce. The event would include activities designed to bring investments and technology to developing countries.
The Social Summit "was ahead of its time" when it was convened in 1995, he said, and the review to be conducted by the UN General Assembly in June at Geneva offers a useful opportunity to review implementation of agreements on attacking poverty, unemployment and social strife, while also agreeing on new measures, he said.
A report from the UN Department of Economic and Social Affairs -- which is headed by Mr. Desai -- to the March meeting of the Preparatory Committee for Social Summit +5 finds that while most countries are struggling to deal with social issues in the context of a volatile globalized world economy, they remain committed to pursuing Summit objectives.
The report (A/AC.253/..E/CN.5/2000/2) can be accessed at www.un.org/esa/socdev, a web site where the UN Department of Public Information is posting updated information on the Social Summit review process.
"The Havana Summit is aimed at restoring the commitment of the Member States of the Group of 77 to a new economic platform for the South", Ambassador Samuel Insanally (of Guyana, currently representing the G-77 at the UN) wrote in a column appearing in the December issue of the UN Chronicle. The agenda -- covering the themes of globalization, knowledge and technology, South-South [technical and development] cooperation and North-South relations -- will "allow for high-level discussions to find a consensus on global development", the Ambassador writes.
With an increase in the number of member countries, differing perspectives on liberalization among Asian, Latin American and African regions, and a widening divergence in income levels between the poorest and most prosperous of the developing countries, observers have noted that the task of maintaining common positions in the G-77 has grown increasingly difficult in recent years.
Ambassador Insanally calls for re-establishing the basis of dialogue between developing and developed countries, to emphasize "mutuality of interests" and "genuine interdependence".
Four Preparatory Committee meetings for the South Summit have been held in New York. An open-ended core group is assigned to draft the Summit documents, which will include a strategic declaration and a task-oriented action plan with clearly defined measures, targets and time frames, Ambassador Insanally reports.
Already under way are seven projects -- supervised by the UN Executive Committee for Economic and Social Affairs -- which establish on-line networks of public administration and economic experts, as well as capacity building to implement action plans agreed at the Earth Summit, the Social Summit and Habitat II (on cities and communities). Another group of 18 projects is under consideration by the General Assembly in its current session.
The first tranche of $13 million for the development account was derived from confirmed savings in administrative overheads in the 1996-97 UN budget, when reforms under Kofi Annan were just beginning. On the assumption that these productivity improvements were considered sustainable, another $13 million was allocated from the 1998-99 budget. UN officials expect a larger amount of savings to be identified, leading to an expansion of the fund in the 2000-2001 biennium.
28 February - 10 March
Commission on the Status of Women, 44th Session
(New York, United States)
13-17 March
Commission on the Status of Women, acting as the Preparatory Committee
for the General Assembly special session on follow-up to the Fourth World
Conference on Women
(New York, United States)
3-14 April
Preparatory Committee for the General Assembly special session on follow-up
to the World Summit for Social Development
(New York, United States)
10-17 April
Tenth United Nations Congress on the Prevention of Crime and the Treatment
of Offenders
(Vienna, Austria)
17-27 April
Commission on Sustainable Development, 8th session
(New York, United States)
1-5 May
First Preparatory Committee for the World Conference against Racism
(Geneva, Switzerland)
2-4 May
First Preparatory Committee on follow-up to the Second UN Conference
on Human Settlements (Habitat II)
(Nairobi, Kenya)
22-26 May
Millennium NGO Forum
(New York, United States)
5-9 June
General Assembly special session on follow-up to the Fourth World Conference
on Women
(New York, United States)
26-30 June
General Assembly special session on follow-up to the World Summit for
Social Development
(Geneva, Switzerland)
5 July-1 August
Economic and Social Council
(New York, United States)
5 September
Opening of the Millennium Assembly of the United Nations
(New York, United States)
6 September
Opening of the United Nations Millennium Summit
(New York, United States)
13-20 May
Third United Nations Conference on Least Developed Countries
(Brussels, Belgium)
5-12 August
World Youth Forum of the UN System
(Dakar, Senegal)
Development Update, Editor: Tim Wall, United Nations Department of Public Information, United Nations, Room S-1040, New York, NY 10017, USA Fax (212) 963-1186 E-Mail: devup@un.org