Development-led globalisation

The quadrennial conference of the United Nations Conference on Trade and Development (UNCTAD) is due to take place in Qatar from April 25th to 28th. The theme of this year’s conference is ‘Development-led globalisation: Towards sustainable and inclusive development paths’.

UNCTAD was established in 1964 as a permanent intergovernmental body dealing with trade, investment and development issues. It was intended to provide a forum where the developing countries could discuss problems relating to their economic development, UNCTAD’s goals being “to maximise the trade, investment and development opportunities of developing countries and assist them in their efforts to integrate into the world economy on an equitable basis.”

The creation of UNCTAD was based on concerns of developing countries over the international market, multinational corporations and great disparity between developed and developing nations. It was felt that the other institutions such as the GATT (now WTO), IMF and World Bank had not been able to handle the problems particular to the developing countries. Sri Lanka is an active member of UNCTAD and had the distinction of having a national of hers – Dr. Gamani Corea – as the secretary General of UNCTAD a few decades ago.

A major achievement of UNCTAD was to conceive and implement the Generalised System of Preferences (GSP) by which developing countries were offered special tariff preferences by developed countries.

The Secretary General of UNCTAD has prepared a report for the conference in April. The report titled development and globalisation; towards sustainable and inclusive development contends that “neither muddling through nor a return to business as usual will get things back on track” after the global crisis and urges decisive international and national steps to establish a “global new deal”. It states that “business as usual “is the wrong response, both for short term macroeconomic and for long term structural, social and environmental reasons.

The report notes that leaving financial markets to regulate themselves is both ineffectual and costly and that in an interdependent world, countries cannot tackle destabilising threats and imbalances on their own. It also notes that a new world order is taking shape with the rise of new growth poles in the South which heralds a significant shift in the global economic and political landscape.

The challenge today is to rebalance economies in a way that is timely, sustainable and just. This time, rebalancing will need a global new deal that can ‘lift all boats’ in developed and developing countries alike and finding the appropriate mixture of redistribution and regulatory measures to achieve these goals is the urgent task of policy makers at national and international levels.

The Secretary General uses the term Development-Led Globalisation (DLG) to describe the principles, priorities and policies needed to be pursued to turn tentative recovery into an inclusive and sustainable future.Stating that an inclusive development agenda cannot depend on economic policies alone, the report notes that balanced economy depends on a strong social compact which, in turn, requires a range of universal and targeted social policies, tailored to specific circumstances, to ensure that the benefits of growth are widely enjoyed and its risks are shared fairly.

Noting that the crisis has confirmed UNCTAD’s long-standing insistence on the importance of policy space, it states that its role in building new and more inclusive development paths cannot be understated. Responsibility for the choice of policies to secure a prosperous, fair and stable future remains to a large extent with national governments, institutions and constituencies.

In this interdependent world, the need for a more secure and inclusive global economy requiring strong international leadership and collective responsibilities is mentioned and the report released prior to UNCTAD XIII is meant to be studied by delegations so that they could discuss these challenges openly and constructively at the conference.

(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)