Thursday, April 12, 2012

UNCTAD's future threatened for dissenting against financial orthodoxy

We have been sent a remarkable letter published yesterday by senior former staff members of UNCTAD, the United Nations Conference on Trade and Development, including some very big names in economics, such as Dani Rodrik, professor of International Political Economy at Harvard, and Rubens Ricupero, Brazil's former Minister of Finance. Essentially, the letter is arguing that developed countries are trying to silence UNCTAD because its analysis of global financial and economic issues has stood out too far against the prevailing orthodoxies. The letter begins:
Silencing the message or the messenger .... or both?

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

"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."
John Burley, who worked for UNCTAD for many years in senior positions, and who coordinated the letter, gave a presentation in Geneva in which he provided some background information (supplemented with a couple of comments in an email):
"The next conference, UNCTAD XIII, starts 21 April in Doha, Qatar.

An attempt is going to be made there, on the basis of what we hear ... at the moment, to change UNCTAD's mandate by denying the organisation the right to continue – and I emphasise: to continue – to analyse and report on global macroeconomic issues, including the role of global finance in development.

UNCTAD has always looked at these issues in the context of interdependence . . . meaning the realtionship among the various flows of trade and finance and technology, and how that interrelationship affects development. This aspect of UNCTAD’s work has never been popular with the developed countries.
. . .
But in the end, all counties have accepted that a full understanding of the development process requires inclusion of this aspect of macroeconomic analysis. What is now at stake is a continuation of that acceptance. In other words, in plain English, part of UNCTAD is to stop what it has been doing.
. . .
This is not a matter of money: it is an attempt to dilute the mandate of UNCTAD to work on macro-economic and global finance issues."
The letter continues:
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 (our emphasis).
. .
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 full letter is here. With thanks to David Spencer. Burley adds, via email:
Delegations in Geneva are working on the text of the final outcome, in usual UN style. I cannot say at this stage whether our statement will change things, but lets hope so.
Indeed. And if you don't believe that the rich countries are trying to pull the wool over the eyes of developing countries, try this. And read more on the conflict between the UN and the OECD, here. It's startling stuff.


Blogger Physiocrat said...

Silencing dissent against prevailing orthodoxy? That rings a bell.

10:47 am  

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