Trade and Development Report up-to-date - panelist
Experts marking the 30th anniversary of the world’s more influential
economic annuals said Monday that themes long sounded in UNCTAD’s Trade
and Development Report retain current prominence – particularly those
citing the questionable wisdom of unbridled free markets. Other
prominent themes concerned the persistence of trade imbalances, the
risks of overdependence on commodities exports, the risks of premature
liberalisation of capital flows, the need for new mechanisms to deal
with sovereign debt, and the problems posed by income inequality.
The report, first published by UNCTAD in 1981 – when it explored the
themes of “world development in historical perspective” and “the world
economy in transition” – was celebrated with a day of panel debates
reviewing its origins and evolving ideas, its approach to development
strategies, its macroeconomic reasoning, and its evolving theories on
international economic governance.
The seminar was titled “Thinking development” and served as a prelude
to the April 23 release of a publication of the same title during the
UNCTAD XIII quadrennial conference in Doha, Qatar. That volume will
review in depth three decades of the report’s theories and analysis.
The Trade and Development Report “is UNCTAD’s original flagship
report,” said Anthony Mothae Maruping, President of the organisation’s
Trade and Development Board, as he opened the meeting.
Rubens Ricupero, former Secretary-General of the organisation, termed
the Trade and Development Report “an encyclopaedia of development
thought” and said that over the years, as neoliberal economic reforms
swept the world, the publication often was a lonely voice calling for an
“active role of the State” in spurring the kind of stable economic
growth that leads to rising living standards in poor countries.
The 2008 financial crisis and resulting recession have proven the
worth of that unorthodox and sometimes controversial thinking, several
speakers said.
“The reasoning is that you need a State, a government, to have an
idea, a plan for the economy, a design, and an economic policy strategy
that makes sense, given the domestic and international constraints,”
said Heiner Flassbeck, Director of UNCTAD’s Division on Globalisation
and Development Strategies and principal author of the last eight
editions of the report. “That is the basic argument of the Trade and
Development Report in recent years.”
He added that in addition to being influential, the report also “is
often ignored. The Trade and Development Report is always provocative
and challenging. Sometimes, if you’re ignored, it’s the result of a
challenge that hits at orthodox opinion –that hits at the core of the
matter. You show people the empirical evidence to back up what you’re
claiming and they simply don’t know what to say.”
A current example is the case of widening economic inequality under
global economic forces, said Mr. Flassbeck and Carlos Fortin, a former
UNCTAD Deputy Secretary-General. “The 1997 Trade and Development Report
was about issues of income distribution and the effects of globalisation
on income distribution and employment,” Fortin told the meeting. “That
continues to be pertinent today. Growing wage inequality between skilled
and unskilled labour is becoming an increasing problem. And that report
warned about a hollowing out of the middle class.
This goes a long way towards describing the current situation – and
it was written in 1997.” The focus of the Trade and Development Report
2012, to be published in September, is income inequality, Flassbeck
added.
Anthony Thirwall, Professor of Applied Economics at the University of
Kent (United Kingdom), said that “the free trade orthodoxy still ignores
the balance-of-payments consequences of trade.
This idea that the balance of payments adjusts automatically – the
fact is, it often doesn’t. I think we all agree that global imbalances
are bad for the health of the world economy. The Trade and Development
Report has always been at the forefront of warning about these dangers.”
Thirwall said another consistent Trade and Development Report theme
has been the importance for developing nations of enabling their
economies to produce significant goods for export other than
commodities, whose prices are historically unstable. “To put it
crudely,” he said, “it makes a difference to a country whether it
exports cabbages or computers.”
Remarking on current concerns about a “jobless recovery” from the
global recession, Jayati Ghosh, Chairperson of the Centre for Economic
Studies and Planning of the School of Social Sciences at Jawaharlal
Nehru University in New Delhi, said the Trade and Development Report has
noted in recent years that “Growth isn’t necessarily linked with job
creation. . . (Perhaps) the time has come for Trade and Development
Report to stop being against the mainstream. Its ideas need to become
mainstream”.”
And the Report’s recent calls for reform of the international
financial and monetary systems so that 2008 crisis does not recur drew
support from Arturo O’Connell, Advisor to the Presidency of the Central
Bank of Argentina, speaking in his personal capacity. Among other
things, Mr. O’Connell expressed concerns about the limitations of the
G-20 countries in setting rules for the global economy: “It is only a
self-appointed forum supported by a jungle of working groups, without
any power to take binding decisions, instead working through peer
pressure.” He called for “a rule-based decision-making system supported
by a dedicated, independent Secretariat.”
Echoing those comments, Jomo Kwame Sundaram, Assistant
Secretary-General of the United Nations Department for Economic
Development, told the meeting, “We are living in a world where G-20
leaders are constantly looking over their shoulders to see what markets
will say, which constrains effective leadership for a strong and
sustained recovery when the world economy needs bold Rooseveltian
leadership more than ever.”
Other panellists at the Thinking Development event included Yilmaz
Akyuz, Special Economic Advisor to the South Centre; Rolph van der
Hoeven, Professor of Employment and Development Economics of the
Institute of Social Studies at Erasmus University of Rotterdam (the
Netherlands); Faizel Ismail, Ambassador and Permanent Representative of
South Africa to the World Trade Organisation; and Andrew Cornford of the
Observatoire de la Finance, Geneva. Among UNCTAD officials speaking at
the session were Richard Kozul-Wright, Head of UNCTAD’s Unit on Economic
Cooperation and Integration Among Developing Countries; Taffere
Tesfachew, Director of UNCTAD’s Division for Africa, Least Developed
Countries and Special Programs; Charles Gore, UNCTAD’s Head of Research
and Policy
Analysis on Africa and Least Developed Countries; Detlef Kotte,
former Head of UNCTAD’s Macroeconomics and Development Policies Branch;
and Alfredo Calcagno, current Head of the Macroeconomics and Development
Policies Branch.
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