Conference on Trade and Development held in Accra concluded 2008 by adopting on April 25th the Accra Declaration and Accord, which while reaffirming the UNCTAD mandate, downsized the UNCTAD intergovernmental machinery from three commissions as agreed at the Midrand conference, to two commissions. This is perhaps the most dramatic downsizing of UNCTAD since then and could be a forbearer of further downsizing the UNCTAD secretariat, with negative impacts on programme delivery.

The group of 77 had put forward a proposal for a fourth commission to be devoted to “Globalization and systemic issues.” The proposal for a new commission was strongly opposed by the developed countries, who instead, wanted to abolish all the existing commissions so that the expert group meetings would report directly to the Trade and Development Board. The compromise at the conference was to reduce the existing commissions to two and, as a “carrot” to the G77, to have a standing item on the trade and Development Board Agenda entitled “Development in a globalizing world”.

The conference was held against the backdrop of economic uncertainties triggered by the financial crisis in the USA, the surging food prices with the food riots spreading in many countries, and in the aftermath of the Bali conference that highlighted the nexus between climate change, trade and development. Also in the background was the failure, thus far, to reach an accord in the WTO Doha Round of trade negotiations. With conference being held in Africa, the expectation was that Africa’s plight would take centre stage. These issues were highlighted in the debates and speeches in various forums as well as in the Accra Declaration and Accra Accord, adopted by the conference.

Long term Strategies needed to address food crisis

Dr. Supachai, speaking to the press just before the opening of UNCTAD XII, cautioned against “kneel-jerk” responses in coping with the global food shortages and skyrocketing commodity prices. He encouraged long term strategies and policy options including, including the scaling up of investments in agricultural research and development. He said the rising food prices were driven by, among other things, population growth in the developing world, climate change and weather extremes, and soaring energy costs, coupled with shortages in staples such as rice and corn. Some governments had responded by restricting food imports and setting limits on commodity prices, or both. Such stop-gap measures, he said, were not the best solution and could actually prove more demanding in the long run, especially since coping with the global food shortage was also about coping with shortages in agricultural development processes.

The international development community had long emphasized social-sector and emergency aid at the expense of investment in productive sectors such as agriculture.

President Kufuor of Ghana, in his opening address, noted the significance of UNCTAD XII taking place in Africa – a continent whose chequered history has dogged its development efforts for decades. Most countries in Africa are still classifies among developing nations, inhabited by some of the poorest populations of the world. The conference must therefore be seen as a unique opportunity firstly to give a boost to the fight against poverty and human indignity and secondly to strategise to assist Africa and other developing nations.

Reverse Africa’s Marginalization

He said Ghana and other African countries are subject to vagaries of a savagely competitive global system which leaves them with no control over the pricing of their commodities and denies them the opportunity to protect their farmers and infant industries. Both the domestic and international economic policies need constant adjustment to enable them to respond to unique or emerging challenges, address new development goals, and define mechanisms for achieving them.

He called for immediate measures aimed at reversing Africa’s dwindling fortunes in the global trade arena. Undoubtedly, Africa remains deeply marginalized in the expanding global trade.

The era of colonialism had been described as the first wave of colonial powers while seriously compromising Africa’s development. It had inflicted such deep-seated psychological wounds on the continent that it still defied the best laid plans aimed at healing them. Therefore, on the threshold of its second wave, globalization must be driven by a high moral imperative to ensure that it did not leave any scars of losers in its wake, he stressed. It should be beneficial for all and detrimental to none.

UNCTAD XII must be seized upon as opportunities to review the process of empowering nations to meet the ever-changing challenges and conditions of globalisation.

President Lula of Brazil recalled that the 11th UNCTAD had introduced the innovative concept of “space for national policies” which captures the essence of the challenge resulting from the interaction between domestic policies and international commitments. One of the fundamental ideas of UNCTAD: is the notion that development is an autonomous and sovereign responsibility of each nation to be exercised in an international environment conducive for efforts to overcome poverty and underdevelopment.

Massive Agriculture Subsidies a numbing drug

He said since taking office his government had sought to implement initiatives that meets the ideals of UNCTAD, in line with the teachings of Raul Presbisch and Celso Furtado. The very establishment of the group of 20 in the WTO reflected the changing geography of global trade and the determination of developing countries to take charge of their own destinies. The G-20 sought to eliminate the distortions that affected agricultural trade. The massive subsidies paid by the treasuries of developed countries worked like “a numbing drug that turns its own users into addicts”, while the main victims are the farmers of the poorest nations,” he stated.

South-South Trade a survival imperative

Stressing the importance of trade exchanges between developing countries, President Lula said South-south trade has been growing faster than the average growth rate of world trade. Brazil has been contributing to that by expanding substantially their exchanges with the countries of the south. “We reduced our dependence on the North. At the same time, we reduced the vulnerability of the Brazilian economy. Diversifying partnership is, today, more than geographical goal. It is a survival imperative” he continued. “The international economy is experiencing a crisis caused by problems regarding good financial governance in the world’s richest economies. The poor countries should not pay for the costs of adjustments. Globalisation, which already brings so many strands of symmetry, cannot become a way of transferring losses to the developing economies. Indeed, they are precisely the ones that have most contributed to maintain the world’s economy growth levels” he stressed.

Alluding to the MFN clause in the EPAs between EU and ACP countries, President Lula said; “we must be vigilant against the temptation of rich countries to step up their protectionist practices. Equally damaging are the initiatives to perpetuate relations of dependency by creating barriers to the expansion of south-south trade. This is what happens when the renewal of trade preferences in the developed countries is conditioned to the extension to them of the same benefits that the economies of the south may grant to each other”. He noted with satisfaction that “some African countries have been resisting such attempts”.

Bio-fuels

Commenting on concerns about the Bio-fuels, he saw no contradiction between the search for alternative sources of energy and development of agriculture standards that ensure food safety. This is a challenge that they are successfully overcoming in Brazil. Levels of malnutrition in Brazil had fallen as the production and use of ethanol increased, helping to reduce CO2 emissions. Bio-fuels could increase the participation of developing countries in international trade by diversifying exports – especially in the case of African countries.

UNCTAD has been, since its foundation, the focal point in the United Nations System for Trade and Development. Its three pillars of research and development, consensus building and technical cooperation remain central.

Crisis of development takes extreme forms

Mr. Ban Ki-Moon the UN secretary general said this was a crucial time, when fresh thinking and new approaches were needed. The crisis of development takes extreme forms, including the sky-rocketing prices of food. The prices of staple foods had increased by more than half in the last six months. The ban on rice or wheat exports by some countries threatened to exacerbate the problem.

The causes of the crisis are many, including the switch to bio-fuels, high costs due to oil price increases, and financial speculation. The world has consumed more food than it produced and this is unsustainable.

He said while immediate humanitarian action is needed, in the long run production must be increased, and indicated the need for a Green Revolution in Africa. He announced that he would set up a task force of experts to look at all elements of the food crisis.

Calling on wealthier nations to rethink their old policy on agricultural subsidies, he asked. "If we can't reduce subsidies when the prices are high, then when will we do so?” Earlier Mr. Ban announced the creation of a UN system-wide task force to address the food crisis.

CSOs viewpoint

Ms Jane Nalunga of SEATINI, presenting the viewpoints of civil society, stated that the two major challenges we currently face are the financial and food crisis. The current food crisis is mainly caused by supply not meeting increased demand. One factor is the shift from producing food crops to bio-fuels which shift should be arrested and reversed. Another factor are the loan conditionalities of World Bank and IMF imposed on governments to remove subsidies and support to farmers and the removal of tariffs on food imports, while high agriculture subsidies continue in rich countries. “This makes policy changes imperative,” she continued.

Developing countries must be allowed to safeguard their food security and support their farmers. Developed countries must quickly phase out their distorting subsidies, including those in the Green Box.

Commodity dependent developing countries have been facing complex problems ranging from price volatility to corporate concentration. She called for expansion of UNCTAD’s work on commodities so as to help developing countries get better value for their commodities.

Policy space being whittled down

Recalling that the significant achievement of UNCTAD XI regarding the recognition of the importance of policy space for developing countries, she said “this space continues to be reduced through loan conditionalities, WTO rules, and free trade arrangements including EPAs”. EU should stop putting pressure on African, Caribbean and Pacific countries to conclude EPAs and an alternative should be found.

Doha “certainly not Development Round”

Regarding WTO Doha trade negotiations she observed that as subsidies in the North continue, the developing countries are being pressured to cut their agricultural tariffs further. This would lead to import surges and rural dislocation. In the industrial goods negotiations, developing countries are being asked drastically lower their tariffs which will destroy many local industries. Benefits are few but costs are high for developing countries. Although the LDCs are told they do not have to reduce their tariffs at the WTO, most of them will be affected by even deeper tariff cuts through agreements like the EPAs. “it is certainly not Development Round” she declared.

She underscored a unique role of UNCTAD especially in these uncertain times and stressed that its support role to developing countries must be strengthened and expanded.

Accra Accord and Declaration adopted

The Accra Accord and declaration were adopted by consensus. These address economic, trade and development issues as well as set UNCTAD’s four-year work programme. The conclusions highlighted the challenges facing many developing countries and set out a detailed agenda for progress in economic and social development spanning areas ranging from commodities, trade and debt to investment and new technologies.

While welcoming the strong economic growth rates that global trade and investment flows have brought, UNCTAD XII cautioned that these advances have not been shared by all and have been accompanied by new difficulties, most notably the current crises in food prices and financial markets, and growing income inequalities.

It called for UNCTAD’s role to be strengthened, including through work on the trade and development aspects of such key emerging issues as climate change, energy security and international migration. The conference asked UN Secretary-General Ban Ki-moon to reinforce UNCTAD’s commodities work and put it under the direct responsibility of Dr. Supachai.

The Accra Accord emphasized the urgency of meeting the needs of least developed countries, many of which are in Africa, the host continent of UNCTAD XII.

UNCTAD XII underscored the importance of diversifying economies away from dependence on one or two commodities, building the capacity to produce a wide range of goods, ensuring access to basic services and strengthening legal and regulatory frameworks and institutions. Policies should be tailored to needs of individual countries, while at the same time respecting international law. There is no one precise model for improved, growth-enhancing governance and institutions”.

The conference stressed the immense potential created by growing trade and investment links within the developing world, spurred by the emergence of dynamic developing economies, such as China, India and Brazil. It called for such ties to be encouraged and reinforced.

At a time of economic slowdown in developed countries, UNCTAD XII signaled the increasingly prominent role that developing countries can play in fostering global economic stability.

Forums

UNCTAD XII featured a number of roundtable debates. Among the highlights of the conference were the civil society forum and the World Investment Forum.

The world investment forum brought together government, corporate leaders and international experts to consider how to enhance the impact of foreign direct investment on economic development and poverty reduction.

The Civil society forum organized a series of dialogues on many current issues concerning people centered development. These included, inter alia, the state of negotiations on EPAs and WTO Doha Round and their implications for development, the food crisis, and governance of international financial system etc. It was noteworthy that the civil society forum mobilized support for UNCTAD and provided a more frank interaction between stakeholders.

Mixed feelings on the outcome of the conference

The conference agreed that UNCTAD XIII will take place in Doha Qatar in four years time.

There were mixed feelings regarding the outcome of the Accra conference. On one hand there were those with a sense of joy and satisfaction that UNCTAD mandate had been reaffirmed and the declaration and Accord had been adopted by consensus. The developed countries were happy that intergovernmental machinery had been pared down.

On the other hand many developing countries delegates, left with a sense of frustration and apprehension. They had failed to secure a fourth functional commission which would have dealt with globalization and systemic issues and failed to resist the pressure of reducing intergovernmental machinery. They were apprehensive that the structure that had been carefully crafted at Midrand conference and meticulously safeguarded at Bangkok and Sao Paulo conferences was beginning to unravel. There was a real danger that in the interim period and at UNCTAD XIII in Doha Qatar, UNCTAD could further be weakened by its detractors. This calls for vigilance of delegates in Geneva to avert such eventuality.

*By Ambassador Nathan Irumba is the Chief Executive Director of SEATINI and formerly was Ugandan Ambassador to WTO in Geneva.