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UNOS CUANTOS EUROS PARA EL PRESUPUESTO DIARIO

2015-09-04T20:56:30Z

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The Danger of a Global Governance Deficit

2013-04-08T13:48:55Z

Pascal Lamy, Director-General of the World Trade Organisation, addresses an audience at Bilkent Univeristy Ankara upon receiving a Doctorat Honoris Causa, 15 March 2013.

Ladies and gentlemen,

Being with you in "bilim kenti," the city of learning and science, I am both honoured and moved.

"Honoured" because there is nothing more humbling than to stand here before you today, in this house of knowledge, to speak about the place of the World Trade Organization in the global governance architecture. It is the researchers, scientists, and academics like you that allow the world to engage in a deeper reflection of where the world is headed. It is the bastions of science, such as the University of Bilkent, that allow us to look at our planet from a distance - stopping the clock on our day-to-day chores - to assess where we really are and where we ought to be going.

"Moved" because I still remember the very founder of this institution, Ihsan Dogramaci, who had contributed to the establishment of numerous public institutions of higher learning, who had served as rector of Ankara University, and as founder and first rector of Hacettepe University. A towering figure in the world of knowledge and education, and a dear friend of my late father-in-law. I pay tribute to his family members in the audience.

Ladies and gentlemen, to speak about global governance, is no easy task, in particular in a world as troubled economically and as challenged politically as the one that we live in today. Since 2008 we have been in the midst of the deepest economic crisis that the world has known since the Great Depression. We have witnessed political turbulence - such as the neighbouring Arab Spring - of proportions few had thought imaginable. Social pain and widespread unemployment have been the consequence. Meanwhile, climate change has continued to progress unabated, with Tsunamis and other natural disasters that we thought were confined to the science-fiction universe, taking place right under our very own eyes.

In the face of all this, it would be easy to shrug one's shoulders in despair. It would be easy to feel helpless and overwhelmed. And, yet, what history teaches us is that our greatest strength is born of our moments of greatest weakness. The General Agreement on Tariffs and Trade - a watershed agreement in global economic and trade co-operation - was itself born out of the ashes of the Second World War.

In fact, the catastrophy of the Second World War brought in its wake an unprecedented joining of hands at the global level between visionary statesmen and women and politicians who wanted to make the world a better place. A large number of international institutions were created immediately after the war by a humanity traumatized by war and destruction; wanting to build a future based on higher ethical standards, deeper scientific knowledge, and a vastly improved global governance architecture. And, by and large, I would say they made it. But there is more to be done because history doesn't end here. This is just the beginning of another chapter in our collective story.

As we continue to write our history, the world has seen an unprecedented level of globalization. But our capacity to harness that globalization through proper governance has certainly lagged behind. Such a "governance deficit," I would argue, puts the world at risk.

Solid, Liquid and Gaseous?

Ladies and gentlemen, I have often likened governance systems to the three states of mass. The national level, in my view, represents the solid state. The international level, the gaseous state. And in-between would lie the efforts for greater regional economic and political integration, like the European Union which Turkey is attempting to join, which I would say are in a liquid state.

What I mean by this is that our governance chain, today, weakens the further it rises because citizens are left farther behind. Our end goal should be to make our governance structures more solid both horizontally and vertically. For this to happen, we must strengthen the links between the highest and the lowest levels of governance. In this global village, citizens have be involved not only in local governance but in regional and global governance too.

Whichever the state of the mass, what is required to have a governance system work is a combination of political will, capacity to decide collectively, and accountability. Let me now walk you through the four principles of global governance, as I see them.

The Rule of Law and its Enforcement

The first point that I would stress in the creation of effective governance systems is the importance of the rule of law and that of enforceable commitments. Global governance must be anchored in rules, in international commitments, that foster and promote their respect. This is at the heart of the multilateral trading system, with its more than 60 year experience of regulating trade relations amongst nations, and with its binding dispute settlement system that ensures compliance. This is also at the heart of what the international community is striving to achieve on climate change; a multilateral deal in which nations commit to carbon emissions reductions, with accompanying measures to strengthen capacity for adaptation. It is also at the heart of what the international community is seeking to accomplish in the area of nuclear non-proliferation. Commitments which are anchored in a multilateral context; which can be monitored and subjected to effective dispute resolution systems, and which go hand-in-hand with proper capacity building.

Subsidiarity

The second principle that I would stress is that global governance needs to respect the principle of subsidiarity. It is about taking decisions at the level at which it would be most effective to do so. The international system should not be overburdened with issues which are better dealt with at the local, regional or national level.

Coherence at Home

The third principle that I would stress is that “coherence starts at home”. Coherence lies, first and foremost, with the members of international organizations. Take the United Nations. We can and must have the “United Nations Deliver as One”, but for that to happen United Nations members must also "Behave as One” in the different organizations to which they belong in the United Nations family.

Domestic Debate on International Issues

The final principle that I would put to you is that since the political “demos” remains essentially national, legitimacy would be greatly enhanced if international issues were to become a larger part of the domestic political debate. The exercise of democracy today needs an international dimension. The fact that citizens elect the governments that represent them in global institutions is not itself sufficient to ensure the legitimacy of international organizations. The fact that in an organization such as the World Trade Organization, decisions are taken by consensus, and are based on one-country one-vote, may not be enough to ensure its legitimacy in the eyes of our global citizenry. More is required. National actors — political parties, parliaments, civil society, trade unions, and citizens — need to ensure that the issues discussed and decided at the “global level” are carefully explored, first, at the "domestic level."
The Triangle of Coherence

The bad news is that global governance remains far from this ideal structure. The good news is that much of what I have described is already in motion; it is being done gradually, and not through a big bang. The global economic crisis that we are witnessing has accelerated the move towards a new architecture of global governance, in what I have called a "triangle of coherence."

On one side of the triangle lies the G-20 - of which Turkey forms part as a major emerging economy, replacing the former G-8, that is meant to provide political leadership and policy direction. On another side lie the member-driven international organizations that provide expert knowledge, be they in the form of rules, policies or programs. The third side of the triangle is the G-192, the United Nations, which provides accountability.

In the longer term, it is my hope that both the G-20 and international organizations will report to an eventual “parliament” of the United Nations. In this respect, a revamping of the United Nations Economic and Social Council could lend support to the recent resolution on United Nations system-wide coherence. With time, the G20 could even be a response to the necessary reform of the United Nations Security Council.

A structure of this type needs to be underpinned by a set of core principles and values. And this is precisely what German Chancellor Angela Merkel has proposed with the creation of a Charter for Sustainable Economic Activity. It is a commendable effort to provide a “new global economic contract," to anchor economic globalization in a bedrock of ethical principles and values. This would renew the trust of citizens in their policy makers, which is vital to make globalization work.

But let us recognize that this "new software" of values still needs to be constructed and needs to be moved away from an exclusively Western set of values. The African, the Asian and other value systems will need to be brought to bear. Some countries, such as Turkey, seem to me to be well placed to contribute to this new software, the purpose of which is to overcome deeply entrenched cultural divides, and to create a common vision based on human dignity.

The WTO Scoreboard

Let me now turn to the World Trade Organization, and how it scores on the global governance scoreboard. Where does the World Trade Organization feature in the governance landscape? The main mission of the WTO is to regulate trade opening for the benefit of all people. To perform our task, we use four main channels. First, we offer a forum where our members negotiate international agreements which are then adopted. Second, we have monitoring and surveillance mechanisms — including peer reviews — of member states' actions. Third, we have a strong mechanism of adjudication and enforcement of our members' obligations. Finally, we have a mandate to ensure coherence with other international organizations, specifically in the field of capacity building for developing countries.

Ideological Underpinning of the WTO

The basic value underpinning the WTO is that market opening enhances global welfare. The multilateral trading system helps to increase economic efficiency — and it can also help reduce corruption and bad government. At the same time, the WTO also recognizes the importance of values other than trade efficiency via competition. While far from being a perfect model, the WTO is nevertheless a laboratory for harnessing globalization and contributing to the construction of a system of global governance.

In its Preamble, the WTO agreement recognizes sustainable development as one of its objectives. This calls for the consideration of fundamental values other than those of trade opening to include, for instance, the protection of the environment, development as well as social values. WTO members have the right to deviate from market-opening obligations to uphold certain values, such as protecting public morals, protecting the health of people or animals, or the conservation of natural resources. Moreover, pursuant to the WTO agreement, each member is free to determine the values to which it gives priority and the level of protection it deems adequate to achieve them.

There are areas of the WTO where, in my opinion, the organization scores as much as others in the global governance landscape; in other words, areas where it gets an "equal to" sign. But there are other areas where it gets a "greater than" or "less than" sign. Let me walk you through these.

Where the WTO Scores an "Equal to" Others

The WTO is equal to other institutions of global governance in being a quasi-universal, member-driven, organization. It is equal to others in being an inter-governmental organization, albeit one that tries, like others, to reach out to non-governmental actors. It is an organization that is also equal to others in having a Secretariat and it's Director-General, with very limited executive powers, that must remain neutral, and only act as facilitators or honest brokers of the international trade relations between sovereign states. And it is roughly equal to others, quite frankly, in poorly defining the role of the Director-General.

I must confess to you that my job description can be found nowhere in the WTO Agreement - nor that of my predecessors and nor will my successors find it! I have defined my own duties and responsibilities as I went on!

Now, in saying that the organization is "equal to others" in these respects, this is by no means a criticism. When it comes to the actors, the WTO is a classic international organization where governments are members. Many argue that the WTO has problems of accountability. I believe that accountability with our members is high.

The old club of the GATT has now given way to new groupings of states and coalitions. A new "G-7" (consisting of China, Brazil, India, the EU, Japan, Australia, the United States) has replaced the old QUAD (Canada, EU, Japan and the United States) on trade matters.

The proposals of the G-20 (another one!) — a WTO alliance of developing countries on agriculture — are now the benchmark in many areas of the WTO negotiations. There are also important new actors, such as the group of Asean countries or the African group.

Those who criticize small-format meetings — called "green room" meetings in our jargon — ignore the fact that, with around 160 members today, decisions to be taken by the entire membership need first to be prepared in smaller formats like committees in a parliament.

The WTO, to some extent, also embraces non-state actors, as complex as the interplay with these legitimate stakeholders of the Multilateral Trading System may be. Indeed, we have no mandate from our members to enlarge the WTO family beyond governmental representation. Yet, we have made efforts within the current system. We now have annual Public Fora open to all participants, states and non-states, and regular WTO briefings are held for civil society and parliamentarians.

Members of civil society can send in their views under the form of amicus curiae briefs to WTO adjudicating bodies (Panels and the Appellate Body) during dispute settlement procedures. Some hearings in ongoing proceedings have been open to the public.

I believe that in its relations with non-governmental actors, the WTO scores equally to the international organization average. It gives them room to express their views, and welcomes all interaction, even if there is scope to go further.

Where the WTO Scores a "Greater Than" Others

In numerous areas, in my opinion, the WTO scores better than others. First of all, the WTO has a stock of what I would call "hard rules;" disciplines and commitments. Its rulebook spans issues that range from agriculture, to industrial goods and services, all the way to trade in ideas and intellectual property rights. I often liken WTO disciplines to a "fishing net." Some of our nets are tight - even considered to be too tight by some - but some of our nets are wide, and do not catch the entire spectrum of uncompetitive business practices or trade distortions that are out there. Constant information sharing, discussion and negotiation by our members tighten that net.

The WTO provides a permanent forum for negotiations among its members concerning their multilateral trade relations. Global governance requires intense discussions and negotiations — and, from that perspective, the institutional structure of the WTO is well-developed. We have various levels and forms of decision-making that can be multi-stage and sequential. All in all, it ensures that issues brought to the WTO cannot simply be swept away.

I would say that the WTO stock of hard rules, its fishing net, make it the envy of many other organizations in fields such as the environment for instance, where others still dream of much greater discipline and control at the international level. Take the IMF for that matter, and its continued search for new disciplines on currency.

But the WTO also performs better than other international organizations in its monitoring/surveillance and enforcement mechanisms. There are numerous WTO committees and councils where members' legislation is subject to peer review. The WTO Trade Policy Review Mechanism enables the regular collective evaluation and appreciation of WTO members’ trade policies and practices and their impact on the functioning of the multilateral trading system. In fact, at the Copenhagen Climate Summit a few years back, President Obama proposed that the WTO Trade Policy Review Mechanism be replicated in a climate governance context.

Building global governance is a gradual process, involving changes to longstanding practices, entrenched interests, cultural habits and social norms and values. Through greater transparency and understanding of trade policies, the WTO review mechanism contributes to improved adherence by all members to the rules, disciplines and commitments of the organization.

The ongoing negotiations taking place today in the WTO have reinforced this surveillance in the crucial areas of regional trade agreements. The WTO also hosts a monitoring forum on the Aid-for-Trade that is provided bilaterally, regionally and multilaterally to developing countries to assist them in trade capacity building.

In the WTO, the non-observance of the rules may give rise to litigation — and the litigants are bound to accept the decision of panels or the Appellate Body. And there is no doubt, that this where the WTO vastly outperforms other international organizations.

The strength of the WTO dispute settlement mechanism, its binding nature, and severe consequences it creates for non-compliance, not only make it the "crown jewel" of the organization as some have called it, but the crown jewel of the international system. When I speak to my friend and colleague, Achim Steiner, the head of the United Nations Environment Program, he tells me that a similar system in the environmental sphere remains, unfortunately, a distant dream.

Where the WTO Scores a "Less Than" Others

So where does the WTO score less than others? The WTO is a “consensus” based organization as many of you know. With its total of 159 members, the WTO decides when all members agree to decide - essentially! The idea behind this is to try to balance the interests of the big and the small, the rich and the poor. But this inclusiveness in decision making has a cost; it costs the organization both time and effort and often prevents finality from being reached to the many issues under discussion.

We must also remember that WTO rules, and any changes that are made to those rules through rounds of trade negotiations, must be ratified by Parliaments. A process which also takes time to run its course. Consensus, there is no doubt, though, brings legitimacy and so does parliamentary scrutiny.

Consensus-based rule-making in the WTO, when coupled with "bottom-up" approaches to decision-making, and limited Secretariat and Director-General powers, sometimes cripples the organization. In a number of other international organizations, the Secretariat plays a bigger role in leveraging its experience while remaining neutral. It has a "right of initiative;" in other words, the capacity to table proposals to facilitate negotiations and to broker compromises. In the WTO, that role is virtually non-existent, and when coupled with the need for consensus, can make it significantly more difficult to generate expert solutions to problems. In that sense, the WTO falls below the international benchmark.

A study of the role and powers of the various Secretariats and heads of international organizations would actually be very revealing, and I would strongly encourage that a study of this nature be done at the international to trigger discussion and reform.

I have myself looked at the issue, in particular at the "right of initiative" that I mentioned before, of Secretariats and their heads. The situation differs markedly form one international organization to another. The Secretary General of the United Nations and the head of the International Labour Organization enjoy that right, for instance, with various conditions. In the WTO, no such right is enshrined in its constitution, and when/if the head of the organization or its Secretariat advance their views, they take enormous risks in doing so. Countries prefer to tighten the leash on the powers they devolve out of sovereignty concerns, but in so doing, they imperil the functioning and even the survival of the very institutions that they worked so hard to create. In my view, his issue cries out for attention and reform.

Conclusion

Ladies and gentlemen, to conclude, globalization today is posing a serious challenge for our democracies; and our governance systems must respond to it. If our citizens feel that the global problems are insoluble, if they feel they are out of reach, this will risk emasculating our democracies.

The same will be true if our citizens see that global problems can be addressed but they have no influence on the result.

Today, more than ever, our governance systems, at whatever level they may by, must provide citizens with avenues for shaping tomorrow's world, the one they want their children and grandchildren to inherit.

So where is the world headed? Towards more globalization, not less. Technology, the engine of globalization, does not move backwards. We are headed towards deeper integration, wider cooperation, an even greater sharing of responsibilities and interests.

Governing this globalized world can be messy and frustrating. But the fiction that there is an alternative is naïve and dangerous. Naïve because it ignores that we are becoming more — not less — dependent on one another. Dangerous because it risks plunging us back to our divided past — with all of its conflicts and tragedies.

We must work towards a global governance architecture that allows different international organization to borrow from each other the governance systems that work. That teach each other what pitfalls to avoid. The WTO has a little to teach, but also much to borrow.

We must also work towards a system of global governance that enshrines the concept of hard and enforceable law, that respects the principle of subsidiarity, that fosters greater coherence, that takes international issues as close as possible to "home" for each and every citizen amongst us. It must be based on values that can be shared across civilizations, cultures and religions. In sum, we need more solid governance systems, and less liquid and gaseous ones.

With this, I thank you for your attention, and would like to wish you a fruitful academic year.

Opinions voiced by Global Minds do not necessarily reflect the opinions of The Global Journal.

Original Source: WTO

At the Crossroads of Public Health, Intellectual Property and Trade

2013-02-06T11:21:30Z

For the first time, the three global institutions dealing with health, intellectual property and trade have pooled their expertise on a study of policies needed to advance medical technologies and ensure they reach the people who need them most.

The book, Promoting Access to Medical Technologies and Innovation: Intersections Between Public Health, Intellectual Property and Trade was launched at the World Trade Organization (WTO) in Geneva on 5 February, by the heads of the three bodies. Former Swiss President, Ruth Dreifuss, who is also a former Chairperson of the World Health Organization's (WHO) Commission on Intellectual Property, Innovation and Public Health, chaired the event.

The goal of the study is ambitious, aiming to support governments – particularly in developing countries – that want to increase access to effective treatments while containing costs. A guide for policy-makers, academics and researchers, the book brings together a vast amount of analytical and factual material on medicines, technologies and innovation, in one concise volume.

“Promoting both medical innovation and access to the fruits of that innovation is indispensable for progress towards improved and more equitable health outcomes,” said Dreifuss. World Health Organization Director-General Dr Margaret Chan said the report “sets out a comprehensive and coherent inventory of legal instruments and policy options that can be drawn on to craft measures that meet national public health objectives.”

The purpose of a joint publication is to enhance the global understanding of health, including its trade and intellectual property dimensions, while providing policy-makers with sustainable solutions for effective health policies. The book looks at ways to tailor systems that encourage innovation, yielding new treatments for the diseases of the poor and ensuring sustainable and equitable access to these innovations. It also sets out the international policy framework, as well as the factors shaping that policy.

Much attention is paid to health challenges such as HIV/AIDS, malaria, tuberculosis and non-communicable diseases. The evolution of research and development as well as alternative ways of promoting innovation for neglected diseases are also explored. The study demonstrates how the way in which intellectual property rights such as patents and trademarks are obtained and managed determines access to medical technologies and innovation. Equally, trade rules (pricing policies, taxes and import duties on medicines, procurement, regulation, technology transfer, compulsory and voluntary licences) can either promote or hinder innovation and access to medicines.

While the study does not prescribe any way to deal with a country's particular health problems, it is a cutting-edge tool for decision-makers to face the evolving worldwide burden of disease. By explaining trade and intellectual property rules and their link to health in a global context to a non-specialist audience, the book unlocks complex global health problems. Ultimately, it delivers solutions to meet objectives such as the right to health and the United Nations’ Millennium Development Goals.

Photo on Frontpage © Health Poverty Action

Photo © Allied Healthcare Group

A Dictatorship’s Success Stories

2013-01-23T11:25:41Z

Aleksandr Lukashenko is resilient. The President of Belarus has stood firm against the European Union (EU) and its renewed political and economic sanctions in response to his increasingly autocratic rule. In six months, he has freed two political prisoners while a dozen remain in custody. On September 23, nation wide parliamentary elections ran smoothly in an atmosphere of total indifference from the great majority of the population. Russia, for its part, supports Belarus with financial subsidies, ready to buy out everything possible at discounted prices.

The village was still part of the Soviet Union when Yuri Chizh – today one of Belarus’ richest businessmen, with close links to President Aleksandr Lukashenko – preferred to run around in the neighboring forest rather than attend school. To get up to childhood mischief, he had to carefully avoid his family’s bright yellow home, which stood only a few meters between the school and the kolkhoz. At that time, it seems, the two intersecting streets of Sabali in Biarozovsky district, 250 kilometres south of Minsk, were full of life. Forty years later, while the petrified Soviet Brezhnev era has disappeared into history, the village has plunged into a kind of hibernation. The school has been dismantled, and families with children have fled to the cities. Most of the wooden houses lie empty – indeed, only 70 pensioners remain.

The kolkhoz holds on unconvincingly, with two or three old tractors languishing in a yard. The endless wet and flat countryside, dotted with familiar birch trees, has become noticeably sadder. The yellow house is slightly less colorful.

Chizh had to leave for Minsk relatively early, in order to commence studies in electronics at the Belarusian Polytechnical Institute. From then on, everything moved quickly. He had a chance to exercise his entrepreneurial skills during perestroika, and now heads a business empire based on the Triple holding, which reprocesses and exports oil products bought from Russia at discounted prices. Chizh has also diversified into civil engineering, construction, manufacturing, restaurants, food production and a network of hypermarkets – the Prostore chain. He has been especially prominent in media headlines in recent times for building the first luxury Kempinski hotel in central Minsk, just behind the Circus and near the unchanged Sovietera Gorki Park. Although associated with the Slovenian Riko Group in the context of that project, Chizh has failed, however, to escape the EU’s sanction list.

Blacklisted since March, Chizh is undoubtedly paying for his close links with Lukashenko, and, by implication, for his impressive success. Yet in compensation for the European punishment, his boss has just granted Chizh a 99-year concession over his native Sabali village. Essentially, this means that every single square inch of the land where he grew up ultimately belongs to him. After years of fruitful wanderings in the capital, the oligarch has returned home. He has brought with him an immense sponsorship project focused on building a large complex boasting a hotel, restaurant, ethno-museum and a host of other infrastructure. In theory, Sabali will benefit as a revitalized rural center. At the very least, the faded paintwork of the wooden houses will be refreshed.

Belarus is not devoid of successful private companies. Chizh’s Triple ranks among the leaders, but many others follow close behind. Alexander Moshensky’s Santa Impex for food – particularly seafood – processing, Pavel Topuzidis’ Tabak Invest, Alexander Shakutin’s Amkodor for road-building machinery, or Anatoly Ternavsky’s Univest-M group – with activities ranging from petrochemical exports to banking, restaurants and construction – have no reason to be ashamed. Among these business leaders, only Ternavsky has been the subject of EU sanctions. Notably, the other three have significant investments in neighboring European countries. The old Belarusian economic clichés of arms traders linked to rogue states (such as fellow oligarch Vladimir Peftiev – blacklisted) and manufacturers of heavy machinery have faded away. Now engaged in more conventional enterprises, most ‘normal’ Belarusian businesses owe their success to efficient and skilled CEOs, whose first talent is to maintain close, loyal and ‘friendly’ relations with their unique common business boss: Lukashenko. Ironically, in the few remaining post-Soviet dictatorships, the Marxist economic model has been reversed. Political superstructures today prevail over the base.

The new bourgeois class of Belarus, owners of the means of production, have been reduced to acting as presidential ‘wallet persons,’ or koshelki as they are nicknamed in Russian. They cannot even pretend to stand alone as independent partners or shareholders in the national wealth. Lukashenko usually considers these individuals as simple business managers tasked with implementing his instructions. Their dependence is as prodigious as their efforts to maintain the President’s confidence. Ternavsky, for instance, has been obliged to employ Lukashenko’s daughter-in-law, Anna. He also sponsors the Presidential Sport’s Club, headed by Dmitri Lukashenko, Alexander’s son and Anna’s husband. Meanwhile, Chizh seems to prefer playing ice hockey on the same team as the President. He cannot refuse to sponsor the cultural resuscitation of Belarus’ birch-dotted countryside in the south, and when, for mysterious reasons, several of his top managers were arrested, he remained silent. The new Christian cross presented recently to Sabali by a Polish historical society, commemorating the Polish-Belarusian insurrection against Tsarist Russia in 1863 – and which will hardly be a tourist attraction in the middle of the kolkhoz – has a poignant political meaning.

In Belarus, Lukashenko decides almost all matters. The 58-year old former state farm manager assumed power in 1994, and recently described himself in a widely publicized interview as “the last and only dictator in Europe.” Though most infamous internationally as a result of accusations of torture and other human rights abuses – often focused on opposition figures – his political choices also determine business strategies. Chizh may have willingly agreed to allocate some money to his childhood village so long as he could also run his business according to his own interests and economic rationale. Now on the EU sanctions list, he has fallen as collateral damage in the President’s acrimonious relations with Europe, entrapped within Belarusian diplomatic strategies.

To read the full report, subscribe or order a copy of The Global Journal.

By Laurent Vinatier

Photography courtesy of Alexander Vasukovich

UNCTAD: Call for Appointment of a Leader with Independent Thought

2013-01-17T17:44:10Z

Open letter to Secretary-General of the United Nations

Appointment of the next Secretary-General of UNCTAD

Dear Mr. Secretary-General,

Later this year, you will be nominating to the General Assembly your choice of the next Secretary-General of UNCTAD. The personal attributes of the chief executive of an international organisation are key factors affecting its performance and credibility. Thus the selection is crucial and for that, UNCTAD is no exception, especially at this time of global economic uncertainty.

We very strongly urge that the next Secretary-General of UNCTAD, in addition to all the necessary experience, knowledge and management abilities, should have in particular the capacity and courage for independent thought. It is this characteristic that has been the distinguishing factor among the eminent persons who have held the post over nearly 50 years of UNCTAD’s existence.

A demonstrated ability to provide strong and independent leadership to global analysis from a development perspective and to promote fresh thinking on trade and development issues is needed today more than ever. The world clamours for innovative economic thinking that charts a sustainable way out of the current crisis and that contributes to development and poverty reduction. We would regard the capacity to stimulate such thinking and to articulate the resulting policy approaches in the relevant forums as the single most important consideration when sifting among possible candidates in the requisite consultations with member States. The growing weight of developing countries in global matters requires an intellectually outstanding personality as the new leader of UNCTAD.

The undersigned comprise those from public life and academia who respect the work of UNCTAD in one area or another as well as former UN and UNCTAD staff members who remain committed to its ideals and values. We have an interest in the outcome of this matter, but no interest in a particular candidate. We all fervently believe in the value to the international community, particularly developing countries, of ensuring a strong and credible UNCTAD that serves to focus inter-governmental debates on how the workings of the global economy affect developing countries.

We are confident you will select that eminent person who best epitomizes the capacity and the courage for independent thought on trade and development.

John Burley & Khalil Hamdani

To read the full list of signatories, click here.

* This letter in no way engages any responsibility on part of any of the organisations with which any of the signatories are currently affiliated.

Opinions voiced by Global Minds do not necessarily reflect the opinions of The Global Journal.

Speaking Truth to European Powers

2012-09-04T14:20:07Z

An interview with George Papandreou, former Prime Minister of Greece, about debt, the challenge of structural reform, and governance in a time of crisis.

At what point did you realize that your European counterparts, beyond giving Greece money to pay back its debt to them, would take no further measures?

The Deauville summit between Merkel and Sarkozy was a clear turning point. Their decision concerning the future European Stability Mechanism (ESM) spooked the markets and creditors. It created a selffulfilling prophecy, as the new ESM would basically punish creditors in the future if they invested in highrisk countries; it pushed them to stop investment or hike the risk premium for these countries in the present. This created fear and it hit Greece first. While we were expecting to access the market in 2012, by May 2011 we all realized the markets were too afraid to invest in countries like Greece. And this had little to do with Greece’s performance. The markets simply did not trust the new system set up for the euro.

In fact, what happened after Deauville is that we created a rift in the Eurozone between low and higher risk countries. This divide has been growing ever since and is threatening to tear Europe apart. Up until then, Greece – at least until March 2011 – was the ‘poster boy’: the positive example of our efforts. In fact, Greece had been hailed in Brussels as a model to follow in terms of putting our house in order and making deep structural reforms. Up until then, there had been diligent preparation on behalf of all parties: the Greek government, the Greek people and the Troika. In Greece, the tide was turning in favor of complex issues such as tax collection and the reform agenda for our civil service. But Deauville created fear. Confidence in the market was consistently being eroded, pushed by a populist press full of doomsayers and fear mongers. This wasn’t just happening in Greece, it was happening all over Europe and around the world: Greece was the news every night on every major channel. The morale of the markets as well as the morale of the Greek people was undermined. There was a sense of inevitable failure: our difficult Odyssey suddenly seemed to become a Sisyphean task. But if we look at the facts, Greece had made major changes and improvements in a very short time – to say nothing of the unprecedented reduction of the deficit by 5 percent in one fiscal year.

It was, however, quite convenient for some EU members and the Troika to attribute this impasse in the markets solely to a lack of effort on Greece’s part: Greece soon became the easy scapegoat. This further de-legitimized the program among the European public and in the eyes of the Greek public. Not only were Greeks already feeling the pain - now they were also being told that they were failing. The markets, analysts and politicians then began to predict a default or an exit from the euro. Uncertainty is corrosive – more so than austerity. Uncertainty further undermined our efforts. This had profound effects on the economy. Lending, borrowing, consuming and investing simply slowed down almost to a halt. At the same time, people started to worry about their savings in euros and began pulling them out of the banks. This situation continues to the present day. Therefore, a program and a mechanism set up to protect Greece while it was reforming ended up not protecting Greece at all.

While we began the program in a climate of optimism – even dynamism – in a Greek society longing for change, we were overtaken by events beyond our control. A proud people making important sacrifices, we were now portrayed as lazy, incompetent and profligate: stereotypes and prejudice reigned rather than cool-headed analysis. This became offensive to the Greek people. It not only harmed the economy, it deepened the recession, and also undercut the acceptance of major reforms such as fighting against tax evasion. All the efforts we had put in place in the preceding 14 months were eroded. At this point, there was little understanding from a number of governments in the Union of the complexity and difficulties of the situation. Instead of solidarity – a word to be avoided – there was a greater push for more discipline. This was compounded by a new style of decision- making by France and Germany that avoided in-depth deliberation or technocratic examination, while sidelining the Commission. Once again, in unchartered waters, it was politically easy to put the onus on Greece. As I was battling for consensus between domestic and international political forces on reform intensity and the impact of austerity, I clearly understood and stated from the very beginning that Greece had a problem but was not the problem.

What is clear, more than two years after the crisis began, is that Greece is a victim of failings in the design and implementation of the common currency. Over the past two years, the Eurozone has made significant progress in fixing some of the structural flaws. Sadly, it has always been too little, too late. We have reached a make-or-break moment for the Eurozone. We must stop applying patchwork fixes and take immediate steps towards a deeper, more integrated union. We must stop avoiding the real issue, which is not simply to monitor our individual behavior, but to pool our resources as a community and to deal with the crisis at hand.

To read the full interview, subscribe or order a copy of The Global Journal.

by Jean-Christophe Nothias

Global Financial Crisis

2012-09-04T14:04:28Z

Why America Needs a Left: A Historical Argument, Eli Zaretsky, Polity, $19.95.

Eli Zaretsky’s Why America Needs a Left is a call to action to the young idealists of America in today’s crisis-ridden world. Traveling back into the history of America’s Left, Zaretsky argues that the Left is especially important in times of crisis, when the country’s identity must be redefined. Specifically, he cites the American Left’s role in defining the abolition of slavery in terms of racial equality and the New Deal in terms of social equality. At both points in America’s history, the country faced serious problems eventually leading to the Civil War and the Great Depression, respectively. Today, the US, like the rest of the world, faces another major crisis, the global financial crisis. According to Zaretsky, today’s problems are the result of neoliberal policies that began in the 1970s as a backlash to the counterculture of the 1960s. As inequality in the US continues to grow, Zaretsky calls upon the New Left, which formed in the 1960s, to rise again in order to help the country define a new identity based, once again, on equality. Disappointed with the failure of Barack Obama’s presidency to revive the Left, Zaretsky places his hopes on Occupy Wall Street. Whether this movement will bring about the return of the Left to American politics is yet to be seen. But in an increasingly globalized world still largely run by a single superpower, the revival of equality in American political discourse could help to decrease economic disparities. Why America Needs a Left is an interesting look into American history, which sheds light on contemporary problems and their possible solutions.

–K. Y.

Can Media Enhance Africa’s Development?

2012-07-11T17:29:28Z

When you think of Africa what comes to mind? Go ahead give it a go, and honestly say the first things that popped into your head. Your answers will probably cluster around the same topics and images – the obvious ones that have become representative of a continent that seems to lack borders, countries and identities. Issues in Africa are usually referred to as issues in Africa. Being country specific is optional. Could the African experience be unilateral? How did we get to cover Africa in such general terms?

Ernst & Young recently conducted the Africa Attractiveness Survey, in which they interviewed over 500 business leaders, with some doing business in Africa and others not. Their findings highlighted a significant perception gap between the two groups. Those not doing business on the continent had a largely pessimistic view of the prospects for doing so, while those already doing business there were confident in the region’s growth. The survey pointed to an attractiveness based on perception versus reality.

For the average person who has never ventured to Africa, their information is largely sourced from the news media. They gather images of poverty and war, which are the typical context in which Africa is discussed. The most obvious contributing factor is the presence of few news correspondents in the region. For a continent containing 54 countries, tracking every notable story is quite a feat for one individual. So the usual happens – the headlines tend to be the same, and you find a correspondent covering a story about Lagos from Dakar, a four-hour flight away. Newspapers around the world pick up stories from the Associated Press, which delivers a singular story told over and over again, and these shared headlines are rarely positive in nature.

In depth African coverage simply has not been a top priority for Western media. Individuals relate more easily to stories from their own communities, and media organizations take their lead from ratings. When it comes to Africa, the ratings seem to vote for stories of despair and neediness, creating the aforementioned perception gap. Without mainstream media providing a diverse source of information about the African continent, perceptions from the 1980s endure.

This redundant coverage reinforces the negative images of Africa that persist globally. Unless people visit the continent for themselves, they are exposed only to a piece of the truth. When that truth is all negative, there is even less of a desire to explore the region. Unfortunately, this perception of Africa is not limited to the general public, but has infected potential employers that could otherwise invest locally. The emphasis on investment is important, as investment, not aid, will help turn the continent around. Foreign direct investment (FDI) in Africa is growing, and arguably yields the highest returns. It has also been responsible for the creation of over one billion jobs. Intra-African investment has also increased over the past ten years. These factors, along with the discovery of natural resources, have been responsible for the growth of African economies, with six of the fastest growing economies globally presently found on the continent.

Have Western media experimented in including more diverse contexts to support African coverage? Could this have an effect on wider perceptions? Perhaps by reporting at a country specific level, media could present a clearer picture of the climate of individual states that may not be so apparent when all countries are lumped into a narrative of war and unrest. By lending more of an identity to the countries that make up the African continent, this could provide deeper insights for the reluctant investor.

The good news is that serious African media sites are creeping up in the wings and Africans are on a mission to tell their own story. Sites like AllAfrica.com and Sahara Reporters are not only reporting on the issues that plague the continent, but are celebrating successes too. These outlets also provide insight into African business, from large corporate entities to the grass roots. The idea is to present a more complete picture – for the global community to gain a better understanding of the continent and spot opportunities, leading to investment and eventually job creation. The voices of these outlets need to be louder, and made more relevant to the general public outside of the African Diaspora. They need to gain a place of relevance in the wider international news media, as Al-Jazeera has done for itself in becoming the voice of the Middle East. Western media could take a cue from these African outlets as they are the more prevalent, despite the world still being wholly reliant on Western media for African coverage.

Africa is not the most typical region in which to do business. Business owners have to operate on a country specific basis, and think more about the ‘hows’ of doing business in Africa. The ripple effect, however, is worth investigating further. As already noted, FDI has been directly linked to the creation of one billion jobs; further investment would only increase the figure. In this theory of how Africa can continue to grow, African governments cannot be removed. Regardless of how Africa is covered, government is still at the center of what will ultimately make Africa an attractive place to invest. Governments need to be held responsible for creating a stable environment for their citizens and foreigners to do business. They need to be held accountable for curbing corruption, securing their countries, and creating infrastructure for increased productivity. Africa’s development hinges on the effectiveness of the public and private sectors, and each sector needs to hold the other accountable for Africa’s rise. Media could foster the growth of this investment by being more specific in their coverage, and making diverse African coverage a priority.

Opinions voiced by Global Minds do not necessarily reflect the opinions of The Global Journal.

Maybe Not Buying But...

2012-07-09T14:49:15Z

Is China Buying the World?, by Peter Nolan, Polity Press, €19.90, $17.95.

China has become the world’s second biggest economy and its largest exporter, and is now getting close to becoming the foremost importer as well. It possesses the world’s largest foreign exchange reserves and has 29 companies in the FT 500 list of the world’s largest companies. It is now competing to become the most prolific generator of new patents. China’s ‘rise’ is preoccupying the world.

In this short book, Peter Nolan – one of the leading international experts on China and the global economy – probes behind the media rhetoric and contests the idea that China is buying the world. Since the 1970s the global business revolution has resulted in an unprecedented degree of industrial concentration. Giant firms from high-income countries with leading technologies and brands have greatly increased their investments in developing countries, with China at the forefront. Multinational companies account for over two-thirds of China’s high technology output and over 90 percent of its high technology exports. Global firms are pressing China hard to be permitted to increase their presence without restraints. Not an easy task.

In contrast, Chinese firms have a negligible presence in the high-income countries – in other words, Nolan thinks that we are “inside them” but they are not yet “inside us.” China’s seventyodd ‘national champion’ firms are protected by the government through state ownership and other support measures. They are in industries such as banking, metals, mining, oil, power, construction, transport, and telecommunications, which tend to make use of high technology products rather than producing these items themselves. Their growth has been based on the rapidly expanding home market. China has been unsuccessful, so far, in its efforts to nurture a group of globally competitive firms with leading global technologies and brands. Whether it will be successful in the future is an open question. The same question applies to its rising currency.

Nolan’s book is a balanced and very honest analysis. Looking at things from a distant perspective, he may be missing one point: the situation must be appreciated not only in terms of ownership or rankings as of today, but also in terms of dynamics and time-scale. In China, the short term is a 100 year period, whereas most of our politicians look at their watches every minute, anticipating the next election, and our business execs get stressed about the next quarterly report.

So far, China is doing much better than Russia, its neighboring oil-rich country, which is having trouble transforming its black gold into social advantage and improvement. China is betting on almost every piece of technology, know-how and land, in order to move forward, and, in many ways, its ability to make tough decisions for the long term is already placing it ahead of many developed countries. China may not buy the present world, but its future…? That’s for sure.

-J.C.N.

Occupy History

2012-07-09T10:57:11Z

Identifying lessons from the Great Depression is certainly wise. Yet, it was not on the macroeconomic front that Roosevelt won the election in 1936. Marc Flandreau looks at the ‘microeconomics’ from the same period, with reference to contemporary policymaking.

In the middle of October 2011, making my way out of the Wall Street subway station in downtown Manhattan, I was met by a joyful crowd that did not quite match the local dress code. They were going from one passer-by to the other, asking directions for “the historical site of JP Morgan bank.” The young bankers in bespoke suits did not have a minute or a clue. As a financial historian, I certainly owed them directions to 23 Wall Street. As we traded jokes I learned they were part of “Occupy Wall Street” on their way to a rally that social websites had coordinated there.

This was an interesting coincidence. During a seminar delivered earlier that day, I had emphasized some aspects of the interwar crisis that involved finance, politics and symbols. I had spoken a lot of the House of Morgan, and how the New Deal financial Acts of the 1930s could be interpreted as a power fight between the Roosevelt Administration and Wall Street. This encounter with the “Occupy” people roaming the financial district in search of Morgans brought me an additional perspective; perspective that had been missing in my talk and that is missing in the conventional parallels currently being drawn between the Great Depression and the sub-prime crisis. It is this perspective I want to bring into the discussion.

Since the beginning of the Great Contraction of 2007, Great Depression era ‘lessons’ have inspired much economic policy action. It is fair to say that the first efforts at crisis fighting were devoted to addressing what was identified as a replica of 1929. Austere charts showing the parallel spiraling down of stock prices, trade and the economy after 1929 and after 2007 gained Tweeter currency. Thus policy makers have taken for granted that history matters. In fact, the extent to which economic discussion and debate have turned to historical precedent and analogy is astonishing. Macroeconomic ideas of the pumppriming variety – which had been tailored precisely in the aftermath of the Great Depression – were taken out from the closet where they were stored and adjusted to the fashion of the day. Government checkbooks were set wide open: not as wide open as some, such as Paul Krugman, would have wanted, but certainly wider than interwar policy makers dared, and wider than some modern constituencies support. This first round of history- inspired policy responses bought policy makers precious time, and ensured divergence between interwar and current economic curves: Economics 101 had saved the world.

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by Marc Flandreau