New UNCTAD S-G for global compact to address South concerns

UNCTAD Logo. Creative Commons

Washington DC, 15 Sep (D. Ravi Kanth) – The new Secretary-General of the UN Conference on Trade and Development (UNCTAD), Ms Rebeca Grynspan, intends to bring to the global centre-stage the escalating economic and social problems of the developing and least-developed countries stemming from the COVID-19 pandemic.

Ms Grynspan, who took office on 13 September, said that UNCTAD must have a seat at the high table for deciding on the proposed new financial arrangements at the international financial bodies, as it is a body that articulates the concerns of the developing countries and LDCs.

Ms Grynspan signaled UNCTAD’s support for the TRIPS waiver at the WTO for ramping up the production of COVID-19 vaccines in developing countries.

She underscored the need for transfer of technology and know-how to countries in the Global South for producing the much-need vaccines.

The new SG highlighted the existing vaccine inequity and the need to provide more affordable access to vaccines to the poor.

Ms Grynspan mentioned that COVAX (COVID-19 Vaccines Global Access facility) will fall short by 25% in its target and therefore, there is a need for urgent action.

Launching UNCTAD’s flagship Trade and Development Report (TDR) 2021 in Geneva, Ms Grynspan briefly set out her priorities to address the “rising inequalities”, and “asymmetries” in the areas of economic and social development, where developing and poorest countries are being hit hard.

The TDR 2021 forecasts 5.3% global economic growth this year, the fastest in the last 50 years.

The main contributing factor for this somewhat impressive growth is largely due to the contribution of radical fiscal policy interventions that began in 2020, as well as the rapid roll-out of COVID-19 vaccines in the advanced countries, the report said.

However, developing and least-developed countries remain in a quagmire due to lack of fiscal and monetary space, which is easily available to the advanced countries in the North.

The TDR says that the economic recovery is “uneven” along regional, sectoral, and income lines.

It predicts growth deceleration during 2022, suggesting that it could be sharper if policy makers continue to follow business-as-usual policies based on deregulation and austerity.

The report expresses concern that the policy makers in advanced countries seem to be unaware and somewhat indifferent to the size of the shock being experienced by developing countries and LDCs.

Ms Grynspan has expressed grave concern that the developing countries and LDCs may not even recover in a balanced way from the continued health and economic crises stemming from the pandemic until 2024.

She said even if the economies of the developing and least-developed countries recover from the current crises, they could continue to face adverse social matrices.

“These widening gaps, both domestic and international, are a reminder that underlying conditions, if left in place, will make resilience and growth luxuries enjoyed by fewer and fewer privileged people,” she cautioned.

Moreover, “without bolder policies that reflect reinvigorated multilateralism, the post-pandemic recovery will lack equity, and fail to meet the challenges of our time,” Ms Grynspan said.

There are many other issues such as increasing disparities in the financial sector as well as in the real economy, suggesting that 40% of the IMF’s $650 billion allocation of Special Drawing Rights, could go to the G7 advanced countries.

Ms Grynspan called for a new financing arrangement in which UNCTAD has to be part of the discussions.

“The global recovery from the pandemic must reach beyond emergency spending and infrastructure investments to embrace a reinvigorated multilateral model for trade and development,” the new S-G said.

“Only concerned rethinking of priorities holds out hope of addressing the inequality and climate crises that have come to define our era,” she said.

As a former macro-economics professor in Costa Rica, Ms Grynspan has brought a breath of fresh air to UNCTAD that seems to have remained dormant over the past several years, said an analyst, who asked not to be quoted.

40TH ANNIVERSARY OF TDR

In his remarks, Mr Richard Kozul-Wright, Director of the UNCTAD Division on Globalization and Development Strategies, said the 40th anniversary of the TDR this year calls for celebration, as many things said in these reports have come true.

He said that “the pandemic has created an opportunity to rethink the core principles of international economic governance, a chance that was missed after the global financial crisis (in 2008).”

He argued that “in less than a year, wide-ranging policy initiatives in the United States have begun to effect concrete change in the case of infrastructure spending and expanded social protection, financed through more progressive taxation.”

“The next logical step is to take this approach to the multilateral level,” he said, pointing out that it will need much stronger backing from the advanced economies and the inclusion of developing country voices.

The biggest risk for the global economy, he suggested, is that a rebound in the North will divert attention from long-needed reforms without which developing countries will remain in a weak and vulnerable position.

After the WHO’s announcement of the COVID-19 pandemic last year, the world is waking up to the indispensable role of international cooperation in achieving economic resilience, he suggested.

The advanced economies turned 180 degrees by moving away from their austerity-driven economic policies during the pandemic, Mr Kozul-Wright argued.

He said the climate crisis is much closer now and the world needs a robust new Green Deal to address climate- related policies.

Mr Kozul-Wright called for debt relief and debt cancellation as the pandemic continued to wreak havoc in the developing and least-developed countries.

He said there are positives in the reform agenda being advanced by the Biden administration that need to be taken into consideration.

He said the world was remarkably unprepared for the crisis, suggesting that the asymmetries are big.

Mr Kozul-Wright said that the need of the hour is to strengthen the poverty alleviation programs in developing countries.

- Third World Network