South Bulletin 61 Article

UNCTAD has an impressive record of being ahead of the curve in anticipating problems, including the debt and the financial crises and more importantly in putting forward proposals for resolving critical problems when they arose over the past two decades and more. 

Often, these analyses were different or even opposite to those of the prevailing orthodoxy, as represented by the IMF or World Bank.  And the proposals when they were made were seen as “out of the box.”  But within several years, these unorthodox proposals (or variations of them) were adopted by the mainstream organisations or became policies. 

Examples of these were provided by former UNCTAD chief economist, Dr Yilmaz Akyuz, at a press conference in Geneva on 11 April.  These include:

·  UNCTAD was the first organisation to argue for the need for debt relief in Latin America in the 1980s, several years before it became part of the official wisdom with the Brady Plan.

·  UNCTAD was the first organisation to argue in the early 1990s for the need for the relief of debt of poor countries to the Bretton Woods Institutions, something which was taboo at the time but later came to be accepted by the mainstream in the HIPC (Heavily Indebted Poor Countries) initiative.

·  UNCTAD was also the first to argue for orderly workout mechanisms for sovereign debt, more than a decade before it came to be put on the agenda of the IMF.

·  UNCTAD has been well ahead of the curve in predicting and analysing financial crises in emerging economies and recognising the need for reform of the international financial architecture and to manage international capital flows.

·  For many years, UNCTAD has been warning that instabilities and misalignments of the exchange rate non-system could become very disruptive for world trade and tried to draw attention to the lack of coherence between the trading and monetary systems in respect of multilateral disciplines.

This list can be added to, said Akyuz. This only shows that UNCTAD can provide useful insights that the mainstream institutions were not capable of.

“Now the major OECD governments are trying to silence the Secretariat once-and-for-all at a time when we need a broad-based,  participatory debate on the governance of international finance or even the governance of global economic system of the kind that the UN system allows is desperately needed. This will not do any good to anybody," he said. 

"Experience teaches us that progress tends to be slow and mistakes become too frequent and costly when dominant powers have little tolerance for diversity. And it is no wonder that yesterday's unyielding advocates of the Washington Consensus are now talking about ‘capitalism in crisis'", he added.

 Kanaga Raja, Editor of the SUNS Bulletin (from a report of SUNS, 13 April 2012)