UNCTAD agenda to include Third World issues

International financial architecture has become a buzzword in the last few years after the East currency meltdown and its contagion effect on several other countries but no concrete action has been taken so far.

This UNCTAD conference in its plan of action, committed itself to the reform of the global financial structure to prevent recurrence of currency crisis which kicked off an extended discussion on the wording in the plan on Friday night.

The reform of international financial institutions included enhancing of the early warning and response capabilities for dealing with the emergence and spread of financial crises. This would be done through the traditional means of relevant analysis from a development perspective.

Indian officials here expressed satisfaction over the outcome of the meeting and said it was a major step forward in moving towards financial stability.

India was first to demand a new international financial architecture after the Southeast Asian currency crisis and had circulated a note which had found wide acceptance.

The plan also called on UNCTAD to contribute to the achievement of coherence in the global economic policy mainly through analysis of the interdependence between trade, finance, technology and investment, and on the impact of such interdependence on development.

UNCTAD’s role in the reform of international financial architecture had been one of the most contentious issues, with some countries emphatic that it should have no say.

Farm subsidies, market access and good governance, which remained sticky issues till final and last meeting of the committee of the whole last night with developing and developed countries taking a confrontantionist posture, were ultimately resolved with suitable modifications.

Though India did not have any objection to the issue of good governance, several African countries had reservation about the para seven in the plan of action which referred to good governance and corruption.

Ultimately the paragraph was retained with suitable modifications to the satisfaction of Group of 77 developing countries including India.

The main objection India had was on food security and market access and the relevant paragraphs on agriculture and trade liberalisation were substantially diluted and modified to the satisfaction of India and other developing countries.

In the post-Seattle scenario, the plan of action is expected to act as “catalyst” to work towards the agenda of new round of trade negotiations for the WTO. Protection of human rights and fundamental freedoms, previously opposed by Myanmar and China, were also approved.

Developing countries wanted to pass strictures on developed nations over farm subsidies, but the text slightly toned down this aspect. It was, however, strong enough to reflect the developing countries’ concerns.

It now reads `farm subsidies can affect the relative competitive positions of countries and have distorting effect on developing countries.’

The plan called for improvements `on as broad and liberal a basis as possible’ of market access conditions for agricultural and industrial products of export interest to least developed countries (LDCs).

The 48 LDCs including Bangladesh are likely to benefit as unilateral action by industrialised nations to permit duty-free imports from these countries are expected to follow in the coming months.

The European Union has already offered market access to the LDCs for 99 per cent of their products, European Commissioner Poul Nielson said, adding the remaining one per cent concerned classically sensitive products that Southern Europeans `find hard to restructure.’