Does UNCTAD get it (at last)?

For many years, the UN Con­fer­ence on Trade and Devel­op­ment (UNCTAD) has been a fount of anti-glob­al­ist, anti-cap­i­tal­ist and—not infrequently—anti-market rhetoric. It has railed, rather self-indul­gent­ly, on behalf of the devel­op­ing economies of the South against appar­ent­ly pow­er­ful but ill-defined giants such as the dis­crim­i­na­to­ry trade poli­cies of the North­ern (read OECD ) economies and their law­less storm-troop­ers, the trans-nation­al cor­po­ra­tions. A few years ago, when ex-Brazil­ian diplo­mat (and WTO Ambas­sador) Rubens Ricu­pero took over the top UNCTAD job, the orga­ni­za­tion start­ed to change its tune. It start­ed putting much more pro­fes­sion­al work behind its scep­ti­cism: issu­ing top-qual­i­ty reports on glob­al invest­ment trends and issues sur­round­ing trans-nation­al cor­po­ra­tions. Now, accord­ing to the Finan­cial Times, there is a new theme for its lat­est four-year glob­al event—to be held this week­end in Sao Paulo, Brazil: bq. Rep­re­sen­ta­tives, most­ly from devel­op­ing nations, will learn how to com­bat pover­ty by slash­ing cap­i­tal costs and meet­ing con­sumer pref­er­ences in wealthy nations. Forty years after its foun­da­tion, Unc­tad is preach­ing sup­ply-side eco­nom­ics. (“Finan­cial Times”:http://www.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1086445576145&p=1012571727102) It’s poten­tial­ly an ortho­dox posi­tion, if you read “sup­ply side” issues to mean poli­cies to attract invest­ment or sup­port entre­pre­neurs or spend­ing respon­si­bly on eco­nom­ic infra­struc­ture rather than hand­ing out road-build­ing con­tracts as polit­i­cal favours. There’s still a lot of wooly old-style rhetoric in UNCTAD’s claims that the poor­est devel­op­ing coun­tries are dis­crim­i­nat­ed against because they are com­modi­ties exporters. Some very rich coun­tries, includ­ing Aus­tralia, have grown rich on the back of com­modi­ties exports despite declin­ing terms of trade. With appro­pri­ate exchange poli­cies, low­er pro­tec­tion and good eco­nom­ic man­age­ment, there’s no rea­son why devel­op­ment should be hin­dered by a com­par­a­tive advan­tage in com­mod­i­ty pro­duc­tion.

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