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”: 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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