UNCTAD´s flagship Trade and Development Report, which now has been issued annually for more than 30 years, foresaw the mounting influence of globalization on the economies of developing countries, warned of the dangers of unregulated financial flows and volatile exchange rates, and consistently argued – against the free-market orthodoxy of the 1980s and 1990s – that governments have important roles to play in helping national economies achieve steady, long-term progress.
Those are among the conclusions of a publication launched today titled Trade and Development Report, 1981-2011: Three Decades of Thinking Development, which traces key issues relating to the global economy and development strategies addressed in UNCTAD´s influential flagship report since 1981.
The publication was presented at a lunchtime event on the third day of the UNCTAD XIII quadrennial conference being staged through 26 April in Doha, Qatar. The theme of the conference is “development-centered globalization,” and the publication highlights the relevance of the Trade and Development Report (TDR) in enlarging the spectrum of the debate on how the world’s poorer countries can harness global forces to achieve economic progress and higher living standards for their populations.
As Supachai Panitchpakdi, Secretary-General of UNCTAD notes in the preface of the publication: "The Trade and Development Report (TDR), launched as a debt crisis was about to break, became UNCTAD’s principal vehicle for offering an assessment of the evolving global situation and advancing alternative policy proposals. It is a testament to the quality of the research presented in the TDR that practically no other international agency warned countries such as Mexico or Thailand about the potential dangers of rapidly opening up their capital account, the possibility of middle-income countries becoming trapped in the low-value-added stages of international production networks, or the threat to economic and social stability from growing levels of inequality.”
As the world economy has undergone major changes since the inception of the TDR series in the early 1980s, UNCTAD economists recognize that "the raison d’être of the TDR remains valid: it continues to provide critical assessments of current economic developments and policy action, forward-looking analysis and evidence-based policy recommendations," Mr. Supachai contends.
The report has a reputation for providing ideas, opinions, proposals, and analytical approaches which differ from mainstream economic thinking. From a development perspective, the rigorous and independent policy research of the TDR has remained consistent over the years in basing its analyses on the concept of global interdependence and on Keynesian macroeconomics. The active role of the State in economic development also has been a recurrent theme.
The first part of the 30-year review publication shows that the originality of the TDR has been rooted in the discussion of national policies and strategies in relation to the performance of the global economy and its institutions. Taking a novel approach to the prevailing discussion on development challenges and policies, the TDR abandoned the dichotomy between short-term macroeconomic issues and long-term development issues that was shaping "development economics" at the time. From the start, the TDR emphasized the importance of the external environment for development. In a way, it anticipated the notion of globalization.
The hallmark "holistic" view of the TDR on policies related to employment, trade, debt, and monetary, finance, and payment balances has been reflected in its analyses on the debt crisis of the 1980s, in its view of the problems created by conditionalities attached to structural-adjustment programmes of the international financial institutions, and in its warnings on the dangers for developing countries of opening to unregulated capital flows and increased exchange-rate instability. More recently, in examining the build up to -- and the macroeconomic impacts of -- the global economic and financial crisis, the report called attention to the weaknesses of international monetary and financial governance and to the deep inconsistencies among global trade, financial, and monetary policies.
The TDR has called for a balance between multilateral rules and actions and national policy autonomy, or "policy space" in economic matters -- a term coined by UNCTAD´s economists. This point of view has enlivened economic debate in recent years. In defending the need to address specific local needs and challenges, the report has been strongly critical of the "one-size-fits-all" approach to development policies often taken by international institutions.
The discussion of the role of the State in economic development, particularly in promoting capital formation for the diversification of economies, has been a recurrent aspect of the TDR. While taking a prudent attitude towards the merits of free markets -- distinct from that of other organizations -- the TDR has never intended to serve as an agent in favour of an "anti-market" ideology. Rather, the 30-year review publication claims, the TDR’s aim has been to promote a well-targeted pragmatism in policy-making. The concern is not "State vs. market" but effective policy vs. what it calls "market fundamentalism". Accordingly, the TDR has tried to help developing countries create what is sometimes called a "developmental State".
The second part of the 30-year review publication released today consists of a compilation of the contributions of experts to a panel discussion titled "Thinking Development: Three Decades of the Trade and Development Report held in Geneva on 20 February as a pre-conference event for UNCTAD XIII.
On this occasion, Rubens Ricupero, former Secretary-General of UNCTAD, portrayed the TDR as an "encyclopedia of development thought"; Jayati Ghosh, Professor at Jawaharlal Nerhu University of New Delhi, India, said she hoped “the very logical, nuanced and yet pragmatic economic perspective embodied in the TDRs" will become the mainstream way of thinking; and Faizel Ismail, Ambassador and Permanent Representative of South Africa to the World Trade Organization, said the TDR had successfully influenced development policy-making in his country. He gave as examples South Africa’s applications of the concepts of the “developmental State,” strategic integration, industrial policy, and policy space.