unctad.org | Address at the Key Issues on the International Economic Agenda Seminar, International Institute for Trade and Development
Statement by Mr. Rubens Ricupero, Secretary-General of UNCTAD
Address at the Key Issues on the International Economic Agenda Seminar, International Institute for Trade and Development
20 Nov 2002

My good friends, Ambassador Manaspas Xuto, Executive Director of the Institute, and Dr. Kim of ESCAP; seminar participants:

Good afternoon. It is a source of great joy for me to return to this Institute: I have followed its creation from its conception two years ago here in Bangkok at UNCTAD X, when it was but a remote dream, to its birth today as a dream come true. I came here for the inauguration, but am especially pleased to be part of your first concrete undertaking - this seminar - and to see that the Institute is already helping us establish a link between UNCTAD in Geneva, which deals with global issues; ESCAP, which represents the United Nations system not only in Thailand but throughout Asia; and the Institute itself, which was created to show that development is an ongoing learning process.

The Institute has a strong vocation not only to train Thai nationals but to reach out to all the countries in the region and help them cope with problems of the international economy. I am particularly happy to see that vocation realized concretely. Of course, we should not forget the decisive role of the United Nations Development Programme (UNDP), whose presence in the field helps countries address development problems on their own terms and in accordance with their own needs and challenges.

I was invited to talk to you in a very formal setting about the key economic issues on the international agenda, but will instead focus on what we are facing right now. It has always been my habit to examine problems in the here and now - not only in the abstract, or in terms of what they might look like 15 years from now, but in concrete terms, as they appear to us today. Of course, the disadvantage of this approach is that it means we reflect on events that are still unfolding, without the benefit of hindsight.

Every person must do this for himself or herself, but when you look at the world as it appears today - and I´m referring particularly to economic matters - the first thing that comes to mind is that, since the events of September 11 - just over a year ago - political and security problems, and strategic considerations in general, are once again predominant in international relations. They predominate so much that it sometimes seems that the whole debate on globalization is gradually giving way to a different debate, one which covers the gamut of problems within the security framework, such as the implications of fighting international terrorism and how terrorism can be linked to other strategic problems, particularly in a region like yours, which does not have the institutionalized security arrangements that Europe has with NATO or that the Americas have with the Inter-American Mutual Assistance Treaty. Asia is perhaps one of the few world regions without a security arrangement covering all countries.

But my concern is less with the security problems than with their possible implications for development in general. There is, for example, a danger that if we focus almost exclusively on strategic or security concerns, we might overlook some important problems in the world economy or other crises in need of solution. When dealing with security problems, there is always a danger of viewing everything through the prism of one´s most pressing concerns. This is what happened during the Cold War, when development concerns were sometimes filtered through the Cold War prism, and when assistance was frequently given or withheld on the basis of extra-economic or political considerations. This risks becoming a problem again today, and we must be aware of it if we are to prevent its recurrence. I´m not saying there is any evidence of a strong trend of this kind, but it could materialize, so it´s a good thing to keep in mind.

The centrality of security concerns could also have an impact on what has been for many years the expansion of globalization trends in terms of the unification of space for economic transactions. You know there are many, many possible definitions of globalization, one of which is as a phenomenon where borders do not matter as much as they did in the past. That is why, for some analysts, the product of globalization is not so much the increase in cross-border transactions - whether in trade, investment, financial deals or even cultural exchange from one side of the border to the other - but the transborder aspect of the phenomenon, in that borders still exist but they no longer matter as much.

A very clear example of such transborder transactions is precisely what we are discussing in ESCAP this week: electronic commerce, and the use of the Internet and electronic means in general, to conduct transactions. It is possible to conduct transactions over the Internet without the knowledge of Governments. You can start and finish a deal and even deliver a product, as long as it is not a physical product, but an idea, a concept or a piece of software - entirely over the Internet, without being subject to any kind of government control. This raises unprecedented new possibilities for international transactions.

It was these possibilities that for many years constituted the most powerful force driving globalization. Globalization is the result of many, many different forces, including political changes like the end of the Cold War and of the bipolar world, but it is above all a historical and cultural phenomenon that is very much related to science and technology, particularly telecommunications. Telecommunications has been the driving force of globalization. Of course, this will continue to be the case. There should be no illusions that, because of changes in the security environment, these technological forces will no longer operate. The economic and technological forces driving globalization will continue to be there, but they are encountering more obstacles than before, precisely because of the security concerns.

As I said, during the golden days of globalization - that is, up until the mid-1990s or so, before the onset of the decade´s financial crises - there was a perhaps naïve belief that border controls would someday disappear. At the time, it was customary to say that border measures in trade were no longer the problem, that trade negotiations of the past had dealt with most of the obstacles that trade specialists used to call border measures - tariffs, quotas or other measures applied when merchandise arrives at the border and has to cross it. At the time, we used to say that the future would involve other issues, less material and less tangible in nature.

There was also an assumption that the nationality of a company no longer mattered. This is at the root of everything that has been written about transnational corporations, that their nationality or the location of their headquarters would no longer matter, that investment would become cosmopolitan by nature and that things would be increasingly liberalized. To some extent this has proved true and, I would venture to suggest, it will still be true in the future - but again, to some extent. Now, however, we are beginning to see some counter-forces appearing. This is partly the direct result of the concern with security problems, but partly the indirect influence of the resurgence of political problems, which lead to a sort of nationalistic attitude in the international economy. One example of the impact of the security concerns is the new measures we are seeing to combat terrorism, which also have a negative effect on trade, tourism and financial transactions.

I myself learned this morning, on arriving in Thailand, that there is great and justifiable concern in this country about the warnings issued by industrial countries against tourists coming to Thailand or South-East Asia as a result of the events in Bali. Even yesterday or the day before, there were warnings of this kind, issued both by Governments and by one international bank in particular. This is a very concrete example of the damaging impact that fears which are sometimes exaggerated, even in the absence of hard evidence, can have on a powerful industry.

Other examples have to do with trade in merchandise. One of the forces behind the enormous increase in trade was precisely the ease of conducting transactions. If you take the case of NAFTA, about 80 per cent of all the merchandise traded in this area is transported by trucks and depends very much on easy border crossings. But now those flows are being subjected to constant checks and security verifications, and the US is currently posting customs inspectors in a number of what they call "super ports" around the world, including Rotterdam, Hamburg and Le Havre, and I understand they will soon be posted somewhere in Thailand. This will require the installation of special equipment, as the basic idea is to do security checks on containers at their point of departure. But even those measures will cover only a small portion of all the merchandise flowing into the US, for instance.


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