UNCTAD S-G calls for strong social contract to underpin globalization

Addressing the Berlin International Economic Congress on 7 March 2012, UNCTAD Secretary-General Supachai Panitchpakdi said an ever more complex international division of labour embedded in the phenomenon of globalization needs a strong social contract, with strong moral and political foundations, if the outcomes are to be inclusive and sustainable.​

He noted that over the past decade, building international bridges between the economic and social domains had unfortunately become increasingly difficult due to the lack of trust and shared goals among players in the global economy.

Expanding on themes in his Report to UNCTAD XIII, Dr. Supachai said trust in the ability to deliver on commitments and shape economies to the benefit of all are eroded when governments and international institutions appear weak or powerless in the face of market forces. Financial markets and institutions have become the masters rather than the servants of the real economy, distorting trade and investment, and heightening levels of inequality. An undue reliance on market forces, particularly in finance, has over the past three decades produced a more interconnected, more innovative but also more unbalanced world, he added.

UNCTAD Secretary-General Supachai Panitchpakdi

The UNCTAD Secretary-General warned of the dangers of muddling through and noted positive efforts such as those of the G-20 to build bridges between leading advanced and emerging economies in order to rebalance economies in a way that is timely, sustainable and just. However, he felt the scale of response needed is beyond the capacities of groups of countries and will also require collective action at the international level with a global new deal that lifts all boats and "a new global consensus on key values and principles that will promote sustainable economic activity" as called for by the 2009 G-20 summit in London.

In an address entitled "Economic Bridges: Aims, Incentives and Impacts", Dr. Supachai was of the opinion that if the inclusiveness agenda is to be taken seriously, building economic bridges cannot be undertaken in isolation from moral and political actions which meant extending rights of all citizens through greater voice and security and a greater sense of justice, thus reinforcing the sense of trust and confidence in institutions on which economic progress ultimately depends.