UNCTAD PAST AND PRESENT: OUR NEXT FORTY YEARS by Rubens Ricupero Secretary-General of UNCTAD

12th Raú Prebisch Lecture UNCTAD Present: Forty Years Rubens Ricupero Secretary-General UNCTAD Geneva, 14 September 2004 1 fond Ramó árcano, Argentinean diplomat gentleman school, entitled autobiography. charming mixture humour, irony optimism, called Mis Primeros Ochenta ños -- Years. years UNCTAD existence -- reason , case, call volume launching today Forty Years. hand, counts forty years, fragment fleeting time hope . , repeat wrote preface years UNCTAD, evolving role forum intergovernmental deliberations, Celso Lafer, Minister Foreign Relations Brazil, called “ creative tension” GATT WTO, constant efforts bring perspective development trade negotiations. subjects developed preface , , refer today. preceded lecture series scholars great academic prestige. case. comments nature, personal reflections inspired Raú Prebisch’ teachings, capture changed changing reality shape UNCTAD’ work forty years, presumptuous. divide presentation parts: 1) lasting legacy Prebisch; 2) reality dealt intellectual challenges represented; 3) evolution international system significance development; 4) concluding remarks view essence development process. - Lasting Legacy Prebisch Raú Prebisch’ enduring legacy ethical commitment genuine development lift poverty world' marginalized excluded masses. guide struggle, left method, systematic critical attitude evaluated dominant theories paradigms light concrete, practical results context differences economic social structures underdeveloped societies. sort double “reality check” illustrated Raú Prebisch Lectures, delivered Palais des Nations 6 July 1982. describing begun working life economist Great Depression 1930s, : “ years great slump beginning Latin America movement intellectual emancipation consisted critical theories centres, attitude intellectual arrogance – theories great merits – realization deserved critical study. United Nations played big part critical inquiry led seek path development copying ; ponder realities situation meet economic, social moral requirements development – path equity”. lines : ethical social conscience development, indispensable reference reality – – critical attitude (note word “critical” appears times passage). 2 suggest lessons relevant today. forget, instance, wrote technical progress constituting essence development process, redress imbalances trade centre periphery order progress flow freely deterioration terms trade consequence imbalances, adoption industrialization policies correct , prescription strategy import substitution manufacture export recipe fighting trade gap – examples Prebisch’ themes centre stage current debates. , root themes find attitude “intellectual emancipation”, rejection intellectual dependence defined “ unconditional subordination centre-elaborated theories part circles periphery”. tempting apply Prebisch’ method critical inquiry Karl Marx’. Irrespective share Marx’ conclusions, method inseparable modern approach social sciences. Prebisch’ method unavoidable dealing development problems. Essential components attitude readiness change constant search renovation, evolution describes contribution book Pioneers Development: “ thinking development successive stages influence changing reality broadening experience”. text, intense personal experience marked intellectual history: “ started life young economist professor 1920s, firm believer neoclassical theories. , great crisis capitalism – Great Depression – forced question beliefs. beginning long period heresies, explore views development matters”. presenting comments Prebisch’ essay, Professor Jagdish . Bhagwati stresses: “ remarkable interacted economic political environment grown economist”. Shortly death 1986, Prebisch declared lectures, Medellí, Colombia, “ renew ideas imperative”. founding father UNCTAD man profoundly involved history times. strong, passionate convictions stopped attentive receptive history, recognizing signs times evolving growing . lasting legacies: innovative bold, mind eyes open facing problems . II – decipher nature changed lifetime. suggesting sufficient recall happened forty years order imagine forty bring. process, , identify patterns change, exist, contrary conclude clear, predetermined patterns, history remain domain unpredictable, unexpected, impossible--foresee. refer patterns hopeless sense individual, fragmented events. Fernand Braudel, intelligent Brazil, tells , stranded side dark dirty road Bahí hinterland, discovered 3 historical events fireflies tropical nights: shine show . needed discern road, identify structures change, century- long cycles longue duré, “ long duration”. , , lesson mind, moment UNCTAD created -- , 1964 1969, Prebisch’ term office -- catches eye final years phase fast growth economic history. period extending World War oil shocks 1970s, roughly 30 years French call les trente glorieuses, “ glorious thirties”, coincided reconstruction recovery European Asian economies suffered widespread destruction conflict. World output expanded rapidly. Economists Prebisch, busy calculating minimum rates economic growth successive United Nations Development Decades, engulfed exhilarating atmosphere capitalist expansion, granted. extent aware , short years , phase , return ; “ golden years” exception rule long evolution world economy sudden rapid growth, worrying phenomena appearance, high structural unemployment. concentrated Europe spread Japan. extravagant promises globalization 1990s, growth rates world economy disappointing. 2003, Bank International Settlements Basel asserted pattern international economy years unfulfilled expectations. United States economy reached stage needed continuous massive monetary fiscal stimuli avoid deflation post erratic unstable rates growth. Perceptions improved, face major macro-disequilibria US rest world, rash maintain solid path high, sustained expansion, euro zone Japan emerged long period slow growth. conclude Braudel suggested Le Temps du Monde years 1973-1974 signalled beginning downturn long trends century- long tendencies, started upturn 1896 facts confirmed pessimistic prophecy, find unenviable position witnessing long painful decline cycle grandchildren . truth, duration current phase sluggish, erratic growth proves shorter Braudel feared, consequences developing countries uncertainty experiencing undeniable mediocre growth period decades, countries, Asia, managed expand vigorously, due catching- potential instances, China, internal dynamics. , , Africa, LDCs , muddling . Latin America, dear Prebisch, day succeeded regaining dynamism displayed great Argentinean economist directed ECLAC 1950s 1960s, preparing adventure UNCTAD, unconsciously dreaming repeating worldwide performance crisis region origin. pattern emerge UNCTAD confronted initial stage emergence oil energy central lasting challenge 4 international economy. UNCTAD met time mid-1960s, time oil priced US$ 2 barrel, mineral water. paid attention appeared permanent situation. oil shocks 1970s, , world . Oil crises, constant volatility prices periodic threats shortages return haunt . irony fact concrete expression effort stabilize improve commodity prices managed survive, OPEC, destabilizing effect world development -- unreasonable seek stable, fairer prices oil, lack political part mighty achieve goal process international cooperation addressed predicament commodity producers poor countries. important structural lasting upheaval economic environment inspired UNCTAD’ creation President Nixon’ decisions 1971 1973 fundamentally alter original cornerstones Bretton Woods system, introducing currency flotation tha implied, worse. , making repetition worldwide scale Great Depression 1930s . point instability unpredictability increased result, entailing frequent resort competitive devaluation aggravating lack coherence monetary-financial system trade regime. unilateral, cavalier Bretton Woods inspiring principles cast captured phrase Nixon’ Secretary Treasury, John Connolly, dollar’ international impact: “ currency, problem”. add phrase relevance time US external deficit finance sucking 10% total savings world trade finance links US Asia influenced problem selective concentrating examples change share unusual characteristics. , -reaching consequences continue felt strongly day. , place decade UN conference trade development closely interrelated. purpose exhaustive simply suggest implied opening paragraph part lecture true -- predictable, discernible patterns change history. ideas suggestions Prebisch UNCTAD apparently accepted, implemented manner suggested. GSP, Generalized System Preferences, instance, depend unilateral choice granting Governments; , proposed binding agreement, selective coverage open manipulation political purposes selfish economic advantages. Prebisch’ key principles – reciprocity purely legal apparent real, expressing differences structure levels development advanced underdeveloped economies – imperfectly expressed Special Differential Treatment provisions, Part IV General Agreement, Enabling Clause. , commodity agreements price clauses, undermined influential powerful consuming countries. rightly claim early structural economic environment, implementation problems, altered basic challenges 5 development faced UNCTAD mid-1960s, adequacy policy recommendations offered. , , change conditions prospects international cooperation needed recommendations succeed. process altered consequence profound transformation effected evolution international system. III – Evolution evolution system undergone 1990 favoured solution grave outstanding international problems, notably political-strategical sphere. reasons , case economic problems general development . crumbling Berlin Wall 1989 , event symbolizes potential era bring deep ideological divisions cold war political consequences: division Berlin, Germany, Europe world hostile irreconcilable camps. Barriers -- physical, legal, political -- demolished , reunification cities, countries entire continent, enlargement European Union, bridging opposing sides Iron Curtain, concluding chapter happy . demise ideological conflict, “real socialism” Central Eastern Europe disintegration Soviet Union represented formidable thaw allowed frozen problems melt -- typical cold war conflicts, questions indirectly related . wall apartheid South Africa good apparently independent insoluble problem surprisingly peaceful solution propitious moment international relations peace appeared contagious. effects pacification guerrillas Central America; civil wars Cambodia, African countries torn conflict struggle independence; final defeat withdrawal Soviet forces Afghanistan. impetuous momentum allowed creation plurilateral coalition Gulf War cooperative efforts Bosnia Kosovo. condition movement rapid efficient problem- solving concentration power hands United States collapse Soviets bipolar system. deeper level, – appears rare historic phases international system significantly increases degree ideological homogeneity. expression growing homogeneity sharing common criterion legitimacy – representative pluralistic democracy – , rising convergence countries similar compatible principles political, economic social organization. trends reinforced preference multilateral solutions -minded partners previously intractable problems exacerbated ideological divergence confrontation. , political arena, internal logic trend favoured international cooperation, held true economic field. , ideological convergence form universal preference market basic organizational principle economy. problem miraculous capacity markets -regulation trouble accepting international cooperation impose limits undisciplined market forces correct market imperfections. , wrongly, kind cooperation viewed free-market advocates poor 6 substitute , complement , market; threat, aid. helps explain , era solution political problems, proven impossible mobilize international cooperation level solve economic challenges -- development, catastrophic monetary financial crises continue threaten countries. trends reinforced tendency international economic cooperation. , philosophical ethical sphere, demoralization weakening ideology socialism. helped pave removal political obstacles, deprived world individual countries powerful counterbalancing force free play greedy market influence social matters. pressure equitable treatment poor countries, fear communism attraction ideal; concern increasing inequality poverty society ruled ruthless competition. negative factor, political nature, conservative revolution Reagan Thatcher gave , authoritarian -, semblance legitimacy effort dismantle remnants welfare State legislation intended protect weak vulnerable. Emmanuel Levinas shortly died, demise socialism victory democracy: socialism solution problem social injustice -- -- socialism helped alive idea history sense direction, life senseless absurd. lost idea spiritual conquest. yesterday, knew history knew attach time. wander , disoriented, constantly , “ time ” longer. time, huge, powerful forces work, transforming fundamental dynamics human society. demographic transition driving massive migrations people South North. force, cultural nature, scientific revolution treatment information extraordinary achievements technology satellites, cell phones, telecommunications, computers software. typically Schumpeterian , gave strong push productivity renewed vitality -confidence capitalism, quintessence, American capitalism. Helped enormously political demolition ideological barriers, technological innovations telecommunications electronics combined role transnational corporations create incarnation globalization. utterly simplistic reduce globalization economic dimension. , contrary, macro-phenomenon historic significance broad comprehensive character, encompassing, , political, cultural, scientific demographic aspects. essence, expresses acceleration trend began gathering momentum Renaissance, great maritime voyages discovery exploitation: unification markets planetary space mutual knowledge cross-fertilization exchanges branches human civilization lived isolation , extreme cases, existence long . forces contributing acceleration, doubt decisive making communications easier, quicker cheaper. 7 spectacular manifestations outsourcing, opening possibility people India, , offer provide services personal nature distances thousands miles. coincidence period witnessing -emergence China India, accomplished -Western civilizations, long time overshadowed political economic rise West. Professor Angus Maddison shown quantitative measurement economic achievements historical perspective, Asian giants accounted greater share pre- industrial output world economy. late 1820, effects Industrial Revolution fully felt, China accounted world' gross domestic product. regard, compare India China giant whales long, deep dive ocean world economy. resurfacing, surprise big waves. important , , people surf crest waves. phenomenon magnitude complexity requires unprecedented level high-quality international cooperation adequate governance. , excessive reliance alleged "-regulatory" capacity market threw problem mercy unbridled competition gigantic corporations sake profits shareholder , deplorable consequences . dominant prejudice caused permanent damage pathetic inability international community attenuate frequency destructive power monetary financial crises tha , Bank International Settlements , pose threat survival current system international payments. terrorist attacks September 11, 2001, brought brutal post-cold war era began demolition Berlin Wall, sombre period ushered renewed predominance security political-military priorities economic considerations. initial result continuous reinforcement State indisputable prevalence market civil society. internal logic process turned upside . , -defence, obsession security absolute , cost pre-emptive attacks, search international political cooperation - option, option . pendulum swinging heterogeneity dissent, allies. Walls, separation fences, barriers erected . face mortal danger posed murderous monstrous variety international terrorism, impelled utter contempt sacred values lives mothers children, difficult understand -reliance, prevailed market fundamentalism, spread political arena. net paradoxical result consensus-building, international cooperation multilateral solutions common problems difficult time vitally needed unavoidable . chances survival ideal humanistic civilization, inspired solidarity enlightenment reason, depend capacity solve intricate equation. expressed attitude dark times Antonio Gramsci, letter brother Carlo prison cell, , , die, murderous hands enemies: “… conditions … man reached maximum degree stoic serenity acquired deep conviction man source moral forces, depends , energy, … ( ) despair, fall 8 vulgar trivial dispositions called pessimism optimism. present disposition synthesizes sentiments overcomes : pessimist intelligence optimist ”. days, war -- ultima ratio – ordinary commonplace, hearing strategists call “ fog war”. situations Iraq war tragic aftermath, expression explain unexpected unexplainable, uncertainty, confusion battlefield, surprising turn apparently planned events. , “fog war” means confined battles wars. field, hard find examples careful predictions thoughtful analysis economic commercial problems development easily turned planned, equally unexpected outcomes. , instance, future multilateral trading system. years years told system inexorably breaking regional blocs, centred EU, US Japan, currency. , shape eyes : huge bloc formed China, Japan Asian countries hand, US ; heterogeneous group, Asians export gigantic “black hole” American market finance enormous external deficit purchase dollars Treasury bonds. remarked, today groups developing economies: finance growth exports United States, rest, legion countries plagued Prebisch’ infamous “trade gap”, forced finance debt. coherence trade financial systems, closest . manufacture exports South. share manufactures developing countries' exports grew steadily, 20% exports 1980 70% 2000. impossible dream time UNCTAD conference 1964. problem remarkable performance concentrated dozen countries, Asian, cases result integration production distribution systems transnational corporations. downside entering markets international production system uncertainty , companies easily relocate restructure activities – true country concerned contributes marginally added cheap labour. UNCTAD demonstrated, countries managed acquire capability needed add -- simply assemble imported inputs -- secure long-term benefits involvement international production system, increasing share world trade time increase share world manufacturing added. foreseen 1964, production understood essentially endogenous national process. Final Act UNCTAD called “ modified international division labour, rational equitable accompanied adjustments world production trade”. extent international division labour emerged fit exhortation, extent result product “fog war” needed major, earthshaking change entered ' calculations, China. remotely conceivable 1964, 9 precisely eve violent radical phases Chinese Cultural Revolution, imagine generation , country emerge leading trading countries world, large extent transnational corporations’ exports US market obvious lesson examples rarely happen supposed happen, happen . time, totally unexpected form, crushed irrelevance completely surprising development -- phenomenon China. problem lies inability “ fog development” predict economic world future, inability deal “unexpected” events suddenly emerge fog divert desired trajectory. proud UNCTAD met challenge posed unexpected events trends , sound analysis Trade Development Report, “de-construct”, call , mechanisms explains increase manufactures exports ultimately prove futile illusion. TDR equally capable conveying early warning, early 1990, mortal dangers financial globalization, proceeding series memorable reports offer comprehensive profound set analyses policy options deal monetary financial crises. , systematic monitoring international movements foreign direct investment growing role TNCs carried World Investment Report deserved attention, interest applause received wide audience. true careful efforts clarify explain complex issues related investment negotiations, embodied series monographs constitute indispensable guide policy makers, pioneering work investment policy reviews preparation investment guides LDCs. regard LDCs, category exist formally time UNCTAD , team responsible Developed Countries Report carrying , penetrating analytical capacity admirable devotion poorest poor, daunting task filling void previous approaches development economics. effect, LDC Report shown , stage underdevelopment, LDC condition trap -- poverty trap -- difficult escape; , Prebisch’ language, LDCs belong category structurally deserving special efforts. encouraged findings research poverty issues LDCs complex elusive links trade poverty. deliberately limited choice examples oldest analytical reports UNCTAD, difficult compile long list similar cases work Divisions branches organization. Paraphrasing statement outstanding Minister Foreign Relations Brazil Chairman -77 UNCTAD II Delhi, Antonio Francisco Azeredo da Silveira, feel confident close part lecture “UNCTAD' tradition capacity continuous renovation”. 10 IV – Conclusions clear exposition, presumptuous idea manage extract clue future holds store -- futile, foolish hope. discernible patterns succession events lead path. Chesterton exercising love paradox “History teaches History teaches ”. . wiser History intelligible, comprehensible, hidden, predetermined meaning, give meaning rational action. starting point action realization , surprising events years – undoubtedly positive nature – social concerns Prebisch attached paramount importance remain major concerns day. growing 1980s, middle “ crisis capitalism”, grew strongly committed equity solidarity societies. contribution Pioneers Development, affirms time “ search synthesis socialism genuine economic liberalism, restore essential philosophic unity economic liberalism political liberalism”. absence -depth transformation system, feared inevitable collapse democratic variety capitalism replacement authoritarian regimes, countries periphery. discussants paper, Professor Albert Fishlow, argued frustrations dictatorships Chile Argentina evident source concern. Nowadays feel anguish distress oppression depressing, revolting developments, occurred Caucasus, mark alarming stage march folly, annihilation human values. nihilistic destruction innocent lives, appalling menace civilization culture, fought strength democratic society legitimate power emanate highest source legitimacy world, Charter United Nations. upheld Charter ' duty, duty loyalty United Nations ideal foundation work lives. words Professor Thomas . Franck, President American Society International Law, apply : “, , proper role lawyer” – read, “ international civil servant” “Surely, stand tall rule law. entails -evident. policy makers society’ benefit skirt law, lawyer speak longer-term costs. politicians seek bend law, lawyers insist broken . faction power subvert rule law, lawyer defend risk personal advancement safety. powerful tempted discard law, lawyer , omnipotence wanes, law. Lawyers called traitors. traitors calling.” 11 centuries , age intolerance religious atrocities, Erasmus refused approve call crusade Turks feared tha , fighting Turks, Christians forget Gospel behave Turks fighting. Erasmus embodied -fashioned values indispensable today time: tolerance, enlightened reason, healthy scepticism dogmatic -righteous certainties. phrase era : “Lutherus asseverat, Erasmus dubitat”. , lost casualty times , quote Yeats, “ lack convictions, worst full passionate intensity”: sense measure perspective, balanced judgement, discretio Latin, equilibrium -- queen virtues, master Saint Benedict. resist temptation reciting verses “ Coming”, Yeats astonishing prophetic power great poets experiencing daily; applies events witnessing. Yeats wrote: “ fall ; centre hold; Mere anarchy loosed world, blood-dimmed tide loosed, ceremony innocence drowned.” true, true -- Dickens wrote opening Tale Cities, Carlos quoted UNCTAD secretariat report preparation UNCTAD XI -- apply historical period time French Revolution: “ times, worst times, age wisdom, age foolishness, epoch belief, epoch incredulity, season Light, season Darkness, spring hope, winter despair”. contrasts light shadow present today age Dickens. considerable degree depends , efforts, children live spring hope winter despair. brings central concern responsibility UNCTAD: development. , avoid repetition happened cold war: relegate development burner, , subordinate legitimate search security, worse, ideological prejudices. conclusion presentation, attempt prescribe detail priorities UNCTAD' work uncertain future . time analytical, time concentrate essence . , essential themes structure encompass innumerable activities organization. subject conference ã Paulo: contribute greater coherence external economic environment national efforts , context, ensure monetary- financial system hand, trade system , reinforce undermine . task faced sustained effort enlightened international cooperation. 12 , living edge dangerous economic situation trade growth hinge precarious dependence major source global demand. unilateral dependence aggravated major macroeconomic disequilibria principal engine growth – US economy – great industrial powers, good part rest world. conditions, comfort witnessing extraordinary rise China , lesser extent, India Asian economies general. absence distributed growth , face resilient high structural unemployment industrial countries, rise perceived threat, reason hope opportunity, . days , speaking Beijing forum issue, problem growth China, developed countries, LDCs, Africa, Latin America, Europe Japan. reminded audience TDR years . analogous situation 1950s 1960s, Japan Italy equally increasing manufacture exports world high rate, economic growth widespread – remember "glorious thirties" – full employment reality. Countries Germany France trouble accommodating Japan Italy growing fast import surplus labour, Italy. , conditions accommodating China’ rise manufactures exports India’ role outsourcing services propitious. solution, , lies reducing China’ growth accelerating growth rest world. goal require, sooner , correction present disequilibria. , central concern UNCTAD ethical human dimensions development. precisely economist, essence development economic realm. quoted definition development, proposed Jacques Maritain, “ promotion man man ”. words, universe: men, "tous les hommes”, women men exception, equal opportunities. Man , “tout ’homme”, man integrality, economic equally symbolic cultural . Promotion concept close education; promote elevate. strongly development continuous learning process stop. pattern history, certainty evolve direction growing complexity. final analysis, develop learn manage increasingly complex societies, exclusively economic terms, terms equity, human rights, environmental protection, gender equality; sum, legacy Enlightenment, hope purely human perspective transforming depth quality relations human beings. guarantee, , peace , Teilhard de Chardin , “tout ce qui ’éève, converge” -- , rises converges. guiding inspiration meeting challenge type development Bertrand Russell’ introduction autobiography. read years quoting memory, mistaken, wrote life 13 governed passions: longing love, search knowledge unbearable pity suffering mankind. dwell . words compassion. Human suffering ocean islands, dealing development, concentrate poverty, destitution, inequality. present addressed closing ceremony UNCTAD XI ã Paulo, patience repeat verses William Blake , , poignant expression mystery inequality share suffering falls human beings. , “Auguries Innocence”: “ night morn misery born morn night born sweet delight born sweet delight born endless night”. understand suffering world. , , alleviate suffering, priority respect poorest poor -- preferred option UNCTAD. closing long speech, feel ways resembles experience closing stage working life, today. life , leave feeling complete task, finish generous people worked . depended appears incomplete, unfinished, idea started. reminds final scene Decameron. Pasolini portrays successive episodes book supposed happened, Naples, mother’ home. time, intervals episodes, shows Giotto paints fresco ceiling Naples’ famous churches. describes agony artistic creation, long periods passivity - doubt, interrupted fits furious energy, middle night, torchlight. episode recounted, painter puts final touch fresco. friars ring bells church fills hundreds people possessed unequalled capacity colour design medieval Renaissance Italian boast intensity. celebration joy, Giotto-Pasolini join general enthusiasm, sighing resignation: “ exists dreams, work art beautiful reality". . UNCTAD Present: Forty Years - Lasting Legacy Prebisch II – III – Evolution