"The century is ending with failure to solve two major threats to a future with security: mass unemployment and growing inequality", UNCTAD Secretary-General Rubens Ricupero stated today in Geneva. Mr Ricupero was speaking during a high-level policy dialogue with the Heads of international financial and trade institutions, including the IMF and the World Bank, on "The role of employment and work in poverty eradication: the empowerment and advancement of women". This marked the opening of the annual session of the United Nations Economic and Social Council (5 - 30 July).
The more marginal groups in the labour force - the poor, the less educated, the young and women - had been the worst affected by the Asian crisis and were more likely to be long-term unemployed, he said. While there had been recoveries lately in some local stock markets, and currencies had stabilized, Mr. Ricupero warned that it would be "premature, and a sign of guilty complacency" to declare the crisis over without taking specific action to deal with its social and gender fallouts.
Analyzing the impact of globalization, the UNCTAD Secretary-General said this was an unfinished business, a work in progress". He pointed out that developing nations have strived hard, often at considerable cost, in recent years to integrate more closely into the world economy". However, they had all too often been confronted with deep-seated imbalances in economic power and systemic biases in the international trading and financial systems.
Projections of the gains for developing countries in terms of faster growth, greater employment opportunities and poverty alleviation had proved overly optimistic, he said. This had also been the case with the "extravagant predictions" regarding the impact of the Uruguay Round.
"The empirical record has been strikingly at odds with the promises", Mr. Ricupero observed, adding that economic growth in developing countries during the 1990s has accelerated above that of the 1980s but has remained well below the 5.7 per cent average registered during the 1970s".
For developing countries, as a general rule, the expansion of imports had not been matched by a corresponding increase in exports. This was particularly true for Latin America where the gap has averaged 4 percentage points. The notable exception was China, which, he pointed out, was not yet a member of the WTO.
"There is no denying that a combination of declines in terms of trade, losses of purchasing power of developing countries exports and ‘big bang’ liberalizations of trade and capital accounts have contributed significantly to this situation", Mr. Ricupero stressed.
The result was that, for many developing economies, the average trade deficit in the 1990s was higher than in the 1970s by almost 3 per cent of GDP while the average growth rate was lower by 2 per cent annually.
Faced with this situation the time has come to rethink our policies and responsibilities, Mr. Ricupero urged. Developing countries need to protect their policy autonomy if pragmatism is to prevail over ideology.
Although reform of the financial architecture had rightly been attracting most attention in recent months, efforts should now turn to restoring balance to the trading system. UNCTAD was actively contributing to a "positive", or pro-active, trade agenda for developing country negotiators in the upcoming set of trade negotiations. "This must be a truly development round", he said.
The central foci of a development round should be on industrial countries opening up their markets to developing countries where the latter had competitive advantages and on redressing the imbalance of past negotiations. Mr. Ricupero cited the example of Latin American exports to Europe. These had grown by only 29 per cent during the 1990s while Europe´s exports to that region had risen by 164 per cent. One reason for this disparity was European barriers in agriculture, a competitive Latin America sector; this explanation was suggested by the fact that Latin exports to markets other than Europe had increased by more than 120 per cent over the same period.
The panorama of protectionism in developed country markets was no better for industrial goods and commodities. Mr. Ricupero cited as an example the area of steel in which Awe are now witnessing what I personally consider the worst setback since the Uruguay Round: the return of the so-called ´voluntary´ export restraints, in other words, the comeback of managed trade.
"These are not ideological arguments, nor academic lectures about free trade of the type some are so fond of preaching. These are facts, hard, ugly facts that have to be overturned not by the end of a new trade round but now, immediately, if we are to encourage developing countries to persist in and even to further the path of liberalization", the UNCTAD Secretary-General stated.
"There is of course nothing wrong with trade liberalization", said Mr. Ricupero. However, this had to be achieved in "a gradual, equitable, balanced way". If this were realized, it might do wonders for poor people in general, in particular for disadvantaged groups like women, many of whom were playing an increasing role in export trade sectors in developing countries.
