Liberalization and globalization: the issues at stake for the South and for UNCTAD

Executive Summary UNCTAD IX is taking place at an important historical juncture. The conclusion of the Uruguay Round negotiations and the establishment of the World Trade Organization have contributed to the emergence of a new world order in matters extending well beyond traditional trade matters. What the implications of the new order are for developing countries and how these should be addressed are central questions for UNCTAD IX. It is argued, particularly in the multilateral financial institutions, and within organizations of the developed countries, that the new system will be of immense benefit to the South and that developing countries should therefore hasten to integrate themselves fully into the world economy. On that basis, it is further argued that UNCTAD -- the UN body centrally concerned with trade and development and related matters -- should make its primary task one of helping to speed up such integration. Integration, it is suggested, should not be confined to opening up the economy to international trade, but also encompass foreign direct investment and capital flows. Moreover, this view asserts that the debate on development is basically over and that there is consensus that the best way to achieve development is to enhance the role of the market, while diminishing that of the state. The role of the latter should be confined to creating a suitable environment (including macro-economic policies) for private enterprise to flourish and competitive markets to function. This thesis, if correct, logically leads to the rather different agenda proposed for the future for UNCTAD as an international organization. Apart from "helping" developing countries to integrate more quickly and closely with the world economy, the proposed new agenda suggests that UNCTAD should concentrate largely on the least developed countries. By implication, it is proposed that the organization should no longer be a forum for North-South dialogue as it has been in the last three decades. Not should it deal with structural and systemic issues. This also is in part because it is believed that there no longer exists such a entity as the South.