Some UN agencies no longer equivocate on their assessment of the present global economic order—unequal, unjust and unsustainable. Nor do they equivocate on who are the culprits for the unjust and unequal economic order: World Bank, International Monetary Fund (IMF) and the Washington Consensus ideologues.
The UN Conference on Trade and Development, an agency established in the 1960s to help speed up industrial transformation in developing countries, did the above when they came up with their 2019 report, “Global Green New Deal.” It is probably the boldest report Unctad has published since the 1970s. Five decades ago, the hottest topic then among the Unctad member-states was how to establish a “new international economic order,” in order to complete the decolonization process for the newly independent countries from the three A continents—Asia, Africa and Latin America.
The report pointed out that the Bretton Woods twins—IMF and the World Bank—turned neoliberal in the 1970s and became promoters worldwide of the Thatcher-Reagan privatization counterrevolution. In short, the twins, which mark their 75th this year, abandoned their original Keynesian development orientation, notably the central role of government in directing the economy, strict regulation of speculative financial flows and public spending, to hasten growth and mop up unemployment.
The success model for the Keynesian development framework was the “New Deal” program of US President Franklin D. Roosevelt. The Roosevelt Administration arrested the 1929 to 1933 Great Depression in America through an unprecedented government-led social and economic mobilization to stimulate the depressed economy and give jobs to the unemployed, who numbered over one-fourth of the labor force. Instead of repressing workers’ rights, Roosevelt strengthened these rights by passing progressive labor laws recognizing their right to form unions, right to bargain collectively, and right to social security and other benefits. Instead of simply tightening the financial belt through a harsh program of austerity, the Roosevelt government launched massive infrastructure and job-creating programs through deficit spending.
Some of the New Deal programs turned out to be environmental and community oriented—rural electrification, construction of mains and sanitary sewerage systems, building of dams to control floods, planting of “shelter belt” of trees to tame the destructive dust bowls and development of park trails to combat forest fires. Clearly, Roosevelt’s New Deal economic recovery program had a green and social dimension.
Roosevelt’s green new deal is what Unctad is trying to replicate, this time on a global scale. Hence, the proposed “Global Green New Deal,” which is aimed at helping member-states also achieve the 2030 sustainable development goals. Both the GGND and SDGs cannot be realized if the present global order, which has caused financial turbulence (remember 1997 and 1998 Asian financial contagion and 2007 to 2010 global financial crisis), deepened inequality everywhere and has pushed the planet on the brink of a climate-change armageddon. Unctad, therefore, is proposing a rebuilding of “the rules of the global economy toward goals of coordinated stability, shared prosperity and environmental sustainability, while deliberately respecting the space for national policy sovereignty.”
The last item—space for sovereignty—means the WTO, international financial institutions and free-trade negotiators should respect the right of developing countries to develop at their pace and in accordance with their development priorities and realities. This is the meaning of the principle of special and differential treatment, or SDT. It collides with the standard “equality” rule on trade and investment liberalization that the neoliberalizers have been pushing in the WTO, and various bilateral and regional free-trade agreements.
The recent rice tariffication/liberalization law is an example of the failure of Philippine policy-makers to use the SDT principle when they abandoned higher tariff protection, ignored the importance of assisting the domestic palay producers, failed to keep the NFA’s regulatory power to prevent smuggling and nefarious operations of rice cartels, and so on. It appears that the economists who advised the Senate on the rice tariffication law simply used the argument that such tariffication is part of the government commitment to the WTO, and that the market will sort out things eventually. Such a naïve stance is unthinkable to a country like China, whose government tries to balance the interests of both rice producers and consumers by keeping a tight control over rice importation and distribution, while pursuing a program of 95-percent production self sufficiency at home.
At any rate, back to Unctad. The officers of this UN body, in partnership with Boston University, came up recently with a list of five principles to stop the global phenomenon of “predatory rent seeking” by the big corporations or multinationals lording over the present economic order. In“A New Multilateralism for Shared Prosperity: Geneva Principles for a Green New Deal,” they explain that the “social contract” after World War II has been broken when these MNCs were allowed to roam the world market freely under free-trade rules, resulting in huge imbalances, meaning workers and the general public lose while these few corporations amass wealth in various ways, including through the speculative finance business. This predatory rent seeking or “crocodile capitalism” is reflected in the falling wages and incomes of the working population vis-à-vis rising wealth of the few, deteriorating capacity of humanity to stop the cataclysmic warming of the Earth and social unrest breaking out in different countries.
Unctad and Boston University came up with five goals to rebalance development, namely:
1. A productive global economy built around full and decent employment at livable wages, for all countries;
2. A just society that targets closing socioeconomic gaps, within and across generations, nations, households, race and gender;
3. A caring community that protects vulnerable populations and promotes economic rights;
4. A participatory politics that defeats policy capture by narrow interest groups and extends the democratic principle to economic decision-making; and
5. A sustainable future based on the mobilization of resources and policies to decarbonize growth and recover environmental health in all its dimensions.
To achieve the above goals, they are advancing five principles to guide a new multilateralism in trade and economic relations among countries. These are as follows:
1. Global rules should be calibrated toward the overarching goals of social and economic stability, shared prosperity and environmental sustainability, and be protected against capture by the most powerful players;
2. States should share common but differentiated responsibilities in a multilateral system built to advance global public goods and protect the global commons;
3. The right of states to policy space to pursue national development strategies should be enshrined in global rules;
4. Global regulations should be designed both to strengthen a dynamic international division of labor and to prevent destructive unilateral economic actions that prevent other nations from realizing common goals; and
5. Global public institutions must be accountable to their full membership, open to a diversity of viewpoints, cognizant of new voices, and have balanced dispute resolution systems.
To many civil society organizations and people’s organizations, such as the Asia Europe People’s Forum, Freedom from Debt Coalition and the Fair Trade Alliance, the foregoing goals and principles are not really new. They have been advocating them as early as the 1990s, when they saw the imbalances that one-sided neoliberal economics has been causing everywhere. What is new is the courage of the Unctad leadership to be forthright about the sad state of global economic affairs under one-sided multilateralism.