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20 Feb, 2000

UNCTAD Conference Shines Light on Alternative Paradigms

Originally Published: 20 Feb 2000

Last week’s UNCTAD conference was dominated by discussion of the machinations and manipulation of global players in pursuit of power and riches — and the consequences thereof.

Certain global players already have both power and riches. Others are in pursuit of it. The domination of the weak by the strong is certainly very much alive, the kind of fodder on which revolutions feed.

This is a world in search of balance, respect, humility, responsibility, sharing. Such words abound in philosophic and religious discourses. They have all been elusive targets since time immemorial and it is unlikely that they will be attained just yet.

For starters, those awesome character flaws, arrogance and lack of humility, are still very much alive. Michel Camdessus, the man who presided over the global monetary system for 13 years, will perhaps be best remembered in Asia for that famous picture of him standing hands folded across his chest looking haughtily down at former Indonesian President Suharto signing the financial surrender of his country to the IMF.

Like some kind of bizarre wizard, the IMF thundered for many years about “the only way” to restore economic stability being its formula of high-interest rates and tight fiscal discipline. Everyone agrees this caused massive bankruptcies in Asia, resulting in millions being thrown out of work.

Malaysian Prime Minister Mahathir Mohammed took an alternative action that did not do quite as much damage and proved that the IMF way was not “the only way.” Will the IMF admit it made mistakes, and perhaps be humble enough to offer an apology?

Camdessus brushed aside all such talk. Instead, he showered himself with further self-congratulatory accolades that the resumption of economic growth in Thailand and Korea had proved the IMF right. And then he quoted the Bible as saying that the “the just, they fall seven times a day,” though quite where it says that in the Bible I’m not sure.

It was Indonesian President Abdur-rahman Wahid who reminded Camdessus that there are many in Asia, including his own country, who agree with Mahathir but cannot say so in as many words because they are still in the hock to the IMF. However, those who are weak today could well become strong tomorrow, and then things will change. “An unjust system will be replaced by a just one,” he said.

Sadly, that has still to happen anywhere. On the contrary, the world abounds, unfortunately, with examples of one form of unjust system merely being replaced by another, further exacerbating the revolutions that make history.

Secretary-General Rubens Ricupero said that UNCTAD had been warning about the 1990s witnessing economic disruptions due to currency speculative activities as early as after the fall of the Berlin wall and the end of the cold war in 1989. Of course, nobody paid any attention. “The fate of prophets is not to be listened or be glorified. Prophets, you know generally how they end up.”

On a more sombre, realistic note, he said, “One should never lose sight of the centrality of power. Power is by far, far, the dominant force in international relationships. There is pressure of public opinion, but at the end of the day, in negotiations, in trade, in decisions of finance, what really has the final word is power.”

Amidst the piles of speeches, documents and papers, all offering solutions to global problems, the conference had its rich moments in which speakers raised more basic issues, the kind for which no Harvard degrees are needed. Indeed, there were frequent reminders of the long-term gain over short-term pain philosophy which all religions talk about. A few leaders mentioned words like “coming to our senses,” “sensitivity” and empathy for the poor.

Juan Somavia, Director General of the International Labour Organization, said, “To properly develop policies for the globalised world, we have to make an effort to try to understand problems through the eyes of people. Sometimes this approach is considered too hazy and not too analytically strong, but I have come to the conclusion that unless we follow it, we will make policy mistakes.

“This is because other, more analytical, mechanisms fail to adequately deal with the effect of policies on people, because they are based on aggregates. We seldom make the link that an unemployed person means an unhappy family, and therefore greater potential for violence and crime and so on.”

He added, “If the aim of policy is to deliver to people, then the aim of policies in the globalised world would be to deliver some certainty, and this is deeply affected by the availability of secure and reasonable employment. We must have the sensitivity to look at the way policies affect people, as this is the only way to get the policies right.

Thai Foreign Minister Dr Surin Pitsuwan indicated there were other ways, too. He said, “I am reminded of, and draw great inspiration from, the wisdom of His Majesty King Bhumibol Adulyadej who has spoken at length on the need to maintain a “sufficiency economy” as a means of promoting the welfare of the people at large.

“During a time when there was over-exuberant talk of Thailand becoming the next “tiger” of East Asia, His Majesty the King sought to bring the country to its senses by cautioning that it was not important whether or not Thailand became a tiger or a newly industrialised economy.

“The important thing, His Majesty said, was to have a “Sufficiency Economy” that was self-supporting, with enough for the people to live on. Such a concept also serves as an insurance against the volatility of the world economy and financial uncertainties. At least, the weak and the vulnerable will be protected.

“By ‘sufficiency’, His Majesty did not mean that a country would have to be one hundred percent self-sufficient, without having to rely on other countries, cutting ourselves loose from the world trading system. That is not the case. Rather, His Majesty meant that a country and its people should try to live within their means, in moderation and without extravagance,” Dr Surin said.

And on it goes, people slowly burrowing deeper and deeper into the real causes of today”s problems. While UNCTAD resounded with words like “the only way,” “the first thing to be done,” “the most important issue,” “the top priority,” etc.. there were also words like “there is no easy answer,” “there are no answers,” and “one size cannot fit all.”

UNCTAD is today only a knowledge-based institution designed to provide a forum for debate, discussion, research and other such activities to spread knowledge around. But clearly, knowledge will only help identify the problems and clear up the technicalities.

The solutions will start coming with the upward graduation of knowledge to intelligence and thence to wisdom. That has still some way to go and may, unfortunately, require a clearing of the deck first.