Subject: Speech by Outgoing G77 Chair (fwd)
Date: Fri, 11 Mar 1994 10:50:25 +1030 (CST)
 
FORWARDED MESSAGE: From the Progressive Economists Network
 
 
 
 
>                               Jim Craven
>
>
>
>
>
>                   G77 CHAIRMAN CRITICISES URUGUAY
>                  ROUND OUTCOME AS AGAINST THE SOUTH
>
>              -------------------------------------------
>
>      In his speech as outgoing Chairman of the Group of 77 (a
> negotiating grouping which today encompasses over a hundred
> developing nations), Luis Fernando Jaramillo of Colombia presents
> a sweeping critique of North-South relations. He traces the
> decline of the Third World in global affairs and the rising power
> of the Northern-controlled Bretton Woods institutions at the
> expense of the United Nations and multilateral processes. He
> concludes his review with a sharp analysis of the recently
> concluded Uruguay Round which he says provides a clear example
> of how the South has lost out in global relations.
>      The following is the text of the speech presented in New
> York in January this year:
>
>
> ALMOST 30 years ago, when the Group of 77 was founded along with
> UNCTAD, multilateralism had a favourable climate and the
> international agenda was more and more responsive to the
> inclinations and needs of the developing countries.  Today that
> context is markedly different.  We have to face a much more
> complex and difficult environment.
>      In contrast to the euphoria created by the end of the Cold
> War, the changes in Eastern Europe, the reforms of economic
> liberalisation, the new concepts of sustainable development and
> the conclusion of the Uruguay Round of GATT, the developing
> nations continue to face, at the dawn of the 21st century, a
> hostile international environment and a loss of economic and
> political standing in the so-called New World Order.  While it
> is true that some progress has been observed in some developing
> countries, the list of adversities remains and in many cases has
> grown.  The welfare of the majority of our peoples is either
> non-existent or stagnant at best.  The deterioration of our human
> resources continues to be more pronounced.
>      Despite signs of sustained growth on the part of some Asian
> countries and that several Latin American nations show certain
> symptoms of recovery, the general outlook for the developing
> countries continues to be uncertain and unstable.  In the case
> of the African countries, the situation is sorrowful.  There
> underdevelopment has its most alarming expression.  There, human
> suffering has reached dimensions unknown in other parts of the
> world.  It is there where the most chronic process of
> pauperisation can be observed.  Far from being overcome, it has
> grown worse.  It is expected that in 1994 once again the rate of
> economic growth will be below the rate of growth of the
> population.  If these trends are not reversed, want, hunger, war
> and all its painful consequences will continue to be observed.
> We fail to understand why the international community does not
> take the measures nor allocate the resources necessary to help
> the African countries face the acute crisis they are
> experiencing. The international community is responsible in great
> part for this crisis.
>      The dramatic changes that continue to occur in shaping a new
> world structure of power make our work much more complex.
> Instead of the so-called New World Order, we are witnessing the
> emergence of sources of profound economic, political and social
> disorder.  In several countries new and obscure anti-democratic
> forces have emerged.  At the same time, developing countries
> continue to be subjected to constant pressures to weaken or
> abandon our collective interest for constructing a truly free and
> just world.  In the new balance of power, the relative situation
> of the developing world has worsened ostensibly.  Any dissent of
> our countries from the position of the countries of the North is
> now labelled as confrontational, even by ourselves.  In practice,
> we have less political influence and less priority in the
> international agenda.
>      For years the Group of 77 has been involved in intense and
> complicated negotiations with the developed countries which have
> varied from the most minute issues, many a times of little
> consequence, to the definition of grand strategies and global
> development programmes.  In truth, many of these have ended up
> as simple reference literature or have served to enlarge the
> archives of the United Nations.  Whether consciously or
> unconsciously, the Group has accepted to be submerged in a scene
> of linguistic negotiations, procedural discussions, grandiloquent
> discourses  and in the elaboration of an immense volume of
> resolutions, many of them having little, if any practical effect.
> Frequently we find ourselves lost in the trees without the
> perspective of the forest.  The limited real impact and the
> scarce results in favour of the developing world bear no relation
> to the magnitude of efforts and the attrition of negotiations.
> No matter how excellent the conduct of the Chairmanship of the
> Group is, the concrete effects of its work are practically
> imperceptible.
>
>                 Closed decision-making circles
>
>      In the meanwhile, the strategy of the developed countries
> continues to be clearly directed at strengthening more and more
> the economic institutions and agencies that operate outside the
> United Nations system.  Many subjects that are vital for the
> international community and the Third World are kept out of the
> purview of said system and taken to closed decision-making
> circles.  Such is the case of the Group of 7, a forum in which
> the interests of the developing countries have either been taken
> into account marginally or been completely ignored.  The Group
> of 7 has only been concerned with promoting a North-North
> dialogue. It has not had the developing world as its
> interlocutor.
>      The Bretton Woods institutions for their part continue to
> be made the centre of gravity for the principal economic
> decisions that affect the developing countries. We have all been
> witnesses to the conditionalities of the World Bank and the
> International Monetary Fund. We all know the nature of the
> decision-making system in such institutions. Their undemocratic
> character, their lack of transparency, their dogmatic principles,
> their lack of pluralism in the debate of ideas and their
> impotence to influence the policies of the industrialised
> countries. We all know the way in which structural changes are
> imposed and how projects are formulated. And how subsequently,
> when many of those policies and projects fail, their authors
> disappear from the facilities of Pennsylvania Avenue. Nobody is
> then accountable for anything.
>        This also seems to be applicable to the new World Trade
> Organisation. The terms of its creation suggest that this
> organisation will be dominated by the industrialised countries
> and that its fate will be to align itself with the World Bank and
> the International Monetary Fund. We could announce in advance the
> birth of a New Institutional Trinity which would have as its
> specific function to control and dominate the economic relations
> that commit the developing world. Even the designation of the new
> institution as World Trade Organisation was rejected at the last
> minute in the Uruguay Round. This seemingly nominal change
> conceals a different intention. The institutional reform of GATT
> is directed at bringing about, in the area of trade, a further
> weakening of the United Nations, the only multilateral mechanism
> in which the developing countries can have some say.
>        Therefore, there is an evident trend to systematically
> limit the role of the United Nations as an economic forum. Its
> capacity continues to be eclipsed and eroded by the
> aforementioned institutions. But the problem is not only
> expressed in the imbalance with the latter. The internal
> functioning of the Organisation is also subjected to continuous
> demands to devote greater efforts to peacekeeping operations and
> security in detriment of its functions and responsibilities in
> the area of economic and social development.
>        As a result of the above, there has been a progressive
> reduction in the effective capacity of the Group of 77 to exert
> influence on the international centres of economic
> decision-making and to deal with the unilateral practices of the
> developed countries.  No institutional economic forum exists in
> which decisions are adopted on the basis of discussions and
> negotiations that incorporate the aspirations and interests of
> the developing countries. Nor does a forum exist in which the
> industrialised countries make effective commitments before the
> international community in the area of coordination and
> stabilisation of their macro-economic policies.
>        The lessons learned from the UNCTAD Conference in
> Cartagena, the Rio Summit, the last meetings of the General
> Assembly, the conclusion of the Uruguay Round and other recent
> negotiations, show the critical importance for developing
> countries of having a collective strategy available to them.  We
> must recognise that the Group of 77 lacks an elaborated and
> comprehensive position which responds both to the specific issues
> as well as to the more general problems of the international
> agenda.  On many occasions the position of our countries comes
> about as a reaction to the initiatives and unilateral moves of
> the industrialised countries and of the institutions that are at
> their service.
>
>        We are fragile to pressures and weak to the appeal of
> particular interests and aspirations.  Many a time we fall in the
> temptation of rhetorical discourse as a pretext for not harming
> resource flows from the North or bilateral preferential
> treatments.  The industrialised countries and their institutions
> know this vulnerability and this ambivalence very well.  They are
> used to establish new conditionalities, to interfere in the
> domestic affairs and to transfer the international responsibility
> over to the national policies of the developing countries.  In
> the meantime, the developed countries elude their own
> responsibilities.  Their policies, despite the profound impact
> they have, remain outside the sphere of influence of the rest of
> the countries which make up the international community.
>
>        The Group should articulate a global strategy that may
> enable it to respond adequately to changes that take place in the
> world scene and which may translate into true negotiating
> capacity.  Otherwise we will progressively continue to be
> marginalised from the real world and our influence on the latter
> will continue to be virtually non-existent.  A key component of
> this strategy should be the review of the functioning of the
> Chapters of the Group of 77.  Up to now the latter have acted in
> a dislocated manner and without clear goals, which is reflected
> in the weakness of their positions and in their lack of
> continuity and dynamism. The disadvantage of the developing
> countries ultimately resides in the lack of a firm political
> platform.  This is an issue which should be discussed in depth
> urgently in a Ministerial Summit of the Group.  This cannot be
> put off.
>
>        International economic relations are most definitely power
> relations.  It is not easy that the countries which exert control
> in the prevailing international system accept reforms aimed at
> correcting the prevailing economic and institutional
> inequalities.  Only the determined joint action by the countries
> of the South, based on clear development policies, a better
> utilisation of their resources and capabilities and a solid
> strategy of economic cooperation, may offer possibilities for
> changing the current system of relations.
>
>        In its 30 years of existence, the Group of 77 has striven
> to defend the interests of its member countries. Yet the voids
> are noticeable.  There is still a long way to go.  Our main duty
> is to build and preserve the unity of the developing countries
> and to accommodate its different concerns and aspirations without
> jeopardising the basic objectives of the Group.  The strength of
> the latter must rest on the clarity of its objectives, the
> effectiveness of its mechanisms, its unity and its internal
> cohesion.  Only in that way will it be more real and less formal.
> The Group of 77 has an enormous potential for making use of its
> influence.  Therefore, our duty is to persevere in the efforts
> to achieve its effective consolidation.  The celebration of the
> 30th anniversary of the creation of the Group of 77 represents
> a particularly valuable opportunity for an in-depth review of its
> role and the formulation of concrete institutional proposals to
> give it new legitimacy and energy.
>
>        The remainder of the present decade will be decisive for
> the Third World.  The Agenda for Development and other related
> issues dealing with cooperation, growth and the development of
> our countries will define, in one way or another, the course of
> relations with the developed countries and our participation or
> non-participation in the benefits of the world economy.  We must
> be cognizant that if the Group of 77 does not respond adequately
> to these challenges, the consequences will be a source of new
> frustrations and despair.  We should not spare any effort to make
> the Group a united and strong front around basic principles and
> a different strategy. It is the duty of all to strengthen it and
> to work with the necessary creativity and commitment to move from
> the abstract discussions to specific achievements.  Otherwise we
> would have failed history, and worse yet, we would have failed
> those numerous peoples and billions of beings who place their
> hopes in the construction of a more just, equitable, democratic
> and free world.
>
>        The manner in which the negotiations of the Uruguay Round
> of GATT were conducted is a clear example of the weakness of the
> developing world.  As we noted in our recent statement to the
> Second Committee of the General Assembly on the issue of Trade
> and Development, the scheme of negotiations that dominated the
> Uruguay Round was fragmentary and lacking in transparency.  The
> industrialised countries concentrated on making their own deals
> in negotiations that took place outside normal channels.  Their
> strategy was to arrive a few hours before the deadline for the
> completion of negotiations with an agreement that was presented
> as a fait accompli to which the developing countries had no
> choice but to accept it without any change. To the disconcertment
> of the developing countries was added their lack of organisation,
> the clear inclination to resolve their own individual problems
> first and even the emergence of contradictory positions among
> them.  In Geneva our countries negotiate individually on their
> own, without a holistic vision.  Of course, in such a scheme the
> most adversely affected are the weakest countries.
> Unquestionably, the developing countries are th e losers both
> individually and collectively.
>
>        The Uruguay Round is proof again that the developing world
> continues to be sidelined and rejected when it comes to defining
> areas of vital importance for their survival. In said Round the
> developing countries, which are the overwhelming majority in
> GATT, a fact that seemed to have been of no good, limited
> themselves to wait and observe.
>
>        Despite insisting that the negotiations were global in
> character, the countries of the North refused in the end to
> accept any discussions, even bilaterally, with the countries of
> the Third World.  Our negotiators were frustrated in their
> attempts to find interlocutors among the partners of the North.
> They found themselves alone in the corridors and rooms of GATT
> with the only hope to have access to information on the
> negotiations that were taking place. The lack of negotiating
> leadership on the part of the countries of the South, their
> disunity and their fear of generating antagonistic positions
> against the industrialised countries were taken advantage of by
> the latter which led the Third World to confine itself to a role
> of passive spectator of the decisions adopted. It seems that the
> developing countries have forgotten that in a negotiation process
> only those who have negotiating leadership count, those who
> defend with courage their principles and their positions.  Let's
> see how that got reflected in several of the areas of decision:
>
>        One of the principal issues for the developing countries,
> that of bilateral negotiations on market access, was left
> unresolved. The countries of the Third World have been put in a
> situation in which they already paid the price of accepting the
> new terms in different areas of interest for the industrialised
> countries, without obtaining in exchange satisfactory conditions
> of market access. It will be difficult to expect that the
> developed countries will be ready to enter into a substantive
> negotiation by the agreed deadline of 15 February 1994 to allow
> for the introduction of necessary adjustments and correctives,
> since there is no incentive nor interest for doing so.
>
>        The modalities and commitments in the area of reduction
> of agricultural subsidies and the tariffifcation of the
> instruments of market access in this sector show that the
> reduction will take place in a proportion and at a rate well
> below expectations.  The impact on prices would be reflected in
> the year 2000.  The developing countries will continue to be
> subjected to the effects of the huge agricultural subsidies
> applied by the industrialised countries and to quantitative
> restrictions that prevent them from capitalising on their
> markets.  In some cases, the only result achieved was a marginal
> increase in the import quotas which was offered in exchange for
> export countries giving up on their demands against those
> restrictions which violated GATT.
>        With regard to the termination of the Multi-Fibres
> Agreement, projected for the year 2005, it should be borne in
> mind that it derived from the commitment made at Punta del Este,
> which assumed a termination without reciprocity.  A minimum
> compensation to export countries was implicit following thirty
> years of discriminatory measures in that sector.  The developing
> countries had to absorb, however, a high price in other areas of
> negotiation. According to the agreed terms, it may be expected
> that the industrialised countries will maintain restrictions on
> textiles and apparel until at least the seventh year of the
> decade foreseen for the termination of the Multi-Fibres Agreement
> and that in the case of sensitive products, which happen to be
> the ones of most interest to our countries, those restrictions
> will be maintained until the last year.  It is not unlikely that
> new attempts will be made to perpetuate them.
>
>        Some developed countries exerted until the last minute
> pressures to amend the provisions on antidumping measures. The
> interest of the majority of importers is none other than
> preserving the discretion of their national authorities and
> maintaining control of their markets against competing
> commodities, particularly those from developing countries.  As
> a result, and despite the improvements introduced, the objective
> of achieving a multilateral trading system based on clear and
> transparent rules which would give security to export countries,
> faded for the most part.  Once again, the market economy in which
> the most efficient, the best quality and the best prices prevail,
> was soundly defeated.
>
>        The special and differential treatment to developing
> countries provided for by the Punta del Este Declaration was
> object of permanent distortion during the Uruguay Round. The
> results of the latter should be evaluated in order to verify the
> application of such treatment and to introduce, if necessary, the
> pertinent correctives.  To that end, the Secretariat of GATT
> circulated last December a document which was regarded by many
> delegations as weak and anachronistic.  The document in question
> is based on the Draft Final Act of December 1991.  It does not
> take into account, for instance, two years of negotiations.
>
>        While it purports to be illustrative of econometric
> projections on the effect of the Uruguay Round on the trade and
> income of developing countries, it is dispersed and confusing in
> the assessment proper of the commitments made at Punta del Este.
> In the end, the developed countries have been the ones to benefit
> from special and differential treatment.  They have been allowed
> to keep subsidies, such as in the agricultural sector, and
> quantitative restrictions, such as in textile and apparel trade.
> Developing countries have received little or nothing as far as
> special and differential treatment is concerned.
>
>        It is clear, on the other hand, that in accordance with
> existing exportable supply, the tariff reductions which
> developing countries could take advantage of, apart from being
> inferior to the ones initially foreseen, are proportionally less
> deep than the tariff reductions that will benefit trade among
> developed countries.  According to some estimates, the
> industrialised countries, which make up only 20% of the
> membership of GATT, will appropriate 70% of the additional income
> that will be generated by the implementation of the Uruguay
> Round.
>
>        It would seem that this quick overview does not allow one
> to conclude that the Uruguay Round will translate into a positive
> balance to developing countries.  While the results were
> insufficient in several crucial areas of interest to our
> countries, and in some cases those results remain to be
> clarified, the concessions granted to the countries of the North
> are notorious.  To cite but one example, the concessions granted
> in areas such as intellectual property, investment and services.
>
>        After the frenzy over the conclusion of the negotiations
> passes, time will confirm which countries will really benefit.
> For the time being, it can be affirmed that the conclusion of the
> Uruguay Round will not lead by itself to the abolition of managed
> trade, unilateral and bilateral restrictive measures and all
> types of protectionist practices which were supposed to fade
> away.
>
>        I paused to refer to the GATT negotiations not only
> becasue of the current nature of the subject and because of the
> lessons it teach us regarding the treatment received by the
> countries of the Third World, but because of the transcendence
> that trade exchange has for our countries. Neither official
> development assistance, nor technical assistance, nor credit
> resource flows, nor any other aspect of international cooperation
> match the paramount importance and determinant nature that trade
> has for the developing world.
>
> Luis Fernando Jaramillo is Permanent Representative of Colombia
> to the UN and was Chairman of the Group of 77, until January
> 1994. He was also formerly Foreign Minister of Colombia. -ends-
>
>
> *---------------------------*----------------------------------------*
> *  James Craven             * "The great paradox [contradiction] of  *
> *  Dept of Economics        * a global consumer democracy is that    *
> *  Clark College            * the right to pleasure and happiness,   *
> *  1800 E. McLoughlin Blvd. * the right to choice in the present,    *
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> *  cravjm@ooi.clark.edu     * the marginal parasite, turns the       *
> *                           * earth into a dead artifact, the dream  *
> *                           * of material pleasure will have         *
> *                           * murdered life itself. In order to      *
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> *                           * (Jacques Attali, "Millenium")          *
> *                                                                    *
> * MY EMPLOYER HAS NO ASSOCIATION WITH MY PRIVATE/PROTECTED OPINIONS  *
>
 
 
--
 
                                 Manjit Bhatia
                             Graduate Student (PhD)
                               Politics Department
                             University of Adelaide
                            Adelaide  5005  Australia
 
                        mbhatia@chomsky.arts.adelaide.edu.au