Elements for an Agenda of the South,
Report of the Ad Hoc Panel of Economists to the XII NAM Summit, Durban, South Africa, 1998
I. The Evolving External Envrionment for Development
II. Key Issues for an Agenda of the South
III. Developing and Applying the Agenda
The present report is a response to this decision. It is submitted to Colombia, current Chair Country of NAM, for eventual presentation to the XIIth NAM Summit in Durban, South Africa. The report reflects the broad consensus among Panel members, though not all Panel members were able to attend the meetings.
The report seeks essentially to present a broad overview of the major issues involved with the principal aim of assisting in the launching of a process that would require continuing work by the Non-Aligned Movement in the period ahead. The report seeks in particular to highlight key elements in the evolving external environment for development and to outline in broad terms the responses called for from the countries of the South. The issues involved are wide ranging and would require further elaboration of both their analytical and technical dimensions in the context of the evolving global scene. The Panel hopes that the present report will assist the Non-Aligned Movement by laying the foundations for such a task.
For information two Annexes are also provided. Annex 1 of the Report contains submissions by individual Panel members. Annex 2 contains contributions submitted by the South Centre at the request of Panel in order to help it in its work and which the Panel decided should be appended to its report for information. The Permanent Mission of Colombia to the United Nations in Geneva, together with the South Centre, organized the Panel's second, third and fourth meetings held in Geneva. The Centre provided assistance to the Panel's Chairman.
The Panel consisted of nine members, each appointed by a country having chaired the Non-Aligned Movement. The Panel members were H.E. Mr. Saad Alfarargi (Egypt), Dr. Mohammed Bachir-Bouiadjra (Algeria), Dr. Jonathan H. Chileshe (Zambia), Dr. Gamani Corea (Sri Lanka), Mr. Abid Hussain (India), H.E. Mr. Tichaona Joseph B. Jokonya (Zimbabwe), Mr. Osvaldo Martinez (Cuba), Mr. Gabriel Misas Arango (Colombia) and Prof. Widjojo Nitisastro (Indonesia). Dr. Gamani Corea of Sri Lanka was elected by the members of the Panel to chair the Panel.
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A New South Agenda: The Rationale
An Agenda of the South: Principal Issues
Science and Technology
Developing and Applying the Agenda
Recent political, economic, technological and institutional changes have had a major impact on the global environment for development. In particular, the end of the cold war signified the beginning of a new era in international relations, in which the political and economic ideologies of the major market economies gained a new ascendancy. Liberalization, deregulation, privatization and monetary-fiscal discipline as policy prescriptions came to be presented as a universal panacea of benefit to the developing and developed countries alike.
There have been significant developments in the global economy under the influence of this new doctrine. However, initial high hopes in developing countries have given way to concern. Many countries have taken significant steps to deregulate, liberalize and integrate further into the world economy, but major benefits have not been realized. The development of the poorest countries has in some cases been prejudiced. Several richer developing countries, with a long history of fast growth and sound economic fundamentals, have recently experienced a severe economic setback, arising from a financial crisis generated by the instabilities associated with financial liberalization and from inappropriate policy prescriptions to deal with the crisis.
For the South, it is of major concern that the reforms which have led to a greater integration of developing countries into the world economy have not diminished the economic gap between rich and poor countries. What is more, most countries are experiencing a worsening of internal income disparities, which are generating complex domestic social and political tensions.
At the level of North-South relations, the new doctrine has had particularly far-reaching implications for developing countries. Almost exclusive emphasis on the role of unfettered markets has displaced key principles that underpinned earlier multilateral discussions and negotiations on economic issues. The role and responsibilities of the international community, the need for non-commercial international transfers and the need of developing countries for special and differential treatment no longer orient international policies and action to foster development. As a result, the concept of international development cooperation and multilateral negotiations with a North-South or development orientation have virtually ended. Instead, the international agenda is dominated by the concern of developed countries to gain greater freedom for foreign investors and for capital flows and the export of their goods and services.
The earlier agenda of the South was therefore side-lined and developing countries did not develop an agenda of their own to promote their key interests during the negotiating processes promoting liberalization and globalization. Now, in the light of experience, it is imperative that they face the task of adapting the liberalization and globalization process to their own situations and development needs so that the process strengthens their own indigenous capabilities. Equally importantly, they must also review the role they are playing in multilateral decision-making and work out approaches and actions that will enhance their cohesion and effectiveness on the international scene. Their impact in multilateral negotiations still derives from the strength of numbers. Their unity and cohesion remains, therefore, the source of their strength. A new Agenda of the South therefore needs to identify major issues around which all can rally.
The Panel's report identifies the principal issues that must make up any new agenda of the developing countries, outlining in broad terms what the objectives of the developing countries might be in respect of each of the major issues. The issues, old and new, are as follows.
In a world of growing linkages the issue of governance of the global economy and of representative mechanisms for dealing with this assumes a special importance. At present the developed country G7 or G8 groupings, and the institutions over which they exercise almost exclusive influence, have a virtual monopoly in determining policies affecting the entire globe. The South needs to give serious consideration to the development of institutional mechanisms at the highest level, representative of the interests of all countries or groups of countries, to deal with the task of global economic surveillance and management.
Developed countries have begun to distance themselves from the earlier edifice of development cooperation in the area of money and finance, and the current emphasis is on market forces and private financial flows. Any agenda of the developing countries must, however, emphasize the following:
Official financial flows
External debt and other issues related to the need for finance
Private capital flows
In the context of financial liberalization and the crisis affecting South East Asia and the prescriptions applied by the multilateral financial institutions, a South Agenda must give serious attention to:
The reform of the multilateral financial institutions
In view of the overwhelming influence of the Bretton Woods institutions on developing countries' policies either through structural adjustment policies or prescriptions for crisis management, a range of issues relating to the conduct of the institutions needs to be placed on an Agenda of the South. In particular, serious consideration needs to be given to establishing new policies and mechanisms in these institutions to achieve improvements in:
World Trade Organization (WTO) matters
In addition to trade, the WTO agenda now covers a wide range of trade-related matters, agreements on which determine or circumscribe wide areas of domestic development policy in developing countries. The experience of the Uruguay Round and its aftermath demonstrates the need for developing countries to ensure a mutually reinforcing relationship between trade liberalization and development goals. These matters must be a continuing subject for any South Agenda.
Developing countries will need to develop proposals relating to the implementation of agreements already reached, to the new issues that have subsequently emerged, or to any new negotiating round proposed for the future. In doing so the South must:
There are other key issues which must form part of the South's agenda on trade and trade-related matters. These include:
A multilateral investment agreement
The advanced industrial countries' quest to establish a multilateral regime to liberalize foreign investment and establish standard rules of treatment has far-reaching implications for developing countries and ought therefore to figure in any new South Agenda. In considering whether it is in their interests to participate in possible negotiations, developing countries need to define a set of principles for a policy framework which correspond to developing country interests in this matter.
Other trade-related issues
The importance of commodity trade in the exports of developing countries taken as a whole has declined. Nevertheless, the weakness of commodity prices and hence their terms of trade in recent times has severely affected many developing countries, many of them the poorest. The commodity issue must therefore remain an important element in any new Agenda of the South. In particular, the rationale underlying the dismantling of the framework of international commodity agreements must be contested, and consideration should be given to undertaking schemes of supply management among the producing countries themselves.
The growth of preferential trading arrangements, including mega-blocs, which embrace both developed and developing countries, raises a number of important issues for developing countries. Two such issues are the discriminatory treatment of developing countries that do not belong to these groups and the erosion of generalized preferences. Such issues relating to the evolution of the international trading system must be part of an Agenda of the South.
The widening science and technology gap between developed and developing countries is of central concern since technological transformation lies at the core of the development process. Capacities in science and technology determine a country's ability to compete successfully in the increasingly integrated world economy. Moreover, science and technology issues are a crucially important aspect of an ever wider range of issues dealt with in international fora, including the WTO. Developing countries therefore need to place science and technology firmly on their agenda. In particular, a South agenda pertaining to science and technology needs to establish organizational arrangements within the South in order to develop proposals regarding:
In this context and more specifically, the South needs to place on the international agenda a well formulated proposal for an in-depth review and adaptation of the Uruguay Round Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) in order to evolve an intellectual property rights regime which responds to the need for development in the South.
The issue of environment has relatively recently become a subject for discussion and negotiation in the international arena. Two particularly important concerns must be addressed by a new Agenda of the South.
The changes in the global political scene have brought into focus the issue of the role and reform of the United Nations system, in particular in relation to the management of the global economy. The South's Agenda must include the bolstering of the UN's role in placing the development problem in a global perspective, the strengthening of the UN's contribution in the development field and resisting any retrogression in this area.
In recent years, considerable international attention has been given to social and related aspects of development in contrast to that devoted to "hard core" international economic issues affecting development. But the former cannot be a substitute for addressing the key economic issues. As part of its agenda, the South must try to rectify this situation and continue to encourage initiatives in the United Nations intended to bring about a mutually reinforcing relationship between these two dimensions.
South-South cooperation has long been an important part of the overall agenda of the countries of the South on development issues and in the context of negotiations with the developed countries. Recent years have witnessed a weakening of the cohesiveness and preparedness of developing countries in multilateral fora. New developments in the South and in the international economy suggest that the need for exchanges and cooperation between developing countries to discuss and develop multilateral questions is even more imperative. How to deal with this matter is therefore a matter of central importance for a South Agenda.
A more comprehensive analysis of each of the above subjects will need to be undertaken by the developing countries as a follow-up to the present report. In view of ongoing or imminent discussions in international fora on many of the issues suggested as items for a South Agenda, it is a matter of considerable urgency that joint approaches and policies be formulated However, if an Agenda of the South is to be formulated and applied effectively, it is vital that developing countries address immediately the question of how the work required for such a task could be organized. A number of possible actions in this respect are put forward in the final section of the Panel's report. It is hoped that the forthcoming Summit of the Non-Aligned Movement to be convened in South Africa will launch the actions that would achieve this aim.