Richard Melson

October 2006

South Bulletin No. 113

South Bulletin 133

Someshwar Singh

Senior Editor
South Centre

Ch. du Champ d'Anier 17
1211 Geneva 19
Switzerland

This issue of the South Bulletin focuses on ‘Taking Responsibility for Shared Development’.

South Bulletin 133

www.southcentre.org

singh@southcentre.org

15 October 2006

In this Issue

Shared Development True Path to Peace - Lula

Eliminating the barriers that keep poor countries from developing is the ethical duty of the international community, Mr. Luiz Inácio Lula da Silva, President of Brazil, said while addressing the UN General Assembly last month in New York . "If we do not want war to go global, justice must go global."

Global Partnership for Development

The common commitment for a global partnership for development cannot be transformed into reality when the rich and powerful insist on an unequal relationship with the poor. That was the view expressed by the current Chairman of the G-77 and China - the President of South Africa Thabo Mbeki - at the UN General Assembly in New York last month.

A Tribute to Mahatma Gandhi’s Satyagraha Campaign

It was indeed a unique celebration in Durban. On 1 October 2006, South Africa and India marked the centenary of Satyagraha - the great non-violent philosophy and practice of struggle for human emancipation shown to the world by Mahatma Gandhi. A tribute by the President of South Africa, Thabo Mbeki in the presence of India’s Prime Minister, Dr. Manmohan Singh.

Development A Shared Responsibility – Kamal Nath

Talk of a Development Round remains largely rhetorical, India’s Minister of Commerce and Industry, Mr. Kamal Nath told the UNCTAD’s Special Session of Trade & Development Board. "Issues of serious concern to developing countries like cotton, ushering in fair and undistorted agricultural world trade, Duty Free Quota Free Treatment for LDC’s, Implementation Issues, etc. remain unresolved."

A Sincere Engagement Can Unblock the Doha Round’

In an interview to the South Bulletin, Dr. Arsene M. Balihuta, the Ambassador and Permanent Representative of Uganda to the United Nations in Geneva and the World Trade Organization, responds to questions on the Doha Round, its suspension and likely resumption, and the interests of the Least Developed Countries like Uganda.

Other articles:

‘Hard Analysis’ Needed for ‘Good Policy’ Space - Lamy

Doha Agenda: Suspension No Cause for Lowering Ambitions - Supachai

‘Aid for Trade’ Initiative In Need of A Definitive Structure

South Centre News

Editorial - Taking Responsibility for Shared Development

Shared Development True Path to Peace - Lula

Eliminating the barriers that keep poor countries from developing is the ethical duty of the international community, Mr. Luiz Inácio Lula da Silva, President of Brazil, said while addressing the UN General Assembly in New York on 19 September, 2006. "It is also the best way to ensure prosperity and security for all." President Lula observed that the true path to peace is shared development. "If we do not want war to go global, justice must go global." He noted that the search for a new world order, fairer and more democratic – was not only in poor countries’ or in emerging nations’ interest but even more in rich countries’ interest. Presented below are extracts from his address.

"When I first took the floor from this rostrum in 2003, I stressed the need for urgent and relentless action to fight the scourge of hunger and poverty in the world.

This is what we are doing in Brazil. We have combined economic stability with social inclusion policies. The standard of living of Brazilians has improved. Employment and income have grown. The purchasing power of the minimum wage has increased. Our resources are scarce, but even so we have achieved surprising results.

The ‘Family Stipend’, at the core of our ‘Zero Hunger’ program, assures a basic income to over 11 million Brazilian families. Well-fed people can enhance their dignity, their health and their learning capacity. Putting resources into social programs is not expenditure. It is investment.

If with so little we have done so much in Brazil, imagine what could have been done on a global scale, if the fight against hunger and poverty were a real priority for the international community.

Where there is hunger there is no hope. There is only desolation and pain. Hunger nurtures violence and fanaticism. A world where people starve will never be safe. The sheer size of the task will not daunt us, especially if we are not alone. All here know that some 840 million human beings – nearly one out of seven in the planet – do not have enough to eat. 50 billion additional dollars each year are needed to reach the Millennium Development Goals on time.

The international community can afford it. On the positive side, just think, for instance, of the hundreds of billions of dollars invested to move forward the full integration of Eastern European countries into the European Union. On the other hand, think of the cost of wars and other conflicts. All here know that that the second Gulf War may also have cost hundreds of billions of dollars to date. With much less we could change the sad reality of a large share of the world’s population.

We could alleviate the plight of these people and lift them out of destitution. We could save millions of lives. Even strong as they are today, rich countries should have no illusion: nobody is safe in a world of injustices. War will never bring security. War can only generate monsters: bitterness, intolerance, fundamentalism, and the damaging denial of current hegemonies.

The poor must be given reasons to live, not to kill or die. Peoples’ greatness lies not in bellicosity, but in humanism. And there is no true humanism without respect for the other. There are, actually, those different from us, but not less dignified for this reason, not less precious, not entitled to a lesser right to happiness, creatures as we are from the same creator. There will only be security in a world where all have the right to economic and social development.

The true path to peace is shared development. If we do not want war to go global, justice must go global. This is why, with the serene conviction of a man who has dedicated his life to fight peacefully for the rights of the working people, I say to you: the search for a new world order, fairer and more democratic, it is not only in poor countries’ or in emerging nations’ interest. It is also or even more in rich countries’ interest, as long as they have eyes to watch and ears to hear, as long as they do not make the mistake of ignoring the hideous cry of the excluded.

We have seen some progress in the last few years. At the Meeting of World Leaders in 2004, we launched the ‘Action against Hunger and Poverty’. Together, we were able to achieve a strong international engagement around this issue. Our collective efforts have begun to bear fruit. We are putting into practice innovative mechanisms such as a ‘solidarity levy on international air tickets.

Hunger and disease walk hand-in-hand. We have therefore undertaken, together with other Governments, the creation of an International Drug Purchase Facility to combat AIDS, tuberculosis and malaria. This initiative will provide new sources of funds and facilitate access to medicine at lower costs. We cannot shirk from our duties. I salute the leaders of vision engaged in this war. The war against the debasement of human beings and hopelessness. This is the only war in which final victory will mean a triumph for all of humanity.

The fight against hunger and poverty is also predicated on the creation of a world order that accords priority to social and economic development. There will only be permanent solutions to destitution when poorer countries are able to advance through their own efforts. Once International Trade is free and fair, it will be a valuable tool for generating wealth, distributing income and creating jobs.

It is essential that we break the bonds of protectionism. Subsidies granted by richer countries, particularly in agriculture, are oppressive shackles that hold back progress and doom poor countries to backwardness. Time and again I must repeat that while trade-distorting support in developed countries amounts to the outrageous sum of 1 billion dollars a day, 900 million people get by on less that a dollar a day in both poor and developing countries. This situation is politically and morally untenable.

The only thing worse than inaction stemming from ignorance is neglect rooted in accommodation. The old geography of international trade must be profoundly reshaped. Together with its partners in the G-20, Brazil is engaged in this task. The creation of the G-20 has changed the dynamics of negotiations at the World Trade Organization. Until recently developing countries played only peripheral roles in the most important negotiations.

Eliminating the barriers that keep poor countries from developing is the ethical duty of the international community. It is also the best way to ensure prosperity and security for all. For the first time in the history of the GATT/WTO system, the word ‘development’ appears in the title of a Round of trade negotiations. But the Doha Development Agenda, which will decide the future of the world trade system, is now in crisis. If successful, WTO negotiations will help pull many people out of extreme poverty.

Farmers who cannot compete against multi-billion-dollar subsidies will have a chance to prosper at last. Poor African countries will finally be able to export agricultural products. If the Round fails, the fallout will go far beyond trade. The credibility of the WTO system itself will be jeopardized, with negative repercussions in both political and social fields. Scourges such as organized crime, drug trafficking and terrorism will find fertile ground to proliferate.

I have called on world leaders to rise to their responsibility. The importance attached to this issue at the latest G-8 Summit has not yielded practical results yet. This generation has a unique opportunity to show the world that selfish interests will not prevail over the common good. History will not absolve us of our omission.

Fair trade, grounded on a solid consensus and on a transparent WTO, aware of the needs of developing countries, is one of the pillars of the world order we uphold. In the field of international peace and security, another pillar is the United Nations. Brazil is a staunch backer of international organizations as fora for cooperation, and dialogue. There is no more effective way to bring states together, to keep the peace, to protect human rights, to promote sustainable development and to build negotiated solutions to common problems.

Conflicts such as that of the Middle East continue to challenge the authority of the United Nations. The recent crisis in Lebanon exposed the Organization to a dangerous erosion of credibility. The effectiveness of the United Nations is been seriously questioned.

Unable to act when needed, the Security Council is accused of being morose. World public opinion is impatient in the face of such incomprehensible difficulties. Deaths of innocent civilians, including women and children, are a shock to all of us. In Brazil, millions of Lebanese and Israelites live in a harmonious and integrated way. Thus, Brazil’s interest in the Middle East arises from a deep and objective social reality in our own country. Aside from the countries directly involved, Middle Eastern issues have always been dealt with exclusively by the great powers. They have achieved no solution so far.

One might then ask: is it not time to call a broad, UN-sponsored Conference, with the participation of countries of the region and others that could contribute through their capacity and successful experience, in living peacefully with differences?

Brazil believes in dialogue. For this reason we held a South America-Arab Countries Summit in 2005. We also have good relations with Israel, whose birth as a state came about when a Brazilian, Osvaldo Aranha, presided over the General Assembly.

Conflicts among nations are not solved only by money and weapons. Ideas, values and feelings also have a place, particularly when based on real-life experience.

More than ever, the UN’s authority needs to be strengthened. We have already made significant progress, with the administrative reform process and the creation of both the Human Rights Council and the Peace Building Commission. But the task will be left irreparably incomplete without changes in the Security Council, the body in charge of overseeing peace issues. Along with the G-4 countries, Brazil holds that the expansion of the Security Council must envisage the entry of developing countries as permanent members. This would make that body more democratic, legitimate and representative. The great majority of member-states agrees with this view and recognizes the urgency of this matter.

We cannot deal with new problems using outdated structures. Sooner or later, Madam President, we must open the way to democratizing international decision-making bodies. As the Secretary-General has said, we travel around the world preaching democracy to others. We must now apply democracy to ourselves and show that there is effective representation in the political bodies of the United Nations.

South America is a priority for Brazilian foreign policy. Our region is our home. We are expanding the Mercosur and strengthening the South American Community of Nations. The future of Brazil is linked to that of its neighbors. A strong and united South America will contribute to the integration of Latin America and the Caribbean.

We also feel connected to the African continent by historical and cultural ties. As the second largest black population in the world, we are committed to sharing Africa’s challenges and destinies. But regional matters are only part of the global problems we face.

The fight against hunger and poverty, the breakdown of the Doha Round and the stalemate in the Middle East are interconnected issues. The appropriate handling of these affairs requires trust in negotiated solutions at the multilateral level. At this very moment, this trust has been shaken. This is extremely serious. The world order that it is our task to build must be based on criteria of justice and respect for international law. This is the only way to achieve peace, development and genuine democratic coexistence within the community of nations.

There is no lack of resources. What is missing is the political will to use them where they can make all the difference. Where they can then turn despair into joy and reason to live. Thank you."

Global Partnership for Development

The common commitment for a global partnership for development cannot be transformed into reality when the rich and powerful insist on an unequal relationship with the poor. That was the view expressed by the current Chairman of the G-77 and China - the President of South Africa Thabo Mbeki - at the UN General Assembly in New York on 19 September, 2006. "A global partnership for development is impossible when the rich demand the right, unilaterally, to set the agenda and conditions for the implementation of commonly agreed programmes." President Mbeki was critical of the fact that despite many Declarations adopted in the past, "nothing practical is done to assuage the hunger pains" that keeps billions of people awake at night. Presented below are extracts from his statement.

"Once again, we have convened at this seat of the Organisation of the Peoples of the World, representing the entire humanity and coming from all corners of the world. Our pilgrimage this year is tinged with sadness because we also pay homage to one of the most outstanding servants of the United Nations, a native son of Africa, Kofi Annan, whose term of office will soon come to an end.

The G77 and China as well as my own country, South Africa, sincerely thank the Secretary-General for the selfless and dedicated work he carried out during one of the most challenging periods of this Organisation.

In the midst of increasing poverty and underdevelopment during an era of unprecedented wealth accumulation and technological advances and, as the river that divides the rich and the poor zones of the metaphorical global village ever widens, the Secretary-General of the United Nations never lost focus on the imperatives of our time.

We thank him for never losing sight of the fact that poverty and underdevelopment remain the biggest threats to the progress that has been achieved, and that equality among the nations, big and small, is central to the survival, relevance and credibility of this global organisation.

Your Excellencies, we are only six years into the 21st Century. Those who populate the poorest part of the regions of the world – Africa – have boldly declared that it will be an African Century. It is a century in which billions of the citizens of the developing world and other poor and marginalised people, would want to transform into a Century for all Humanity.

If the wishes of the majority of the world could turn into reality, this would be a century free of wars, free of internecine conflicts, free of hunger, free of preventable disease, free of want, free of environmental degradation and free of greed and corruption. Indeed, we began the century with great hopes for a better, peaceful and humane world.

Together, we crafted comprehensive plans and bold declarations to defeat the scourge of poverty and underdevelopment.

Together, we committed ourselves, with what seemed like renewed vigour, to transform the UN to reflect the modern reality that is defined by free, sovereign and equal nations. However, six years into the 21st century dispassionate observers would dare us to achieve our noble and lofty objectives, pointing to the terrorists’ acts that welcomed us into the new century. They would emphasise the unilateralism that threatens to negate the democratic advances of the last decades of the 20th century, and draw attention to renewed conflicts and wars that seem to compete with the destructive fury of the conflicts of the last century.

They would remind us that for a decade and more, some of the developed nations have consistently refused to implement the outcomes and agreements of this world body that would help to alleviate the wretchedness of the poor. Thus, Madam President, when you correctly urge us to implement a global partnership for development, we, the members of G-77 and China, who represent the poor people of the world, understand you to be communicating a message that we should make real the common commitments we solemnly made at this supreme organisation of the nations of the world.

Yet, this common commitment for a global partnership for development cannot be transformed into reality when the rich and powerful insist on an unequal relationship with the poor.

A global partnership for development is impossible in the absence of a pact of mutual responsibility between the giver and the recipient. It is impossible when the rich demand the right, unilaterally, to set the agenda and conditions for the implementation of commonly agreed programmes.

We who represent the poor, know as a matter of fact that these billions of poor people are increasingly becoming impatient because every year they hear us adopt declaration after declaration, and yet nothing practical is done to assuage the hunger pains that keeps them awake at night. Only few and selected agreements are implemented, with outcomes that are clearly insufficient to alleviate the excruciating pain of their children who cannot cry anymore because to do so is to invite more pain.

Those of us who were at the 14th Summit of the NAM in Havana heard this message very clearly, emanating from all the countries and organisations that spoke. Those who are capable of listening should take note of what that great son of India and South Africa, Mahatma Gandhi, said on this matter: "The test of friendship is assistance in adversity, and that too, unconditional assistance. Co-operation which needs consideration is a commercial contract and not friendship. Conditional co-operation is like adulterated cement which does not bind."

Precisely because of the absence of a global partnership for development, the Doha Development Round has almost collapsed. Indeed, because the rich invoked, without shouting it, the slogan of an over-confident European political party of the 1960’s, and directed this uncaring declaration to the poor of today - "l’m alright Jack!" - we have not implemented the Monterrey Consensus on Financing for Development, thus making it difficult for the majority of the developing countries, especially those in Africa, to achieve the Millennium Development Goals, and have reduced the Johannesburg Plan of Implementation to an insignificant and perhaps forgotten piece of paper.

Part of the problem with this unequal relationship is the imposition of conditions on developing countries and the constant shifting of the poles whenever the poor adhere to each and every one of those conditions. Among other things, we have recently seen an outbreak of great social instability across Europe and other reactions of the poor to their miserable conditions in different parts of the world, always putting into question the image of seemingly harmonious well-woven tapestries of diverse groups because, in good measure, we continue to fail to implement our own decisions of the United Nations World Conference against Racism, Racial Discrimination, Xenophobia and Related Intolerance.

Your Excellencies, those who coined the slogan: "I’m alright Jack!" were communicating, whether consciously or not, a message and an attitude that said – ‘I don’t care about my neighbour as long as I and my family eat well and sleep peacefully’ and that ‘it is not my responsibility to ensure that my poor neighbour also eats well and sleeps peacefully’.

Today the attitude among some of the rich also communicates the same message to the rest of the world that: ‘I’m alright Jack!’, even when they are acutely aware that many in their neighbourhood die of hunger, of preventable diseases and abject poverty.

This happens also in a situation of the cruel irony where resources flow from those who have little to those who have plenty. Although the rich and the powerful know the miserable life circumstances of the poor and have solemnly committed themselves to the collective effort to reverse these conditions, their attitude and response resembles that of the Biblical Cain who, after killing his brother, Abel, and the Lord asked him "where is Abel your brother?", he replied that: "1 don’t know. Am I my brother’s keeper?"

Perhaps, all of us, especially the rich, should heed the words of one of the great sons of the United States of America who perished because of his belief in equality and justice for all human beings, and whose civil rights movement is currently marking its golden jubilee.

Martin Luther King warned that: "As long as there is poverty in the world I can never be rich, even if I have a billion dollars. As long as diseases are rampant and millions of people in this world cannot expect to live more than twenty-eight or thirty years, I can never be totally healthy even if I just got a good check-up at Mayo Clinic. I can never be what I ought to be until you are what you ought to be. This is the way our world is made.

No individual or nation can stand out boasting of being independent. We are interdependent. The majority of the human race is entitled to ask the question whether the rich are responding the way they do because the further impoverishment of the poor is to the advantage of the rich, giving meaning to the old observation that the rich get richer as the poor get poorer.

As the divide between the rich and the poor widens and becomes a serious global crisis we see an increase in the concentration of economic, military, technological and media power.

Your Excellencies, something is seriously wrong when people risk life and limb travelling in suffocating containers to Western Europe in search of a better life. Something is wrong when many Africans traverse, on foot, the harsh, hot and hostile Sahara Desert to reach the European shores. Something is wrong when walls are built to prevent poor neighbours from entering those countries where they seek better opportunities. Something is indeed wrong when all these people, whose fault is merely the fact that their lives are defined by poverty, try desperately to reach countries where they believe the conditions of their existence would improve, only to meet hostile, and at times, most barbaric and inhuman receptions.

In part, the United Nations is unable to fulfil some of the objectives set by the founders in San Francisco because, in truth, it does not reflect the expansion of the global family of free nations. Because this organisation of the peoples of the world has grown to encompass the entire world, many had thought that it would be logical that this custodian of global democracy would itself serve as a beacon in our continuing quest for democracy in all our countries. Clearly, for the UN to continue occupying its moral high ground, it has to reform itself urgently, and lead by practical example as to what is meant to be democratic.

Even as we face the cold reality of the indifference of the many among the rich and powerful, this Organisation of the peoples of the world has continued to offer hope and the possibility of the fulfilment of the aspirations of the majority of the peoples of the world.

All of us, including those who are hesitant to implement the commonly agreed positions, agree that this Organisation has entrenched the correct understanding that development is both a right and is central to the advancement of all humanity. In this regard, all of us, individually and collectively and as members of the UN, must do whatever is necessary to develop and implement policies and strategies aimed at the achievement of sustainable development.

It is important that international organisations such as the Bretton Woods institutions, the World Trade Organisation (WTO) and others should, without any equivocation, seriously embark on the implementation of all the commitments that we have made as the international community.

This Organisation of the peoples of the world cannot merely note the unacceptable situation that Africa would not achieve the Millennium Development Goals by 2015. We need further, focused and concrete programmes to accelerate development in Africa and avoid the possibility of that continent sinking further into the morass of poverty and underdevelopment.

Because we are our brothers’ and sisters’ keepers, we have the responsibility to end the rhetoric and implement programmes that would ensure that all human beings live decent, humane and prosperous lives. On behalf of G77 and China as well as my own country, South Africa, I take this opportunity to thank His Excellency, Jan Eliasson, for the great work he did in steering this organisation during the past year, as President of the General Assembly.

We are honoured to welcome Her Excellency, Sheikhs Haya Rashed Al Khalifa as the President of the 61st Session of the General Assembly and wish her well in her important work. Madame President, we pledge to do whatever is necessary to make your work easier, so that through your efforts, the poor can regain full confidence in the ability of the UN to improve their conditions of life.

Everyday the masses cry out in pain, frustration and anger. Everyday they ask: is there anybody there who stops to hear their voices! Is there anybody there who listens to and is ready to respond to their heartfelt plea for the restoration of their dignity?"

A Tribute to Mahatma Gandhi’s Satyagraha Campaign

It was indeed a unique celebration in Durban. On 1 October 2006, South Africa and India marked the centenary of Satyagraha - the great non-violent philosophy and practice of struggle for human emancipation shown to the world by Mahatma Gandhi. In the presence of India’s Prime Minister, Dr. Manmohan Singh, the President of South Africa, Thabo Mbeki recalled the historic role played by Mahatma Gandhi in the liberation struggles across continents. The following is the address by President Thabo Mbeki.

"I am truly honoured and delighted to have this opportunity to address you in the presence of the Prime Minister of India, His Excellency Dr Manmohan Singh, as we observe and celebrate the 100th anniversary of the beginning of a defining epoch in our history, the Satyagraha campaign, initiated right here in South Africa a century ago.

On behalf of the government and people of South Africa, we extend our warmest welcome to the Prime Minister and the rest of the visiting Indian delegation, and thank you most sincerely for gracing our shores to share in our salute to one of India’s and South Africa’s great creations, the Satyagraha, and pay undying tribute to a truly great human being.

Our emancipation is only 12 years old. It is not so long ago that the celebration we hold today would not have been possible. It is not so long ago that it would have been impossible for a Prime Minister of the great country of India to set foot on our shores. Not so long ago, the majority of us present here were prohibited by law and the force of arms to determine the future of our country.

It is in this context that, today, together with the masses of our people, I am proud to say that, among others, Mahatma Gandhi, the great native son of India and, at the same time a beloved son of South Africa as well, provided the unparalleled leadership and example that inspired the triumphant march to freedom and democracy both in India in 1947 and in South Africa in 1994.

Again, it was no accident that it was India, at the United Nations in 1946 that first put on the global agenda the issue of the imperative to mobilise the international community to join us in our struggle for our liberation from racism and white minority domination.

In this regard, I would like to acknowledge the presence among us as a member of Prime Minister Singh’s delegation, and welcome Anand Singh whom, like E.S. Reddy, many of us have known and worked with for many decades as a frontline fighter against apartheid, for the liberation of all our people.

Mohandas Karamchand Gandhi needs no introduction to anybody here and elsewhere in the world, for he is an international icon, martyr and the champion of freedom, peace and non-violence. He, more than anyone else, personifies the spirit, the essence and the meaning of Satyagraha.

Accordingly, as we celebrate the centenary of the birth of this great philosophy and practice of struggle for human emancipation, we also celebrate the contribution to our liberation by all our historic leaders, such as Mahatma Gandhi.

Having arrived in South Africa in 1893, Mahatma Gandhi’s life, like those of many other leaders who came from India, was to be transformed by a multitude of events’ racist laws, racist treatment of both Indians and Africans as well as enduring personal subjugation and humiliation.

However, two events stand out as some of the most defining moments in shaping the political direction of Mahatma Ghandi and the launching of Satyagraha.

The first happened during the Soe Anglo-Boer War. During this War, Gandhi and other leaders of the South African Indian communities thought it was opportune to prove their loyalty to the British Empire so as secure equal rights for their people. Thus, they encouraged participation of their people in the war on the side of the British troops.

But the blatant racist attitude of the British as well as their policy of allowing whites to subjugate the Indian-South Africans politically and economically, before and after the War, made Gandhi and his comrades to begin formulating strategies of mobilising the people for freedom.

The second event was during the Bambatha Uprising in 1906, whose Centenary we have and are commemorating this year.

Gandhi led an ambulance corps to help the wounded among the Zulu people. He later wrote in his autobiography that:

"The Zulu ‘rebellion’ was full of new experiences and gave me much food for thought. The Boer War had not brought home to me the horrors of war with anything like the vividness that the ‘rebellion’ did.

This was no war but a man-hunt... To hear every morning reports of the soldiers’ rifles exploding like crackers in innocent Hamlets, and to live in the midst of them was a trial. But I swallowed the bitter draught, especially as the work of my Corps consisted only in nursing the wounded Zulus. I could see that but for us the Zulus would have been uncared for. This work, therefore, eased my conscience."

Enraged by such experiences, Gandhi decided to dedicate more of his life to the struggle for the liberation of all our people.

A protest meeting of the Indian-South African people was convened in Johannesburg in September 1906 as a response to the promulgation of the Asiatic Bill and the Transvaal Asiatic Registration Act, which made registration of all Indians compulsory and identified them as a separate racial group, adding to existing oppressive measures such as the £3 tax on the indentured labourers.

The non-violent defiance campaign decided at this meeting gave birth to Satyagraha, as a result of which those who defied the law by striking, burning passes or simply refusing to register were flogged, jailed and even shot at. Thousands across the country put their very lives on line by participating in this non-violent civil disobedience campaign.

In an article in the Indian Opinion in 1907, Mahatma Gandhi wrote that non-violent acts of civil disobedience were acceptable against any immoral law that was repugnant or harmful to the people.

As E.S. Reddy has observed in his article, "The First Martyrs of Satyagraha":

"Gandhiji often stressed that satyagraha is not mere jail-going. He warned, during the first satyagraha in South Africa, as early as 1909:

"A satyagraha must be afraid neither of imprisonment nor of deportation. He must neither mind being reduced to poverty, nor be frightened, if it comes to that, of being mashed into pulp with a mortar and pestle."

Reddy says it was clear to the satyagrahi that "though satyagraha is a totally non-violent and civilised form of resistance, the oppressors would try to break it by resort to an escalation of brutality, together with "dirty tricks" to confuse and divide the ranks of the resisters."

(www.anc.org.za/ancdocs/history/people/gandhi/3.html)

When two infants died in Natal during the Great March of Indian-South African workers in 1913, they symbolised the supreme sacrifice of non-violent protest in the name of noble ideals, struggle and sacrifice for freedom.

Further, Gandhiji was profoundly affected by these and other deaths and wrote tributes to four martyrs: Sammy Nagappan, a teenager who died of pneumonia after being forced to break stones in bitter cold; A. Narayanswami, who was not allowed to land for two months when he returned from illegal deportation to India, though shivering on the open deck without adequate clothes; Valliamma Moonsamy, the 16 year-old girl who refused to seek parole despite her serious illness from incarceration in Pietermartience; and the indomitable Harbat Singh, an illiterate 70 year-old worker who steadfastedly joined other martyrs in prison.

(extracted from "Reddy, E.S., "The First Martyrs of Satyagraha", ibid) From Port Elizabeth to Johannesburg; from the plantations of Tongaat and Verulam to the mines of Newcastle and the farms of Umzinto, countless Indian heroines and heroes became martyrs. While some were professionals and homemakers, the majority were indentured labourers, workers and peasants whom Gandhi described as the "salt of the earth."

In the Preface to his book "Satyagraha in South Africa" published in 1928, Mahatma Gandhi wrote about what he called "the beauty of Satyagraha," and said:

"It comes up to oneself; one has not to go out in search for it. This is a virtue inherent in the principle itself. A dharma-yudda, in which there are no secrets to be guarded, no scope for cunning and no place for untruth, comes unsought; and a man of religion is ever ready for it... God helps when one feels oneself humbler than the very dust under one’s feet. Only to the weak and helpless is divine succour vouchsafed... The reader will note South African parallels for all our experiences (in India) in the present struggle to date. He will also see from this history that there is so far no ground whatever for despair in the fight that is going on. The only condition for victory is a tenacious adherence to our programme."

He concluded the book with these words: "I will consider myself amply repaid if I have in these pages demonstrated with some success that Satyagraha is a priceless and matchless weapon, and that those who wield it are strangers to disappointment or defeat."

Over the years, the work of this great human being as expressed through Satyagraha, with its unshakable advocacy of respect for honesty, the truth, loyalty to principle, and perseverance in the struggle for justice, was to influence generations of brave men and women as they also fought for their freedom.

Indeed, the voice that symbolised the American Civil Rights Movement, which celebrates its golden Jubilee this year, echoed the teachings of Mahatma Gandhi that inspired Martin Luther King Jr, as well as many others across the world, to follow in the humble footsteps of that extraordinary lawyer and human being.

For the timeless lessons of Gandhi are so evident in the words of Martin Luther King Jr when he said:

"If humanity is to progress, Gandhi is inescapable. He lived, thought, and acted, inspired by the vision of humanity evolving toward a world of peace and harmony. We may ignore him at our own risk."

(The Words of Martin Luther King, ibid, p.57)

And surely today, as we confront the spectre of violent national conflicts, war and international terrorism, we can only ignore Mahatma Gandhi’s vision and messaged at our own risk. For the human solidarity, human dignity, self-respect and equality among the peoples, for which Gandhiji fought and died, are the core values that we need to pass on to the generations that follow us so that they may live lives of peace, harmony and prosperity.

And those generations will salute us too if we tackle the challenges of the 21st century with the same vision for social justice, peace and harmony.

A century after Satyagraha began in the old colonial Transvaal, we will tomorrow, on Mahatma Gandhi’s 135th birthday, have the privilege to meet Prime Minister Manmohan Singh and his delegation to discuss the further measures we must take to raise to higher levels our concerted effort to strengthen our bonds of friendship with India, which is, to us, not only a genuine strategic partner, but also a second home (for) all our people.

In this regard, let us reflect on the prescient words of Mahatma Gandhi when he addressed a Satyagraha meeting in Johannesburg in 1908:

"If we look into the future [of South Africa], is it not a heritage we have to leave to posterity, that all the different races (Reddy, E.S. and Gandhi, G., Gandhi and South Africa 1914-1948)…"

These words still ring true in the 21st century, during this time that we, South Africans have defined as the Age of Hope.

The challenge for us is how to produce a heritage where all different races, creeds, faiths and religions commingle and produce a civilisation that indeed the world has not yet seen.

In 2001, the world family of nations gathered here in Durban at the United Nations Conference against Racism, Racial Discrimination, Xenophobia, and Related Intolerances.

Yet, instead of being sisters and brothers and friendly neighbours in this journey of life, we see the rainbow tapestry of the human family being unravelled because of racial hatred, religious intolerance, ethnicity, xenophobia, sexism and terrorism.

At the same time, because of the refusal of especially the most privileged in the world to open their ears, hearts and minds to the unconquerable voice of the Mahatma, billions of people continue to live in abject poverty and underdevelopment despite the fact that human society disposes of enough intellectual and material resources to address these challenges.

Today, as we reflect on the past struggles, may we also look ahead tomorrow to see how the strategic partnership between India and South Africa can be imbued with the Gandhian philosophy so that we may create a sustainable human family where satya, truth, will prevail, underpinned by the universal values of human solidarity, human dignity and self-respect, which must inspire the building of modern human society.

The peoples of India and South Africa have been engaged in united action for freedom, equality and human dignity for well over a century. We are immensely proud that we share with our sister country, India, a common hero, leader and noble giant, Mahatma Gandhi.

As we continue to act together, among other things to contribute to the emergence of a just global order, confronting the disequilibria and imbalance of power exacerbated by the process of globalisation, we must remain as Mahatma Gandhi said, "strangers to disappointment or defeat."

May Mahatma Gandhi’s Phoenix Settlement of 1904 be a symbol to inspire a prosperous renaissance in our countries and across the developing world, so that the African phoenix and the Indian phoenix rise from the ashes of colonialism and apartheid and reach for a destination defined by democracy, peace, true friendship, prosperity and a better life for all our peoples.

Once more, a warm welcome to our dear friend and brother, Manmohan Singh, as well as his esteemed delegation!

Long live Satyagraha! Long live the spirit of Mahatma Gandhi! Long live the indestructible friendship between the peoples of India and South Africa!"

Development A Shared Responsibility – Kamal Nath

Talk of a Development Round remains largely rhetorical, India’s Minister of Commerce and Industry, Mr. Kamal Nath told the UNCTAD’s Special Session of Trade & Development Board on 4 October, 2006. Delivering the keynote address at the High-Level Policy Dialogue on "UNCTAD, Development & The Way Forward", he said, "Issues of serious concern to developing countries like cotton, ushering in fair and undistorted agricultural world trade, Duty Free Quota Free Treatment for LDC’s, Implementation Issues, etc. remain unresolved." The basic premise of a Development Round is primacy for the development needs of developing countries, and not market access for developed countries, the Minister noted. Following are extracts from his statement.

"The recent decades have witnessed a sharp acceleration in the growth of the global economy. Underpinned by worldwide productivity growth, the processes of globalisation and liberalisation are inexorably leading the world towards greater economic openness, inter-dependence and integration. These trends have manifested themselves through higher levels of international trade, cross border capital flows and increasing integration of financial markets.

The entry of billions of workers into the world economy has also had an important effect on global growth and poverty reduction in developing countries, even though the impediments to mobility of professional service suppliers across borders have not been seriously addressed. Nevertheless, wealth has been created across the world.

A remarkable feature of the current economic expansion has been the participation and performance of developing countries. Many developing countries have consistently outperformed the developed countries in output growth. Within the developing world also, the growth has been fairly broad-based, with Africa growing at around 5% in the last three years. UNCTAD’s Trade and Policy Report 2006 finds that Sub-Saharan Africa is expected to grow at 6.6% in 2006, the highest growth rate of a sub-region after East Asia. Significantly, the improved output growth of developing countries in recent years is matched by their performance in international trade. This does not, however, mean that our job is done, and developing countries, large and small, are firmly on a path of sustained growth and development fuelled by trade.

UNCTAD has been playing a vital role to address the development dimension of the international trading system given its mandate as the focal point within the United Nations for the integrated treatment of trade and development and the inter-related issues in the areas of finance, technology, investment and sustainable development as defined in the Sao Paulo Consensus. I recall my meeting with Dr. Supachai Panitchpakdi, Secretary General, UNCTAD, during his visit to New Delhi in November 2005. At the outset, I would like to reiterate India’s willingness to work to strengthen UNCTAD. The High Level Policy Dialogue presents a useful and timely opportunity to share my views.

The timing of the present discourse is significant. We are on the cusp of the multilateral trading systems’ development oriented evolution and reform, and against the background of some paradigm shifts taking place in international trade and development. It is also an occasion for the international community to affirm, that despite our involvement in over 300 RTAs, PTAs, regional and inter-regional, North-North, North-South and South-South, we attach importance to the WTO as a central pillar governing the regulation of trade relations globally. Equally, and in the context of the UN reform efforts, we support the focal point role of UNCTAD in the UN system for the integrated treatment of trade and development through its independent research and beyond conventional wisdom analysis, beneficiary- driven technical cooperation and knowledge based consensus building functions.

In recent years we have witnessed certain paradigm shifts in international trade and development. There has been an intensification of the "new geography of international trade" wherein countries of the South are moving from the periphery towards the centre. My own country is contributing to this dynamism with a services success story to tell, and ambitions of becoming a global manufacturing hub and one of the world’s most attractive investment destinations. South-South trade liberalisation and economic integration has gathered pace in an unprecedented way both regionally and inter-regionally. Demography trends are creating a growing "Human Resource and Youth Reservoir" in developing countries (like India) along with a preponderance of aging populations in developed countries. Comparative advantages in trade are increasingly weighted in favour of knowledge intensive and innovation driven products and services.

Since the time that UNCTAD was founded, the world has evolved. Much, however, still needs to be done to create an international enabling environment conducive to the accelerated and sustained growth of developing countries consistent with their special circumstances and their national priorities. UNCTAD can, and should, continue to play its important role in this relentless pursuit of development. It should continue to examine the interface between the international trading system and national development strategies with a view to assuring that the processes of globalization and liberalization bring benefits to all.

Development is a shared responsibility, a collective endeavour. The search for solutions to the challenges of development cannot but be a shared objective among all countries to ensure enhanced welfare for all. The geo-political and economic relations, as they have thus far evolved, have had a positive impact on the development and poverty reduction of many developing countries. They have contributed a note of optimism regarding the achievement of the United Nations Millennium Development Goals. However, the statistics hide a number of worrying features which the world can only ignore at its peril. Some of the danger signals are already evident – continuing protectionism in developed countries, and turbulence in energy markets are only a few examples of such dangers.

One of the most important factors contributing to global imbalances is the inability of many developing countries to take advantage of the economic expansion. The structural factors which contribute to such market failures have to be urgently addressed if the current phase of growth is to be sustained. In a globalised world where economic decisions are increasingly taken by markets, market failure leading to exclusion of countries and regions remains a major challenge. To address it, apart from strengthening a rule based and fair multilateral trading system which is in the shared interest of all, each country must also have policy space and ability to choose what is most appropriate for its circumstances and its people.

In order to address the prevalent imbalances and asymmetries in the global economic system, it is also necessary to re-visit the institutional architecture involved in the governance of globalisation. This architecture includes the UN System, the Bretton Woods Institutions and the WTO. The structure and objectives of these institutions have to reflect the deep-seated changes that have taken place since they were established. Setting aside my views on the systemic changes required in the UN and the Bretton Woods Institutions for a relevant forum, let me confine myself today to international trade and development.

The suspension of the Doha Round Negotiations in July has brought into focus not only the substantive issues which are the subject of discord, but also the institutionalised asymmetries which continue to pervade the WTO after its emergence from the GATT. While its professed objective is greater openness in all aspects of trade, in practice this objective is observed in a highly selective manner that reflects the predilections and concerns of developed countries. Let me give just a few examples of this selective openness:

I could go on about this. But the basic point is that unless we deliver on the agreed development dimension under the Doha Round, the underpinnings of the WTO will continue to address mainly the mercantilist interests of the developed countries.

It is important for the WTO to resolve the issue of inequitable integration through both political and institutional measures. At the political level, we must recognise the current asymmetries, and agree to do away with them in the present Round of negotiations. This would involve in agriculture, for instance, a clear understanding, both on the removal of distortions caused by developed countries’ measures as well as an understanding on S&D measures required by developing countries to manage their concerns regarding subsistence, small and low-income farmers, food security and livelihoods in their agricultural sectors. Similarly, in manufactures, the concerns of small-scale and labour intensive production as well as of infant industries must be addressed through effective flexibilities. In services, developing countries have acquired skills in the delivery of a number of services, for example through cross border trade (Mode 1) and movement of natural persons (Mode 4) that are critical to their trading partners. For globalization to entail win-win scenarios, the comparative advantage of developing countries should not be stifled by protectionism in their developed partners.

As far as institutional measures are concerned, there is a need for greater emphasis on capacity building and technical assistance to enable smaller developing countries to participate meaningfully in the negotiations. Supply side constraints in such countries have to be tackled through an effective Aid for Trade Programme that ensures additionality of resources, predictability and need-based programmes that improve the capacity of the recipient countries to take advantage of increased opportunities. In order for Aid for Trade to be effective, it needs to be channelled multilaterally and integrated into country development strategies. In terms of decision making, this implies greater emphasis on transparency and openness. Considerations of efficiency alone cannot be allowed to prevail over the need for inclusive decision making procedures to ensure equity and sustainability of the decisions.

As someone who has been deeply involved with the current Round of negotiations in the WTO, I cannot assert with any degree of confidence that these changes are being made in the WTO. Judging from the progress so far, talk of a Development Round remains largely rhetorical. Issues of serious concern to developing countries like cotton, ushering in fair and undistorted agricultural world trade, Duty Free Quota Free Treatment for LDC’s, Implementation Issues, etc. remain unresolved. The fundamental principle of S&D treatment for developing countries to address their concerns of policy space in the major areas of negotiations remains deadlocked. There is as yet, no recognition by some developed countries that the basic premise of a Development Round is primacy for the development needs of developing countries, and not market access for developed countries. Under these circumstances, much needs to be done to maintain the confidence and optimism of the developing countries in this Development Round.

Trade exchanges among the developing countries constitute a promising area of current and future trade growth. According to the Trade and Development Report, 2005, the share of South-South exports in total developing country exports increased from 27% in 1985 to 43% in 2003 i.e. from US$ 97 b to US$ 921 b. Exploring the full potential of South-South trade remains a desirable objective. GSTP is an important vehicle for promoting South-South cooperation. We are actively participating in the ongoing third round of negotiations of the GSTP that was launched at Sao Paulo in 2004, and would like to see its early successful conclusion.

Moreover, India is forging links through regional trade, free trade and comprehensive economic cooperation agreements. We have recently concluded a successful Summit of the IBSA (India-Brazil-South Africa) trilateral partnership. We have been sharing our experience in information technology, biotechnology, pharmaceuticals, medical sciences, and remote sensing with our friends from the developing world, including the developing countries of Africa and Asia. Indian entrepreneurs are taking a serious look at trade cooperation and closer investment in our larger neighbourhood. We believe that these South-South initiatives serve to complement the multilateral trading system. This does not diminish our firm belief in the benefits that can potentially accrue from a fair and strengthened multilateral trading system.

UNCTAD’s mandate must remain the enhancement of development opportunities for developing countries. It must continue to make a real contribution to assist developing countries confront today’s complex trade and development challenges.

As a knowledge-based body, UNCTAD needs to remain ahead of the curve in generation of ideas and in addressing issues related to integrated treatment of trade and development. It has the wherewithal to serve as a brains trust for development-friendly and innovative analyses and policy options.

UNCTAD should continue to examine, from the development perspective, the inherent asymmetries and inequalities in the international market place and its structural limitations.

UNCTAD can play a role in supply-side productive and trade capacity building, in working on issues related to trade diversification, strengthening of technological capacity, and addressing the development dimension of intellectual property rights.

Development, we reiterate, is a shared responsibility, a collective endeavour. Shared responsibility should beget a shared programme for development and a collective response. To this end, there is a need for an effective, results-oriented partnership between the developing and the developed countries. Let us not confront each other; let us together confront the problems, the challenges of development that we face today; and, it is in this context, that UNCTAD must act as an effective bridge between developed and developing countries on the entire range of issues relating to globalization, trade and development."

‘A Sincere Engagement Can Unblock the Doha Round’

It has been just over six months that the Ambassador and Permanent Representative of Uganda to the United Nations in Geneva and the World Trade Organization, Dr. Arsene M. Balihuta has assumed his functions. In an interview to the South Bulletin, Dr. Balihuta responds to questions on the Doha Round, its suspension and likely resumption, and the interests of the Least Developed Countries like Uganda. In his opinion, there is a possible solution to the biggest stumbling block – reduction subsidies and greater market access for agriculture.

Someshwar Singh

SB: What was the role of countries like Uganda in this suspension?

Amb. Balihuta: Minimal. Because really, first of all, both in agriculture and NAMA – we are not even supposed to make commitments. The first thing I did after coming here is look at the issues – first in agriculture and in the light of the objectives of the Round. I started from the Doha Declaration, Cancun was out so I went to the July Framework and then to the Hong Kong. I looked at the issues, the progress and its implications for Uganda. In other words, what was intended – the mandate- what was achieved as far as the negotiations were concerned. You see Uganda does not have to do anything, we do not feature. In agriculture, we do not have to reduce any subsidy, nor open our markets. All we have to do is join with other LDCs to persuade the developed countries to reduce their agricultural subsidies. Our role is really hortatory – it is moral suasion. But we do not have to make any commitments. In NAMA, we were asked to increase the level of binding if we thought we could and if it was necessary and in accordance with our development needs.

So we were not, in any way, a source, a cause or party to the suspension. Because we did not have any vital role to play in the most contentious issues that led to the suspension. Our interests were essentially peripheral.

SB: At the time of the suspension, how far had the negotiations gone in catering to the needs of the LDCs?

Amb. Balihuta: The needs of the LDCs, as far as this Round is concerned, are that we continue getting special treatment. Generally, the interests of LDCs in this Round are in the fact that the Round is focused on development of our countries. In the sense, in order to participate fully in the multilateral trading system and reap the maximum benefits, you need to be a developed country. Because the WTO is a trading institution. It is the World Trade Organization, focusing on the trading aspect of the affairs of countries. So it assumes you can trade. It focuses on the market. It assumes you can trade when you come to the WTO – where you can sell something and buy something. That means you must also produce something to trade. What are really traded on the world market are automobiles, clothing, electronics, grains, primary commodities and food, plus services. Which countries have the capacity and the ability to produce all those and efficiently? It is the developed countries. The world trading system is like the Olympics ground – where you are equal partners and you are supposed to run to the finishing line. It will be the developed countries which will reach the finishing line first. They are the ones that benefit maximum from the multilateral trading system. It is Japan, the US the EU, and Canada that benefit twice – once as producers they get the profit, even by transferring their production lines to other countries to benefit from cheap labour – and then by trading.

This is where the development concept comes in. Instead of letting them run in the stadium with the mature old people, they wanted special treatment so that they can learn how to run, gather energy, catch up and then run. That is the development concept of this Round. That is what I understand. That is what we expected to benefit from this Round - that we are given special treatment, special leeway - given our development situation, in different degrees and doses because LDCs would need more time and more help than developing counties like China, India, and Brazil. If you put all together, who will win? You have to give more of a head start to the least developed countries, then the developing and last the industrialized countries - so that those left behind can catch up. That is what I understand by giving the benefit of development and development aspects.

SB: How far had this Round gone in terms of realizing that development aspect?

Amb. Balihuta: It has not. In fact, it is very contentious. We were in a briefing session of the African Group this morning regarding the outcome of the recent G-20 meeting in Rio. And in this briefing we were made to understand that some members of the G-6 are proposing to open the mandate – precisely on such issues. They are saying that in asking to be given special treatment to catch up – that really expands the mandate too far! In other words, by asking for too much special and differential treatment, you are leading to the defeat of the original objectives of the Round – which were meant to be more liberalisation and more market access than ever before.

SB: Is that a G-6 position to reopen the mandate?

Amb. Balihuta: From the briefing mentioned above, it would appear that some members of the G-6 would like to do that. By focusing more on the market access within the developing and LDCs’ markets for agricultural and industrial products from the developed countries, you would be doing the contrary of what a Development Round is supposed to do. The development objectives, given the multilateral trading system as it is, which focuses on trade of equal partners - to some people actually look contrary to the market access objective. Because in order for the developing countries and LDCs to talk the same language as the developed countries at any given point, the developing countries and LDCs must be given special and differential treatment. But this special and differential treatment you are asking for can actually look as if it is hindering more market access for agricultural and industrial products from the developed countries. For example, while the industrialized countries want to have ‘sensitive products’ in agriculture, perhaps for food security reasons, the G-33 developing countries would like to see ‘special products’ plus a safeguard mechanism. Now for the G-33, the request for special products and safeguard mechanism are development issues – so that as we are running you do not kick us and we fail to catch up with you! But the others (industrialised countries) are saying "no, these SP and SSM are actually hindering more market access for our products." In other words, by requesting for these development issues, you are actually hindering more opening up of markets – your developing countries and LDCs’ markets.

SB: So at this stage even as the talks are suspended, there are attempts to reopen the Doha mandate?

Amb. Balihuta: Yes.

SB: And at the time of the suspension, how far had the negotiations gone in terms development concerns?

Amb. Balihuta: Not very far. As I said, the LDCs are not at the centre-stage. For example, it is not the LDCs who are advocating for SP and SSM. It happened even though we did not ask for it but it is clearly useful for us. It will be relevant for us some years down the line. But in so far as the LDCs are concerned, the Round has not gone far. One has to recognize that we are standing out of the pitch. To be given time to come on to the pitch, to run slowly- that is what is necessary. But people are not seeing that – they are saying ‘open your market for our industrial and agricultural goods." The contention is between the industrialised and the developing countries but it also applies to the LDCs in the long run.

The fundamental objective of delivering the development promises of the Round has not yet been achieved generally, the LDCs included.

Since we are standing on the periphery, we have got what we call peripheral issues. These are Aid for Trade, Trade Facilitation, and issues of Cotton. On those sorts of issues there has been considerable progress. In fact, we feel that even with blockage elsewhere, at least those issues should be allowed to go ahead. But because of the Single Undertaking principle, even progress made under those issues could be reduced to zero. But remember these issues are peripheral and not central to the Round. They are of interest to the LDCs. They are development issues. But they are peripheral to the Round.

SB: What Special and Differential Treatment provisions have been made for the LDCs?

Amb. Balihuta: The Special and Differential Treatment is about letting young and slow runners adjust at a slow pace. In the case of agriculture, for instance, for LDCs the S&D has been great from day one of the Doha Declaration – we do not have to make a commitment either in agriculture or NAMA really. And LDCs have, in principle been allowed Duty Free and Quota Free Market access to all developed countries.

SB: But in the mandate, you are exempt from making any commitment.?

Amb. Balihuta: Especially in Agriculture. In NAMA, according to the July Framework, LDCs need not apply the formula, but as their contribution to the Round, they "are expected to substantially increase the level of binding commitments".

SB: How are the LDCs involved in resuming the talks?

Amb. Balihuta: The LDCs and other groups which are not members of the G-6 are involved in terms of lobbying and by moral suasion and diplomatic contacts. Since they are not the major parties to the positions that led to the suspension, they do not have the substantive leadership to bring them back to the table. So they can only persuade and lobby – hoping that the principals to the negotiations come back. But the decision still has to be made by the main parties to the suspension.

SB: If the mandate were to be reopened, could you please clarify what you are expecting for the LDCs as a package?

Amb. Balihuta: The consensus from what I gather from the LDCs, the African Group and the G-33 is that we stick to the mandate. We cannot open it. As someone said, it would be like opening a can of worms. In any case, if some issues remain after this Round, they can be clarified in another Round. Indeed, it has been like that. This Round is there because issues remained under the Uruguay Round. And as the Director General says, and I agree with him, a lot has been achieved in these draft texts. If we made an Agreement now, already a lot has been achieved despite these other issues as far as the objectives of the mandate go. But what is remaining really and the fundamental problem is in Agriculture. Some people will say the numbers and coefficients. On 24 July, 2006 the Ministers did not even have to talk about NAMA. They got locked up in Agriculture. So the problem is not in the whole mandate – the crucial problem is within a known part of the Agriculture mandate. And since the LDCs and many other countries are not part of it, the bone of contention is really within the G-6.

SB: How is Uganda affected by the suspension?

Amb. Balihuta: We are affected in two principal ways. It creates uncertainty. We are operating on the Uruguay Round and as an LDC we face problems such as tariff escalation and we thought this Round will deal with it. Proposals were made on that. That is a major issue for Uganda. For example, if we export raw coffee to the industrialized countries, the tariff is almost nothing. If you process the coffee, you attract more tariffs. And if you sell the nicely packaged ready to drink coffee, the tariff is very high. This Round was meant to tackle such difficulties. So what we expected is not forthcoming. It is delayed.

Secondly, when the Round stalls, you will find that the plurilateral agreements, especially with the industrialized counties, will become more pronounced. For LDCs like Uganda, the outcomes are worse. For instance, in East Africa and COMESA and SADC, there is an increased momentum to clinch deals in the EPAs (Economic Partnership Agreements).Why? Because it is easier for the industrialized countries to clinch such deals which are more favourable to them.

SB: Are regional agreements and initiatives any substitute to the WTO?

Amb. Balihuta: No. They are complementary. The WTO and the multilateral trading system, despite what we have discussed before, are good in a sense that it has principles which are non-discriminatory. So if you are a smart LDC, you manage your private sector well, and your public sector supports the private sector – then with some competitive firms you can take advantage of the enlarged markets. That is what the Tigers did to a great extent – Hong Kong and Malaysia for instance really used the MTS (multilateral trading system). So the MTS used well by a country has great advantages.

The regional trade initiatives can assist countries to have an enlarged market. It can act like an incubator for young firms at the local level to expand markets and give them capacity to go into the more developed markets. In that sense then, they are not substitutes – they are complementary. They operate in different stages of the life of firms and countries. So the suspension of this Round should not suggest that we should now go to regional trade agreements. They are not substitutes.

SB: What scenarios do you see as a way forward?

Amb. Balihuta: My feeling is that the situation is more or less the same as it was on 24 July 2006. Because the fundamental problem that led to the suspension is still there. It has not been discussed frankly. It has not been negotiated. It is known, the fundamental problem is in agriculture – subsidies and market access. The developed countries are confronting each other on what numbers to take in reducing their subsidies. At the same time, some advanced developing countries seem to be uncomfortable in opening their markets for agricultural and industrial goods as some developed countries would like to see happening. Some developed countries are feeling uneasy by the demands of some advanced developing countries for the developed countries to open their agricultural markets. We seem not to have made much more rapprochement beyond 24 July.

There is no magic in deadlines. There has to be real discussion on the substance under contention. I do not think this has happened. So what really has to happen is that those two issues must be discussed by the leading protagonists in the G-6. There has to be a very sober and sincere meeting of minds, without rushing off to the press.

SB: What is really involved here in your opinion?

Amb. Balihuta: It is not reasonable to expect a developed or developing country to abandon its farmers or peasants – whether it is a few hundred thousand of farmers or several millions of peasants. In many cases, these are the central people that define a country. Cities do not define a country even in the developed countries. It is the people in the countryside who really carry the tradition, the cultures, and principles from generation to generation. It so happens that they have now entered the capitalist arena. They can be annihilated by certain economic policies by making them not able to produce and earn income. So governments are more involved in preserving these peoples’ livelihoods and now there is a serious nexus between economics, commerce, politics and culture. So serious decisions have to be made about these intricate issues. In my view this is the central problem of the Doha Round.

I have a humble proposal. Let developed countries find a way assessing that level of subsidy that can allow them to keep their farmers operating without producing a surplus for exporting. Because it is the exported surplus that is destroying the similar produce of other countries. If we can find an optimal subsidy - and it is possible - especially in developed countries. I really think it is possible. Avoiding such negative externalities should form the guiding principles for finding the magic numbers in the stalled agricultural talks – so that there is optimal subsidy that avoids export dumping.

SB: Does it matter if the Round takes more time than was envisioned?

Amb. Balihuta: This Round was meant to tackle a difficult issue. If the Uruguay Round failed to tackle it, and it took 8 years, why would anyone expect this Round to be shorter? It should have been expected to take longer because it involves these very intricate, sensitive and difficult issues which cross the border of economics and commerce to that of politics. So there is no need to be embarrassed by the passage of the given deadlines.

SB: What do you have to say about the strength of the developing country coalitions?

Amb. Balihuta: The principles of WTO are very noble – the MFN, predictability, transparency, as also the procedural principle of consensus and the democratic principle of equality of members – are very good. Then there is the Single Undertaking principle – where nothing is agreed until everything is agreed. That means all the progress made stays on hold till the whole Round is stitched up. But more importantly, the method and process of negotiations at WTO is Machiavellian. It is not cooperative. It is not collaboration. It is not mutual understanding and supporting or gentlemanly sort of thing. It is Machiavellian and mercantilist. Why? Because country delegations are defending the interests of their countries and they are facing each other like hawks in the WTO. But what are the interests of these countries? They are really the interests of their producers, mainly business interests. And most of the time, the producers in country A claim to represent better the consumers’ interests in the country B and not worry about the effects on producers in country B. Even Adam Smith was against such beggar-thy-neighbour mercantilist philosophy. This appears to be the problem of the negotiations method and process in the WTO from my observation as a newcomer.

Then there is something called ‘constructive ambiguity.’ You cannot be straight forward. Be vague so that your neighbour does not see exactly inside you. You must hold your cards to your chest until a deal is about to be struck, and then you bring them out one by one. That is Machiavellian and competitive.

In that kind of situation, solidarity comes as a last resort. But there is solidarity among countries of like status and mind within the LDCs group, the African group, the G-20 and other developing country coalitions. It is based on our need to see development being given a central place in these trade negotiations.

‘Hard Analysis’ Needed for ‘Good Policy’ Space - Lamy

The WTO Director-General Pascal Lamy believes it is important to make the case not just for policy space but for "good policy" space. "We need to make a convincing case as to why a particular policy is needed, basing ourselves on the facts," Lamy said while addressing the 53 rd session of the UNCTAD Trade and Development Board meeting in Geneva on 27 September, 2006. Speaking on Policy Space, a critical issue for developing nations, and a focus of this year’s UNCTAD Trade and Development Report, Lamy said, "We need hard analysis that holds up to critical examination. We need specificity." While rejecting blind adherence to free trade, he also rejects ‘blind adherence to governments doing pretty much anything and certainly no blind adherence to protectionism. Presented below are extracts from Mr. Lamy’s address.

"I propose to focus my intervention this morning primarily on the issues relating to trade policy that are raised in this year’s UNCTAD Trade and Development Report that is before you, before moving on to the current state of the WTO negotiations under the Doha Development Agenda.

Let me start by saying that I share the views expressed in the Report about the contribution that trade can make to development and to poverty alleviation. Trade is today a crucial ingredient in a policy mix which must nevertheless contain many other ingredients to achieve successfully this objective. This means, no blind adherence to free trade. But this also means no blind adherence to governments doing pretty much anything and certainly no blind adherence to protectionism. If trade opening is not sufficient, it remains a necessary ingredient. This is the core of what I have called the "Geneva Consensus".

Market access for developing countries is therefore an important ingredient to this policy mix. Progress has been made over the years in improving conditions of access in developed country markets but it is clear that much remains to be done in the areas of agriculture and labour-intensive manufactured products. This, of course, is an important part of the Doha mandate, where a successful completion of the negotiations will bring real progress in reducing tariffs, addressing tariff peaks and tariff escalation, and making substantial inroads into trade distorting subsidies in agriculture. It is gratifying, therefore, to see Kofi Annan’s appeal in the foreword to the Report for the necessary determination and political courage to bring the Round to a successful closure.

The Report rightly notes that we continue to face a challenge in ensuring that non-tariff measures and barriers to trade do not simply negate progress made on the tariff front. The Report singles out anti-dumping actions affecting the exports of developing countries. But I would point out that this is not just a North-South issue. Developing countries have become the most frequent users of anti-dumping in recent years, not only against developed countries but also - and primarily- against other developing countries.

Indeed, while developed countries still provide the lion’s share of market opportunities for developing country exports, this situation is changing. South-South trade has been more dynamic than North-South trade for some years now, and it is therefore clear that the trade policies of developing countries also affect one another’s trade prospects and opportunities.

An important part of this years’ report is devoted to the issues of policy autonomy or policy space. The basic argument which UNCTAD is making is that international commitments in the finance or trade fields are preventing developing countries from realizing their true development potential, in that governments are prevented from intervening in the economy in ways that are essential to progress.

When using this argument, I believe it is important to make the case not just for policy space but for "good policy" space. We need to make a convincing case as to why a particular policy is needed, basing ourselves on the facts.

Take the example of the TRIMs Agreement. I believe it is more than debatable that the domestic value-added content of exports would increase if performance requirements were permitted. Are we sure that developing countries that tried to impose performance requirements would easily attract foreign investment, and if so, at what price in terms of other FDI incentives? Another question is whether the objectives of TRIMS could not be achieved more effectively, at least in efficiency terms, through the tariff structure.

Another example is the Agreement on Subsidies and Countervailing Measures, which is again accused of impinging on national rulemaking authority. The alternative, it seems, would be to have no subsidy disciplines, which raises an intriguing question. Do we want to argue that the best contribution the WTO can make to development is to ensure that developing countries have no obligations in this area? Or that export subsidies should be allowed?

Obviously, the WTO legislators - its Members - while agreeing on subsidies rules, have also ensured the necessary flexibilities for Least Developed Countries, and in the case of export subsidies also for countries with a per capita GDP of less than $1000. Therefore, all LDCs and a large number of developing countries are exempt from the prohibition of export subsidies.

The argument of policy space is also often made regarding Industrial Tariffs. The Report argues for "flexibility" in tariff commitments on account of: i) revenue needs; ii) greater difficulty in developing countries to raise revenue for subsidization: and iii) the desirability of high variance in tariff levels in order to tailor protection levels in the context of an industrial policy. Developing countries could thus subscribe to a fairly low overall average tariff level, with plenty of autonomy to raise and lower individual rates. These recommendations go to the heart of the issue of what role governments can play in industrial development and diversification. Again, honest people may disagree, especially when it comes to the question of the degree of protection to be granted and the ability of governments to manage such policies effectively. This is fertile ground for debate, a debate which I believe must be engaged, looking at the facts.

Looking at the facts means looking at the difference between bound rates and applied rates. In the case of Egypt, average bound rates on industrial goods stand at 30%, whereas the applied stand at 12%. In the case of Thailand, bound rates stand at 22% whereas applied stand at 10%. But there are other cases: China’s bound and applied rates stand at 9%. If one takes into account that the tariff negotiations are based on the bound rates, it is clear that calls for policy space would mean very different things for different countries.

Looking at the facts is also needed regarding the relationship between tariffs and fiscal revenue. It is mostly LDCs in Africa and Caribbean countries where tariff revenues are a significant proportion of fiscal revenues. But in the current negotiations, many of these countries are exempted from any cuts on bound tariffs. For other developing countries, such as China, Brazil, Argentina, Indonesia, South Africa, Republic of Korea, Turkey, less than 5 per cent of tax revenues come from tariffs. India is an exception with about 15 per cent of fiscal revenues being generated by tariffs. But this has not prevented India from reducing aggressively its tariffs, year after year.

We need hard analysis that holds up to critical examination. We need specificity. I believe UNCTAD is well placed to contribute to such efforts, and it would be a pity to miss such opportunities.

Finally, on the question of why countries - even small countries that cannot influence their terms of trade - might find it in their interests to engage in international commitments, I should like to make two considerations. First, even smaller countries with little or no influence on world markets can influence negotiated outcomes through participation. The opt-out option simply creates space for others to do as they wish, and offer only what suits them. There is then no dealing, no bargain, only a "take-it-or-leave-it" outcome. This argument is particularly important, I think, when we recognize, as the Report does, that different developing countries face very different situations in regard to their trading relations and trade opportunities. Second, as countries become increasingly engaged in international trade, international commitments help to articulate, solidify and render more stable the process and outcome of trade policy formation.

The report has an interesting chapter on the functioning of domestic markets. It is clear that the degree to which domestic markets are able effectively to transmit price signals is a key determinant of how far an economy can reap the benefits of opening to trade. If the domestic markets are functioning poorly, either because of excessive concentration, or because of government policies, then there may even be scenarios where opening up to trade could harm the domestic economy! While this is not an excuse to avoid competition and the benefits that flow from it, it is certainly a warning that trade liberalization by itself may well not be enough.

This leads me to the issue of infrastructure for trade. We know that a lack of infrastructure, be it human capital, physical infrastructure, or efficient services, will choke off trading opportunities and the growth and development opportunities that accompany them. We also know that governments, both national governments and the international community, have a vital role to play in helping to foster this infrastructure. But these efforts are pro-trade, not instead of trade. This is what is needed to turn the opportunities offered by more open markets into realities, by addressing capacity constraints in developing countries.

Trade infrastructure is part of the wider picture of aid for trade, a topic which, in my view, might deserve more of UNCTAD’s attention. As you are aware, the task force on aid for trade that we agreed to establish in Hong Kong has finalised its work and its recommendations which will be consider at the upcoming WTO General Council meeting on 10 October. I am extremely grateful to the members of the Task Force under the leadership of Swedish Ambassador Mia Horn for the recommendations they have put forward on how Aid for Trade should be "operationalized" and how it might contribute most effectively to the development dimension of the DDA. This work has been on-going in parallel to the efforts to revamp the Integrated Framework for LDCs, in a clear recognition that Aid for Trade is a clear complement to the trade opening agenda.

For my part, I have been actively consulting with various partners including the World Bank, IMF, UNDP, bilateral donors and regional development banks pursuant to the mandate given to me in Hong Kong, as recently as during the recent meetings of the World Bank and the IMF in Singapore. These consultations have made it clear that Aid for Trade is a necessary complement to the Doha Round, but not a substitute. Opening up trade multilaterally and strengthening the rules-based trading system are seen by Members as being the most important contribution that the WTO can make to accelerating economic growth, promoting development and reducing poverty.

I am also aware that the current state of play in the DDA has led some to ask whether the aid for trade initiative will be realised. My position on this is that aid for trade is not part of the single undertaking and therefore should continue on its track and this view is reinforced by the political messages that I am sure you have also heard from many members restating their commitment to a comprehensive aid for trade package. Nevertheless, I also believe that its benefits will be smaller without new trade opportunities that will flow from a successful Round.

It is clear that both trade opening and Aid for Trade must fall on fertile ground to flower and that effective institutions and governance are essential to this end. The role of institutions and the quality of government are clearly crucial ingredients in any analysis of what makes the difference between success and failure in meeting the challenges of development, as well as what role trade policy can play in that process.

The relationship between trade, poverty, inequality and income distribution is a complex one and addressing them is crucial to a viable development strategy, to public support for sound policies, and to perceptions of the legitimacy of government, including in an international context. I do not think these are contentious observations, but a vast amount remains to be done to understand the true nature of these challenges and how we should tackle them.

Let me conclude by sharing with you my assessment of the state of play in the Doha negotiations. Last July, as you know, we decided to suspend the Doha negotiations to allow a period of "time-out" for Ministers to consider how they can each contribute to breaking down the remaining obstacles, particularly in agriculture. I know that serious political reflection has been taking place in capitals since then. I am convinced that the result of this process will be an acknowledgement that there is no acceptable alternative to the successful conclusion of the Round.

In the meantime, I believe it is important that we create a space for quiet discussions, hard reflection and discreet bridge building so that positions on agriculture market access and subsidies can be narrowed. Resumption only makes sense if the position of the main players changes - and this will not happen without heavy political lifting at home. While this hopefully takes place, we should advance the Aid for Trade, building on the progress and momentum that clearly exists. I will continue to work closely with others to ensure that the initiative continues to gather momentum as we deepen and widen our coherence activities.

My number one objective remains concluding the negotiations. That is what WTO members have been saying in the last weeks, and developing countries have said it more loudly than others. But it is also clear to me that we need to think more creatively about how trade, development and growth can fit together into a coherent whole. Aid for Trade is a key piece of that puzzle. It presents all of us with the major opportunity - and challenge - of translating our promise of greater global cooperation into concrete actions and meaningful results. Let’s seize it."

Doha Agenda: Suspension No Cause for Lowering Ambitions - Supachai

In terms of substance, the suspension of the Doha round of multilateral trade talks need not lead to a lowering of ambitions with regard to the Round´s development dimension, says UNCTAD Secretary- General Dr. Supachai Panitchpakdi. Addressing the 53rd session of the Trade and Development Board on 27 September, 2006 he said achieving meaningful and substantial development content remains indispensable for a successful outcome of the negotiations in all areas and would also give a major boost to the world economy. In the following extracts from his address, Dr. Supachai enumerates some of the implications of the current suspension, highlighting the need to resume the stalled negotiations.

"The Trade and Development Board is meeting today at a crucial juncture in the Doha negotiations for its annual review of developments and issues in the post-Doha work programme of particular concern to developing countries. The Board has convened annual dialogues reviewing critical issues of the Doha negotiations since 2002. Our discussions have focused on issues that most affect the development prospects of developing countries. It is gratifying to note that this exercise has been highly appreciated by member States. This year we have the opportunity in this universal forum that is UNCTAD to review and discuss key issues in the stalled negotiations with a view to ensuring the realization of the DDA enterprise. A successful, balanced, and development-focused conclusion of the Round is a common global good. The Round was also meant to contribute to the MDGs. We should not lose sight of the longer-term, broader objective of those goals for the year 2015, including halving poverty and creating the kind of trading system that best promotes development. These messages of hope are reflected in the secretariat´s background report, which provides a concise and comprehensive analysis of developments in the Doha negotiations since 2005.

International trade can be a powerful engine of growth, development and poverty eradication in all countries, and particularly in developing countries. This can be seen from the continuous rise in the share of exports of goods and services in GDP. Trade contributes to generating resources for development by stimulating production, promoting exports, increasing access to essential services, creating jobs, and improving income and welfare. Trade’s contribution to development is recognized by the Millennium Declaration and the 2005 World Summit Outcome.

Experience teaches us that trade works for development, but only under the right conditions. Rules must be fair, clear and balanced; an enabling policy environment must be assured; and market access and entry opportunities must be provided to all participants. This is why the trading system, and trade negotiations by extension, is so important for developing countries. An open, rule-based, non-discriminatory, predictable and equitable multilateral trading system is clearly the best route to generating positive development outcomes and establishing an enabling policy environment with adequate space for development. Such a system offers the best chance for export-led economic growth in developing countries seeking to fully engage in international trade with full confidence that their efforts can deliver anticipated development gains.

But countries’ prospects for export-led growth and development have diminished with the suspension of the Doha Round. Recent failures to advance in the negotiations have even lowered countries’ confidence in the multilateral trading system itself. The international community thus faces the challenge of bridging the divides so that a fresh phase of fruitful negotiations can be launched. Putting the Doha negotiations back on track will require that WTO Members reach agreement and show flexibilities on modalities for agriculture and NAMA and on concluding the negotiations under the "Single Undertaking" in the shortest possible timeframe.

The current suspension of the Round risks detracting from any significant development yields expected from progress achieved in the negotiations thus far. Many development-related areas of the agenda have been "put on hold". For example, LDC exporters are still deprived of opportunities to export goods duty- and quota-free to their principal export markets under transparent and simplified rules of origin. Agricultural exporters in developing countries must continue to wait for a reduction of export subsidies in agriculture. And cotton growers and exporters in West Africa see no immediate action for cotton subsidies to be addressed ambitiously, expeditiously and specifically, as had previously been expected to occur in 2006. Unfortunately, as these and other examples suggest, the suspension of the talks hurts the world´s poorest most acutely.

But aside from missing a historic opportunity to provide immediate and direct gains to spur development worldwide, there are many long-term systemic implications of the suspension. I hope the Board can shed some light on the nature of these implications and how best to address them.

First, the suspension is undeniably a temporary setback to the multilateral trading system. The current round of negotiations, if concluded with a substantial development-oriented outcome, could bring gains for economic growth and poverty alleviation. Second, the suspension sends a negative signal on the future of the world economy and might encourage a resurgence of protectionism. Third, countries might risk intensifying their pursuit of bilateral and regional trade initiatives with deeper commitments; such agreements are already proliferating.

Fourth, the distortions caused by subsidies in world agricultural trade will persist at the current level, thereby jeopardizing the prospects of developing countries to generate additional export revenue and income from agricultural exports, including cotton. This is because agricultural subsidies can only be addressed in multilateral forums, and no single RTA can possibly replace such an important function of the MTS. Fifth, countries are likely to have increasing recourse to dispute settlement. The inability to find negotiated solutions to trade concerns will lead only to more formal and judicial solutions, which are more confrontational and could damage bilateral trade relations. These negative consequences of suspending the Round point clearly to the need to resume the negotiations sooner rather than later.

Notwithstanding the suspension of the Round, the WTO continues to be the central pillar of the international trading system. Its relevance and importance should thus not be questioned but should on the contrary be supported more vigorously. The WTO continues to administer multilateral trade agreements; provide a forum for multilateral trade negotiations, including the Doha Round; and to constitute the world’s most effective dispute settlement mechanism. No single existing regional or bilateral trade agreement, nor any other trading arrangements, can deliver the same benefits, predictability and security as a well-functioning and development-oriented multilateral trading system.

Arguably, the suspension of the Round has cast uncertainty on the overall negotiating process and its eventual conclusion, particularly in terms of the timing, quality and ambition of a possible final package. And prospects for resumption are subject to developments in domestic electoral processes and political decisions. Many have expressed concerns that the scheduled expiry of the US Trade Promotion Authority on 30 June 2007 will make the negotiating prospects less clear unless negotiations are resumed soon.

Since an open, non-discriminatory and rule-based system should be deemed as a public good that provides a fair share of benefits to all, it is the common responsibility of all countries to demonstrate the renewed political will and additional flexibilities needed to facilitate the resumption of work with a leadership role for the key players.

In terms of substance, the suspension need not lead to a lowering of ambitions with regard to the Doha Round´s development dimension. It may be recalled that in the 2005 World Summit Outcome, the international community committed itself to work expeditiously towards implementing that dimension. Achieving meaningful and substantial development content remains indispensable for a successful outcome of the negotiations in all areas and would also give a major boost to the world economy.

For example: Development has been set at the heart of the negotiations but has yet to be fully and effectively integrated into the core areas of market access negotiations. This is where most of the commercial benefits would arise. It requires improved effective market access and entry for exports of developing countries, as well as improved donor support in building their supply capacities, competitiveness and trade-related infrastructure. It also requires helping developing countries to benefit more fully from the opportunities generated by multilateral trade liberalization, including through effective Aid-for-Trade. Such objectives must be vigorously pursued if the Round is to deliver its development promise.

UNCTAD´s commitment to the multilateral trading system, and to assuring development gains from the international trading system and trade negotiations, remains part of our central mission and vocation. This was reaffirmed by the São Paulo Consensus. We will thus continue to steadfastly support - through our research and policy analysis, our intergovernmental consensus-building and our technical assistance and capacity development activities - the Doha Round and developing countries’ engagement in all its aspects. In my opening statement this morning I enumerated the many forms our involvement takes.

I am glad that our competence and experience in trade-related capacity-building has made us a partner in the Aid-for-Trade discourse and its operationalization and implementation. As I said earlier, we embrace a multi-stakeholder approach in our work. I am thus pleased that Mr. Lamy has accepted our invitation to participate in this session of the Board and to share with us his perspectives on the way forward in the Doha Round negotiations."

‘Aid For Trade’ Initiative In Need of A Definitive Structure

As the ‘Aid for Trade’ initiative of the World Trade Organization gathers steam, there are some essential next steps that need to be taken. In the following article, Samuel G. Asfaha, Programme Officer on Commodities and Economic Diversification of the Trade for Development Programme of the South Centre, argues that only by giving it a concrete shape, can the initiative deliver. The following article, which provides a background to the AFT initiative, is written in the author’s personal capacity.

Since its inception in the run-up to the Hong Ministerial Conference, the WTO Aid for Trade (AFT) agenda has taken a center stage in the Doha Round Negotiations. The AFT proposal that was first discussed in the context of the Doha Round Negotiations was a joint-proposal [1] prepared by the International Monetary Fund (IMF) and the World Bank. It was taken up by the WTO and concretized in the Hong Kong Ministerial Declaration (HKMD) adopted in December 2005.

According to paragraph 57 of the HKMD, "Aid for trade should aim help developing countries, particularly LDCs, to build the supply-side capacity and trade-related infrastructure that they need to assist them to implement and benefit from WTO Agreements and more broadly to expand their trade." In accordance with the mandate of paragraph 57, a Task Force on AFT was established with the mandate to provide recommendation on how to "operationalize" AFT. It was also supposed to look into how AFT might contribute most effectively to the development dimension of the Doha Development Agenda. The Task Force submitted its report and recommendation [2] at the General Council meeting on 27 and 28 July, 2006.

Basically, the mandate of paragraph 57 of the HKMD as well as the report of the Task Force justify AFT on the basis that supply-side and infrastructure-related constraints limit the ability of developing countries, particularly LDCs, to take full-advantage of market access opportunities. In other words, while negotiations could deliver market access opportunities, actual entry into market is determined by competitiveness, which in turn is determined by supply-side capacity and infrastructure. Thus, the AFT agenda’s focus on the provision of supply-side capacity and infrastructure building assistance could be a noble initiative.

However, for the AFT agenda to deliver on its intended goals, it is of fundamental importance that the AFT mechanism itself has some pragmatic and concrete legal and institutional framework to ensure that the AFT agenda:

· shall be fully implemented to meet the stated objectives;

· shall have a broader mandate to encompass trade-related adjustment costs;

· shall not involve a trade-off with other types of development aid, i.e. to ensure ‘additionality’ of AFT resources rather than reshuffling of existing aid; and

· shall not become a ‘Trojan horse’ that takes hostage developing countries’ negotiating agenda and divert attention from key development issues of the Doha Round.

The report of the Task Force on AFT has touched upon, and in some ways attempted to address, some of the above-mentioned issues. It has not done that in a systematic way, nor dealt with it comprehensively. The report is generally silent on the institutional and legal architecture for administering the AFT. Apart from listing certain fundamental and well-known principles [3] of good practices on delivery of aid (such as coherence and harmonization among various donors, country-ownership, mutual accountability, transparency, predictability and multi-year commitment), the report shuns away from making a meaningful recommendation in regard to legal or institutional framework such that the implementation of good aid delivery practices that are listed in the recommendation and in other international instruments such as the Paris Declaration on Aid Effectiveness and the Rome Declaration on Harmonization will be assured.

One of the valuable lessons of the Uruguay Round was that good practices and good endeavours often get sidelined in practice - in the absence of institutional and legal framework to ensure compliance. The unfulfilled promises with respect to operationalising the special and differential treatment and the existing backlog of Implementation Issues are good examples. Therefore, if AFT is to have any meaningful relevance to developing countries, it should have a concrete institutional and legal architecture that ensures, in a legally enforceable way, additionality of money; respect to recipient countries’ development priority, trade policy and negotiating positions; transparency and predictability.

The failure to build or specify such an architecture raises concerns related to the likely use or ‘misuse’ of AFT as a ‘negotiating chip’ in the WTO. Used as such, it could not only divert developing countries’ attention from critical development issues in international trade negotiations, i.e. ensuring a fair and balanced multilateral trading system, but also entice them to take binding obligations in exchange for non-binding promises on aid. This concern is strengthened by the fact that while obligations that developing countries would take in this Round are legally binding and enforceable (with consequences for breaches) AFT in its current form is non-binding hence entails no consequence if (when) donors break any or all of the promises they make on AFT.

Particularly now with the Doha talks suspended, AFT has shifted to the centre of the debate on trade, growth and development. [4] The concern with this shift rests on the attempt to pass on AFT per se as the largest piece of the development-cake that the Doha Development Agenda (DDA) could deliver. Such concerns are not without basis. The fact is that there has been an increasing trend in the multilateral trade negotiations to run with components of development and assume they are perceived as the central piece. Thus, one finds development being narrowly interpreted to mean aid, and technical or capacity building assistance.

Developing countries and all organizations concerned with development, hence, must assert that aid cannot be a substitute to a fair and balanced trading system. Therefore, they should stress on the need for the creation of institutional and legal framework with an effective monitoring and enforcement mechanism in order to ensure that AFT plays a complementary role in the development of developing countries and will not be used to compromise on the real developmental issues of the Doha Round, which is the creation of a fair and balanced trading system. In the absence of such a framework, the risk that development may fall hostage to AFT is high. No matter how many commended principles are piled-up, in the absence of an appropriate institutional and legal architecture - AFT may bring more anguish than cure. So discussions on AFT within the Development community should go beyond ‘what good guiding principles should be there’ to encompass ‘what architectural mechanisms for ensuring implementation of and adherence to good guiding principles’.

Without a legal and institutional framework, AFT raises expectations that are unlikely to be met. As a result, it could raise resentments and further weaken the credibility of the multilateral trading system. Therefore, the creation of a robust institutional architecture for the realization of the AFT agenda in a manner that supports development could be a win-win situation to both developing and developed countries.

Notes

[1] IMF and World Bank, 2005, "Doha Development Agenda and AFT," September.

[2] WTO, 2006, "Recommendation of the Task Force on AFT", WT/AFT/1.

[3] These principles are, by and large, consistent with such instruments as the Paris Declaration on Aid Effectiveness and the Rome Declaration on Harmonization.

[4] For e.g. the EU trade commissioner, Mr. Peter Mandelson, has suggested to carve out or salvage what he called a" development package"- which includes AFT as one of the seven issues of the package - out of the ailing Doha talks.

Spotlight on Poverty With Guinness Record Attempt

Bangkok, 13 Oct -- The 2006 United Nations International Day for the Eradication of Poverty has a different flavour this year. According to the UN Information Services, the commemoration will be in conjunction with the "Stand Up Against Poverty Campaign" which aims to set an official Guinness World Record for the most number of people to Stand Up Against Poverty.

The UN Day for the Eradication of Poverty program will take place at the UN Bangkok on 16 October from 10 a.m. The programme will include the launch of the report "The Millennium Development Goals: Progress in Asia and the Pacific 2006", from UNESCAP, ADB and UNDP on anti poverty progress, or lack of progress, in this region.

Participants will also view the Celebrity Voices viewing and speeches with anti poverty messages for this year’s theme, Working Together Out of Poverty. Bangkok will also host the global event The Stand Up campaign, aiming to set an official Guinness Record for the most number of people to Stand Up Against Poverty. The regional UN Millennium Campaign in the Asia-Pacific is expecting 15-20 million people in this region to stand up.

United Nations Secretary General Kofi Annan said: "The challenge to stand up against poverty has captured the imagination of people around the world. We are standing up for the Millennium Development Goals; we are standing up to hold leaders to their promises; we are standing up because until we meet the Goals, we will not give up."

Sewage Discharge Destroying Coastal Habitats

The Hague, 4 Oct -- A rising tide of sewage is threatening the health and wealth of far too many of the world’s seas and oceans, a new report by the United Nations Environment Programme (UNEP) says.

In many developing countries between 80 per cent and nearly 90 per cent of sewage entering the coastal zones is estimated to be raw and untreated.

The pollution-- linked with rising coastal populations, inadequate treatment infrastructure and waste handling facilities-- is putting at risk human health and wildlife and livelihoods from fisheries to tourism.

There is rising concern too over the increasing damage and destruction of essential and economically important coastal ecosystems like, mangrove forests, coral reefs and seagrass beds.

The problems contrast sharply with oil pollution. Globally, levels of oily wastes discharged from industry and cities has, since the mid 1980s been cut by close to 90 per cent.

Other successes are being scored in cutting marine contamination from toxic persistent organic pollutants like DDT and discharges of radioactive wastes.

The study, called the State of the Marine Environment report, says overall good progress is being made on three of nine key indicators, is mixed for two of them and is heading in the wrong direction for a further four including sewage, marine litter and ‘nutrient’ pollution.

Nutrients, from sources like agriculture and animal wastes, are ‘fertilizing’ coastal zones triggering toxic algal blooms and a rising number of oxygen deficient ‘dead zones’.

Meanwhile, the report flags up fresh areas in need of urgent attention. These include declining flows in many of the world’s rivers as a result of dams, over-abstraction and global warming; new streams of chemicals; the state of coastal and freshwater wetlands and sea level rise linked with climate change.

Researchers are also calling for improved monitoring and data collection on continents like Africa where the level of hard facts and figures on marine pollution remains fragmented and woefully low.

The report has been compiled by UNEP’s Global Programme of Action for the Protection of the Marine Environment from Land-Based Sources (UNEP/GPA).

The findings will be given to governments attending an intergovernmental review of the 10 year-old GPA initiative taking place in Beijing, China, from 16-20 October.

Achim Steiner, United Nations Under Secretary-General and UNEP Executive Director, said today:" An estimated 80 per cent of marine pollution originates from the land and this could rise significantly by 2050 if, as expected, coastal populations double in just over 40 years time and action to combat pollution is not accelerated".

He said the GPA was the key initiative, backed by the international community, in order to conserve and reverse declines in the health of the world’s oceans and seas.

Currently more than 60 countries across Continents including Africa, Asia and Latin America and the Caribbean are now part of this global effort.

South Centre News

Board & Council Meetings

The Seventh meeting of the Council of Representatives and the 17 th meeting of the Board of the South Centre will be taking place in Geneva on 16 October. Members of the Board of the South Centre will be holding additional meetings on 17 October.

Executive Director

The Executive Director of the South Centre, Prof. Yash Tandon, participated in the high-lvel conference on Economic Partnership Agreements (EPAs) negotiatons held in Brussels on 12 October, 2006. The details are given below.

High-Level Conference on EPA Negotiations

The South Centre, in partnership with a consortium of ACP and European NGOs, organized a high-level conference on negotiations related to Economic Partnership Agreements (EPAs). NGO co-hosts include: Africa Trade Network, CPDC, Christian Aid, ICCO, 11.11.11, Oxfam International and Traidcraft. The conference in Brussels on 12 October, 2006 provided a platform for ACP governments to voice their views on these negotiations, in the light of the EPAs review expected before the end of this year. Ministers from various ACP regions participated, as well as European Member State policy-makers and parliamentarians, representatives from the European Parliament and European Commission, intergovernmental agencies, journalists and civil society.

Trade for Development

The staff of this Programme

• Participated in two meetings of G-33 to exchange information on recent discussions related to Special Products (SPs) and Special Safeguard Mechanism (SSM). The South Centre’s contributed to these discussions by preparing background documents.

• Attended a roundtable organized by the ACP Secretariat (Geneva office) for ACP delegations to share views on the suspension of the Doha Round On the 6th October. The South Centre’s contribution to this debate consisted in presenting several short and long term possible scenarios for the Doha Round and promoting discussion on possible challenges and needs of developing countries.

• Hosted on the 10th October, a group of students from the School for International Training. The students who visited the Centre were briefed on the current state of play of the WTO negotiations, including a presentation on several conceptual elements related to development policies.

Global Governance for Development

The programme published The South Centre Quarterly on Trade Disputes: Third Quarter 2006. This issue addresses the possible effect of the suspension of WTO negotiations on the dispute settlement activity of most developing countries; and highlights the relevance a recent dispute settlement report to the trade facilitation negotiations.

The Innovation and Access to Knowledge Programme:

The IAIP programme staff attended the WIPO General Assembly meeting from September 26 to October 2006. In preparation for the meeting, the programme came up with an informal Background Note and organised informal meeting for developing country delegates and officials from the Capital. This meeting was held in Geneva in conjunction with the Third World Network on 24 September 2006. The IAIP provided technical assistance and circulated its various research outputs during the meeting.

Editorial

Taking Responsibility for Shared Development

At the annual get-together of world leaders at the United Nations headquarters in New York, some of the Heads of State from the South were open and frank about the current malaise in world affairs. They provide a clearer insight into the kind of North-South cooperation that defines the current world order. Despite numerous resolutions and declarations in international fora, the fact remains that the fate of nearly a billion people on this planet has been sealed for want of real concern to help them have a decent human existence. Speaking on behalf of the Group of 77 and China at the UN General Assembly, President Mbeki of South Africa admitted that world leaders have crafted comprehensive plans and bold declarations to defeat the scourge of poverty and underdevelopment. But ‘for a decade and more, some of the developed nations have consistently refused to implement the outcomes and agreements of this world body that would help to alleviate the wretchedness of the poor.’

A global partnership between nations is in fact the only way out of all the current flashpoints of political unrest and economic underdevelopment. "Yet, this common commitment for a global partnership for development cannot be transformed into reality when the rich and powerful insist on an unequal relationship with the poor," as President Mbeki pointed out. "A global partnership for development is impossible in the absence of a pact of mutual responsibility between the giver and the recipient. It is impossible when the rich demand the right, unilaterally, to set the agenda and conditions for the implementation of commonly agreed programmes."

"Precisely because of the absence of a global partnership for development, the Doha Development Round has almost collapsed. Indeed, because the rich invoked, without shouting it, the slogan of an over-confident European political party of the 1960’s, and directed this uncaring declaration to the poor of today – "I’m alright Jack!" - we have not implemented the Monterrey Consensus on Financing for Development, thus making it difficult for the majority of the developing countries, especially those in Africa, to achieve the Millennium Development Goals, and have reduced the Johannesburg Plan of Implementation to an insignificant and perhaps forgotten piece of paper." There is so much that can be read into that powerful affirmation from the Chairman of the G-77 and China.

The true path to peace is shared development. That was what President Lula told the UN General Assembly this year. "If we do not want war to go global, justice must go global. This is why, with the serene conviction of a man who has dedicated his life to fight peacefully for the rights of the working people, I say to you: the search for a new world order, fairer and more democratic, it is not only in poor countries’ or in emerging nations’ interest. It is also or even more in rich countries’ interest, as long as they have eyes to watch and ears to hear, as long as they do not make the mistake of ignoring the hideous cry of the excluded."

President Lula sees the various manifestations of the world’s flashpoints as inter-connected. "The fight against hunger and poverty, the breakdown of the Doha Round and the stalemate in the Middle East are interconnected issues. The appropriate handling of these affairs requires trust in negotiated solutions at the multilateral level. At this very moment, this trust has been shaken. This is extremely serious. The world order that it is our task to build must be based on criteria of justice and respect for international law. This is the only way to achieve peace, development and genuine democratic coexistence within the community of nations."

Indeed, the suspension of the Doha Round of trade negotiations also brings to the fore the ‘selective openness’ that is sought to be achieved. In the words of India’s Commerce Minister Kamal Nath, "While it’s (WTO’s) professed objective is greater openness in all aspects of trade, in practice this objective is observed in a highly selective manner that reflects the predilections and concerns of developed countries." Examples of this selective openness are: National borders should matter less and less for merchandise trade and capital flows. But we are told – don’t talk about technology flows and labour flows; Subsidies are bad for industrial sectors, but on agricultural subsidies, the only thing we hear is that we’ll get back to you; Tariffs should be transparent and ad valorem in the industrial sector. In agriculture, now, that’s something else; The private interests of IPR holders are sacred, issues of public interest regarding intellectual property are of a second order.

Taking responsibility for shared development calls for a new era in international relations where cooperation has to be unconditional, fair and cognizant of human dignity. It has been rightly observed that Co-operation which needs consideration is a commercial contract and that conditional co-operation is like adulterated cement which does not bind.

Attached please find the latest issue of the South Bulletin in pdf and word
formats. Focus on 'Taking Responsibility for Shared Development.'

See attached file: bulletin133.pdf
See attached file: South Bulletin 133Word.doc
Someshwar Singh

Senior Editor
South Centre

Ch. du Champ d'Anier 17
1211 Geneva 19
Switzerland

Tel-(4122)7918044
Fax-(4122)7988531

singh@southcentre.org
web site: www.southcentre.org

Latest issue of the South Bulletin no 133

Attachment: bulletin133.pdf (0.14 MB) SouthBulletin133Word.doc (0.21 MB)

singh@southcentre.org

Friday, October 13, 2006