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UNCTAD Policy Brief No. 1/2013: The Post-2015 Agenda

Policy brief by Kozul-Wright, Richard/UNCTAD, 2013

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UNCTAD has a key role in the post-2015 process. Specifically, as the focal point in the United Nations for the integrated treatment of trade and development, and interrelated issues in the areas of finance, technology, investment and sustainable development, it falls to UNCTAD to take a leadership role in integrating economic development and related global economic issues into the United Nations-led post-2015 agenda.

UNCTAD AND
The PosT-2015 AgeNDA


The post-2015 development agenda will play a central role in shaping development
thinking over the coming years. It is therefore vital to secure an outcome which
gives due weight to economic challenges and the changes to the global economic
system necessary to meet those challenges. A commitment to the eradication of
extreme poverty is expected to be one such challenge. This would be a welcome
step forward and accords with UNCTAD’s founding principles. The opening
paragraph of the Final Act of the first United Nations Conference on Trade and
Development (UNCTAD I) reads in part: “The States participating in the Conference
are determined… to find ways by which the human and material resources of the
world may be harnessed for the abolition of poverty everywhere.” It goes on to
recognize that “if privilege, extremes of wealth and poverty, and social injustice
persist, then the goal of development is lost,” and that “national exertions [of
developing countries to raise the living standards of their peoples] will be greatly
impaired if not supplemented and strengthened by constructive international
action based on respect for national sovereignty”.


UNCTAD thus has a key role in the post-2015 process. Specifically, as “the focal
point in the United Nations for the integrated treatment of trade and development,
and interrelated issues in the areas of finance, technology, investment and
sustainable development” (Doha Mandate, para. 18), it falls to UNCTAD to take a
leadership role in integrating economic development and related global economic
issues into the United Nations-led post-2015 agenda.


economic development:
still the missing dimension?
Sustained improvements in living standards
depend on rising productivity and per capita
incomes, good jobs and reliable public services.
These, in turn, require long-term investments
and a supportive system to finance them.
Creative market forces are essential, but these
can be countered by restrictive macroeconomic
policies and wage cuts which stifle demand.
More active industrial policies are needed
to encourage production in areas of rapid
productivity growth, develop the infrastructure
needed for increased and diversified production,
and adapt and develop essential technologies.
Policies to encourage a financial sector strongly


U n i t e d n at i o n s C o n f e r e n C e o n t r a d e a n d d e v e l o p m e n t


No.01


focused on financing productive investment
are essential, and adequately funded universal
social programmes need to be gradually rolled
out.


To date, most of the discussion of the post-
2015 agenda has continued the Millennium
Development Goals focus on social deprivation
(in terms of extreme poverty, health, education,
etc.), albeit with a heightened sensitivity to
human rights and environmental concerns.
However, little attention has been given to the
mobilization of resources needed at the national
and global levels to meet any new goals,
and almost none to the systemic constraints
on inclusive growth and development. In
the Millennium Development Goals, global


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of Human Rights, art. 25.1) or, therefore, as the
final objective for a new development agenda.
A rights-based approach in the post-2015
agenda must also include a higher poverty line
which might be considered as representing an
adequate standard of living. There is a need for
a more open discussion here than has thus far
taken place, but halving the number of people
living on $5-a-day might be a place to start.


Neither is it enough merely to ensure that
everyone receives $1.25 per day, irrespective
of the source. The right to work (Universal
Declaration of Human Rights, art. 23) and “to
participate in [and] contribute to” economic
development (Declaration on the Right to
Development, art. 1.1) signify a right to the
opportunity to earn an adequate income
through one’s own efforts, rather than merely
to rely on financial transfers, externally funded
interventions or charity. Likewise, the rights
to fair wages providing a “decent living” for
workers and their families, safe and healthy
working conditions and “reasonable limitation”
of working hours (International Covenant on
Economic, Social and Cultural Rights, art.
7) mean that it is not just employment and
incomes that matter, but also hourly incomes
and working conditions.


From environmental
sustainability to development
sustainability
While the language of “sustainable development”
has underpinned much of the discussion of the
post-2015 agenda, this has been based on a
narrow concept of environmental sustainability.
This is a very important part of the challenge,
but for a developing country, the question is
whether its development can be sustained –
not only environmentally, but also economically,
financially, socially, politically and so forth.


A true development agenda can only be based
on this broader, developmental concept of
sustainability – ensuring that development can
be sustained in all its dimensions, rather than
only seeking to minimize environmental impacts.
This again points to a more integrated agenda,
encompassing both more viable and inclusive
national development strategies and changes in
the global economic system to accommodate
and support them. If progress towards social
and environmental goals is not underpinned by
effective national strategies for sustainable and
inclusive development, or if the global economy
is incompatible with such strategies, that
progress will not be sustainable beyond 2030.


economic issues were restricted to Millennium
Development Goal 8 on the global partnership
for development, which was much weaker and
less specific than the Goals for social outcomes.
Goals, and even discussion of policy options,
for economic development were largely absent
(except for the belated addition of employment
in Millennium Development Goal 1).


As a result, while aid flows have increased
(though remaining less than half the target
level of 0.7 per cent of gross national product,
and falling in real terms since 2010), a broader
package of financing initiatives and reforms to
the financial architecture has gained little traction
even (somewhat paradoxically) since the very
serious setbacks following the international
financial crisis. On trade issues, and even
more on technology, commercial interests
have trumped multilateral efforts to level the
playing field in support of poorer countries
and communities and they now threaten the
workings of the international trading system.


A vacuum has also been left in terms of
development policy options. The international
community seemed ready at the Millennium
Summit to reject a one-size-fits-all policy
prescription. In practice, however, particularly
at the level of international development
agencies, conventional policy advice went
largely unchallenged, despite its poor record
in promoting inclusive economic development.
Further, as the global and national policy
changes needed to realize the Millennium
Development Goals failed to materialize, the
main response was a diversion of limited aid
resources to palliative uses (for example,
disease-specific health programmes).


Partly for this reason, and despite coinciding
with a period of strong growth across the
developing world, most of the Millennium
Development Goals, apart from the headline
Goal of halving extreme poverty, are almost
certain to be missed. Even the Goal on poverty
reduction has been met in large part due to the
strong performance of China, while progress in
sub-Saharan Africa has been limited, and the
other major reservoir of extreme poverty, India,
may also miss the goal (see UNCTAD Post-
2015 Policy Brief series, No. 2, forthcoming).


getting “rights” right
A goal of eradicating extreme poverty is clearly
more ambitious than Millennium Development
Goal 1. However, the $1.25-a-day poverty
line cannot realistically be seen as fulfilling
the right to “a standard of living adequate for
health... and well-being” (Universal Declaration




Doing development differently
Moving beyond a development framework
centred on deprivation and aid requires a
break with business as usual, that is, seeing
development as a process of transformation
in the economic and social structures around
which wealth is created and distributed. But,
in an interdependent world, these structures
are not only a reflection of national efforts and
actions.


The evolution of the international economy over
the last 50 years has sometimes supported
and sometimes hindered more inclusive and
sustainable growth in developing countries.
UNCTAD has shown, in particular, how
unregulated financial markets and unrestricted
capital flows have often been an impediment
to stable and inclusive growth. After 2000,
however, relatively favourable external
economic circumstances provided the space
for some countries to explore a wider range of
policies than had been allowed by the prevailing
orthodoxy, leading to a period of relatively strong
growth in developing countries.


However, the tendency to project growth rates
from the past 15 or 20 years in to the future
is likely to be misleading, given the change in
international economic conditions that many
developing countries are likely to face in the
coming years. Events since the financial crisis
of 2007/2008 have confirmed the urgency of
breaking with the business-as-usual model of
finance-led globalization – and this need is further
underlined by the imperative of reversing the
continued growth in global carbon emissions,
as well as the need for a major reorientation of
the distribution of the benefits of global growth if
the goal of poverty eradication is to be achieved
(see UNCTAD Post-2015 Policy Brief series,
No. 2, forthcoming).


Achieving the ambitious goals envisaged for
the post-2015 agenda will require a major
reorientation of development policy, and this
in turn implies the need for a much more
development-friendly international economic
framework, providing both more stable external
conditions and the policy space for all developing
countries to pursue such goals effectively.


Rejuvenating global
economic governance
Achieving an inclusive and sustainable pattern
of structural transformation will require major
improvements in global economic governance.
The massive build-up of global imbalances
over the past two decades or more – whether
in greenhouse gas emissions, levels of
indebtedness or access to food and energy
– serve as a reminder not only that today’s


interdependent world is facing new threats and
challenges, but also that stronger collective action
at the multilateral level is needed to improve the
effectiveness of global decision-making.


The origins of the current international economic
architecture are rooted in a very different era.
But despite a broad recognition that the growth
of global interdependence poses greater
problems today, the mechanisms and reforms
adopted over the past 30 years have not been
up to the challenge regarding coherence,
complementarity and coordination of global
economic decision-making and actions. The
post-2015 negotiations provide an opportunity
to address these problems in an open, frank
and purposeful manner.


But there is also an urgent need to introduce
stronger democratic principles into how
international decisions are taken. Indeed,
without this, there can be little hope that global
decisions will reflect the needs of the majority of
humanity who live (by any reasonable definition)
in poverty in the developing world, or therefore
that they will achieve the ambitious outcome
goals envisaged for the post-2015 period.


From development narrative
to goals and targets
Whatever the limitations of an approach focused
on goals and targets, in practice this will form
the basis of much of the discussion on the post-
2015 agenda. It is thus critical to consider how
UNCTAD’s objectives can be translated into
such a framework.


Beyond an expanded poverty goal, including
explicit goals for economic development at
the global level is complicated by the major
differences in starting points and circumstances
of developing countries. On the other hand,
specifying economic development goals at the
national level risks returning to (or being seen as
returning to) external management of national
economies via detailed performance criteria,
as was the case under structural adjustment
programmes. This is also at odds with the right
of States to formulate their own development
strategies.


A better approach would be to include a goal
of “broad transformation and sustainability”, for
example:


All countries attain, by 2030, a sufficient level
of economic development to ensure that the
progress (and rate of progress) achieved
towards social and environmental targets
can be sustained indefinitely beyond 2030.


This could be supported by a more detailed set
of criteria by which progress would be assessed
at the national level.




Contact
Richard Kozul-Wright,


Director,
Division on Globalization and


Development Strategies
Tel. +41 22 917 5615


richard.kozul-wright@unctad.org


Press Office
+41 22 917 58 28


unctadpress@unctad.org
www.unctad.org


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Beyond the question of resource flows,
institutional reforms will also be required to
address gaps in the system that could hold
back an agreed development agenda. This is
likely to have a number of dimensions but a
possible commitment could include:


The establishment by 2020 of a formal
and balanced approach to sovereign debt
restructuring, including arrangements on
sharing the burden of adjustment more
equitably between borrowers and creditors.


On the international trading system, its
incompatibility with the post-2015 agenda
is likely to come from system fragmentation
through the proliferation of bilateral and regional
agreements which compete with and, at times,
undermine multilateral rules and procedures.
Equally important, in order for developing
countries to pursue inclusive and sustainable
development strategies, is not just a rules-
based system, but also the support and space
to use policy instruments to promote structural
transformation and to manage the adjustments
that this implies. There must therefore be an
effort to ensure that existing agreements ensure
sufficient policy space. A possible goal in this
regard would be:


To establish, no later than 2020, a formal and
strong agreement on special and differential
treatment which is applicable at the bilateral,
regional and multilateral levels.


Finally, for global economic governance more
generally – a conspicuous gap in both the
Millennium Development Goals and post-2015
discussions – a reasonable goal would be:


The establ ishment, by 2030, of a
global governance system which fully
reflects accepted democratic standards
of representation, accountability and
transparency, and operates in the interests of
all countries on an equal basis.


For the global economy, given the rights
framework underlying the discussion of the
post-2015 agenda, it would be helpful to
base goals on specific articles of the Universal
Declaration of Human Rights, ideally with a
specified time frame, for example:


To establish, by 2030, an international trade/
financial/technology system which actively
supports sustainable development and is
designed to allow the rights set forth in the
Universal Declaration of Human Rights to be
fully realized by 2050.


For development finance, a key target remains
the fulfilment by donors of their existing
commitments on the quantity and quality of
official development assistance (the 0.7 per cent
and 0.15–0.2 per cent targets, commitments
to climate finance and the Paris Declaration
commitments on aid effectiveness), along with
a restoration of the share of official development
assistance going to economic infrastructure
and productive sectors to its 1980s level
(around 50 per cent). The contribution of new
“development partners” could be calibrated to
these commitments and tied to their fulfilment
by a specified date.


But the challenge of development finance goes
well beyond aid and includes financing both
for short-term adjustments and for long-term
infrastructure investment. Possible goals in this
respect could include:


A commitment to expand mult i lateral
financial resources in line with the growth
of cross-border transactions, bringing them
to a level sufficient to undertake effective
countercyclical financing and to deal with
payment difficulties that emerge on the
capital account.


And also include a more ambitious target on
long-term financing that combines the 0.7 per
cent aid target with a concessional loans target
for the new goals adopted under the post-2015
agenda.




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