UNCTAD Session 1 Briefing South Centre/G77 on the main theme for unctad XII

Heiner Flassbeck (UNCTAD): Main opportunities brought by the globalization process are:
High revenues in commodity-exporting countries thanks to better terms of trade in the last 10 years which has led to current account surpluses in many countries and a sustained global growth. Risks are identified in practices like carry trade which devaluate currencies in a unfair manner (by intervening in the markets) and create important distortions in global trade patterns, to the disadvantage of countries with relative high levels of interest rates. Another trend is that of fierce competition for higher competitiveness among industrialized countries by means of low corporate taxes, inter alia. Another potential risk lies in the global account imbalances which might lead to abrupt adjustments in the global finacial system.
UNCTAD XII should address issues such as short-term policies for growth (macro-policies, education, investment promotion) as well as find regional solutions to the practice of carry trade.

Mark Halle (IISD): In order to take into account the environmental aspects of globalisation it is important to overcome the current approach in governance which is too much based on states and include other actors from civil society such as entreprises. The competition between states for rare ressources poses a potential threat to stability;the same applies for local communities whose security is menaced by pollution.

Discussion: The problem of how to quantify globalisation or openness of an economy remains highly controversial and difficult. Indices must be treated with caution. One
reason for this lies in the dynamic nature of globalisation which is hard to capture in an instant shot of an indice. It is crucial to avoid a one size fits all approach when it comes to policy measures and the right degree of government intervention: The case of Singapor is interesting as it is one of the most open economies of the globe, and where more than 90% of the firms are state owned.

Links:
http://www.iisd.org/publications/pub.aspx?pno=862
http://www.flassbeck.de/index.html



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