Year XXXVI, 1994, Number 3 - Page 204
BOUTROS BOUTROS-GHALI’S “AGENDA FOR DEVELOPMENT”
Since the end of the cold war, the UN has been called on increasingly frequently to resolve local conflicts, co-ordinate humanitarian missions, and try to find global answers to world problems such as the environmental emergency and economic development. The UN has without fail displayed its limitations, revealing itself to be powerless in the face of the arrogance of local warlords, incapable of enforcing respect for human rights, and inadequate for the promotion of effective development policies. Debate about the UN’s contradictions is not of itself new. Rather, the new feature is the frequency with which these contradictions are being manifested, and the international disdain that they are arousing. Indeed, such contradictions were already pointed out by the UN’s secretary general Dag Hammarskjöld immediately following the UN’s creation in the 1950s. “It is difficult to see how a leap from today’s chaotic and disjointed world to something approaching a world federation is to come about... we must serve our apprenticeship and at every stage try to develop forms of international coexistence as far as is possible at the moment” (1958). Nowadays, in a profoundly altered international order, the current secretary general of the UN, Boutros Boutros-Ghali, is able to isolate more explicitly the reasons for the impasse: “Respect for the State’s fundamental sovereignty and integrity are crucial to any common international progress. The time of absolute and exclusive sovereignty, however, has passed by... It is the task of leaders of States today to understand this and to find a balance between the needs of good internal governance and the requirements of an ever more interdependent world” (1992). Nevertheless, this balance is very far from being achieved. At the financial level, the UN disposes of resources that are inferior even to those that some large cities (for example New York) employ annually for maintaining their police and fire services, and has a number of employees barely equal to those of a medium-sized capital city (for example Stockholm).  As regards the institutional sphere, power remains concentrated primarily at the national level. Hence it can not surprise us that Boutros-Ghali sums up the limitations of his power thus: “I have no army, no land, no police.”
As is demonstrated by the difficult ratification by the states for the new GATT agreements, on which also depends the re-constitution of the International Trade Organisation, now called the World Trade Organisation (WTO), the clash between national and international interests increasingly dominates the political life of nations. In the US, for example, the Clinton administration has had to accept a face-saving compromise over the safeguarding of US sovereignty in order to obtain ratification of the GATT accords from the House and Senate. On the basis of this compromise, a commission of five federal judges will verify every five years whether the WTO has acted properly. If at least three negative cases are found, a two-thirds majority in the Congress and Senate will be able to demand that the US withdraw from the WTO. This compromise, even according to the opponents of ratification themselves, is no more than a face-saver, in as much as Congress previously possessed the right, though it never exercised it, to re-assess every five years the functioning of the GATT and to denounce it. As regards the future relationship between the UN and WTO, there also exists the problem of a different interpretation of the link between democracy, respect for human rights and economic development: the US and EU have emphasised the existence of this link, while countries such as China or Singapore tend to deny it. For example, the preparatory commission of the WTO has rejected Boutros-Ghali’s request that provision be made for the UN to supervise the WTO’s actions as regards respect for human rights. Singapore’s ambassador to the GATT, K. Kesavapany, who is the current holder of the rotating presidency of GATT’s institutional commission, justified this decision by denying the need to establish an institutional agreement between the UN and WTO.
This is the context in which Boutros-Ghali has presented his “Agenda for Development”.
The Agenda proposes that the General Assembly of the United Nations holds a world conference on “Currency and financing economic development” before the end of 1996. Pointing out that the vital problems for promoting economic development are the scarcity of financial resources at the UN’s disposal and the lack of co-ordination among the UN, the Bretton Woods institutions (World Bank and International Monetary Fund) and the nascent WTO, Boutros-Ghali raises some crucial points in the debate about the UN’s future. After proposing the creation of an international committee of advisers, to be charged with formulating recommendations for UN development policies, the report warns against the illusion of maintaining over the long term the present ambiguity and lack of co-ordination between the UN and the Bretton Woods institutions. The aid volunteered by states is in reality not sufficient either for fulfilling peace-keeping duties or for promoting economic development projects. Only four countries (Denmark, the Netherlands, Norway and Sweden) dedicate 0.7% of their GNP to development policies, as was decided by the UN in 1970. For this reason Boutros-Ghali proposes the introduction of a series of international taxes: a tax on the consumption of fossil fuels (which could generate revenue of at least US $ 500 billion a year according to the United Nations Development Programme); a tax on international financial transactions (that could generate revenue of US $ 1,500 billion a year); a tax on international travel and travel documents. In addition to these taxes, according to Boutros-Ghali, there could be a transfer of part of the peace dividend obtained by the reduction of military spending by developed and developing countries, which between 1987 and 1994 totalled around US $ 935 billion. Apart from an environmental tax, whose introduction has been discussed for some time in Europe, as well as in the US and Japan, the other taxes would appear in the present situation to be difficult to apply, and their inclusion in the Agenda seems to be more for propaganda purposes than as a realistic objective to aim for.
But the crucial point raised by Boutros-Ghali is not so much the scarcity of resources at the UN’s disposal, but rather, as mentioned above, the institutional inadequacy of the current system for governing the world economy. Raising the issue of a revision of the relationship between the UN and the Bretton Woods institutions, Boutros-Ghali poses the problem of re-visiting the 1945 process that led to the creation of that system of world government. On this subject it is worth recalling briefly the presuppositions on which that project was founded.
The entire plan elaborated in the post-war period was founded on the reflections of Americans and Englishmen, most notably Keynes, in the 1930s. The concept of a world economic conference sponsored by the League of Nations went back in fact to 1930. That conference should have dealt with the problems of financing development programmes and currency stabilisation in the wake of the 1929 crisis. But the conference of 1933 failed because the Americans, and particularly Roosevelt, were afraid of seeing national policies sacrificed on the altar of stabilising the dollar exchange rate vis-à-vis the franc and sterling (with a +/-3% margin of fluctuation); because the British wanted to defend the primacy of their imperial interests; and because the French hoped to reinforce the gold bloc (which included France, Belgium, Holland, Switzerland and, nominally, Italy).
The problem of reorganising the international economic order was raised again however with overwhelming force at the end of the second world war, when it became clear that it would be necessary to reconstruct the economies destroyed by the war on the basis of different criteria from those adopted following the first world war, so as to avoid the risk of a new disaster. The principle adopted at the Bretton Woods conference of 1944, and later adopted by the UN as well, was that of abandoning the concept of compensation through heavy war reparations imposed on the defeated countries, as well as passing from policies of assistance to policies of reconstituting stocks of raw materials, and subsequently to real and effective reconstruction. However this approach imposed new undertakings and new institutions. It was in fact clear that it would have been impossible to draw up a code for trade, to provide the necessary financing to cover trade imbalances, and to re-start the flow of capital from developed countries to poorer ones, on the basis of national organs. Hence to fulfil these undertakings four institutions were established in that period: the World Bank, which had the task of overseeing reconstruction; the International Monetary Fund, charged with elaborating and managing the framework of world exchange rates; the United Nations Relief and Rehabilitation Administration (UNRRA), which was an administrative agency, financed by the US (72%), Great Britain (12%), Canada (6%), and the USSR (2%); and the WTO.
The management of UNRRA immediately provoked conflicts between the US, which was the biggest contributor, and the other members. Great Britain began to propose the reduction of its contribution, by including also Italy (previously a beneficiary) into UNRRA; the other members wanted to exercise control over the agency through the “one country, one vote” rule, without assuming greater financial burdens. Within the space of three years the US reached the conclusion that it was unable to finance a global commitment in the context of growing military confrontation with the USSR and the great degree of fragmentation in the global situation. It was in this context that the Marshall Plan for Europe was conceived – a plan that privileged regional objectives over world ones, that affirmed full American leadership over the management of resources and the implementation of the plans, and that forced the beneficiary countries of Europe to co-ordinate their demands in an international framework. In turn, the WTO, at the moment in which global economic objectives were given secondary importance behind those of a regional character, was replaced by a less binding agreement, the General Agreement on Tariffs and Trade (GATT). On the basis of article 57 of the UN Charter, all these institutions were to enter gradually “into relationship” with the UN itself. But the Bretton Woods institutions did so by benefiting from special agreements: the World Bank and IMF kept a representative system for their member countries that was weighted on the basis of economic and financial criteria, and not, as was the case for the UN, organised on the basis of the “one country, one vote” rule. The Bretton Woods institutions proclaimed their complete independence from the UN, reserved the right not to supply information to other UN agencies, and limited the presence of UN representatives in their respective management bodies, while however maintaining the right to be permanently informed of everything that was decided by the other international agencies.
The anti-democratic and heavily pro-American nature of these agreements was clear, but difficult to challenge in as much as the greatest contributor was a single country, the US. Moreover, neither the opposition of the USSR and Norway to these agreements, manifested as early as 1947, nor that of third world countries, which surfaced at the Arusha conference of 1980, offered a credible alternative to this system of governing the international economy and international trade that centred on the US.
Only the end of the cold war, that is the fall of the Soviet empire and the weakening of the military and economic supremacy of the American superpower, allowed the debate on the new world order to return to the issues outlined at the end of the second world war. The situation, 50 years on, is profoundly altered: the member countries of the European Union have become the world’s greatest trading force; and Russia no longer counters American power, but is asking to re-join the organs of world financial management. In Asia, inter-regional trade has overtaken that with the US, and China is in a position to ask to join the WTO.
But faced with these phenomena, the illusion seems to be gaining ground that to establish a more just and democratic world order it is enough to coordinate the currently-existing international institutions. This is undoubtedly a necessary condition, but not sufficient to cope with the global challenges which mankind now faces.
In fact it is necessary to overcome the stumbling block of a radical reform of the UN that will allow the linkage of the problem of promoting sustainable development throughout the planet with the diffusion of democratic principles to the world’s government. This is not a new problem, given that the British foreign minister, Ernest Bevin, could assert as far back as 1945 that “We need a new study for the purpose of creating a world assembly elected directly from the people of the world as a whole, to whom the governments who form the United Nations are responsible.”
From this viewpoint the Europeans have an urgent responsibility. The EU could in fact play a decisive role in reforming the Bretton Woods institutions, and revising the relationships between them and the UN. The creation of a European currency, which is a possibility as early as 1997 for a restricted nucleus of the Union’s member countries, would, of itself, raise the issue of a radical revision of the management and operational mechanisms of the IMF, the World Bank, and the WTO itself. In such a context it would become inevitable to pose the question of a different relationship between these institutions and the UN. In similar fashion, the implementation of a real common European foreign and defence policy, as foreseen in the Maastricht Treaty, would raise the issue of the representation of the EU as such on the UN’s Security Council, as has moreover already been requested in a resolution adopted by the European Parliament. And this process should go hand in hand with a more general reform of the UN’s institutions, starting with the issues emerging from Bevin’s reflections.
All this does no more than confirm how the foreign policies of the various countries no longer make sense if they are not conceived of in a global framework. In this perspective the action of the federalists who work in various countries to further the creation of a parliamentary assembly to operate alongside the General Assembly, must set itself the goal of influencing in a global sense the foreign policies of their respective countries. In Europe this means battling until a European federal core is born, one that is capable of exercising a good European foreign policy. In light of this, the deadline for the federal reform of the EU before the end of 1996 represents an important landmark also for the reform of the UN.
E. Childers, B. Urquhart, Renewing the United Nations System, Uppsala, Dag Hammarskjöld Foundation, 1994.
Charles P. Kindleberger, A financial history of western Europe, London, George Allen & Unwin, 1984.