Important issues for the Non-Aligned Movement

By Martin Khor, Executive Director

The South Centre is very pleased to take part in this Summit of the NAM. The Centre was set up by political leaders of the South to support developing countries through research and meetings, to develop strong positions in international negotiations at the UN, WTO and other venues. We are glad that the Final Document adopted today in Para 482.10 reaffirms the central role of the South Centre as the think tank of developing countries to provide intellectual and policy support for action in the international area. We pledge to try to live up to your expectations. I would like to make some proposals for action by NAM on current important issues.

First is the global economy. The Western economies are entering recession. This will have damaging effects on economies of the South that are already experiencing declines in exports, GDP and in some cases alarming weakening of their balance of payments, which could lead to new debt crises. The crisis this time will be worse than in 2009-10 as it will last longer, and there are less policy tools or policy space available this time. NAM should set up a work programme and an expert group and working group to deal with this crisis which can threaten a lot of the economic progress we have made. NAM can make proposals and take action on what the international institutions and the developed counties should do to support developing countries tackle the crisis, as well as propose reforms to the international and economic system. These can be advocated at the UN, the IFIs and other places.

Proposals to help developing countries can include emergency funding to developing countries that are in trouble, temporary suspension of debt servicing, a new system for debt restructuring, reform of the IMF, reform of the global currency reserve system, etc. In 1994, a NAM expert group on solving the developing countries’ external debt crisis made a report which resulted in the debt relief programme of the IMF and World Bank for low income countries. This shows NAM can take effective action in the economic area, and it can thus do important work on the worsening crisis in the global economy.

Second is the issue of trade and trade agreements. On multilateral trade, the WTO’s Doha Round is at a serious impasse. Developing countries should continue to insist that reforms are undertaken especially by developed countries on their gigantic agriculture subsidies which harm developing countries’ agriculture and farmers, and that the development mandate of the Round is fully reflected in any outcome. Negotiation energy has meanwhile shifted to bilateral and regional trade agreements. There are many imbalances and dangers in such FTAs involving developed and developing countries. In particular our research shows that Africa and Pacific countries face dangers in the Economic Partnership Agreement negotiations with the European Commission which is demanding zero tariffs for 80% of imports as well as other unreasonable demands such as a ban on export taxes, a deregulation of finance and investment, and to be given equal treatment as locals in the government procurement business. Signing such EPAs would prevent or seriously limit these countries from industrial development, food production and affect government revenue and thus public services. The warning of President Nkrumah about neo colonialism is pertinent. We congratulate the African Union Commission and African Ministers for establishing an alternative model of EU-Africa trade relations. We hope they succeed in getting this accepted by the EU. It will be a hard struggle but a very important one.

Third is the issue of investment agreements. These are promoted by developed countries as bilateral investment agreements or chapters of FTAs or both. Most of them are imbalanced and contain threats to the policy space of developing countries. They allow foreign companies to sue governments for millions or even billions of dollars by claiming that the economic, social and environmental policies of government affect their revenues, and this is defined as expropriation of their property. Many developing countries have paid millions or hundreds of millions of dollars to these companies. They also had to change their policies to prevent further law suits. A review of these investment agreements is now being conducted by some developing countries which will not sign any new agreements in the meanwhile. This is another current and urgent issue for NAM to study and propose solutions.

Fourth is the issue of intellectual property and transfer of technology. The present IPR regime at WTO and parts of WIPO are imbalanced against developing countries’ interests in having access to cheap medicines, in controlling seeds and agriculture, and in building their own industries. The strict IPR regimes prevent technology transfer and raise prices and costs. Developing countries are fighting for flexibilities or reform of the present IP regime, and have launched a development Agenda initiative in WIPO. The South Centre can work with NAM members to strengthen this reform movement and to formulate national IPR policies that are pro-development.

Fifth is the need of developing countries to review their development policies in view of the global economic situation. This involves issues like how can we rely less on exports to the West and rely more on domestic and regional demand and on South-South trade and investment, how can we promote a strong role of the state in economic policies, and how can we devise appropriate policies for industry, agriculture and services, including financial policy?

Sixth is the need for developing countries to coordinate to implement the post Rio plus 20 agenda, and to plan for a strong UN post 2015 development agenda after MDGs. There is also need to coordinate more effectively in the climate change negotiations, which have profound implications for the South’s economic policies and not just the environment.

Finally is the need for South-South coordination and cooperation. This is needed even more today, given the global crises. As North-South relations go through difficult or tumultuous times, South-South solidarity and action is even more urgent. NAM has a critical role to play in this. The issues above can be considered for action plans, together with the many issues in the Final Document.

The South Centre is willing and able to work with and stand together with the Non Aligned Movement. We welcome the leadership of Iran in the next phase of NAM’s history. You have a heavy burden to carry and also enormous opportunities. We hope that NAM will grow stronger in the uncertain years ahead and thus protect and promote the interests of developing countries and in doing so help to build an equitable and fair new world order that we have been dreaming of.

Recommended citation: Khor, Martin (2012) ‘Important issues for the Non-Aligned Movemebt’, World Economy & Development In Brief (WDEV), Luxembourg, 10 Sep (www.wdev.eu)

Posted: 10 Sep 2012

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