THE UN AND THE BRETTON WOODS INSTITUTIONS

THE UN AND THE BRETTON WOODS INSTITUTIONS

Also by Mahbub ul Haq A STRATEGY OF ECONOMIC PLANNING THE POVERTY CURTAIN SUSTAINABLE DEVELOPMENT: FROM CONCEPT TO ACTION NEW PERSPECTIVES ON HUMAN DEVELOPMENT Also by Richard Jolly ADJUSTMENT WITH A HUMAN FACE (co-editor with Andrea Cornia and Frances Stewart) DISARMAMENT AND WORLD DEVELOPMENT EMPLOYMENT, INCOMES AND EQUALITY REDISTRIBUTION WITH GROWTH Also by Paul Streeten DEVELOPMENT PERSPECTIVES ECONOMIC INTEGRATION FIRST THINGS FIRST THE FRONTIERS OF DEVELOPMENT STUDIES WHAT PRICE FOOD? Also by Khadija Haq CRISIS OF THE '80s DIALOGUE FOR A NEW ORDER EQUALITY OF A NEW ORDER EQUALITY OF OPPORTUNITY WITHIN AND AMONG NATIONS HUMAN DEVELOPMENT: THE NEGLECTED DIMENSION (co-editor) THE INFORMATICS REVOLUTION AND THE DEVELOPING COUNTRIES

The UN and the Bretton Woods Institutions New Challenges for the Twenty-First Century Edited by Mahbub ul Haq Special Adviser to UNDP Administrator New York Richard Jolly Deputy Executive Director UNICEF Paul Streeten Emeritus Professor Boston University and Khadija Haq Executive Director North South Roundtable New York M MACMillAN

North South Roundtable 1995 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Pa!ents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published 1995 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world ISBN 978-0-333-62894-2 ISBN 978-1-349-23958-0 (ebook) DOI 10.1007/978-1-349-23958-0 A catalogue record for this book is available from the British Library. 10 9 8 7 04 03 02 01 6 5 4 3 2 I 00 99 98 97 96 95

Contents Preface List of Abbreviations Conference Participants and Contributors vii ix X Part I Overview Part II The Bretton Woods System 2 3 4 5 6 An Historical Perspective H. W. Singer The Vision and the Reality Mahbub ul Haq A Changing Institution in a Changing World Alexander Shakow The Keynesian Vision and the Developing Countries La/ Jayawardena An African Perspective on Bretton Woods Adebayo Adedeji A West European Perspective on Bretton Woods Andrea Boltho 17 26 34 49 60 83 Part III Reforms in the UN and the Bretton Woods Institutions 7 8 9 A Comparative Assessment Catherine Gwin A Blueprint for Reform Paul Streeten A New International Monetary System for the Future Carlos Massad 95 117 127 v

VI 10 Contents On the Modalities of Macroeconomic Policy Coordination John Williamson 140 Part IV Priorities for the Twenty-first Century 11 12 13 14 15 16 Index Gender Priorities for the Twenty-first Century Khadija Haq Biases in Global Markets: Can the Forces of Inequity and Marginalization be Modified? Frances Stewan Poverty Eradication and Human Development: Issues for the Twenty-first Century Richard Jolly Role of the Multilateral Agencies after the Earth Summit Maurice Williams New Challenges for Regulation of Global Financial Markets Stephany Griffith-Jones A New Framework for Development Cooperation Mahbub ul Haq 157 164 185 196 210 239 246

Preface With the end of the cold war, the United Nations is experiencing a new lease on life. In political and peace-keeping matters, it has often been thrust to centre-stage. However, in economic and social development, the United Nations continues much as before, with most of the finance and much of the action concentrated on the Bretton Woods institutions. This book explores why this is unsatisfactory and how it can be changed. It presents the papers and conclusions prepared for and reviewed by two meetings of the North-South Roundtable of the Society for International Development, in April and September 1993, on the eve of the fiftieth anniversary of the conference in Bretton Woods which laid the basis for the institutions which bear that name. Earlier meetings of the North-South Roundtable had considered measures to strengthen the United Nations for the 1990s. Other reports, notably the series of reports under the Nordic Project, reviewed changes of policy and actions needed to reform the United Nations. But most of these took only marginal account of the Bretton Woods institutions, and discussions of the need for reforms of the Bretton Woods institutions have so far concentrated on measures to improve internal effectiveness with no fundamental questioning of their basic objectives and roles in relation to the world economy of the next century. The papers in this volume consider reform of global economic governance from a perspective given by four concerns: An integral view of the United Nations and the Bretton Woods institutions taken together; A priority for human development, including gender awareness, not just economic and financial concerns; A long-term perspective, looking to global issues of the twenty-first century, not merely problems ofthe 1990s; Perspectives given by needs and concerns in the South as well as the North, taking account also of regional perspectives in Asia, Africa, Latin America and the Middle East. Forty-five eminent personalities from different backgrounds, nationalities and expertise participated in the discussions of these papers organized by the North-South Roundtable meeting in Bretton Woods. The participants are listed on pp. x-xi. About half have worked in the United VII

viii Preface Nations at different times and about one-quarter in the Bretton Woods institutions. Nine have served as ministers in their own countries and most have at one time or another been members or advisers of governments and the international agencies. Thus, although most had reputations as academics or analysts, the wealth of practical experience was also considerable. Part I of the volume presents an overview of the main themes and conclusions of the discussion. This summary has been prepared by a small team consisting of Mahbub ul Haq, Khadija Haq, Lal Jayawardena and Richard Jolly and was published as a summary report of the Bretton Woods meeting. Part II analyses the Bretton Woods system in the light of the original vision of the founders. Two regional perspectives, African and West European, are also presented here. Part III offers some proposals for reform. Part IV sets out the priority areas for global governance for the next century. The fiftieth anniversary of the Bretton Woods institutions took place in 1994; the fiftieth anniversary of the United Nations will take place in 1995. Both events mark the need for fundamental rethinking of these institutions in relation to the needs and challenges of the final part of the twentieth century and the opening years of the next. It is hoped that this book will provide a stimulus and challenge to the new thinking and perspectives required for this task. New York March 1994 Mahbub ul Haq, Richard Jolly, Paul Streeten and Khadija Haq

List of Abbreviations A SEAN ECA ECOSOC FAO GATI GNP IBRD IDA IF AD ILO IMF INSTRAW LPA NAFfA NGO OAU OECD OPEC SAARC SAP SDR UNCTAD UNDP UNESCO UNFPA UNICEF UNIFEM WHO Association of South-East Asian Nations Economic Commission for Africa Economic and Social Council of the UN Food and Agriculture Organisation of the United Nations General Agreement on Tariffs and Trade Gross national product International Bank for Reconstruction and Development International Development Association International Fund for Agricultural Development International Labour Organisation International Monetary Fund United Nations International Research and Training Institute for the Advancement of Women Lagos Plan of Action North American Free Trade Agreement Non-governmental organisation Organisation for African Unity Organisation for Economic Cooperation and Development Organisation of Petroleum Exporting Countries South Asian Association for Regional Cooperation Structural Adjustment Programmes Special drawing rights of IMF United Nations Conference on Trade and Development United Nations Development Programme United Nations Educational, Scientific and Cultural Organisation United Nations Population Fund United Nations Children's Fund United Nations Development Fund for Women World Health Organisation IX

Conference Participants and Contributors All parttctpants attended in their personal capactttes. Participants' affiliations given here are those at the time of the meeting and not necessarily their present affiliations. An asterisk (') before a name indicates a contributor to this volume. Ismail Sabri Abdalla, Chairman, Third World Forum, Cairo Jim Adams, Director, Operations Policy, The World Bank, Washington, DC Adebayo Adedeji, Former Executive Director of ECA, Nigeria Lourdes Arizpe, Director, Institute of Anthropological Research, Mexico Princess Basma, Q.A. Jordan Social Welfare Fund, Jordan Andrea Boltho, Fellow, Magdalen College, Oxford University, UK Margaret Catley-Carlson, President, Population Council, New York James P. Grant, Executive Director, UNICEF, New York stephany Griffith-Jones, Institute of Development Studies, Sussex, UK catherine Gwin, Vice-President, Overseas Development Council, Washington, DC Peter Hansen, Secretary-General, Commission on Global Governance, Geneva Khadija Haq, Executive Director, North-South Roundtable, New York Mahbub ul Haq, Special Adviser to the Administrator, UNDP, New York Gerry Helleiner, Professor of Economics, University of Toronto, Canada Eveline Herjkens, Executive Director of the World Bank, Washington, DC Ryokichi Hirono, Faculty of Economics, Seikei University, Japan Enrique Iglesias, President, Inter-American Development Bank, Washington, DC (Represented by Nora Marulanda, Senior Advisor, Inter-American Development Bank) Shafiqullslam, Senior Fellow, Council on Foreign Relations, New York Lal Jayawardena, Former Director of WIDER, Sri Lanka Richard Jolly, Chairman, North-South Roundtable, UNICEF, New York Alexander Love, Chairman, DAC, Paris Carlos Massad, Deputy Executive Secretary of ECLAC Solita Monsod, Professor of Economics, University of the Philippines, Quezon City Philip Ndegwa, Chairman First Chartered Securities Ltd, Nairobi X

Conference Participants and Contributors xi I. G. Patel, Former Director, London School of Economics, India Jan Pronk, Minister for Development Cooperation, The Netherlands Shridath Ramphal, Co-Chairman, United Nations Commission on Global Governance, Geneva Gustav Ranis, Professor of Economics, Yale University, New Haven Nafis Sadik, Executive Director, UNFPA, New York Horst Schulmann, President, Landeszentral Bank, Frankfurt, Germany *Alexander Shakow, Director, External Relations, The World Bank, Washington, DC Alexander Shokhin, Vice Prime Minister, Russia (Represented by Edward Kudryavtsev, Deputy Permanent Representative, Russian Mission to the United Nations) *H. W. Singer, Institute of Development Studies, Sussex, England Anoop Singh, Senior Advisor, Policy Development and Review Department. IMF, Washington, DC Joel Spiro, Director, Office of Technical Specialised Agencies, US Department of State, Washington, DC Frances Stewart, Institute of Commonwealth Studies, Oxford, UK Paul Streeten, Consultant, UNDP Human Development Report *Maurice Williams, President, Society for International Development, Washington, DC *John Williamson, Institute of International Economics, Washington, DC