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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 MMACMillAN © 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 6 5 4 3 2 I 04 03 02 01 00 99 98 97 96 95 Contents Preface vii List ofAbbreviations ix Conference Participants and Contributors X Part I Overview Part II The Bretton Woods System An Historical Perspective H. W. Singer 17 2 The Vision and the Reality Mahbub ul Haq 26 3 A Changing Institution in a Changing World Alexander Shakow 34 4 The Keynesian Vision and the Developing Countries La/ Jayawardena 49 5 An African Perspective on Bretton Woods Adebayo Adedeji 60 6 A West European Perspective on Bretton Woods Andrea Boltho 83 Part III Reforms in the UN and the Bretton Woods Institutions 7 A Comparative Assessment Catherine Gwin 95 8 A Blueprint for Reform Paul Streeten 117 9 A New International Monetary System for the Future Carlos Massad 127 v VI Contents 10 On the Modalities of Macroeconomic Policy Coordination John Williamson 140 Part IV Priorities for the Twenty-first Century 11 Gender Priorities for the Twenty-first Century Khadija Haq 157 12 Biases in Global Markets: Can the Forces of Inequity and Marginalization be Modified? Frances Stewan 164 13 Poverty Eradication and Human Development: Issues for the Twenty-first Century Richard Jolly 185 14 Role of the Multilateral Agencies after the Earth Summit Maurice Williams 196 15 New Challenges for Regulation of Global Financial Markets Stephany Griffith-Jones 210 16 A New Framework for Development Cooperation Mahbub ul Haq 239 Index 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 meas­ ures 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 con­ centrated on measures to improve internal effectiveness with no funda­ mental 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 insti­ tutions 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, national­ ities and expertise participated in the discussions of these papers organized by the North-South Roundtable meeting in Bretton Woods. The par­ ticipants 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 insti­ tutions. 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 con­ clusions 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 orig­ inal 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 Mahbub ul Haq, Richard Jolly, March 1994 Paul Streeten and Khadija Haq List of Abbreviations A SEAN Association of South-East Asian Nations ECA Economic Commission for Africa ECOSOC Economic and Social Council of the UN FAO Food and Agriculture Organisation of the United Nations GATI General Agreement on Tariffs and Trade GNP Gross national product IBRD International Bank for Reconstruction and Development IDA International Development Association IFAD International Fund for Agricultural Development ILO International Labour Organisation IMF International Monetary Fund INSTRAW United Nations International Research and Training Institute for the Advancement of Women LPA Lagos Plan of Action NAFfA North American Free Trade Agreement NGO Non-governmental organisation OAU Organisation for African Unity OECD Organisation for Economic Cooperation and Development OPEC Organisation of Petroleum Exporting Countries SAARC South Asian Association for Regional Cooperation SAP Structural Adjustment Programmes SDR Special drawing rights of IMF UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific and Cultural Organisation UNFPA United Nations Population Fund UNICEF United Nations Children's Fund UNIFEM United Nations Development Fund for Women WHO 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 necess­ arily 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,
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