Secretary-General Ban warns against impulses towards protectionism

The forces of trade and globalization that have driven a “virtuous cycle” of economic prosperity around the world in the last two decades must be allowed to continue or the current crisis in poor countries over soaring food prices will only worsen, Secretary-General Ban Ki-moon told a major gathering of trade and development officials today.

Speaking in Accra, Ghana, at the opening of the twelfth UN Conference on Trade and Development (UNCTAD), Mr. Ban warned that neither the food crisis nor the chance that some regions may be poised for a slowdown should be used by governments as an excuse to turn towards protectionism.

“International grain markets must remain open and functioning normally,” he said. “Beggar Thy Neighbour food wars cannot, in the long run, help anyone.

“Ultimately, our task is to ensure that the virtuous cycle goes on and its benefits extend as broadly as possible – most especially to those who have so far missed out. More trade, not less, will get us out of the hole we're in.”

Mr. Ban said the world was “living through one of the most extraordinary economic transformations in history,” with the global economy growing in size from $23 trillion in 1990 to $53 trillion in 2007 and trade increasing by 133 per cent over the same period.

“Developing nations have generated more than half this growth. They now account for nearly 40 per cent of world trade – half of it among themselves. Once-poor countries have become engines of growth for others, lifting hundreds of millions of people out of poverty.”

But the Secretary-General added that the global economic boom of the past two decades has passed by the poorest of the world's poor. “We cannot leave the 'bottom billion' to flounder. We cannot neglect their real and pressing needs. We need fresh thinking, fresh approaches.”

Protests and riots have broken out around the world recently over the surging cost of many basic foods and agricultural staples, such as rice, wheat and corn. Mr. Ban said the reasons for the crisis were complex, and included not only the increased production of biofuels, but also the higher oil prices lifting both overall transport costs and fertilizer costs and the rising consumption, especially in Asia, that was boosting worldwide demand for many foods.

“One thing is certain: for the past three years, the world has consumed more food than it produces. Grain stocks are at their lowest in 30 years. The situation is unsustainable.”

Mr. Ban told the conference that immediate steps must be taken to guarantee the world's food security, starting by ensuring the UN World Food Programme (WFP) has the additional $755 million it needs to cover the rising costs of its existing emergency operations.

In the long-term, he said, agricultural production must be expanded, especially in the developing world and sub-Saharan Africa. “Simply improving market efficiency can have a huge effect. Roughly a third of the world's food shortages, according to the WFP, are the result of bottlenecks in local markets and distribution systems.”

Welcoming the World Bank's plans to increase its agricultural lending in Africa from $400 million to $800 million next year, the Secretary-General said the rest of the international community must take similar measures to alleviate the problems of the developing world.

He also stressed a need for a successful conclusion to the current Doha round of trade liberalization talks.

“At a minimum, that would mean opening new and significant markets for agricultural and non-agricultural exports and services from low-income developing countries.

“It is time for wealthier nations to rethink old-fashioned programmes of agricultural subsidies. Economists agree that they inhibit trade and disproportionately penalize poorer nations, contributing to the current emergency. If we cannot scrap these relics today, in an era of high prices, then when can we?”

In addition Mr. Ban called for aid and official development assistance (ODA) from affluent nations to be channelled towards projects that boost local industry and production capacity, such as roads, schools and health-care systems. Resource-rich developing nations should also benefit more from the global boom in commodity prices, he said.

The Secretary-General's visit to Ghana is the first stop on a four-nation tour of West Africa that will also take him to Liberia, Burkina Faso and Côte d'Ivoire.

Speaking to reporters on his arrival yesterday in Accra, he said that, apart from the food crisis, he would also raise the subjects of several political situations – especially those in Zimbabwe, Kenya, the Darfur region of Sudan and Côte d'Ivoire – during his meetings with political leaders.