Fire brigades or arsonists? A UN debate on the economic crisis

May 22, 2009

     By Duncan Green     

I spoke at an UNCTAD symposium on the global crisis in Geneva this week (Oxfam’s pre-conference submission is here). A laudable attempt to get a conversation going with civil society organizations, but a classically frustrating UN event – dozens of developing country delegates mingling with NGOs and others, but any real exchange was deadened by a format of interminable lists of speakers, poor chairing of long vacuous ‘questions’ from the floor, vast airless halls and little real debate. People agreed with each other too much (in the kingdom of the UN, Stiglitz is king); there was too little power present in the room (no speakers from IMF, World Bank or G8 governments).

Still, at least the fire brigade metaphor continues to blossom. I had an exchange on this with Stiglitz back in March – I said the IMF was the only feasible fire brigade for the crisis, essential to squirt jets of cash into beleaguered developing country economies. Stiglitz said how can you leave it all to the IMF fire brigade when it employs the pyromaniacs who set the fire in the first place?

At the UNCTAD symposium, Peter Wahl of WEED (World Economy, Ecology and Development) went into metaphorical overdrive. The response to the crisis consists of a fire brigade in which each major economy runs its own fire engine, but they are decades old and getting obsolete; the IMF has a hand pump, but has mixed 10% of gasoline into the water; the EU has a few buckets, but most of them have holes in. His point was that the multilateral system has been exaggerated – the response to the crisis remains largely national (e.g. through the various fiscal stimuli), and success lies in coordinating those national reponses (and self identified groups of nations – plurilateral in the jargon).

Given that we were taking part in a valiant effort to increase the UN’s role in the response to the crisis, I asked him what kind of fire equipment the UN system represents. His answer – a youth fire brigade of 14 and 15 year olds, which maybe once they’ve grown up, will be capable of putting out the fire. I hope he’s right.

So we’re left with a dilemma between legitimacy and speed of response. There isn’t time to create a new institution for the short term response, so which is easier, make the IMF more legitimate or make the UN lean, mean and quick? No easy answers, surprise, surprise.

The UN seems to be doing better on research than on politics, helping to fulfil one speaker’s desire for the UN to provide a ‘second opinion capacity’ for developing countries not satisfied with the advice they get from the IMF or World Bank. Apart from the Stiglitz commission, good work is emerging from the ILO, UNEP and now other UN agencies like UNESCO and UNRISD are lumbering into action, as well as UNCTAD. The symposium was part of the run up to a big UN event in New York in early June, where the Stiglitz Commission will present its report. More on that later.