Surprised? UN Summit Falls Short on Tackling Debt, Free Trade

The theme of the global development summit is “From decision to action,” but representatives at the United Nations Conference on Trade and Development are struggling to to reach an agreement on tax and debt issues, while critics are skeptical the world meeting will take steps toward curbing runaway corporate power.

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The week-long meeting – that entered its fourth day in Nairobi, Kenya, on Wednesday – is held every four years to set the global agenda on economic development. The Summit kicked off Sunday with over 5,000 delegates from 120 countries including heads of state, ministers, corporate representatives, and civil society leaders. But with just two days left, challenges remain.

"We are facing a real battle on debt and tax policies," U.N. debt expert and executive director of Jubilee USA, Eric LeCompte, said in a statement Wednesday.

Advocates of more just global debt and tax rules, including the Vatican, have called for action to address predatory lending practices of so-called “vulture funds” that exploit debt defaults, like Argentina’s in 2001, to profiteer off economic crises.

“UNCTAD built the consensus for billions of dollars in international debt relief that benefited the world's poorest countries,” added LeCompte. “This year's summit can continue that legacy by promoting improved debt restructuring and responsible lending and borrowing.”

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The draft outcomes of the UNCTAD includes calls for a “clear institutional framework” on dealing with an preventing debt crises. But the document suggests “debtors and creditors should work together to prevent and resolve unsustainable debt situations,” failing to acknowledge the unequal power dynamics in the equation and the predatory practices unleashed particularly against developing nations.

The draft document also suggests that debt sustainability is “primarily the responsibility of borrowing countries,” but also calls for “transparent, fair, predictable, coordinated and legitimate” lending practices.

Meanwhile, the international peasant movement La Via Campesina, hailed as the world’s largest social movement, criticized UNCTAD’s “free market driven neoliberal trade paradigm” for failing to respond to the needs of smallholder farmers and campesinos fighting to defend food sovereignty around the globe.

“Instead of corporate-backed trade promotion schemes, we want an UNCTAD that protects us from the destructive and secretive free trade agreements promoted by the undemocratic World Trade Organization,” La Via Campesina wrote in a statement Tuesday, singling out the TPP and TTIP, among other examples.

Along with other critics, La Via Campesina has also called attention to the negative impacts of controversial investor-state dispute settlement mechanisms enshrined in trade agreements from NAFTA to the TPP, urging the UNCTAD to take action. The so-called “corporate courts” through the World Bank allow corporations to sue countries for infringing on their profits through economic and environmental regulations. For example, three mining companies recently launched a US$16.5 billion lawsuit against Colombia for creating a national park.

This year’s UNCTAD is the first such conference since the UN set its new Sustainable Development Goals, the new version of the Millenium Development Goals, with an outlook toward 2030.

The conference wraps up in Nairobi on Friday.