Why Is UN Praising the Castro Regime?

By Fabio Rafael Fiallo

Whether due to institutional constraints or to intellectual empathy, or to both, UN bureaucracies have on more than one occasion shown a lack of any real critical thinking toward anti-market regimes and policy prescriptions. Throughout the Cold War, it was not by reading UN reports that one could discover the disaster of central planning in the Soviet bloc and the ordeal of the peoples of Eastern Europe. Those reports reproduced, and based their analyses on, the triumphalist rates of growth and advances in social services that communist regimes fraudulently claimed to have achieved. These same UN would often fawn over the dirigiste, anti-market policies of such regimes, as well.

A first example relates to the UN Economic Commission for Latin America and the Caribbean (ECLAC), based in Santiago, Chile. In the 1960s, that agency, then headed by the Argentinian economist Raúl Prebisch, advised developing countries to impose protectionist trade barriers so as to promote an inward-oriented industrialization through import substitution. That strategy led nowhere; it proved to be inferior to the pro-market, export-oriented industrialization that made the success of the so-called "Asian Tigers" (Hong Kong, South Korea, Singapore and Taiwan).

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Latin American countries ultimately put aside ECLAC's recipes, adopted export-oriented policies and some of them -- Brazil, Chile and Peru, to mention a few -- have become able competitors in the globalized world economy.

The Vienna-based UN Industrial Development Organization (UNIDO) had its anti-market spree in the 1970s, when -- acting like a central planning bureau -- it launched a state-induced "plan of action" aimed at relocating 25 percent of world industrial production in developing countries.

Developing countries are not far from reaching that targeted percentage. But this achievement has nothing to do with the UNIDO plan, which soon fell into oblivion. The success is due, instead, to the fact that a growing number of developing countries have played the game of the market by aggressively competing in the globalized world economy.

A third example of counter-market tinkering relates to the Common Fund for Commodities, an idea put forward, also in the 1970s, by the Geneva-based UN Conference on Trade and Development (UNCTAD). The Fund, in which governments were to play an active role, would attempt to curb market-led volatility in the world prices of primary commodities by purchasing such commodities when their prices were on the downside and selling them at their peaks.

The Fund never got off the ground and ultimately joined the dustbin of failed, and costly, initiatives engineered by the United Nations.

All these institutional setbacks should have blown the whistle on market-bashing initiatives. Nonetheless, to judge from the eulogies chanted on Cuba by the present head of ECLAC, Ms. Alicia Bárcena, it seems that the lesson has not yet been fully learned.

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Fabio Rafael Fiallo is a Dominican-born economist and author and a retired official of the United Nations Conference on Trade and Development (UNCTAD).

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