Pressures Mount for Deeper Investigations Into the UN Trade Group

Mukhisa Kituyi, secretary-general of the UN Conference on Trade and Development, at an e-commerce session on Africa, organized with the Alibaba Business School, April 1, 2019. HENRIQUE PACINI/UNCTAD

The United Nations Conference on Trade and Development, riven internally by disputes over its mission and future direction, may be in trouble. Faced with questions about its basic competence from board members and outside investigators, accusations have been gathering about unsatisfactory statistical work and laxity in meeting UN standards and regulations for spending reports by its leadership.

In the first of several recent investigations of Unctad, as the organization is known, a “working party” of member governments said in a report published in September 2018 that more evaluations of possible shortcomings of Unctad’s programs were needed. Some delegates raised the issue of rights, saying, “greater attention should be paid to the greater integration of gender and human rights aspects” in programs . . . “which were directly related to the right to development.”

In her response to these criticisms, Unctad’s deputy secretary-general, Isabelle Durant of Belgium — an international development policy expert appointed by UN Secretary-General António Guterres in 2017 — noted that internal evaluations were being done and promised to detail them in the next review meeting in September 2019. Unctad is located in Geneva.

In March this year, the UN’s systemwide inspectorate, the Office of Internal Oversight Services, released results of an audit focused on Unctad’s statistical work, which was found to be very weak. “This audit was included in the 2018 risk-based work plan due to the risk that potential weaknesses in the provision of statistical services by Unctad could adversely affect the achievement of its objectives,” the auditors reported.

They listed flaws or gaps in governance, the tools and systems used for collecting data, managing statistics, disseminating findings and feedback, as well as technical cooperation and capacity-building in developing countries, which is Unctad’s prime purpose. Its performance could negatively affect progress on the Sustainable Development Goals.

Among the findings in the audit report was a reference to the scattershot collection of development data in various, sometimes overlapping, sections of Unctad, which some staff members call silos or “little empires.”

Unctad is reportedly missing basic information on its own statistical data. The auditors said: “Divisions in charge of  statistical products that were not centrally managed . . . used various formats such as Excel or PDF and these products were not referenced under the statistical tab of the webpage of Unctad.”

By April, an unofficial group of governments, mainly in Europe and the Americas, took their concerns about Unctad to the Organization for Economic Cooperation and Development, or OECD, whose more developed, selected 36 member nations from both the global North and South regions are committed to, among other tasks, good statistical practices and transparency in public finance and tax collection in development work.

The OECD, based in Paris, does not have authority over Unctad, but its members often consult a related institution, the Multilateral Organization Performance Assessment Network, which monitors UN agencies. In an informal memo to and by OECD members, the group of governments critical of Unctad describes itself as frustrated enough to make it a priority demand that the UN address continuing lack of transparency and accountability in the trade organization.

That demand includes not only Unctad’s core functions but also issues related to the alleged use of extrabudgetary funds for questionable (and sometimes unauthorized) travel by high-level officials. Unctad, they argued, needs to follow UN-wide administrative rules and instructions.


 

 

Complicating reform of Unctad is its status in the UN system. It is not an agency like Unicef or the UN Development Program, where donors can exert considerable influence. Unctad was founded in 1964 by and for developing nations as well as China as a permanent standing conference for all UN member nations.

As finally approved by the General Assembly, its directorate was drawn from three regions that needed development policy planning — Africa, Asia and Latin America and the Caribbean — where numerous countries had only recently won independence from colonial rulers.

Unctad has its own secretary-general, always drawn from the regions for which it was created, although its deputy secretary-general often comes from a developed (and donor) country. Because of its status, Unctad gets most of its income from the regular UN budget. Donations from member countries are voluntary. Underlying some of the concern within Unctad as well as by outsiders is that the body, which has experienced dips in donations, will suffer more losses of extrabudgetary financing if accounts of incompetence and malfeasance persist or increase.

The current secretary-general is Mukhisa Kituyi, a former trade and industry minister of Kenya from 2002 to 2007, under President Mwai Kibaki, who served from 2002 to 2013. The Kibaki government was condemned internationally and in Kenya — a sharply divided country ethnically and politically — for widespread corruption. Regional African newspapers accused Kituyi of involvement in various scandals.

After the Kibaki government fell, John Githongo, Kenya’s most outspoken whistleblower and anticorruption activist, spoke at a forum on foreign policy in London in 2014, sponsored by the United Nations Association of the United Kingdom (UNA-UK). He told reporters on the sidelines that corruption was continuing to poison Kenyan politics, and the situation was compounded by terrorist threats in East Africa.

Moreover, Githongo said, close ties to China would only increase corruption everywhere in the developing world, including in Africa.

“Ever since we started engaging our Chinese colleagues in business, transparency has crashed, and that is causing considerable concern vis-a-vis corruption and its potential implications with regards to governance problems,” Githongo was quoted as saying in an interview with The Guardian.

In 2019, Kituyi had a different view, when he was criticized for his close partnership at Unctad with Jack Ma, the mega-rich Chinese entrepreneur who founded the immensely successful online shopping site Alibaba. Kituyi, who has introduced Ma to African leaders as they travel together, has named him his most-prominent special adviser. Together, they work with the Alibaba business school, named for Ma’s Amazon-style store. The school is Ma’s but Unctad claims a big role in its activities. It was originally based in China but has a wide reach now globally, specializing in e-commerce.

In a March 2019 interview published by the East African Review, Kituyi railed against corruption in Kenya, saying that a death penalty should be imposed on corrupters who cost countries millions in lost and stolen revenues. Kituyi, who is generally assumed to be seeking a political future in Kenya when his term at Unctad ends in 2021, then turned to what he saw as a model nation in his view, according to his interviewer, David Ndii, who wrote:

“He urged China, to help developing countries in waging a furious war against corruption as it has zero tolerance for graft.”


 

 

Kituyi’s ties to the Alibaba business school and other large corporations has been a factor in a new, expanding North-South split in Unctad, with some development specialists in Europe and elsewhere opposed to what they say is a growing influence of multinational corporations like Alibaba in the policies and initiatives of Unctad — not how the organization was conceived by its founders. The divisiveness is considered by some staff to be deeply disturbing.

But others are focused on the more concrete allegations of misuse of Unctad’s finances for Kituyi’s frequent travels, some of which have not proved to be necessary or even linked to the business of Unctad and may violate clearly stated UN administrative rules. Only recently, he spent a week in Silicon Valley that has not been explained.

Office records show sporadic circulation in Unctad of his travel agenda, although Kituyi is unofficially clocked to be away from his Geneva base for as much as two out of every three weeks. His record as a minister in Kenya was similar. Unctad staffers are acutely aware that Erik Solheim, the former executive director of the UN Environment Program, was asked by UN Secretary-General Guterres to resign last year after Solheim’s excessive, expensive travels became a pressing issue for donor nations.

 

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