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‘UN Ideas that Changed the World’, published under the UN Intellectual History Project, seeks to trace the origins of key ideas about international economic and social development in the modern world.

Neo-liberal Washington Consensus ‘is now dead’

28 October 2009

UN experts laud Commonwealth as “ahead of the curve”

The global financial crisis has finally put paid to the ‘Washington Consensus’, the neo-liberal economic doctrine long adopted by international institutions, donors and developing countries, two acclaimed United Nations experts claimed at the Commonwealth Secretariat last week.

Former UN Deputy Secretary-General Sir Richard Jolly and Professor Louis Emmerij insisted that the doctrine - which advocated reduced government and the liberalisation of trade, finance and monetary systems - was now “discredited”, arguing that both the UN and the Commonwealth have both been “ahead of the curve” in pushing for alternative policies.

“There is no doubt in my mind that the Washington Consensus - as it was conceived with privatisation, liberalisation, de-regulation, free-trade all over the place - is now dead,” said Professor Emmerij, addressing an audience of academics, policy-makers and staff at Marlborough House in London, UK, on 19 October 2009.

UN Ideas that Changed the World

He added: “There is always a danger that things will come back, but [the Washington Consensus] will never come back in its strong and pure form. The role of the state has been firmly re-established through the crisis in all countries.”

Sir Richard and Professor Emmerij were speaking ahead of the UK launch of their joint book, ‘UN Ideas that Changed the World’, published under the UN Intellectual History Project, which seeks to trace the origins of key ideas about international economic and social development in the modern world.

The authors argue that the United Nations has played a pivotal role in advocating for principles which were once against the grain of the Washington Consensus, but are now common currency – such as human rights for all, fairer international economic relations, development goals and strategies for poorer countries, and environmental sustainability.

‘Catastrophic events of the last two years’

“In each of these ideas, the UN has played a crucial part – not the only part, of course, but a crucial one. It has been a moral force ... ahead of the World Bank and the IMF and often ahead of the conventional economic thinking,” Sir Richard said.

Neo-liberal economic policies pursued under the Washington Consensus have proven damaging for developing countries, noted Sir Richard: “I think the consensus ought to be discredited after the catastrophic events of the last two years, not merely financially but in terms of economics, in terms of the impact on developing countries.”

He added that the Commonwealth, which has long advocated for reform of international financial structures, has, like the UN, played an important role in pursuing formative new policies: “The Commonwealth has produced several good ideas on financial approaches.”

Symbiotic relationship

Explaining that the Commonwealth and the UN share a “symbiotic relationship”, Sir Richard said he welcomed the ministerial meetings organised by the Commonwealth Secretariat ahead of major UN meetings and its work to “try and get consensus” among its member states.

“I always thought the Commonwealth meetings - of finance ministers and other ones – before UN conferences must have been potentially a great chance for getting common positions behind progressive ideas or positions,” he continued.

“The Commonwealth still has a major role to play particularly in mobilising focus and support on these issues.”