The first session of UNCTAD´s new Commission on Investment, Technology and Related Financial Issues was suspended on Friday, following failure by member States to agree on the number of Expert Meetings to be initiated by the Commission and their work programme. Consultations have begun with member States over setting a date for the Commission´s resumption, to complete its work.
After five days of deliberations (18-22 November), the Commission agreed to other aspects of UNCTAD´s future work in the area of its competence. On the developmental impact of liberalizing domestic investment regimes -- a key issue for many developing countries, especially LDCs -- it recognized the need for empirical studies to be carried out. The Commission recommended that the secretariat continue to improve its collection of investment and related financial data; encouraged UNCTAD to "continue to promote dialogue among development partners, including at the regional level;" and called for continued collaboration with the World Association of Investment Promotion Agencies over exchanges of experience on investment promotion practices.
Furthermore, the Commission said it looked forward to receiving the investment policy reviews, as well as the science, technology and innovation policy reviews, being carried out by UNCTAD at the behest of several countries, so as to familiarize other governments and the private sector with their results. It invited member States to make extra-budgetary contributions to UNCTAD´s work programme, especially for technical assistance and for projects involving LDCs and African countries. And it expressed its appreciation of the World Investment Report, UNCTAD´s annual publication in this field.
The first main topic on the agenda was the interaction between investment and trade and its impact on development. This was introduced by Mr. Karl Sauvant, Chief of the International Investment, Transnationals and Technology Branch of the Division on Investment, Technology and Enterprise Development. He emphasized that while trade has grown rapidly since the early 1980s, so has FDI. FDI was now more important than trade in linking markets internationally and as a mechanism to link the production systems of countries internationally. All country groups and many individual countries recounted their own experience of FDI and its effects on their economies, noting its importance to development, although the possible negative effects of FDI were also noted. Most countries felt they did not receive enough FDI, and suggested that UNCTAD act as a catalyst to increase it. Many delegations encouraged UNCTAD to continue its research analysis in this area.
Mrs. Lynn Mytelka, the Director of the Division, gave an oral report on activities in the five main areas of its work: investment and transnational corporations; science and technology; technology for development; advisory services for investment and technology; privatization, entrepreneurship and competitiveness; and international accounting and reporting. Based on the background documentation provided by the secretariat (TD/B/COM.2/Misc. 2), she stressed that, despite shrinking resources under the regular budget, the programmes had produced some 40 publications, technical papers and reports, during the period January 1995 to November 1996, and had undertaken numerous advisory missions, workshops and training activities.
Speaking about UNCTAD´s mandates on competition law and policy, Mr. Jagdish Saigal, Senior Programme Manager of the Division of International Trade in Goods and Services, and Commodities, discussed the implications of globalization and liberalization for competition policy and the need to strengthen international cooperation in this area. A panel discussion was held within the framework of Agenda item 4 on issues related to competition law of particular relevance to development. Presentations were given by Mrs. E. Gachuiri of Kenya on "The problems faced by competition authorities in relation to the business community (the Kenyan experience)"; Ms. C. Curiel of Venezuela on "The competition advocacy role of the competition authority in creating a level playing field for market players", and Mr. M. Ben Fraj of Tunisia on "The experiences of Tunisia in implementing its competition law and policy".
The Vice-Chairman of the Expert Meeting on Competition Law and Policy, Mr. François Souty (France), introduced the report and agreed recommendations of the Expert Meeting, held in Geneva from 13-15 November. At the Meeting, presentations had been made on the challenges faced by competition authorities in implementing competition law and policy; the treatment of vertical price restraints; on the application of competition law to monopolies and enterprises with special rights; and on the protection of confidential information. There was strong support from most delegations for UNCTAD´s work in the area of competition law and policy and on restrictive business practices, especially in its provision of technical assistance, which was greatly needed by developing countries. The Expert Meeting´s agreed recommendations suggested that work in these areas be pursued and that the Meeting convene again next year. This was approved by the Commission.
The Chairman of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) at its fourteenth session presented the Working Group´s report. He explained ISAR´s origin in the United Nations Economic and Social Council (ECOSOC) and its role in the harmonization of national accounting standards. He also noted that ISAR´s work was consistent with the spirit and intentions of UNCTAD IX; while the Group was composed of government experts, it also had the participation of civil society in the form of professional accounting associations and committees. Moreover, it combined technical discussions with practical activities for the benefit of developing countries. He spoke about the Intergovernmental Group of Experts´ work on accounting for commercial banks and for government concessions, as well as on environmental accounting, and its efforts to improve accounting education and professional qualifications in developing countries, particularly in Africa.
Delegations were divided on how ISAR should continue its work. The representatives of the African, Asian and Latin American Groups gave their complete support to ISAR, and backed by India and China, stressed that ISAR should continue its work. The United States, disagreed and declined to accept the report. They believe this activity is better undertaken in the private sector, despite the fact that governments are responsible for this activity in many countries around the world. The representative of the European Union found the work of this Group to be useful. However, like Japan and Canada, the EU believed that future work on accounting and reporting should be carried out through an Expert Meeting, rather than an Intergovernmental Group of Experts.