unctad.org | 2nd Ministerial Conference of the Forum of Economic and Trade Cooperation between China and Portuguese-speaking Countries
Statement by Mr. Dirk J. Bruinsma, Deputy Secretary-General of UNCTAD
2nd Ministerial Conference of the Forum of Economic and Trade Cooperation between China and Portuguese-speaking Countries

24 Sep 2006

Honourable Minister Bo Xilai,
Ladies and Gentlemen:

It is a great pleasure for me and my colleagues from other international organizations - members of the UN family, UNDP, UNIDO and ITC, but also the community of Portuguese-speaking countries and the private sector - to have been invited to this Forum. This Forum helps to foster closer cooperation between one of the major emerging trading nations and a group of countries with a common colonial history, which is now looking to a brighter common future in a globalized world. In this regard, it is intimately linked to the history and work of UNCTAD.

Our organization was established in the wake of decolonization. Many former colonies gained their independence in the first decades after the second World War. They faced dependence on the export of primary commodities; high tariffs on potential export products, such as agricultural goods and textiles and clothing; and tariff escalation to discourage efforts to achieve industrialization. As a result, developing nations soon recognized that economic independence was as important as political independence.

In order to draw the attention of the international community to these inequities and help set them right, the developing countries called for the convening of a United Nations conference. And thus, in 1964, UNCTAD was born, as a conference with worldwide membership. At the first UNCTAD conference, the developing countries also joined forces and formed the so-called Group of 77, so as to give a stronger, unified voice to their concerns.

Ever since its establishment, UNCTAD has worked to help developing countries integrate into the world trading system, build supply capacity and achieve sustainable development. Through sound research and policy advice, intergovernmental consensus-building and technical cooperation activities, we have helped them achieve better market access, accede to the WTO and diversify their economies. We have also helped to improve their trade logistics, including transport infrastructure and ports, and to build the required domestic institutions, such as competition authorities. UNCTAD is also very active in helping developing countries attract more foreign direct investment. This organization therefore prides itself on being a positive partner in the efforts of developing countries to benefit from globalization.

The world has changed significantly in the past four decades. While developing countries were marginal players in the world economy in the 1960s, as the overwhelming proportion of trade took place between developed countries, today they have become important global actors. A number of developing economies, particularly in Asia, have achieved sustained growth at spectacular rates. This growth has had a significant positive impact on the development prospects of many other poor nations, and on the world economy as a whole. These changes have brought about a "new geography" of international economic relations.

This new geography has not only resulted in a stronger role for developing countries in the trading system but has also substantially increased the potential benefits to be secured from economic and trade cooperation among countries of the South. The cooperation between China and the Portuguese-speaking countries assembled at this Forum is an excellent example of the kind of South-South cooperation that UNCTAD is trying to foster: Trade flows between China and the lusophone countries have grown dramatically in recent years.

Ladies and Gentlemen:

Legend has it that when Vasco da Gama first landed in Mozambique in January 1498, he had to leave the port soon afterwards because he had very few interesting goods to trade. This is, I am sure, no longer the case for trade between the Portuguese-speaking countries and China today.

Another factor facilitating economic and trade cooperation is, of course, common language. Recent research has shown that sharing a language increases bilateral trade between two countries by at least 11%. The special position of our host city, Macau, is of crucial importance here, as it provides an interface between the lusophone countries and the vast economic potential of mainland China.

One of the greatest challenges facing particularly the least developed countries is their dependence on the production and exports of a very limited number of commodities. It is of course true that the recent fast growth in such large economies as China and India has increased the prices of many primary commodities, yielding windfall gains for many producers. Nevertheless, the current prices are unlikely to be sustainable in the long run, and producers should use this windfall to diversify their economies. UNCTAD stands ready to assist in this endeavour.

One of the key commodities on everyone´s mind today is oil. The group of lusophone countries and China include important oil producers and important oil consumers. Indeed, China alone accounts for one third of incremental oil demand. From the sharp increase in the price of oil in recent years, key producers like Angola have enjoyed soaring export revenues. However, the price increase is problematic for many oil-importing developing countries. Both exporters and importers have a key interest in diversifying their economies. There are numerous gains to be had from developing alternative energies, such as biofuels. Brazil has already made important strides in this field, and other countries stand to gain from adopting these technologies and developing them further. The early adoption of a technology for which demand is likely to rise over the next few years also promises healthy profits for entrepreneurs in this field. UNCTAD is already assisting developing countries to explore their potential in the exploitation and production of biofuels and to secure funding support through such mechanisms as the Clean Development Mechanism of the Kyoto Protocol.

The changed trading environment for textiles and clothing after the phase-out of the Agreement on Textiles and Clothing is another challenge that could be addressed through cooperation. The abolition of quotas, and the emergence of new efficient producers, means that many countries, especially those that are highly dependent on this industry for export revenues, will have to make adjustments. For numerous countries, these adjustments will include improving their productivity and specializing in higher value-added products or more specialized stages of the production process.

Moving to high value-added stages in the production process is indeed a key part of the development process, for which one perquisite is having the ability to adopt and adapt science and technology.

Cooperation in these and other areas could consist of trade facilitating measures at intergovernmental level, technical assistance and cooperation, the secondment of experts, or joint public investments. At the end of the day, however, it is always the private sector that forges crucial economic linkages, and it is through forums such as this one that entrepreneurs from lusophone countries across the globe come together to explore joint interests. UNCTAD stands ready to assist your efforts through its technical assistance.

Ladies and Gentlemen:

When Portugal joined the European Union in January 1986, it soon came to appreciate the benefits of belonging to a wider integrated market, as its economy received a healthy shot in the arm. I hope that other Portuguese-speaking countries will similarly cooperate more closely so as to enhance the benefits of globalization.

Thank you very much.


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