Ladies and Gentlemen,
Feliz novo ano 2004. Happy New Year. It is my pleasure to welcome you to the 8th session of the Commission on Enterprise, Business Facilitation and Development. Fully immersed in the preparatory process for UNCTAD XI, we find ourselves discussing much content. And that is good.
Competitiveness of SMEs through enhancing productive capacity
As I stated at the first session of the Preparatory Committee for UNCTAD XI of the Trade and Development Board on 15 October 2003 and on many other occasions, at the heart of the concerns of many developing countries regarding trade negotiations is the realization that they are really not competitive, and that many of them are totally dependent on one, two or three commodities. We have to focus on this weak side of trade matters. Much attention has been given to trade negotiations, perhaps even too much, and not enough to the other side, the supply-side response, as if this response were automatic or linear, when in fact this is not the case, as it depends on many factors.
This is why I feel that the work of this Commission on "Improving competitiveness of SMEs through enhancing productive capacity" is very relevant. The topic is also closely related to the UNCTAD XI subtheme on "Building productive capacity and international competitiveness". I would therefore like to encourage you to use this opportunity to reflect on key issues that should be brought to UNCTAD XI.
We have an opportunity today to hold a substantive discussion on constraints faced by developing countries in strengthening the productive capacity of their economy. This includes such issues as:
finding ways to diversify the productive sector so that countries are not dependent on only a few commodities for their exports;
finding ways to enable enterprises in developing countries to shift to higher value-added activities so that they are not competing solely on the basis of low wages and raw materials;
exploring other means to strengthen the competitiveness of enterprises in developing countries, particularly through the application of ICT; and
ensuring the supply of competitive transportation services for trade in developing countries.
The work done by the secretariat provides a good starting point for these discussions. The issues note on Policies and programmes for strengthening SME competitiveness(TD/B/COM.3/58), and the report of the expert meeting on "Policies and programmes for technology development and mastery, including the role of FDI" (TD/B/COM.3/56), provide some very useful recommendations on strengthening enterprise competitiveness.
The results of the expert meeting showed that in terms of moving up the "technology ladder" and improving competitiveness, only a handful of East Asian developing countries have managed to make significant progress. The results also showed us that there is no one way to achieve competitiveness. The type of policies implemented by these countries differs immensely. Furthermore, the international context has changed, in terms of WTO and other international standards and rules, as well as in terms of opportunities - such as what the semiconductor boom was for East Asia. One conclusion is thus that each country must find its own way of achieving competitiveness.
In terms of the Commission´s work today, this afternoon´s panel on "National competitiveness policies and international commitments" will allow us to explore this issue further, also in terms of changes in the international framework with regard to WTO rules.
I would also like to note the briefing on the Empretec Programme this afternoon by national Empretec directors. The Empretec programme has had a major impact on strengthening enterprises and fostering a culture for entrepreneurship in African and Latin American countries. It is also a good example of South-South cooperation, with established Empretec Centres assisting new centres. For example, Empretec Zimbabwe and Empretec Ethiopia assisted in the full establishment of Enterprise Uganda, and Empretec Brazil (Sebrae) provided training to Empretec Romania.
Efficient Transport and Trade Facilitation
For developing countries to attain trade-related growth they need to improve their supply capacities and improve the international competitiveness of their enterprises. Efficient transport services are essential for this process. The benefits to be derived by developing countries from globalization will depend largely on their capacity to build up efficient trade and transport infrastructure and services that will reduce transaction costs. The process of globalization is closely linked to changes in transportation practices and patterns, which are primarily reflected in the exponential growth of containerization and international multimodal transport. Transport is also a prerequisite for enterprise development and consequently the development of productive capacities. Access to adequate transport services is a major part of the enabling environment for business and investment, together with the appropriate legal and regulatory framework and other infrastructure. Transport has been a sector where private-public sector partnerships have been relatively advanced, and the sector´s experience can well be drawn on by other industries in their search for coherent strategies for investment and the improvement of productive capacities.
The successful development of efficient transport services depends not only on basic transport infrastructure but, more importantly, on the establishment of effective mechanisms that warrant the most efficient use of available infrastructure. The problem in many developing countries is that regulation, planning and management of the different elements of trade-supporting infrastructure are highly disjointed and without effective coordination. Laws and regulations governing the conduct of trade and the organization of trade-supporting services and infrastructure are often outdated. There is thus a need to develop modern policies, administrative arrangements and management practices that bridge both institutional and organizational disparities and inconsistencies.
Any trading nation in today´s global market is forced to adjust to the trade management practices of its partner countries and, by implication, to the practices of the international logistics and transport industry. The trading community must therefore take a close look at its value-added chain (supply chain management), and government must stimulate effective transport management systems by providing a physical and regulatory infrastructure that will allow the establishment of efficient trade- and transport-related services. For developing countries this also concerns the need to cope and comply with standards and requirements of trading partners.
The ever-increasing importance of linkages based on efficient and adequate transport services, together with the creation of an enabling trade facilitation environment, has been at the root of UNCTAD´s efforts to mainstream transport and trade facilitation on the international development agenda. This is also reflected in proposals put forward for consideration at UNCTAD XI. At the same time, the increasing demand for technical assistance by member States in this area clearly underlines the timeliness of UNCTAD´s approach to transport in the development process. In this context, I am pleased to inform you that UNCTAD has been called upon to undertake a major trade logistics programme as part of the international community´s undertaking to assist the rehabilitation of Afghanistan.
Further new challenges with respect to enhancing transport security have emerged in the past couple of years. Governments, industry and trading parties are faced with the new mandatory requirements. However as the General Assembly has agreed in its recent resolution, any security measure would need to be taken in a manner that is least disruptive of normal trade and related practices. For many developing countries, the financial costs and technical expertise required, and the tight time schedule for compliance, are of particular concern. Many are looking to the international community to provide the necessary assistance and guidance for implementation. One important issue, however, is the impact of these measures on the international trade and transport services of developing countries. Some of these issues could be considered in this forum and in the context of UNCTAD XI.
Information and communication technologies for development
Information and communication technologies (ICTs) have become a tremendous force for integrating people and nations into the global economy and a powerful tool that could be used to further development efforts. The application of ICTs as tools for development offers opportunities to reduce poverty and to promote trade, health, tourism, business and education. However, affordable and widely available access to ICT infrastructure and services remains a challenge for many developing countries in building the information society. Capital and human capacity-building, as well as sources of financing for the provision of assistance, therefore need to be addressed. At the same time, developing countries will have to deal with problems of poor computer literacy, lack of awareness of the Internet and regulatory inadequacy that hinder the diffusion of ICTs and access to the Internet.
The World Summit on the Information Society
(WSIS), whose first phase was concluded last month in Geneva, recognized these challenges and unanimously adopted a Declaration of Principles and Action Plan that address a wide range of themes on the information society, including the role of ICTs in promoting development. New technologies for information and communications are largely a non-controversial issue. But as we saw at that Summit, steering ICTs towards development still involves arduous discussions. Member States and their stakeholders (the private sector and civil society) vigorously debated the best manner to govern the Internet fairly, and the new financial mechanisms required for ICTs (where Senegal and the cities of Lyon and Geneva provided resources to set up a new international Digital Solidarity Fund). UNCTAD, with its unique mandate to promote trade and development, and as a key player at the Summit, should continue encouraging the exchange of ideas and knowledge with a view to harnessing ICT for development.
Last December, I had the opportunity to attend the G-77 High-level Conference on South-South Cooperation, held in Marrakesh, Morocco. Participants at the conference emphasized the power of ICTs to contribute to poverty reduction, and ICTs were recognized as one of the most important aspects of South-South cooperation.
In particular, I believe that the application of ICT to business and trade represents a unique opportunity for developing countries, and that UNCTAD should thus continue to emphasize the role of ICTs for business. In addition to its current activities in a number of ICT applications, UNCTAD will address a selection of other ICT-related activities, including those that would enable developing countries to take full advantage of free and open-source software, promote e-tourism, e-business and e-finance, and assist them in developing national e-strategies and building capacity to monitor ICT developments at the national level.
At both WSIS and the G-77 conference, Member States acknowledged that concrete actions are urgently required to help countries improve the use of ICTs. Harnessing the power of ICTs is not a purely technical issue. It also requires a change of approach and mentalities, as well as of methods of work, in order to enable people, enterprises and administrations to take the best advantage of the technologies. In this regard, developing countries need to put in place ICT strategies and policies, which in turn calls for solid political commitment. Moreover, the involvement of all stakeholders is an essential cementing ingredient successfully to bridge the digital divide and increase welfare.