unctad.org | First session of the Preparatory Committee for UNCTAD XI <br>Trade and Development Board
Statement by Mr. Rubens Ricupero, Secretary-General of UNCTAD
First session of the Preparatory Committee for UNCTAD XI <br>Trade and Development Board
Geneva
14 Oct 2003

Mr. President,
Distinguished delegates,
Ladies and gentlemen:

Yesterday, Mr. President, you made a comment at the reception you offered, saying that you hoped that the spirit of cooperation, consensus-building and good humour that had prevailed over this meeting would continue for the duration of the preparatory process, during the Conference itself and afterwards. I think this is the best possible introduction for my presentation this afternoon. May I add what you told me as I left the reception, that you believed it indispensable for us to have a good start; otherwise, we would waste too much valuable time. It is with this spirit that we need to face the preparatory process - a spirit that could be described as consensual and businesslike.

When we first started reflecting on UNCTAD XI, we thought that when we met in Brazil the global trade negotiations would be moving into the decisive phase, as they were supposed to be completed by the end of next year. Now, after Cancún, we no longer know how those events will unfold, but I hope the problems will be overcome and our initial predictions prove right, so that we can maintain not only the time limit on the trade negotiations but the level of ambition as well.

Be that as it may, I don´t think this should require any change in our basic approach to the Conference, because the principles underlying our proposals are independent of the basis of the trade negotiations. Your deliberations will be guided by the report prepared by the secretariat, which contains two parts. Part I is a general reflection on key developments over the last period of development history. It focuses largely on the evolution of UNCTAD, but of course it is not the part that should serve directly for negotiations. Part II, on the other hand, is indeed a pre-Conference text to assist you in your deliberations. As agreed by the Board, it addresses the overall topic of the Conference, enhancing the coherence between national development strategies and global economic processes, because we want to promote economic growth and development, with all the desirable characteristics. This general topic will have four main subthemes: development strategies; the need to give more attention to the productive sector and supply-side constraints; ensuring development gains from trade negotiations; and partnerships for development. Those are the important areas for the deliberations, and they are all intertwined.

In putting together these subthemes we were guided by two overarching frameworks: First, the basic, fundamental mandate of UNCTAD as the principal organ of the UN General Assembly for development-related issues and as the focal point within the UN system for the integrated treatment of trade and development and interrelated issues in the areas of finance, technology, investment, sustainable development, and our mandate from the Bangkok Plan of Action.

Secondly, and this is very important, we have to make our contribution to the implementation -- and I underline the word "implementation" -- of the outcomes of recent global conferences, including the Third UN Conference on the LDCs, the Millennium Declaration, the Monterrey Consensus, the World Summit on Sustainable Development and the Doha work programme. Within this broad framework, in each of the subthemes we are trying to distinguish three aspects: the identification of concrete, specific problems we face in each area; the national and international response required to deal with those areas, relying on the results of recent global conferences; and UNCTAD´s specific contributions to enhancing coherence among all those aspects. The logical sequence of assessing the specific trade and development-related problems or challenges within each area, and then identifying the responses needed at the national and international levels, is critical to mapping out the exact role of UNCTAD in fulfilling our mandate.

Having placed our task within this context, I would like to elaborate on some of the tasks that lie ahead, without attempting to be exhaustive but just highlighting some important aspects. First, the overall theme, enhancing coherence, and trying to establish or clarify the linkage that should exist between the global processes -- but here we are thinking very much of the global trade negotiations, which are clearly the area of UNCTAD´s central expertise -- and the supply-side constraints, the problems on the productive side - treated not in isolation, and not sequentially, but together. The trade negotiations should be dealt with as work in progress, in which developing countries would exert their influence in the proactive directions they would like to follow in order to take advantage of their current and actual competitive advantages, or where they think they could develop such advantages. Under this heading I would include all the work UNCTAD has been doing over the past seven or eight years in the adoption of a proactive, and not purely defensive or negative, strategy; of something that is much more assertive in terms of trade strategy - identifying, for example, all the work that has been conducted in different areas of the services industry, including health, construction, environment, energy, tourism, audiovisual services, Mode 4 and so forth. This is but one of many examples of where we have tried a technical approach to identify where developing countries could have gains and put on the table concrete proposals to promote those gains. The approach could be repeated in many other areas. It is very clear that such areas include not only industrialization, not only what UNIDO does, but the economy in general, all the areas covered by international trade negotiations: goods, of course, but also services, and how to improve the capacity of countries to participate as both exporters and importers, because the two are interrelated.

A central preoccupation of UNCTAD is to continue the work that was given so much prominence at UNCTAD X in Bangkok, when we decided to highlight UNCTAD as a knowledge-based institution that would increasingly work in training and capacity development, preparing countries to be better able, starting from their own realities, to present their strategies for negotiations. We now have a virtual institute that has been working hard not only on the trade negotiations, but also in setting up courses on economic issues under Paragraph 166 of the Bangkok Declaration. We plan to consolidate and further develop this initiative. Among other concrete expressions of this work: for the first time in Brazil, a major university, the University of Campinas, near Sao Paulo, has negotiated a one-year course, set up by the economics faculty with the help and partnership of UNCTAD, and we are already involving many other universities in the same direction.

We would like to see some practical outcome from this overarching theme of increasing the capacity of developing countries to compete in the marketplace, paying attention to their supply-side constraints. We are thinking about some concrete and practical ideas that could be further developed in the preparatory process. We would like to look closely at case studies of countries or sectors, in goods or services, and try to identify the success stories as well as where the major problems lie -- as was done in this week´s panel on Africa by the representative of the Ugandan Central Bank, who looked at how to design appropriate trade policies to take advantage of liberalization. We would like to have a more systematic way of examining those case studies, involving all UNCTAD divisions, because it will be necessary to look into the trade aspects, foreign direct investment or domestic investment, enterprise development, technology and trade efficiency, among others. We think this kind of review could be extremely useful, taking full advantage of the intergovernmental machinery to produce a sort of peer review. Discussions would lead to concrete, practical advice, based on the existing wisdom in terms of approaches, but applying those approaches to concrete cases. This is one of the ideas that we would like to develop during the preparatory process.

It is my conviction, as I have said many times recently, that at the root of the reluctance of many developing countries to engage in 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 the international approach to 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 this is not in fact the case, as it depends on many factors.

I see in this overarching theme not only the central issue for this current moment in economic discussion -- it is an issue that has not been addressed by others and is still very much in the shadows -- but also an area where UNCTAD could try to bring together all the expertise it has accumulated in the most diverse aspects, and fully integrate those elements into case studies. But within this overall approach, I also believe there are some issues that deserve special attention, because they are of a different nature. Up until now, I´ve been talking just about problems you could call purely economic, such as competitiveness, performance, trade, the productive sector, and taking advantage of trade negotiations. Now I would like to flag three other issues that have a strong link with the economy and with trade, but which go far beyond them, and which touch on very important human or social values: trade and poverty, trade and gender, and trade and the creative industries - by which we mean culture, but culture viewed as an active element of economic life.

What these three areas have in common is that they´re all mixed, in the sense that none of them is purely economic or purely social; they all touch on constituencies that are not purely the trade negotiators´ constituencies; they appeal to a much broader audience. They all require additional research, more knowledge. We still don´t know very well the mechanisms for transmission of trade gains towards poverty reduction; we need policies that will reflect those trade gains in reducing poverty. Some countries have been very successful in that; others, less so. We thus have to explore this further. The three areas also have in common the fact that they cannot be totally subsumed under the mandate of any particular organization because their very essence is multidisciplinary, multi-stakeholder; so they require a network approach, a division of labour in which each will do its part. I don´t want to go into details, but in trade and gender, at least, UNCTAD has been designated the manager of the UN systemwide task force on trade and gender, which has already held several meetings. We´ve accumulated a goodly amount of experience in this area and have some guidelines that were agreed to by the entire UN system in the broad sense of the term: the World Bank; the WTO; OECD was invited, but couldn´t come last week; and the Commonwealth Secretariat, which has much experience in this area. We intend to look for something similar in trade and poverty and in the creative industries - which, by the way, in some countries, like the UK, are already responsible for the employment of more than 10% of the work force, making them the largest industry in the country and thus not a marginal sector of economic life.

In all those areas, during the Conference we would like to see the full participation of the different stakeholders; openness; and a good mix between research and sound theoretical work on the one hand and practical outcomes and ideas on the other - outcomes and ideas that could be carried out in some cases by UNCTAD, in other cases by such agencies as ILO and FAO, which have programmes in these areas.

These, then, are some of the subjects that could enrich our discussions in Sao Paulo. They could be related to the overall theme of the Conference, because they deal very much with trade, the productive sector, and the promotion of greater capacity to compete, but they also add other dimensions. Of course, in our future work, it is our intention to fully mainstream problems like poverty reduction and gender equality when we analyse the case studies I have mentioned, in terms of making developing countries better able to participate in dynamic sectors of growth and export opportunities.

These ideas could make of UNCTAD XI something really new in the international arena. Most of these subjects, or the approaches we are taking, are fresh approaches. They are not the same areas that have been under discussion or negotiation for many years. I hope that if we succeed in showing that developing countries have much to gain in these areas, it will prove a net gain all around, including for the overall climate of the trade negotiations and for the approach to globalization, in terms of both its opportunities and the increased competition pressure it creates.

As I said, this is a fresh approach, but UNCTAD´s basic work and basic contribution in these areas is long-standing. In all those areas I could give you concrete examples of what we´ve been doing - commodity diversification, upgrading capacity to export fresh fruit and vegetables, setting up commodities exchanges to replace the old commodity boards, or helping oil-exporting or -importing countries to risk-manage this area so important for their economy. All those subjects that in one way or another relate to the basic subject are already there. They are the object of some concrete activity, of some continuous effort on the part of the divisions of UNCTAD, such as investment promotion, technology, e-commerce, e-finance and e-government. What is lacking is a unifying link or concept that would bring them all together, give them a basic coherence. When we speak about coherence between the global processes and the national strategies, we should not forget that in approaching this challenge, we also have to bring with us an internal coherence to our thinking and our basic approach. This is, simply, what we are proposing: a concept that will increase coherence in the work of UNCTAD, trying to bring together what we are already doing, trying to use the expertise we have accumulated here in Geneva with the trade negotiations and the productive sector, and putting this at the service of the developing countries in general, the poorest of them first and foremost, in order to create better conditions for growth, for a real and worthy development that will not increase the feeling of exclusion or marginalization but which on the contrary will fully integrate all the dimensions I have mentioned in terms of fighting poverty, promoting equality, etc.

I hope these ideas will prove useful in the days and weeks to come.

Thank you very much.



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