unctad.org | The XII Summit of Heads of State and Government of the G15
Statement by Mr. Rubens Ricupero, Secretary-General of UNCTAD
The XII Summit of Heads of State and Government of the G15
27 Feb 2004

[translated from the Spanish]

On behalf of Kofi Annan, Secretary-General of the United Nations, and also on behalf of the United Nations itself, allow me to greet all the Heads of State and other important representatives present here today. Allow me also to stress the central importance Mr. Annan attaches to the G15 as a constructive force at the service of international dialogue, cooperation and development.

Ladies and gentlemen:

Trade among developing countries last year accounted for 43 per cent of all their trade. This is particularly encouraging in Asia, which, thanks to intraregional trade, has continued to grow rapidly at a time when the economies of the US, Japan and Europe were slowing down, beginning in 2001. During that period, according to the Asian Development Bank, the 41 economies of Asia and the Pacific have achieved a growth rate of 5.5 per cent and, according to the same source, they will continue to expand at an annual rate of 6 per cent between now and 2010. The two giants, China and India, enjoy annual growth rates of 8 per cent and 6 per cent, respectively.

As a result, we are seeing the emergence of what President Lula has correctly termed "a new geography of trade and economics".

Other regions of the South are also enjoying increased trade within their own regions and, more recently, with other developing regions or continents. For example: Asia is now an important market for Africa, Latin America and the Middle East. Exports from Argentina and Brazil to China have doubled, and the Chinese market has for the first time become the largest market for the Republic of Korea and other neighbouring countries. But this trend does not benefit developing countries only. Last Tuesday, 24 February, the Financial Times announced on its front page that the Japanese trade surplus had reached $3.7 billion as a result of a 34% increase in exports to China. The paper said that, thanks to the strong regional growth in Asian trade, Japan is finally emerging from a 10-year-long economic crisis.

This phenomenon highlights what was the central belief of the great creator of development thinking in Latin America, the Argentinian economist Raúl Prebisch, the founder of UNCTAD. He believed that in our pursuit of sound and equitable interdependence between the economies of the North and of the South, our efforts should be aimed at redressing the asymmetries in the international finance and trade system, asymmetries which are responsible for the perverse dependence of the South on the North.

Unfortunately, these efforts are still far from bearing fruit. Less than a year ago in Cancún we witnessed some resistance to correcting the imbalances in agriculture and in cotton subsidies that are doing so much damage to Africa. A few months later, when we met at the UN in New York to take stock of the outcome of Monterrey, we saw that for the seventh consecutive year there has been a negative net transfer of financial resources from South to North. Thus, two years after the Financing for Development Conference, the sad fact is that the poor countries in such dire need of capital are having to export capital to finance the deficit of the developed countries. The conclusion is that the struggle for a more stable financial architecture has only just begun. The architecture we strive for must not only be capable of financing development, but also prevent, and, if necessary, overcome financial crises. A successful outcome to the heroic effort of the people of Argentina is imperative in this respect. They have my full-hearted support in healing the social and economic wounds of the financial crisis and in negotiating their future financial commitments on a fair, honourable and balanced basis.

Ladies and gentlemen:

In the past, interdependence was much more of a one-way street between South and North, but this is beginning to change. Last year almost half of all imports by the US and Japan, and more than a third of all imports by the European Union, came from the South, and the same is true of their exports to markets in the South.

Taken as a whole, the countries of the South represent a third of world trade in goods and a fourth of trade in services. Collectively the South constitutes the most dynamic sector in global production and trade. This is due both to its ever-increasing purchasing power and to its demographic growth.

All of this demonstrates how relevant Prebisch´s thinking still is today: when the South grows, its growth creates new markets and feeds the demand for imports from the North, as well as from other countries in the South. Far from being an alternative that excludes North-South trade, South-South trade is in fact a crucial complement to North-South flows. South-South trade is increasing at an annual rate of 10 per cent, more than twice the rate of expansion of world trade in 2003 (4.7 per cent). This transformation - this "silent revolution" - is being reinforced by the increase in investment, transfer of technology and intra-firm linkages within the South, both intraregionally and, increasingly, among various developing regions.

This is the new "trade geography" that is emerging before our very eyes. We should thus seize the opportunity of the eleventh United Nations Conference on Trade and Development (UNCTAD XI), to be held in São Paulo, Brazil, from 13 to 18 June, to further this trend. In São Paulo we will celebrate the fortieth anniversary of UNCTAD and of the Group of 77, both of which were born on the same occasion and for the same purpose. What better occasion than this conference, whose theme is "Enhancing coherence between national development strategies and global economic processes towards economic growth and development, particularly of developing countries", to create a dynamic new paradigm for development?

One of its components must be the revitalization of the Global System of Trade Preferences among Developing Countries (GSTP), with a view to achieving significant reductions in barriers between countries of the South and more favourable treatment of the least developed countries, which are the most vulnerable of us all and in need of our cooperation and solidarity.

In addition to the South-South economic and trade dimension, another essential element of the new paradigm for development, in honour of this Caracas meeting, is the energy integration of South-South and North-South. In no other area is interdependence as clear and compelling as in the field of energy; such nations as Italy, Japan and Germany rely on external markets to meet between 65 and 80 per cent of their energy requirements.

And in no other area is the imbalance in the use of the Earth´s resources greater. Each of the 1 billion inhabitants of the rich countries today consumes 4.5 tons of oil equivalent (TOE) every year, while each of the 5 billion inhabitants of the poor countries consumes about 0.75 TOE. If present trends continue, by 2050 each inhabitant of developing countries should consume from 2 to 3 TOE which, multiplied by the population projected for those countries in that year - almost 9 billion - will increase world consumption to between 25 and 30 billion TOE, as compared to just under 9 billion today.

According to the International Energy Agency, which is the source of these figures, prices will reach their highest levels ever before current reserves are exhausted, which is projected to occur in 2040 for oil and in 2060 for gas. The search for new deposits or alternative sources of energy will require astronomical investments. It is this scenario that calls for close cooperation among all, North and South alike, so that the developed countries become aware of the need to provide the capital and technology transfer that will facilitate not just the growth and expansion of new sources of hydrocarbons and alternative energy, but also the possibility for producers like Venezuela to participate in the value-added chain represented by valuable energy services.

Caracas is the perfect city for launching a major new project on South-South and North-South cooperation aimed at making energy a shared benefit. Venezuela´s calling, Mr. President, has always been that of innovator and visionary in international cooperation. So it was at the creation of OPEC, and so it was as well with the memorable role played by my illustrious predecessor, Dr. Pérez Guerrero, UNCTAD´s second Secretary-General after Prebisch. As a country that has already enriched the Americas with the Liberator Simón Bolívar, followed by Simón Rodríguez, Andrés Bello, Francisco de Miranda, Sucre and other extraordinary men of thought and action, Venezuela has shown itself fully capable of the leadership needed to realise its aspirations of "sowing oil" as a source of new wealth.


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