unctad.org | African Group Seminar on the operationalisation of the right to development
Statement by Mr. Petko Draganov, Deputy Secretary-General of UNCTAD
African Group Seminar on the operationalisation of the right to development

22 Apr 2010

"Mainstreaming the right to development in the activities of UNCTAD"

Thank you for this invitation to share some of the recent thinking and the recent activities of the United Nations Conference on Trade and Development, regarding the operationalization of the Declaration on the Right to Development.

As many of you know, UNCTAD is the focal point within the UN system for the integrated treatment of trade, development, finance and technological issues. Our work to operationalize the development goals espoused in the Declaration -- and indeed, the goals outlined in the UN Charter signed in 1945, which share parallels to the Declaration´s spirit -- is therefore conducted through this mandate.

The link between UNCTAD´s work and the international development goals is, I trust, obvious. Through UNCTAD´s three pillars of research, technical co-operation and the inter-governmental process, we work to help developing countries integrate into the world economy on a more equitable and beneficial basis. Through trade, countries can grow; and through growth, we can help reduce poverty and promote human development. Without economic growth, it is very difficult to even begin to make meaningful reductions in poverty, or to enable genuine and sustainable improvements in peoples´ lives and livelihoods.

This is not to say that all forms of growth are the same, and UNCTAD argues that the links between growth and poverty reduction are by no means automatic. Our work aims to identify and help put in place policies that can help ensure growth is sustainable, pro-poor and that it promotes the achievement of development goals. Without growth, however, achieving the other goals is a much more difficult task.

UNCTAD is therefore very concerned that the latest data on African LDCs finds only twelve out of 33 countries appear to be on track to meet the first MDG target of reducing hunger. In fifteen countries, progress is extremely low or even stagnating. And yet it goes without saying that without adequate nutrition, well-meaning values such as those in the Declaration are unachievable.

Moreover, ensuring adequate nutrition is only one of many critical steps needed in the development path. It is doubly concerning that UNCTAD research finds only six African LDCs are on track to achieve both of the first two MDG goals: reducing hunger and meeting targets for primary education. This augurs very poorly for these countries prospects of achieving a sustainable, participatory, development path. Not least, it makes it very difficult for countries to move away from old patterns of commodity dependency and into more innovating, value-added economic activities.

The effect of the world economic crisis has only exacerbated what was already a negative picture for many countries in Africa, especially LDCs. These findings reinforce UNCTAD´s long-held concerns that there is a need for a profound change in development strategy, at the national and the international level.

Let me highlight just a few UNCTAD activities, of the many that are directly or indirectly supporting the spirit of the Declaration and other internationally agreed development goals, with specific relevance for African countries.

South-South co-operation. UNCTAD research, technical activities and inter-governmental processes have increasingly focused on South-South trade and regional cooperation, which can offer countries in Africa an important opportunity, helping them to build industries, local and regional markets, and ultimately international competitiveness.

UNCTAD evidence shows that intra-African merchandise trade has grown from insignificant levels in the early 1960s to approximately 9 per cent of total merchandise exports and 13 per cent of foreign direct investment in 2006. These figures appear to be low, but several LDCs including Djibouti, Togo, Mali and Senegal have Africa as their main export market. Other countries count African destinations as their second most important export markets. In Uganda, recent data shows that regional trade with Burundi, Rwanda and Sudan is boosting the country´s trade surplus.

Intra-regional investment is another component of south-south collaboration that is pertinent for the African group and where UNCTAD has directed attention. Our research shows that intra-regional investment in Africa is currently low, but it is increasing. This is especially significant at a time when international investment is declining, and potentially likely to remain low for some time. Intra-African investment has become an important source of investment for a few countries. South Africa has been a major source of investment, benefiting countries throughout the continent. Most recently, countries such as Nigeria, Libya, Morocco and Tunisia have become major investors across Africa. Investment has been particularly strong in the services sector, targeting telecoms, banking and tourism, mostly in the form of mergers and acquisitions. At the same time, countries are embracing newly active emerging foreign investors from Asia, Latin America and the Middle East who look to regions in Africa, for example, for new investment opportunities. China, India, Malaysia and Singapore are now among the top 20 investors in Africa. In the current global downturn, these new sources could help counteract weakened financial flows from Europe and the United States.

Debt. Debt is likely to be a critical issue for many African countries in the post-crisis context, as the decline in global demand and fall in exports will at least partially reverse some of the significant improvements that had been achieved in the years up until 2008. Gains that had been achieved in the years of robust international growth, and in association with the HIPC and MDRI initiatives, are likely to be reversed. Current estimates are that Sub-Saharan Africa debt as a share of GDP in 2009 is on average, 17% of GDP. In terms of goods and services exports, this is around 51%, up significantly from the year before when it was around 37%. It is likely that debt service burdens, both as a share of exports and as a percentage of government revenues will remain more elevated well into 2010 than in the pre-crisis years. This increase is due to both an increase in absolute debt service payments as well as a substantive decrease in government revenues due to the contraction in global demand and liquidity, which negatively impacted export revenues, FDI flows, and remittances.

ODA. Another broad theme where UNCTAD work is directly and indirectly related to the right to development issue and other goals concerns ODA. In the Least Developed Countries Report 2008, we noted that ODA was increasingly focused more upon urgent social and humanitarian needs, and away from infrastructure or from productive capacity-building. Over the years 2000 to 2003, ODA commitments to productive sectors such as agriculture, industry, trade and tourism was only 6.8 per cent of the total - and yet these sectors are many countries´ most viable path to achieve sustainable development.

The decline of ODA in productive sectors is of particular concern in agriculture, given its implications for food consumption and poverty. Between 1980 and 2002, multilateral ODA for agriculture declined by 85% and bilateral ODA to agriculture declined by 30%. Over roughly the same period, agricultural productivity in Africa grew on average only 2-2.5 % per annum, seriously limiting Africa´s ability to feed itself.

Given that average per capita food production has been falling and average farm size shrinking, the outlook for Africa´s agricultural growth and food production is alarming, as it must depend more on yield gains than on the expansion of cultivated land.

Transport. Weak or non-existent infrastructure is still hampering the free flow of goods and services across and between countries. The lack of reliable roads, railways, airlines and telecommunications links between many African countries and their neighbours has been limiting trade flows. Moreover, inefficient and multiple border procedures as well as inappropriate domestic trade policies increase trading costs and dampen intra-regional trade. Intra-regional exports are 71% of total exports in Europe, 46% in developing Asia, but only 9% in Africa. Hence, it has been estimated that some regions could potentially expand their trade just by reducing their transport costs.

To conclude, as you know, UNCTAD is about development -- the word is even included directly in our name. I have highlighted this morning just a few of our many activities that are devoted to promoting development and improving living conditions in developing countries. UNCTAD is following closely the discussions on the right for development - we are a member of the High Level Task Force on the implementation of the right to development, established at the recommendation of the Working Group, and I wish to assure you that we will continue to mainstream the right for development into the activities of UNCTAD.



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