Ladies and gentlemen:
In welcoming you to this meeting of the Commission, allow me to share with you some reflections on how your meeting can contribute both to UNCTAD´s regular work this year and to preparations for the next stage in our organization´s history. This meeting, which immediately follows the meetings of our other two commissions, on investment and trade, is particularly timely: It is taking place at the start of a new year of activities and also at a time when we are intensifying our preparations for UNCTAD XI, to be held in Brazil next year. The conference will provide us with the opportunity to consolidate much of our thinking in recent years about the role of UNCTAD.
You are certainly aware that we have already begun consultations with delegations here in Geneva on preparations for the next conference. The basic theme we have been proposing for the consideration of member States is how we can improve the coherence between national development strategies on the one hand, and global processes and negotiations on the other hand. This theme is very broad, encompassing both the policies that have to be taken at the national level, which depend very much on the countries themselves, and also the external conditions, initiatives and decisions that can facilitate implementation of those national strategies. And within this broad theme, we will of course focus on UNCTAD´s specific area of contribution.
Needless to say, when we talk about national development strategies and global processes and negotiations, we are talking about everything that comes under the development rubric; but it is not our intention to try to cover all those subjects. In focusing instead on our particular niche, what we have been suggesting to Governments over the last few years is to concentrate more and more on the links between the multilateral trade negotiations taking place mainly in Geneva, and the enhancement of the productive sector. We have been proposing this because it fits very well into the traditional mandate of UNCTAD and builds on our areas of expertise. At the same time, it is an essential, although not the sole, component of the challenge of development. There are many other components, such as good governance, political stability, macroeconomic policy and financial conditions, but it certainly is one of the most important.
On innumerable occasions in recent decades we have seen how even the best achievements of trade negotiations have not benefited all the participants. Some have been able to take advantage of the export opportunities created, while others have not. When they have not, it is mainly because they suffer from supply constraints and problems of productive structure. But when I talk about supply constraints I do not mean only in terms of productive capacity, which is the narrow sense of the term, but also in terms of the limitations they face in trying to deliver goods or service to the marketplace. Here, for example, there are problems of international transport, of trade facilitation in general, of the ability to put the latest technologies, such as e-commerce, to use for the productive sector.
And this is precisely the focus of your commission, which looks both at the productive sector and at how it can be made to reach out and deliver goods and services in the international marketplace. Thus, your deliberations will include discussions with panellists on such issues as how to improve the competitiveness and the productive sector of small and medium-sized enterprises. Here we have a subject that deserves priority attention and which has been receiving that attention from numerous UNCTAD studies. We have, for example, looked at the internationalization of production systems, and the World Investment Report has been tracking this enormous development in terms of foreign direct investment and the role of transnational corporations. It is also, however, necessary to complement the attention paid to those giants of the transnational economy with adequate attention to the SMEs that constitute the backbone of the economy throughout the world. Many of today´s giants, including companies like Microsoft, got started not very long ago as small businesses and benefited from credit - for example from the Small Business Administration in the US. So there is a link here that we have to clarify, both in terms of the linkages in building the supply networks of SMEs so that they can really integrate themselves into the international production and distribution chain, but also in terms of helping those companies to grow and helping those countries to improve their performance.
Here I would like to reiterate - and I hope the panellists will address this question - that the particular focus of our institution is foreign trade. We would like to explore what we can do in practical terms to improve the participation of SMEs in export competitiveness. Of course this is not the only dimension of the activities or strategies of TNCs, but if we want to deliver on what we promise - namely, to build the linkage between trade negotiations and the productive sector - we must address this problem. We should not be misled by a belief in a division of labour whereby it is only the large TNCs that play a role in improving export competitiveness. We have to concentrate on the contribution of the small and medium-sized actors, and for this we have excellent examples in Europe. Italy, for instance, exemplifies the role SMEs can play in terms of creativity and dynamism in the creation of new products.
We must also examine the factors behind the success of some countries. In general terms, I would like to invite your attention - not just during this week´s meeting, but over the long term - to the search for an empirical approach to the problem of differences in performance. Why is it that even within a group of similar countries, among all the countries on a given continent, or all the countries in a specific category, like the LDCs, some perform better than others in particular areas? What explains the many successes? Some of these successes are quite surprising, given the conditions these countries have faced.
Let me cite just one example from personal experience: Cambodia. When I visited the country some five or six years ago, it was still recovering from one of the most appalling horror stories of the 20th century. It had lost a very high percentage of its population, and practically every individual with some degree of know-how or knowledge had been wiped out. It is hard to think of another country that has faced the development challenge under worse constraints. I have been following Cambodia very closely over the last few years; the Minister of Commerce is a personal friend, and we have been working very closely with the Government on its accession to the WTO. This is an exemplary case of a country that has a very clear strategy about where it wants to go and that has been working hard to train people to negotiate accession to the WTO. The process is almost complete, and I hope that Cambodia will be the first LDC to join the WTO since its creation.
When I visited Cambodia, they were exporting $200 million worth of garments, and now the figure is $1 billion. This is impressive, because they certainly did not benefit from impressive shows of generosity from the outside world. They had to negotiate some very tough trade agreements, which included accepting the linkage between labour standards and export opportunities, and they have done so with increasing success. Of course, there may be many explanations for this - even the recent hardships may have provided additional stimulus for this effort - but I do not want to draw any specific conclusions, only to show that there are some impressive examples. I am not saying that the country has solved all its development problems - far from it, it is still facing some huge difficulties - but only that there are some lessons to be learned. I would like to look at the same elements - investment, enterprise development, technology, export competitiveness - in other countries and see to what extent they can be replicated under different conditions.
This is, of course, only one of the subjects before you. The area of transport, for example, is one where we are facing new difficulties as a result of changes in the security situation worldwide. Here again, we must come up with practical ideas and solutions; we must devote our attention to electronic commerce, which is yet another area where some countries have been doing very well indeed. UNCTAD has done two special studies in this field, one on India, which is a remarkable and well-known success, and the other on Costa Rica, which is another country with much to show for its dedication to electronic software and information technology in general. These concrete examples can guide us in terms of individual performance.
I would like to conclude by saying that, in the case of e-commerce, we should also reflect on our contribution to the upcoming World Summit on the Information Society. UNCTAD has been playing an active part in preparations for this event, but there are many other areas where we can contribute. More than anything else, I hope that your deliberations this week will show us with greater clarity where we should concentrate in our preparations for the next quadrennial conference - not as an end in itself, but only as an opportunity to help UNCTAD to become what it aspires to be: an organization that is increasingly useful to the developing countries in helping them to face their own constraints and define strategies that will enable them to take advantage of the opportunities created by global processes and negotiations.
Thank you, Mr. Chairman.