The UNCTAD Trade and Development Board (TDB) tonight (22 October) successfully concluded intergovernmental deliberations on policies to be pursued for maximizing the opportunities for growth and development for all in a globalizing economy. The deliberations focussed on the impact of globalization on the socio-economic situation and competitiveness of the developing countries, and on the specific problems of Africa and the Least Developed Countries (LDCs).
The Secretary-General of UNCTAD, Mr. Rubens Ricupero, commended member States for the political will demonstrated and the action-oriented outcomes with a fair degree of policy content. "For the first time since many years, in a spirit of partnership between member States and the secretariat, we have used our collective wisdom to reach agreed conclusions on all the substantive items on the agenda of the TDB", he stated, adding that the importance did not lay in this fact per se but in their "fairly significant policy content".
Income distribution and growth in a global context
A set of clear messages (contained in document TD/B/44/L.3) to policy-makers emerged from the deliberations on economic interdependence, chaired by Ambassador Anthony Hill from Jamaica and Ambassador Eveline Herfkens from The Netherlands.
Member States recognized that growing income gaps within and among countries was a major challenge for policy-makers everywhere. Such growing gaps, the Board agreed, could give rise to problems not only for national governments but also the international community because they could unleash a backlash against globalization. Better management of the globalization process was called for, with special attention to the requirements of developing countries which do not start this process from as favourable a position as some others. Therefore, greater consideration was to be paid to the capacity of developing countries to meet the challenges of globalization and competition. Faster economic growth was a prerequisite to solve both the problem of poverty in developing countries and labour market problems in industrial countries. Policies at the international as well as the national level towards the integration of developing countries should be phased and tailored to the circumstances of individual countries. Mr. Ricupero stressed the importance of these messages which "illustrate the role of UNCTAD as a source of policy development and as a place where consensus can be reached, as well as guidelines for action by the international community and by national policy-makers".
The Board agreed that "markets by themselves do not create the full range of factors, inter alia of skills and institutional capacities, needed to accelerate growth and to meet the challenges of competitiveness associated with globalization. Government policy has a crucial role to play in promoting economic growth and competitiveness and reconciling these with social objectives. This role is to complement and regulate rather than restrict market forces". The Board also agreed that for creating conditions for sustainable growth, policy needed to be "oriented towards the avoidance of deflation as well as a resurgence of inflation".
Least Developed Countries
Much attention was paid by the Board, in meetings chaired by Ambassador Daniel Bernard of France, to national and international action required for the LDCs (see TD/B/44/SC.1/L.4).
The Board recommends to the UN General Assembly that a third United Nations Conference on the LDCs be held at the end of this decade and that as for the two previous conferences held in 1980 and 1990, UNCTAD be entrusted with the responsibility of preparing and organizing for this Conference. "We will spare no effort, and do so in an innovative way", Mr. Ricupero stressed. He expressed his personal commitment to ensuring that the Conference not be a repetition of longstanding complaints, but would give an added value to the consideration of the problematique of the LDCs.
The Board recommended a three-fold mandate for the Conference (TD/B/44/SC.1/L.2): assess the results of the UN Programme of Action for the LDCs during the 1990s at the country level; review the implementation of international support measures, particularly in the areas of Official Development Assistance (ODA), debt, investment and trade; and consider the formulation and the adoption of appropriate national and international policies and measures for sustainable development of LDCs and their progressive integration in the world economy.
A substantive discussion took place on how to improve and accelerate agricultural performance in the LDCs, as it was considered that, for many of them, this was the most effective path to raise economic growth rates, expand and diversify exports, ensure food security and reduce poverty. Macroeconomic reforms had already been implemented, but small scale farmers who dominate the sector in most countries still faced serious constraints to raising productivity and output. Sectoral and institutional policy reforms were necessary to ease those problems. Efforts, to be supplemented by international support measures, should aim at building effective research and development institutions and agricultural extension services, improving rural infrastructure and credit, and developing more efficient markets in rural areas.
The Board expressed its concern at the severe problems of regress which afflict a significant minority of LDCs, and its enormous costs to the LDCs directly affected, and to the economies of neighbouring countries. It urged the UNCTAD secretariat to continue its analysis of economic reconstruction of countries in regress. The UNCTAD Secretary-General reiterated his view that humanitarian and peacekeeping problems could not be separated from economic issues. It was his intent to proceed in an effort to shed light on the complex relationship between those issues, including that of human rights.
The Board expressed appreciation for the active support of the UNCTAD secretariat to the High-Level Meeting on Integrated Initiatives for Least Developed Countries´ Trade Development which will be held at the World Trade Organization on 27 and 28 October. "Consistent with the universality of UNCTAD´s membership", the Secretary-General of UNCTAD is requested to report on the High-Level Meeting to the TDB at its next meeting and to seek its approval on the role of UNCTAD and all its members in the implementation of the outcome.
The concern for the plight of the world´s 48 poorest countries found concrete expression in additional contributions made, by Norway and China (see TAD/INF/PR/9725 and 9726), during the Board´s session to the UNCTAD LDC Trust Fund, which now amounts to US$2,900,000 (nearly 60% of the initial target of US$5 million). The Board expressed appreciation for progress made in the formulation of Integrated Country Programmes (ICPs) for Strengthening Supply Capacity of Exportable Goods and Services in LDCs, which was made possible by contributions to the Trust Fund.
The Board´s discussions on Africa, chaired by Ambassador Agnes Aggrey-Orleans, welcomed the recent economic upturn in some African countries. But, the Board recognized (TD/B/44/SC.2/L.2) that African economies continue to suffer from acute problems related to infrastructure and have supply-side constraints which inhibit the capacity for growth and exports.
The need for major investment in human and physical infrastructure was emphasized and linked to action for increasing the resource requirements of Africa. In this regard, the Board agreed on the critical importance of a speedy and substantial reduction of the debt overhang problem, including through an agreement to allow the greatest number of African countries to benefit from the IMF/World Bank Initiative for Heavily Indebted Poor Countries (HIPCs).
Mr. Ricupero informed the Board that he would convey to Mr. Michel Camdessus, Managing Director of the IMF and Mr. James D. Wolfensohn, President of the World Bank, the feelings and conclusions of the TDB in this respect. Both had stated at the annual meeting in Hong Kong that the HIPCs Initiative should be regarded as the beginning of a process with scope for improvement.
The UNCTAD secretariat is requested to closely monitor the relationship between debt and the capacity of African countries to generate savings to support investment.
The Board also noted with concern that the levels of ODA had fallen in real terms to their lowest level and invited all donors to increase their ODA in accordance with internationally agreed targets.
With regard to trade, the international community is urged to make operational the Marrakesh Ministerial Decision on special measures. The Board also recognized that the degree, pace and the sequencing of trade liberalization would need to be adapted to the development conditions of each country. Furthermore, policies should be developed to address the actual and potential losses of trade preferences.
Concern was expressed on frequent interruptions of structural adjustment programmes which can erode investor confidence. Finally, there was recognition of the need for larger economic spaces in Africa through regional and sub-regional integration to achieve economies of scale and attract foreign direct investment.
- "The outcome of this session corroborates the gradual emergence of a new culture in our organization", Mr. Ricupero said. "Beyond current efforts within the secretariat to renew itself, member States have just signaled their willingness to contribute to the revitalization of UNCTAD so as to enable it to be at the forefront of international and national policy-making." This was the result of "creative synergies" between member States and the secretariat. "We stand ready to respond to the challenges of enhancing the policy function and the practical usefulness of this organization", he continued. This was "not an expression of self-complacency as we are just at the beginning of an ongoing process with many challenges laying ahead". One challenge was for UNCTAD to be more useful to end-users. Another challenge was to meet the specific needs of different groups of countries in the developing world.
- The President of the TDB, Ambassador Goce Petreski of the Former Yugoslav Republic of Macedonia, invited all delegates to the High-Level Segment of the Board, tomorrow, on "Globalization, Competition, Competitiveness and Development" (see TAD/INF/PR/9728).
- On Friday 24 October, Professor Dani Rodrik of the Harvard University will deliver the eighth Raul Prebisch Lecture on Globalization, social conflict and economic growth at 10 a.m. in Room XIX (see TAD/INF/PR/9721).