unctad.org | High-level meeting on trade capacity building and competition policy for African LDCs
Statement by Mr. Supachai Panitchpakdi, Secretary-General of UNCTAD
High-level meeting on trade capacity building and competition policy for African LDCs
Lusaka, Zambia
11 May 2010

[AS PREPARED FOR DELIVERY]

The Honourable Felix Mutati, Minister of Commerce, Trade and Industry of Zambia,
Honourable Ministers of African LDCs,
The High-level delegation from India,
Ladies and Gentlemen:

It gives me great pleasure to participate in this meeting on trade capacity building and competition policy for African LDCs. I wish to begin by thanking our host, the Government and people of Zambia for the warm welcome, wonderful facilities, and excellent support in co-organizing the meeting; equally, I would like to extend thanks to the Government of India for its support to this event.

Ladies and Gentlemen,

This time last year, the global economy had reached the nadir of the financial and economic crisis. Since then, we have been hearing a succession of optimistic commentators, media reporters, economists and others pointing to the strength of the recovery: the resurgence in stock markets, the restoration of bank balances, the reversals in growth rates. At the same time, data has emerged describing the full impact and cost of the crisis, particularly for developing countries, such as an increase in unemployment, a further 53 million people falling below the poverty line and more than 100 million extra people going hungry.

The recovery is geographically variable - driven mainly by demand from Asia - and it remains weak: it is still susceptible to threats from asset bubbles and debt crises in several regions, as well as low investment and persistent unemployment. The debt crisis in Greece, which is threatening the entire Euro zone, is indicative of the continuing malaise in parts of the world economy. In LDCs and other developing countries, progress towards the MDGs has been reversed, and it is now unlikely that all of the goals will be achieved by 2015.

Moreover, what momentum there was for the reform of international economic governance has stalled. Apart from macro-prudential regulation and some actions on bankers´ bonuses and taxation, there have been no fundamental changes to the institutional architecture of economic governance. Indeed, currently some of the most significant changes are taking place at the regional level, involving increased South-South cooperation and integration. Additionally, changes in policy at the national level in both developing and developed countries - for example, from tight macroeconomic policies to a looser counter-cyclical stance - needs to be recognized by multilateral initiatives, such as the MDGs and WTO trade talks.

The scale of the financial and economic crisis has made it imperative that we forge a more balanced and inclusive global economy through two channels: measured government intervention in markets and strategic policy action at the national level, and through better coordinated and more inclusive economic decision making at the international level. Such an approach would put people and development back at the centre of economic activity.

Mr. President
Ladies and gentlemen

For African and other LDCs, which have limited financial resources to mount national stimulus packages or mobilize domestic resources, economic and trade growth needs to be supported by the global community. Such external support should include better market access and entry conditions at the multilateral and regional levels. It should also include support to strengthen and diversify the productive capabilities of LDCs, including through the exchange of information, technology and expertise.

I mentioned the role of increased support among countries of the global South and India is one of the large emerging economies that have granted LDCs duty-free and quota-free (DFQF) market access. The challenge for African LDCs is to utilize the trade preferences available to them. But market access is only one element in a successful development strategy for LDCs: building a strong productive base in agriculture, manufacturing and services that can compete internationally is another essential ingredient.

Government and multilateral action is essential in this regard, to help establish a thriving productive sector in LDCs. Internationally competitive industries and markets do not establish themselves automatically: they require government investment to support strategic infant industries, and government intervention to correct market imperfections. As we have seen during the current economic crisis, the market does not always get the prices right, nor does it always provide a level playing field for firms to compete. Governments must create fair markets through the prudent use of macroeconomic policy as well as other regulatory mechanisms, laws and policies that maintain a healthy environment for enterprise and economic development to flourish. Competition law and policy is one such area that governments need to get right.

Inspired by our successful experiences in Latin America, UNCTAD decided to set up a Regional Programme on Competition Law and Policy for African Countries - called AFRICOMP - to assist African countries in formulating and enforcing sound competition law and policy. AFRICOMP has a number of unique features which draw on the success of UNCTAD´s program in Latin America, which you will hear more about later.

With generous financial and human resources from Norway, Sweden, Switzerland and Germany, UNCTAD has been able to launch AFRICOMP for five African countries. In addition, other cooperating partners, including France, UNDP and the UN Development Account are funding UNCTAD technical assistance projects for African countries. These countries will be brought together under AFRICOMP. A successful capacity building programme on competition law and policy for African countries requires the active involvement of development partners, and I would like to take this opportunity to thank donors who have supported AFRICOMP. I also urge other development partners to join UNCTAD in making this programme a success through the provision of human, technical and financial support.

Mr. President
Ladies and gentlemen

To conclude, I wish to underline UNCTAD´s commitment to supporting LDCs in their efforts to use trade as an engine of economic recovery, growth and development. However, trade is not sufficient in itself to create the levels of growth and economic development that LDCs are so in need of. Establishing a strong productive sector, which can operate in fair and competitive domestic, regional and international markets, will also be essential for LDCs. We hope our partnerships with LDCs can be strengthened through AFRICOMP and that African LDCs and India can build on their preferential trade scheme. Together these areas of cooperation can contribute to a more mature and prosperous exchange between countries of the South and their development partners, including UNCTAD, on trade and development issues.

Thank You.




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