unctad.org | High-level debate: UNCTAD 'beyond the curve'
High-level debate: UNCTAD 'beyond the curve'
16 September 2013
The Trade and Development Board has heard the Tunisian Minister of Trade, UNCTAD's Secretary-General, and two other agency chiefs discuss "UNCTAD and new patterns of trade and development".

The Trade and Development Board's annual high-level segment, billed as a view "beyond the curve", featured Mukhisa Kituyi, Secretary-General of UNCTAD; Abdelwaheb Matar, Minister of Trade and Handicrafts of Tunisia; Hamadoun Touré, Secretary-General of the International Telecommunication Union (ITU); and Francis Gurry, Director-General of the World Intellectual Property Organization (WIPO).

Trade and Development Board (High-level segment)
[Click to expand image]
From left: Mr. Hamadoun Toure (ITU), Mr. Abdelwahad Matar (Tunisia), Mr. Petko Draganov (UNCTAD), Mr. Mukhisa Kituyi (UNCTAD), Mr. Triyono Wibowo (TDB President), Ms. Masoumeh Sahami (UNCTAD), Mr. Francis Gurry (WIPO)

In an introduction, Triyono Wibowo (Indonesia), incoming President of the Trade and Development Board, characterized the issue as one of identifying new growth patterns. Despite major progress in developing countries in recent years, "some have recently experienced substantial economic and financial turmoil," he said. "New insights are needed," he continued, as "the question arises as to whether, and under what circumstances, developing countries will be able to continue enjoying rapid economic growth."

Mr. Matar of Tunisia told the meeting that the Tunisian chapter of the Arab Spring had shown that the development model in force over the past two to three decades had been a failure. That model of development had led to the division of the country into two parts: one that had a reasonable level of income, and the other - over half the population - that was poor and marginalized. The revolution had stemmed from the marginalized portion of the Tunisian population. Mr. Matar went on to say that unemployment was still high, and 70 per cent of the jobless were between the ages of 20 and 28. Many were educated and yet could not find jobs. Among that group, the proportion of women was especially high.

Economic growth averaging 4 to 5 per cent annually for years had not raised conditions uniformly, but rather had added to income inequality, Mr. Matar said. Major efforts were being made to set up a truly representative and fair governmental system, he said, but it was clear that a critical goal for the new government is to fight unemployment and to improve the living standards of the population - to design policies and take measures to direct private investment and public funding so as to ensure vocational training that can meet local needs. Even growth of 4 and 5 per cent would not be enough, the Minister said; more rapid progress was needed in order to absorb the country's vast, young population of unemployed. In addition, any new wealth created must be equally distributed. That would ensure domestic demand that could stimulate a self-reinforcing pattern of domestic production. Similarly, it was clear that Tunisian production needed to shift towards greater value added, Mr. Matar said.

ITU Secretary-General Hamadoun Touré said that information and communication technology was revolutionizing life, business activity, and governmental operations around the world, and was creating major new opportunities for economic progress in developing countries. However, "even with the very rapid growth of new technologies such as mobile broadband," he said, "we still risk creating a world of Internet-rich and Internet-poor, a world where the new broadband divide is even more worrying than the digital divide we had before [there were] near-ubiquitous mobile phones."

In 2010, ITU and the United Nations Educational, Scientific and Cultural Organization (UNESCO) set up the Broadband Commission for Digital Development, to encourage governments to implement national broadband plans and to increase access to broadband applications and services, Mr. Touré said. The mission of the group was critical, he said, as broadband had the power to radically transform society and to deliver sustainable social and economic progress. Broadband networks, in the twenty-first century, "must be considered as basic infrastructure, just like roads, railways, water, and power networks." Mr. Touré said that "it is vital to ensure that developing countries are not left behind as this and other aspects of the ICT revolution continue to spur economic growth."

Francis Gurry, Director-General of WIPO, cited "two dominant trends affecting intellectual property and, more broadly, the economy." The first trend was a general shift in wealth creation from tangible assets to "intangible assets", meaning knowledge-based capital. A survey of the world's leading companies indicated that such intangible assets now accounted for some 80 per cent of these firms' assets, whereas, years ago, tangible assets accounted for some 95 per cent of such companies' value. He said that "the reason is that knowledge-based capital - also called innovation - gives firms a major competitive advantage."

The second trend was a shift in the centre of economic and technological gravity from West to East, Mr. Gurry said. For example, China is now the second-largest investor in absolute terms in research and development, he said. Similarly, the growth rate of contributions to scientific journals from the East had been impressive. Those two processes were not a zero-sum situation, Mr. Gurry told the meeting; everyone could end up a winner if an effective "innovation ecosystem" could be set up so that innovation, wherever it occurs, fertilized growth in all nations.

UNCTAD Secretary-General Mukhisa Kituyi, who moderated the debate, summed up the discussion and noted that greater proportions of global production and investment had been achieved by developing countries. The "rise of the South", while spectacular and encouraging, raises concerns that need to be faced, he pointed out. South-South trade is still narrowly concentrated in Asia, he said, reflecting those countries' strong involvement in international production networks whose ultimate destination markets are often the developed countries. Is this a sustainable model? the Secretary-General asked.

Issues of tangible and intangible assets also need careful investigation and policy discussion, Mr. Kituyi said. Who determines how much value is added, and where, when products travel through so many countries and through such lengthy value chains before they are finally ready for sale? The global economy is now one of the components, he said, with unexpected flows of resources and value. It is necessary to study trade policy, investment policy and innovation policy to make sense of these new patterns and to harness them to achieve durable economic progress in the developing world, Mr. Kituyi said.



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