"Developments in the past two years have laid bare (…) systemic weaknesses and their adverse effects on poverty and development. There is now a greater appreciation of these problems by the international community and of the need for global action", UNCTAD Secretary-General Rubens Ricupero said today in an opening address to the annual session of the UNCTAD Trade and Development Board (18-29 October).
The main items on this week’s agenda relate to an examination of global economic issues from a development perspective and of economic trends in the 48 Least Developed Countries (LDCs), as well infrastructure and trade issues in Africa, and the specific problems of land-locked developing countries. The Board will also review UNCTAD’s technical cooperation activities and its programme of assistance to the Palestinian people later this week.
Next week will be devoted to intergovernmental discussions on the text to be finalized at UNCTAD X, the organization’s next ministerial-level Conference, which will take place from 12-19 February, 2000, in Bangkok (Thailand).
The Board today elected Ambassador Philippe Petit of France to preside over its work for the coming year, as the successor to President Ambassador Chak Mun See of Singapore. Mr. Ricupero praised the contributions of the outgoing Board President and of Ambassador Nacer Benjelloun-Touimi of Morocco, who has chaired the preparatory process for the G77 group of countries.
Increasing sensitivity to developing country concerns
In his opening statement, the UNCTAD Secretary-General drew attention to what he saw as an encouraging new pattern of public remarks by prominent figures concerned with the global economy.
Recent statements by Alan Greenspan, the US Federal Reserve Chairman, and by IMF Director-General Michel Camdessus, World Bank President James Wolfensohn, and the WTO’s Director-General, Mike Moore have converged around one implicit theme: a warning that action should be taken to redress trade and financial imbalances in the global system, Mr. Ricupero argued. Their remarks have coincided with the return of investor nervousness in global stock markets, as reflected in last week’s sharp declines.
Mr. Ricupero welcomed the increasing sensitivity of the international community to the fact that "there is no room for complacency," as UNCTAD has consistently argued. "The return of instability in the stock market is a vindication of our warning that relief from the Asian crisis was temporary, that lessons had to be drawn, and that corrective action is needed", he said.
Referring to the increased sensitivity being shown to developing country concerns by major economic institutions, the UNCTAD Secretary-General described the statement made by Mr. Moore at the G77 Ministerial Preparatory Meeting for UNCTAD X, in Marrakesh (Morocco) last month as "a landmark." Never before, whether in the former GATT or in the WTO, had a Director-General spoken out in such "eloquent" terms about the need to take the concerns of the poor into account in trade negotiations, asserted Mr. Ricupero.
He likewise praised the statements made at last month’s semi-annual meetings of the IMF and World Bank Group by Mr. Camdessus and Mr. Wolfensohn as reflecting both growing seriousness about developing country concerns and understanding of the complexity of development issues. No ready-made recipes exist, he said.
"We are getting closer in our understanding of the shortcomings in the global system", Mr. Ricupero continued. While differences in judgement and analysis exist between institutions, he was encouraged by both the growing convergence of views and the sense of the need for global action. This "good atmosphere" and considerable consensus that had been engendered augured well for the upcoming series of major economic conferences: the Third Ministerial Conference of WTO in Seattle (30 November - 3 December), UNCTAD X, and then the Third United Nations Conference on LDCs, in 2001.
Mr. Ricupero highlighted four points in this emerging consensus of views:
- The regulation and supervision of financial flows was required to avoid growing instability in the global financial system;
- The trading system as it had evolved over the past half century had created imbalances and asymmetries that worked against the interests of developing country exports;
- A symbiotic link exists between trade and finance; so that, while financial instability was a threat to trade, trade imbalances were at the root of many financial crises;
- Supply-side and institutional weaknesses in developing countries reduce the effectiveness of price and market mechanisms.
Welcoming the fact that the Board’s discussions this year on Africa and the LDCs will focus on infrastructure problems, in particular transport, he said that these were often more important than tariff barriers, for their impact on trade and competitiveness. Overcoming such weaknesses called for a greater emphasis on institution-building, and corrective and affirmative public action, as well as greater flexibility for developing countries in global arrangements.
These shortcomings in global arrangements and national policies combined to lower economic growth in developing countries, widen income gaps, and aggravate poverty. International institutions should build a convergence of action around these points.
Mr. Ricupero highlighted the continuing value of having independent and critical analyses of the interdependence of the global economy, because of its ability to provide new insights, and warn about potential pitfalls in national policies and global arrangements.
Focusing on the interdependence of issues in the global macroeconomic context was a distinctive feature of UNCTAD´s analysis. Such an analysis has been made possible by providing UNCTAD with mandates on a wide range of issues that constituted the integral and inseparable ingredients of an holistic approach to development.
UNCTAD X: Pooling Wisdom for Action
Looking ahead to UNCTAD X, the Secretary-General said that apart from setting UNCTAD’s mandate and work programme, the Conference would allow a sharing of wisdom and experience about development, so as to enable governments to identify elements lacking in the past and agree on the challenges ahead. The Conference should take advantage of the fact that it would be the first major intergovernmental meeting in the new millennium, at the heart of a region that had been previously the most successful in development and had then suffered a sharp reversal.
The President of the Board stressed that time was short in the intergovernmental preparations, as the pre-Conference text for UNCTAD X was due to be finalized by 17 December. A Preparatory Committee of the Whole will be established within the Board to draft the pre-negotiating text, starting next week. As background material, it will have before it the Report of the Secretary-General of UNCTAD to UNCTAD X (TD/380) and the outcome of various preparatory meetings, including the Plan of Action (TD(X)/PC/4) and Draft Bangkok Consensus (TD(X)/PC/5) submitted by the G77 and China together with their Marrakech Declaration (TD/381).
On 28 October, the UNCTAD Secretary-General and the Minister of Foreign Affairs of Thailand, HE Dr. Surin Pitsuwan, will sign the host country agreement for UNCTAD X.
Other agenda items
Under its traditional "interdependence "item, the Board will focus on policies that need to be pursued in the areas of trade and finance in order to address the mismatch between external financing requirements and the availability of sustainable sources of financing for development. UNCTAD’s Trade and Development Report 1999 (see TAD/INF/2816 and 2817) will serve as a basis for the discussions. "Challenges for the International Trading System" will be the theme of a panel discussion involving Professor Antonio Barros de Castro of the Federal University of Rio de Janeiro, the Economics Editor of The Guardian, Larry Elliott, and Professor Sunanda Sen of Jawaharlal Nehru University of New Delhi (Tuesday, 19 October, from 10.00 to13.00 and 15.00 to18.00, Palais des Nations, Room XXVI).
Sessional Committee I of the Board, chaired by Ambassador Walter Lewalter of Germany, will address the socio-economic situation in the LDCs. It will use an Overview of the Least Developed Countries 1999 Report as background. The Board will also review the preparatory process for the Third UN Conference on LDCs (see UN document A/54/271).
Sessional Committee II, chaired by Ambassador Adolphe Nahayo of Burundi, will explore links between trade, international transport and African economic growth. A report prepared by the Secretariat shows the adverse implications of the high costs of transport for African competitiveness and trade, and makes recommendations to deal with the issue (TD/B/46/10).
The Board will also review UNCTAD’s technical cooperation activities on the basis of an overview prepared by the UNCTAD secretariat (TD/B/46/3 + Add. 1&2). In this context, it will address UNCTAD´s assistance to the Palestinian people, described in a separate report (TD/B/46/5). The latter highlights key aspects of the performance of the Palestinian economy, including its external trade, and provides a brief assessment of the reconstruction and development process.
Bureau of the Board
Mr. Xolisa M.Mabhongo (South Africa) was elected Rapporteur. The following Ambassadors were elected Vice-President of the Board: H.E. Mrs Fayza Aboulnaga (Egypt), H.E. Mr. Munir Akram (Pakistan), H.E. Mr. Krit Garnjana-Goonchorn (Thailand), H.E. Mr. Koichi Haraguchi (Japan), H.E. Mr. Walter Lewalter (Germany), H.E. Mr. George Moose (United States of America), H.E. Mr. Goce Petreski (Macedonia, the former Yugoslav Republic of), H.E. Mr. Camilo Reyes-Rodriguez (Colombia), H.E. Mr. Ronald Saborio (Costa Rica), and H.E. Mr. Vasily Sidorov (Russian Federation).