Urge more aid for developing countries´ productive capacitiesand a re-start to Doha trade negotiations
UNCTAD Secretary-General Supachai Panitchpakdi said this morning that a number of the world´s poorest nations are not benefiting from economic globalization because they "simply lack the capacity to do so" -- they do not have "the ability to produce goods and services; the knowledge needed to create a broad industrial base; and the infrastructure that enables countries to trade and communicate."
Mr. Supachai, opening a high-level panel discussion on the topic of "UNCTAD, development, and the way forward," said countries not being helped by burgeoning international trade and financial flows need increased foreign aid and investments aimed at improving "the basic resources of production, from natural and human resources to financial and physical capital, including infrastructure."
Other panellists were the Prime Minister of Rwanda, the Minister of Trade of India, the Minister for Foreign Trade and Development of Finland (also speaking on behalf of the European Union), the Deputy Assistant Secretary of State of the United States, the Director of the Ministry of Foreign Affairs of Norway, and the Ambassador and Permanent Representative of Bangladesh to the United Nations Office at Geneva.
There were repeated calls for greater efforts to extend the positive effects of globalization, including recent widespread economic growth, to all countries. And several speakers urged a resumption of the stalled Doha round of world trade negotiations.
The high-level policy dialogue is part of a Mid-Term Review of work carried out under the São Paulo Consensus of the UNCTAD XI conference held in 2004 in São Paulo, Brazil. The high-level discussions will continue through Friday.
Openness and market access sometimes are not sufficient help for developing countries, especially the world´s 50 least-developed countries (LDCs), Mr. Supachai told the meeting. "In fact, some have argued that trade liberalization has in some cases resulted in de-industralization and even greater poverty.
"Only investment in the productive sector will create employment, increase household income and reduce poverty over the long term," he said. He added that it also is necessary to strengthen managerial and entrepreneurial skills in developing countries and to bolster the Aid for Trade programme, which aims at helping such countries take advantage of export opportunities.
Bernard Makuza, Prime Minister of Rwanda, said UNCTAD must play an even greater role to support those economies that haven´t yet found a solid footing in the modern age. The "old Third World" no longer exists, Mr. Makuza said; it has divided into three groups --- those countries that have undergone sustained economic growth and are catching up with the developed world; those developing more moderately; and those still struggling to participate effectively in globalization.
UNCTAD´s technical assistance programmes have been extremely helpful and are clamoured for by developing countries, Mr. Makuza said, citing an Investment Guide to Rwanda and an Investment Policy Review of Rwanda (see UNCTAD/PRESS/PR/2006/036/Rev.1), unveiled yesterday and this morning, as examples of the effectiveness of such programmes. He urged UNCTAD to build stronger links with the poorest of the three groups of developing countries, and especially to connect research more closely with practical applications.
Kamal Nath, Minister of Trade of India, called development a "shared responsibility." Recent statistics showing rapid world economic growth "hide a number of worrying features which the world can only ignore at its peril," he said. "Some of the danger signals are already evident -- continuing protectionism in developed countries and turbulence in energy markets are only a few examples."
While India has "a services success story to tell," Mr. Nath said, many developing countries have not been able to take advantage of world economic expansion, and the structural factors which contribute to such market failures must be addressed urgently. He called for the Doha round of world trade negotiations to "deliver on the agreed development dimension" and said there is a need for greater emphasis in the talks on capacity building and technical assistance to enable smaller developing countries to participate meaningfully in the negotiations. UNCTAD´s mandate "must remain the enhancement of development opportunities for developing countries," he said.
Paula Lehtomäki, Minister for Foreign Trade and Development of Finland, saying part of her address was on behalf of the European Union, told the meeting that trade opportunities should not be treated as zero-sum games but regarded as win-win arrangements; that market access is not enough to improve poorest countries´ integration into world trade; and that the problem should be approached through increased development finance for trade and productive capacities combined with domestic reforms and improved international trade rules.
"The cost of a definitive breakdown of the Doha Development Agenda (DDA) negotiations would be extremely high, especially for the most vulnerable of the developing countries," she warned, saying the EU "will do its utmost to secure an early resumption of negotiations and call on its trading partners, in particular the major players, to make the necessary moves to enable the negotiations to restart and reach a positive outcome." Ms. Lehtomäki said Finland´s view is that UNCTAD should function more efficiently, should concentrate its efforts on innovative and original work, especially in research and analysis, and should refine its technical assistance programmes so that they "have an even clearer impact in favour of the developing countries."
Gerald Anderson, Deputy Assistant Secretary of State of the United States, said there has been a substantial rise in developing countries´ share of world trade, from 24.3% in 1990 to 33.5% in 2004. The world is benefitting from the institutional and macro-economic reforms of the 1990s and ongoing trade liberalization, he said.
Obstacles to economic progress in developing nations in many cases require domestic political will to overcome, Mr. Anderson said; such countries need leaders "whose top priority is to enable citizens to become productive members of society, including through such basics as education and health care, but also through the ease of doing business." One role of Aid for Trade is to address major supply-side constraints in such countries, Mr. Anderson said, "but donors will rightly want to provide aid where it can do the most good at the least cost, and where the political will is already evident." In 2005, he said, the US provided $1.3 billion in trade capacity building assistance, including technical assistance to train negotiators participating in trade talks.
Henrik Harboe, Director of the Ministry for Foreign Affairs of Norway, told the meeting that the aim of UN reform and development reform was not to save money, but to get more development out of the money invested. UNCTAD has a broad mandate and that makes it difficult sometimes to be focused, he said, but the organization has to find a focused and efficient role to play, with a clear and effective division of labour between it and other international organizations. Mr. Harboe said Norway approves of the report of the Panel of Eminent Persons appointed to study UNCTAD´s future role, and of the plans unveiled by Secretary-General Supachai to consider the report´s recommendations.
UNCTAD should be a think tank providing forward-looking and probing analyses of trade and development issues, and should make certain that its technical cooperation programmes fit in efficiently with the work of other international agencies, Mr. Harboe said, noting that "the stakes are high."
The final panellist, Toufiq Ali, Ambassador and Permanent Representative of Bangladesh to the United Nations Office at Geneva, said UNCTAD´s "three pillars" -- of policy analysis and research, consensus building, and technical cooperation -- are the organization´s unique strength. One shouldn´t rush into change for the sake of change, but the world really is changing, he said: the developing countries are no longer a cohesive whole, and recently they have become more vocal, "something not everyone likes."
Globalization is here to stay, Mr. Ali said, and it is necessary to find the means for all countries to benefit from it. It is necessary to ask why globalization works well in some locations and less well in others, and how UNCTAD can enable those countries doing less well to improve their situations. Development still has eluded many, he said; and a way forward has to be found for those countries.
