PRESS BRIEFING ON MEETING BETWEEN UNITED NATIONS AND INTERNATIONAL CHAMBER OF COMMERCE

Press Briefing

PRESS BRIEFING ON MEETING BETWEEN UNITED NATIONS AND INTERNATIONAL CHAMBER OF COMMERCE

The international business community was committed to cooperating with the United Nations in order to assist in the development of the least developed countries, Adnan Kassar, Vice-President and President-to-be of the International Chamber of Commerce (ICC), said at a Headquarters press briefing this afternoon.

Mr. Kassar was one of four participants in the briefing, held to describe the outcome of a meeting between Secretary-General Kofi Annan and representatives of the ICC to further the dialogue between the United Nations and the private sector. Also present at the briefing were ICC Secretary- General Maria Livanos Cattaui; the Under-Secretary-General for Economic and Social Affairs, Nitin Desai; and the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), Rubens Ricupero.

Mr. Desai announced that approximately 25 business leaders from all regions of the world had been present at the meeting. In addition, the following ambassadors participated as observers: Francesco Paolo Fulci (Italy), Vice-President of the Economic and Social Council; Oscar de Rojas (Venezuela), Chairman of the Second Committee (Economic and Financial) of the General Assembly; and Ahmad Kamal (Pakistan), Chairman of the Working Group on Informatics.

The focus of the discussion was on concrete ideas for cooperation between the ICC and the Untied Nations, Mr. Desai said. An important outcome of the meeting was a joint statement on common interests issued by the Secretary-General and the ICC.

According to that statement, the Untied Nations and the business community should work jointly to expand economic opportunities, especially in countries which might face marginalization. The promotion of development could succeed only if it lead to a situation in which investment sustained broadly based growth. In addition, special attention must be given to the needs of Africa and the least developed countries.

Mr. Kassar thanked the Secretary-General for arranging the first meeting between the United Nations Secretariat and an international delegation of business leaders. The meeting was important because it illustrated the readiness of the international private sector to discuss ways to promote entrepreneurial skills and to develop an environment conducive to private investment in the least developed countries.

Mr. Ricupero said that UNCTAD had concentrated on presenting a concrete and practical project, to be undertaken with the ICC, to improve conditions

for foreign direct investment in the 48 least developed countries. According to UNCTAD's World Investment Report 1997, the least developed countries only received $1.6 billion of the $350 billion in total foreign direct investment. Africa only received $5 billion. Among the many reasons for that situation was the lack of adequate information about the conditions and opportunities for investment that existed in those countries.

Contrary to conventional wisdom, Mr. Ricupero said that some investments in Africa have had higher rates of return than in Asia and Latin America. The UNCTAD intended to work with the ICC to improve the conditions for investment by producing investment guides for the least developed countries. Of the 311 investments guides that UNCTAD surveyed, only seven covered the least developed countries. Increasing the availability of information could act as a catalyst to change the situations in those countries. The UNCTAD would work together with the ICC and the government and the chamber of commerce of the country concerned, to determine what were the problems facing investors and the local business community and how the government could solve them.

Mr. Ricupero added that on 6 February UNCTAD and the ICC had launched an ambitious survey of 350 major companies on the prospects for foreign direct investment in East and South-East Asia.

Ms. Cattaui said the ICC would focus on raising the productive potential, of the least developed countries, particularly by promoting the private sector. In order to raise investment potential, it was important to assess the situations in the least developed countries, to watch for tendencies and to look at what trends developed. The ICC had a long history of building local capacities, particularly in the business organizations of countries. Some of the activities that should be undertaken included establishing strong regulatory frameworks and fostering respect and understanding of intellectual property. The business world needed a strong, conducive environment for investment.

A correspondent asked if it was possible for outside organizations to control or influence a country that was politically unstable. Mr. Ricupero said the United Nations or the ICC had very limited influence in such cases. Yet, by stressing that instability was a major impediment, the United Nations could make the government and local leadership aware of the need to improve the situation.

The goal of UNCTAD was to concentrate on those countries with relatively favourable conditions that were not attracting investment, Mr. Ricupero continued. One such country was Bolivia, which had enjoyed a continuous period of political stability for 12 years. Bolivia was one of the first Latin American countries to conquer inflation and it had a good macroeconomic indicators, but it was receiving very little foreign direct investment. In some cases, it was the matter of active promotion, because so many countries were competing for investment.

UN/ICC Briefing - 3 - 9 February 1998

A correspondent asked what the ICC could do for a country like Haiti? Ms. Cattaui said the ICC was not embarking on a massive global scheme. It wanted to look at what practical steps could be taken in the least developed countries where something can be done. The first step was to begin the process. It was vital to supply the international business community with objective information about the least developed countries. The business world must be convinced that a risk was worth taking. The task was to put the risk in the right perspective and to determine in what areas it could foster a change.

Mr. Ricupero said Haiti was an extreme case, and it was the only country in the Western Hemisphere that was classified as a least developed country. Political instability had been a major impediment to economic growth. There was not much that could be done in the case of a country experiencing extreme political instability. Yet, there were many least developed countries in which the situation was not as dramatic as it had been in Haiti.

Mr. Kassar said it would be very difficult for businesses to invest in a country that was not politically stable. There needed to be an environment that allowed businesses to come and invest. While the ICC believed that it should do something to help the least developed countries, it could not do everything. The ICC would work carefully to identify two or three countries where investors could feel comfortable. The dialogue had started, and the ICC was optimistic about the results.

Asked which specific countries had been targeted by the ICC, Mr. Ricupero said six countries would be selected at a technical meeting this afternoon between staff of the ICC, the Secretariat and UNCTAD. The participants in that meeting would examine the different candidate countries and make their choices according to various criteria, including the presence of the ICC and the condition of local facilities.

What methods would be used to motivate investment in the least developed countries? a correspondent asked. Ms. Cattaui said the ICC needed to build on the experience and expertise of the businesses that had dealt with the least developed countries, as well as mobilize the local business world. There must also be strong cooperation from the government, UNCTAD and other bodies. It was important to convince the local business community that it had an opportunity. In addition, the international business community must have reliable information and the inclination to overcome initial resistance and risk aversion.

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