SPEAKERS FOCUS ON AFRICA"S DECLINING SHARE OF WORLD TRADE AS SECOND COMMITTEE CONTINUES GENERAL DEBATE

Press Release
GA/EF/2859

SPEAKERS FOCUS ON AFRICA’S DECLINING SHARE OF WORLD TRADE AS SECOND COMMITTEE CONTINUES GENERAL DEBATE

The Continent’s Economic And Social Crisis Called Most Critical Challenge For Humanity As Millennium Approaches

It was a sad reality that, largely because of over-dependence on a limited range of commodities, Africa’s share in world trade had been declining, the representative of Lesotho told the Second Committee this afternoon as it continued its general debate.

Opportunities associated with the liberalization and globalization of the world economy had bypassed Africa and instead threatened to marginalize the continent, he continued. Export promotion and diversification were therefore among the major targets of the continent’s growth-oriented strategies. African countries had taken positive steps that included implementing sound economic reform programmes, adopting democratic principles and moving towards economic cooperation and integration. It was incumbent upon the international community to provide Africa with more ambitious and coordinated support, including broad-based financial and technical assistance.

The economic and social crisis in Africa was the most critical challenge facing the international community at the end of the century, the representative of Morocco said. Forty-four per cent of Africans lived in abject poverty, and Africa’s debt burden grew to $350 billion in 1998. Nevertheless, positive changes were taking place in the shape of legal and economic reforms. Africa needed the resolute support of the international community, including greater financial and humanitarian assistance, reduction of the debt burden and greater direct foreign investment.

The African region had suffered the sharpest consequences of the drop in official development assistance (ODA), the representative of Algeria said. Africa, which had decided to end conflicts in order to concentrate its energies on reconstruction and development, must get all the support it deserved in its recovery. The stagnation of the

Second Committee - 1a - Press Release GA/EF/2859 4th Meeting (PM) 6 October 1999

least developed countries (LDCs) remained a test of conscience for the international community.

Also this afternoon, concern was expressed about the international trading system. The representative of Bangladesh said that trade liberalization had reduced the capacity of Governments to raise revenues from taxation of imports, resulting in significant loss of income. In most developing countries, and particularly in LDCs, no increase in production or trade had occurred to counterbalance that loss. The financial liberalization associated with globalization had tied developing economies to the global capital market, exposing them to the mercies of the mercy of unrestrained capital movement. The developing countries had opened up their markets but had not received meaningful reciprocal treatment.

The representative of Fiji said that an even playing field was not sufficient to establish equal rules for all in the international trading system. While trade barriers were low in the main markets of developed countries, those same opportunities did not exist for developing countries. Future special and differential treatment of developing countries should be based on specific criteria of development rather than arbitrarily defined transitional periods.

Statements were also made this afternoon by the representatives of Senegal, Namibia and the United Arab Emirates. The Director of the Division for Support and Coordination for the Economic and Social Council in the Department of Economic and Social Affairs also addressed the Committee.

The Committee will meet again at 10 a.m. on Thursday, 7 October, to continue its general debate.

Committee Work Programme

The Second Committee (Economic and Financial) met this afternoon to continue its general debate.

Statements

ANWARUL KARIM CHOWDHURY (Bangladesh) said that globalization had increased vulnerability in many ways. Trade liberalization had reduced the capacity of Governments to raise revenues from taxation of imports, resulting in significant loss of income. In most developing countries, and particularly in the least developed countries (LDCs), no increase in production or trade had occurred to counterbalance that loss. Financial liberalization associated with globalization had tied developing economies to the global capital market, exposing them to the mercies of unrestrained capital movement. Dramatic reversal of economic flows had occurred in many countries in 1997 and 1998, prompting everyone to weigh the risks of globalization against the benefits.

At the Third Ministerial Meeting of the World Trade Organization (WTO) in Seattle, ministers would consider launching a new round of negotiations and establishing a WTO work programme that would help define the trade and development agenda for the new millenium, he said. The developing countries had opened up their markets but did not get meaningful reciprocal treatment. They needed access to the global markets of products of interest to them, capacity for diversification of the product base and stable commodity prices. The external trade situation of LDCs should be particularly borne in mind. They had both low market access and high-supply side constraints. Tariff escalation, where higher tariffs were applied to processed goods, was also a barrier to their ability to increase output in the manufacturing sector.

In addition, non-tariff barriers in the form of quotas, voluntary export restraints and so-called antidumping measures further impeded access of new products that LDCs could turn out. The outcome of Seattle should be open market access to all products from LDCs without any exception. That should be supplemented by implementation of the joint initiative of WTO, the World Bank, the International Monetary Fund and other institutions for trade-related capacity building of LDCs.

ABDALLAH BAALI (Algeria) said that the interdependence of economies and globalization revealed the vital need for dialogue and cooperation. The international community was more and more convinced of the need to act in order to promote the optimal exploitation of all countries, especially of developing countries. Failure to act would mean condemnation of the developing countries and the restriction of benefits to wealthy countries. Technical assistance, foreign investments and development of human resources were indispensable conditions for southern-country participation in international markets. Economic growth, which should be vigorous and sustainable, must also promote employment.

The crisis of the operational development activities of the United Nations was of concern because of the drop in official development aid (ODA). The African region had suffered the sharpest consequences of that drop. Africa, which had decided to end conflicts in order to concentrate its energies on reconstruction and development, must get all the support it deserved in its recovery. The stagnation of the least developed countries remained a test of conscience for the international community. Wealthier countries had to increase development aid, give more technological assistance and more debt relief and support the diversification of developed-country economies. The impact of population growth on economic growth must also be acknowledged. That acknowledgement should materialize in concrete actions, particularly in the area of development financing.

AHMED AMAZIANE (Morocco) said that one and a half billion individuals were living on one dollar a day. Millions did not have proper housing or health care, and the gender issue continued to hinder development. For poverty to be tackled effectively, GDP must increase on a sustained basis. Recent levels of ODA, a concrete manifestation of solidarity by developed countries with the world’s poor, had dropped dramatically in relation to the internationally agreed level of 0.7 per cent.

He hoped the financial crisis had encouraged the international community to think about the disfunctioning of the international financial architecture and come up with ways of reforming it. In the context of trade, developed countries should agree to make trade regulations more favourable to developing countries. It was important to seize the opportunity offered by the Third Ministerial Meeting of the WTO in Seattle to consolidate achievements and begin an era in which trade could contribute to the development of the countries of the south.

The economic and social crisis in Africa was the most critical challenge facing the international community at the end of the century, he said. Forty-four per cent of Africans were in a state of abject poverty. Africa’s debt burden grew to 350 billion dollars in 1998. Its predicted economic growth rate for 1999 would not exceed three per cent. In some parts of Africa, conflicts and corruption were compounded by the AIDS epidemic and the debt burden. Nevertheless, positive changes were taking place in the shape of legal and economic reforms. Africa needed the resolute support of the international community. That support could be demonstrated by greater financial and humanitarian assistance, reduction of the debt burden and greater direct foreign investment. Enhanced partnership would help Africa achieve the target growth rate needed to tackle poverty.

IBRA DEGUENE KA (Senegal) said the world was entering the third millennium still burdened by its late 20th century scourges. Absolute poverty prevailed alongside substantial prosperity. The situation was pure paradox: while the means to create better living conditions for all existed, millions survived on less than one dollar a day. Millions lived deprived of basic needs, such as education, health care and clean drinking water. It had to be acknowledged that more than fifty years after the creation of the United Nations, the goals set forth in the Charter were far from fulfillment. As past assessment sessions made plain, the level of implementation of commitments made at international conferences had been low, due to inadequate resources.

A new world order was taking shape under the combined effect of rapid movement of information and liberalization of economies. But who was benefiting from that new phenomenon? What were the chances for those who had no access to drinking water, basic education and health care? What did the Internet mean for those who had no electricity and telephones? The international community had to work together to give globalization a human face.

Poverty, he said, was a multiple and complex phenomenon. Any lasting solution must include a global and integrated approach. From the standpoint of trade, an end must be made to unilateralism, and existing arrangements under preferential trade systems must be respected. Further, the debt problem had to be resolutely tackled. African debt represented more than 100 per cent of its GDP. Any solution to that problem must include a major cancellation or else better management of that debt. Combating poverty also meant combining trade partnerships with the appropriate mobilization of ODA.

MARTIN ANDJABA (Namibia) said the statistics on Africa were grim. The marginalization of the continent was exacerbated by the unfair international economic system. Despite all this, Africans were committed to tackling the formidable challenges they faced. The need to integrate the marginalized economies of developing countries would become imperative in the new century. Capacity building in science and technology in developing countries should remain a priority issue on the United Nations agenda.

Developing countries continued to make the difficult choice between servicing their debt and providing services for their people. That debt was simply not payable. In that regard, the recent undertakings by creditor countries and the Bretton Woods institutions were welcome, he said. Human resources development constituted one of the important pillars for development. African development depended also on the integration of women into the productive sectors of national economies. Moreover, effective ways and means must be found to galvanize support for the efforts of affected developing countries to implement action programmes designed to combat desertification.

MOHAMMAD AL-HAJRI (United Arab Emirates) said that imbalances existed between developing countries and rich countries, and that those imbalances were a threat to global stability. Globalization had put a brake on the aspiration of the peoples from the southern countries, and accelerated the decline of their economic conditions. The drop in commodity prices and the trade barriers put up by developing countries made the creation of international mechanisms of dialogue a matter of urgent necessity. Developed countries should abandon tariff barriers so that developing countries could attract foreign investments and promote their private sectors.

He said that the United Arab Emirates had adopted a free market economy and developed aid programs for the least developed countries, including humanitarian aid to peoples living in conflict zones. In that regard, he took the opportunity to condemn the horrible practices of the State of Israel, which now illegally occupied the territory of the Palestinians and had confiscated their economical and natural resources.

LISEMA W. RALITSOELE (Lesotho) said it was an incontestable fact that international trade had increasingly become the main engine of economic growth. It was also a sad reality that, largely because of over-dependence on a limited range of commodities, Africa’s share in world trade had been declining. The opportunities associated with the liberalization and globalization of the world economy had, therefore, bypassed Africa, and instead threatened to marginalize the continent. As a result, export promotion and diversification were among the major targets of the continent’s growth-oriented strategies. For their part, African countries had taken positive steps that included implementing sound economic reform programmes, adopting democratic principles and moving towards economic cooperation and integration. In light of those developments, it was incumbent upon the international community to provide Africa with more ambitious and coordinated support, including broad-based financial and technical assistance.

Concerning the related issue of financing for development, he said that the final nature of the event to be held in 2001 should be such as to maximize the attainment of its mandated purpose -- to address, in a holistic manner, the question of financing for development in both its national and international aspects, and in the context of globalization and interdependence. Development was in crisis, and unless bold measures were taken to find resources for financing it, the future of mankind was doomed to remain as bleak as its past. Should the international community accept the challenge, it would start the new millennium with a momentous political gesture, a gesture that affirmed global commitment to the eradication of poverty and the attainment of economic growth and sustainable development. It was in the interest of all countries to pursue development cooperation, on the basis of genuine partnership and mutually beneficial arrangements.

AMRAIYA NAIDU (Fiji) said a major concern arising from the imminent expiration of the Lome Agreement was the erosion of trade preferences in international trade of a major export earner, such as sugar. Small island countries with major agricultural export commodities would be seriously marginalized under the new international trade regime. With sugar being the main export, any fall in its price would oblige the country to increase the future volume of its sugar exports simply to maintain the present levels of income. Indeed it would demand expanded milling capacity, combined with more efficient processing and increased cane acreage, as well as the associated infrastructures -– at a cost to the Government of millions of dollars before it attained the desired level of export earnings.

It had now become clear that a level playing field was not sufficient to establish equal rules for all in the international trading system, he said. While trade barriers were low in the main markets of developed countries, those same opportunities did not exist for developing countries. In the context of the WTO’s future moves, the special and differential treatment of developing countries should be based on specific criteria of development, not on arbitrarily defined transitional periods. The challenge of finding new trading opportunities created by liberalization of market access to developed countries should be met both by the needed assistance and by programmes to and strengthen investment and productivity. Such measures would make preferential market access more effective.

He called for total elimination of tariff peaks and tariff escalation, and urged that agricultural commodities should be put on the same footing as other products in the international trading system. He also called for an end to trade- distorting agricultural support measures. The unique difficulties facing Fiji, such as smallness and remoteness from the international market, effectively restricted its ability to achieve economies of scale in production. They further reduced its real national income through excessive freight charges, necessitated by the country’s remoteness from major markets. Heavy dependence on imports and reliance on only one or two export commodities was inevitable, which further compounded the country’s balance of payments problem.

SARBULAND KHAN, Director of the Division for Support and Coordination in the Department of Economic and Social Affairs, highlighted key elements that had emerged from the day’s debate. He hoped that Committee would not just hear a series of statements, but would engage in a dialogue on the state of the world economy and its impact on development. Globalization had emerged as the anchor of today’s discussion. Within globalization there were many other dimensions, such as the core issues of finance and trade. Other aspects had also been touched on, including the role of women and how gender equality could promote development, as well as natural disasters and poverty eradication. The key issue of technology transfer in globalization had also been addressed.

One common strand running through many statements was the existing gap between expectations and reality. Similarly, many statements had dwelt on external debt and commodities prices. While the debate had revealed a range of views on the issues, there was broad recognition that development in the era of globalization, and in the face of greater integration of the world economy, was not development in the traditional sense. It was a new world economy, and the challenge of development was not the same as it had been previously understood. While growth was important, it was now the quality of growth that had to be emphasized.

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