"WE CAN"T TURN BACK THE CLOCK ON GLOBALIZATION", WORLD BANK PRESIDENT TELLS UN TRADE AND DEVELOPMENT CONFERENCE

Press Release
TAD/1913

‘WE CAN’T TURN BACK THE CLOCK ON GLOBALIZATION’, WORLD BANK PRESIDENT TELLS UN TRADE AND DEVELOPMENT CONFERENCE

Numerous Delegations in UNTAD X General Debate Express Similar Views

(Received from a UN Information Officer.)

BANGKOK, 16 February -- As part of a series of interactive dialogues on key issues, the United Nations Conference on Trade and Development (UNCTAD X) this afternoon heard from James D. Wolfensohn, President of the World Bank, before returning to its general debate in the early evening. Representatives of 16 member States spoke in this evening’s general debate, as did representatives of two international organizations.

Mr. Wolfensohn called for an end to slogans and name calling, so that the focus of international attention could be directed at poverty reduction and development. While the actual number of people living in dire poverty has been about 1.2 billion through the past decade, according to World Bank estimates, almost half the world’s population -- nearly 3 billion -- live on less than $2 a day.

“We can’t turn back the clock on globalization”, Mr. Wolfensohn explained, as technological innovations cannot be uninvented, and restrictions on information and communications technology will ultimately be self-defeating. But only a few developing countries -- and those the better off -- have so far benefited from the trade expansion that is a key element of globalization.

It makes no sense to exhort poor countries to compete and pay their way in the world while developed country protectionist policies deny them the means to do so, by restricting market access to a key sector where they actually have a competitive advantage -- agriculture. But this is precisely the effect of the current structure of developed country agriculture protection, including export and producer subsidies, as well as import tariffs.

During the interactive segment, the need to complement debt-alleviation measures with national level interventions to address poverty was stressed, as was the importance of private investment as a factor for growth. The opening up of developed world markets to allow poor countries a chance to compete was proposed.

The World Bank was asked to help document developing world traditional community knowledge so that it could become a source of income. Lessons to be drawn from the failure of the Seattle Conference of the WTO were mentioned, as was the effect of the recent financial crisis on the vulnerable, notably women and children. Corruption linked to international investment was identified as a serious obstacle to development. The idea of a one-size-fits-all poverty reduction strategy was condemned. Among other issues, criticism of the conditions placed on phase two of the Heavily Indebted Poor Countries debt alleviation initiative, and of the slow rate of funding of this programme was voiced.

In the general debate, speakers were the Deputy Prime Minister of Belarus, the representative of Colombia, Poland’s Deputy Minister of Economy, the representative of Saint Lucia, the Ministry of Industry, Trade and Marketing of Lesotho, the Minister of Supply and Trade of Yemen, the Minister of Commerce of Malawi, the representative of Libya, Argentina’s Vice Minister of International Economic Negotiation, the representatives of Paraguay, Lithuania, Bulgaria and Zambia, El Salvador’s Vice Minister for Foreign Affairs, the Minister of Commerce and Industry of Botswana and the Minister of Commerce, Handicraft and Tourism of Benin, as did representatives of the United Nations Industrial Development Organization (UNIDO) and the Food and Agriculture Organization .

The Conference will meet again at 9 a.m. tomorrow, 17 February, when it will continue its general debate.

Keynote Address by World Bank President

JAMES D. WOLFENSOHN, President of the World Bank: Over the past decade, the actual number of people living in dire poverty has remained roughly constant, at about 1.2 billion, according to World Bank estimates. Excluding China, the number has actually risen, from just under 880 million to over 980 million. In addition, the total number of people living under $2 a day is now estimated at nearly 3 billion, approaching half the world’s population.

The prospects for future reduction in the numbers of those living in poverty do not look bright. Recent World Bank estimates, based on a “business as usual” scenario of continuing slow growth and recurring crises, show that by 2008, the same number of people, about 1.2 billion worldwide, may still be living on under $1 a day. These figures call into question the ways in which the world has been doing development, making all the more urgent the “rethinking” that this conference has challenged us to undertake.

Poverty remains intractable despite economic growth in many countries. This partly reflects the problem of income inequality within countries. Income inequality, in turn, reflects inequality of opportunity. The cause of this is at least in part the still tragically unmet need for equitable and inclusive investment in human capital through better education and health care, and for wide access to infrastructure and capital needed to broaden the basis of opportunity.

The World Bank has learned the critical importance of the capacity of developing countries to help themselves –- to own, elaborate and implement development strategies and to get appropriate support from external partners. Those who are closest to the problem are those who are best able to frame solutions.

Against this background, we in the World Bank have been “rethinking development” in order to establish a more effective development effort in terms of “real results on the ground”. Our aim is to support our member countries in bringing the various elements of their development strategies into a coherent whole that would enhance their combined impact.

The Bank’s new framework is a holistic and integrated approach to development strategies and programmes –- a “Comprehensive Development Framework”(CDF) that highlights the interdependence of all aspects of development strategy -– social, structural, human, institutional, environmental, economic and financial. The CDF seeks to make explicit these linkages within a coherent overall strategic framework.

The CDF is country-owned, partner-based, results-oriented and a long-term vision of the development process over a 10- to 20-year time period. It treats social and structural issues equally with macro-economic and financial issues, so that the former are not overshadowed by the latter, as has sometimes been the case in the past. The CDF is intended to build sustained, consensual national support for a comprehensive national development effort and to provide for a more effective, better coordinated role for external partners based upon what each can do best to support the country’s goals.

“We can’t turn back the clock on globalization”. The technological innovations that have fuelled it cannot be uninvented, and restrictions on, for example, unimpeded access to information and communications technology will ultimately be self-defeating for those who try to impose them. Trade expansion is a key element of globalization, but only a few countries have so far benefited. If we care about the poorest developing countries, a special focus is needed on agricultural and trade liberalization.

The momentum for trade expansion and broader integration into the global economy has been uneven. The “rapid integrators” among the developing countries have mainly been those that are already better off. World Bank analysis that divided 93 developing countries into rapid, moderate, slow or weak integrators has shown that only 23 of them have been rapid integrators. If trade expansion is to be the positive force it can be in the wide development and poverty reduction agenda, the poorest countries must be able to participate more fully in its benefits.

It makes no sense to exhort poor countries to compete and pay their way in the world while we simultaneously deny them the means to do so by restricting their market access in areas such as agriculture, where they have a comparative advantage. But this is precisely the effect of the current structure of developed country agriculture protection, including export and producer subsidies, as well as import tariffs.

Here is a case where bold, imaginative action by the international community is needed. In Seattle, I called for completely free market access, not just for agricultural products, but for all exports of Least Developed Countries (LDCs). Today, I urge the same treatment to be applied to the countries eligible for debt relief under the Highly Indebted Poor Countries (HIPC) Initiative. Common sense and equity tell us that liberalizing market access for HIPC countries is an essential complement to debt relief.

Questions and Answers

During the interactive segment this afternoon, it was stressed that debt reduction needed to be complemented by coherent and determined intervention on the national level to address the causes of poverty.

It was reiterated that private investment was a key factor for growth. However, the promotion of private investment needed a stable macro-economic environment as well as political stability and an effective institutional and legal framework. If countries did not work on those matters, capital flows to foreign banks would not stop.

It was also underscored that sustainable solutions to the debt problem needed complementary international action such as the further opening up of markets in the industrialized world. Poor countries should have a fair chance to earn the foreign exchange needed for development purposes in the international market and thus reduce, in the long run, their dependency on concessional transfers.

Other participants asked the President of the World Bank whether his organization could not think of some innovative scheme to ensure that the prices of commodities of interest to developing countries were maintained at reasonable levels. And would not such a project be far more worthwhile and beneficial than the types of loans developing countries were getting from the Bank and in the process becoming more and more indebted?

Addressing the issue of commodity pricing, Mr. WOLFENSOHN said that at the moment he had no ideas and would welcome any. However, the Bank was currently trying to make information available on pricing to farmers so that they could better negotiate and perhaps even hedge in advance of the market.

While acknowledging that third world countries were rich in traditional community knowledge, speakers, expressing concern, asked the World Bank to help document such knowledge so that the developed world could not use it without paying compensation.

Commenting on the Bank’s insistence on privatization, trade liberalization and other elements of the Washington consensus on poor countries, critics referred to such measures as mere instruments at best. It was stressed that the objective was to reduce poverty, increase incomes and ensure sustained development. Decades of World Bank loans had no positive results to show -– only more people with little hope for the future. The years were replete with failures of the present system of loans and thus called for a reorientation of the Bank’s strategy.

Amidst a near-enough general consensus on the failure of the Ministerial Conference in Seattle last November, it was pointed out that if the lack of consensus at Seattle led to a reassessment of the links between trade, development, social issues and the environment, the Conference would not have been a failure, but rather the beginning of a search for a more responsive and responsible global economy.

Attention was also drawn to the fact that economic crises had had a devastating impact on many women and children, forcing them into prostitution and other forms of sexual exploitation linked to the trafficking of human beings. Corruption linked to international investment was also underscored. It was identified as a serious obstacle to lasting development because it penalized the poorest countries and distorted the economic game by allowing unfair competition, retarding social development, exacerbating unemployment, poverty and exclusion, and undermining democracy.

Replying to the question raised on corruption, Mr. WOLFENSOHN said much effort was being put into that problem. Until three years ago, the World Bank President was not allowed to mention corruption, as it was a political issue. However he and Michel Camdessus, the Executive Director of the International Monetary Fund (IMF), had redefined it as a socio-economic issue, and were now confronting it head-on.

While noting that electronic commerce could change the way developing countries competed, participants observed that many such countries had poor access to basic communication infrastructure and lacked related knowledge and technology. The question was how could such barriers be overcome.

Some speakers felt that the one-size-fits-all poverty reduction strategy was not appropriate. Regarding the HIPC Initiative, it was noted that it imposed conditions. It was asked whether the World Bank shared such concerns.

Responding to that issue, Mr. WOLFENSOHN said he was also concerned about the conditionalities of the HIPC Initiative. The Bank’s desire was not to make them insurmountable hurdles. It also was working hard to make sure that the potential threat of a second round of conditions was not met.

The challenge of actually mobilizing funds for HIPC -- funds which had not been forthcoming so far -– was raised. If funds to finance the HIPC Initiative were just diverted from other aid commitments, then that would not help much, as official development assistance (ODA) was also required. The Group of Seven developing States was called on to fully support the debt relief mechanisms they agreed to at their meeting in Cologne, Germany.

Regarding the lack of funds, Mr. WOLFENSOHN said the Bank had its own funding fully covered. The other portion from governments had not been forthcoming. He urged all governments to support the HIPC Trust Fund.

Another view expressed on the HIPC Initiative was that it was inadequate and needed to be overhauled in favour of a strategy aimed at debt cancellation or reduction early in the new millennium

Responding to some of the issues raised on limited connectivity, Mr. WOLFENSOHN said the Bank would work with countries on assessment of their status and provide assistance to them to establish open non-monopolistic markets through loans from the Bank and the International Finance Corporation.

He stressed that the biggest problem tended to be governments with monopolies which were happy to limit competition and keep prices high. That might require a change from oligarchic or monopolistic supply.

Statements in General Debate

BORIS BATURA, Deputy Prime Minister of Belarus: There is no choice but to work together to build an environment to enable each country to develop, based on a common assessment of global challenges and joint action. Marginalization is primarily caused by the wrong choice of strategy -- fast, sweeping market reform and economic liberalization on a single model irrespective of a country’s historical and national situation. We have to find consensus on the cause of unstable development and systemic economic imbalances. UNCTAD’s role should include coordination of design and implementation of a balanced global economic system.

Reform of the multilateral trading system managed by the WTO is a crucial element. Seattle proved that the WTO is seriously deficient and it, too, must be reformed. WTO reform should appear in the final UNCTAD X document. The new trade negotiation agenda should be expanded to include improved market access across a broad range of sectors, the rectification of WTO legal texts to effectively cover development issues, to fast track WTO enlargement and to promote coordination between the WTO and other agencies. Once the WTO is a negotiating forum, UNCTAD should become the analytical centre to better adapt the trade agenda to development objectives and to generate ideas for the multilateral trading system.

CAMILO REYES RODRIGUEZ (Colombia): In the century that just ended, there were major scientific and technical innovations, but the problems of poverty, hunger, marginalization and unemployment remain, and are even of increasing concern. There is now a greater awareness of the need to seek a new concept of development, not limited to the economic but centred on human beings. The multiplication of wealth caused by globalization has not contributed to raising the well-being of the population, but has worsened social inequality. Globalization must be accompanied by a just and sustainable world order that is inclusive, the transformation of the international financial system and integrated approaches to development.

An adequate and permanent response to recurring crisis of the international financial system should lead to new architecture, with mechanisms to prevent and control future crises. We must strengthen funds for development, based on incentives for foreign direct investment (FDI), and therefore the limitations on investments for the stimulation of trade in the WTO must be reviewed. UNCTAD should play a key role in the coordination of the United Nations and Bretton Woods activities in search of development. The failure of the latest trade negotiation round meant priority concerns for developing countries were unresolved. We must be careful to avoid an erroneous reading of reality as was used in the Uruguay Round -- that developing-country weaknesses were economic and not structural.

BERNARD BLASZCZYK, Under-Secretary of State in the Ministry of Economy of Poland: Recent economic progress and recovery are due to the ability to keep markets open to the world, to the consistency of implementing the necessary reforms and to the adoption of the proper State macro-economic policies, particularly in developing countries and emerging markets. These achievements, assisted with a large measure of success by international financial institutions, have to be consolidated and well anchored in the multilateral system.

Poland’s economic growth over the past eight years has been due in part to its early trade liberalization policies, which prompted a geographical and product-mixed reorientation of trade and put pressure on firms to restructure. Poland also reduced its external debt and liberalized capital flows in a cautious and orderly way. This made possible the flow of large-scale FDI. The country also engaged in a sound restructuring of its banking system, based on initially strong regulatory measures; subsequently, privatization was encouraged.

The international community should work towards creating an international environment, as well as domestic conditions, which are conducive to development and the eradication of poverty. It should ensure the proper functioning of market mechanisms, combined with democratic change, peace and stability, good governance, protection of human rights, sound macro-economic policies, transparency and regulatory reform.

JULIAN R. HUNTE (Saint Lucia), on behalf of the Alliance of Small Island States: Small island developing States have long been vulnerable to the forces of nature and the sea, but now they must brace themselves against the forces of globalization and trade liberalization. Island States are easily swamped in the world economy. The pace of trade liberalization is hampering their sustainable development. Small island developing States rely on international trade more than most countries, importing virtually everything from energy to health supplies to machinery. This drives up the cost of living and makes it difficult to compete against lower-cost producers. Poor market access and reliance on a single or few commodities are other problems.

Trade liberalization is eroding the special trade preferences that allow small islands to sell their few exports in developed countries at reasonable prices. Without preferential access, these States, devoid of economies of scale, have little hope of competing in global markets. We have called for an UNCTAD agenda to deal with the implications of trade liberalization and globalization of small islands, with four key areas: assessing vulnerability; reducing handicaps; improving economic diversification; and participating more effectively in the multilateral trade system. Globalization must be responsive to the needs of the people, especially the weak and vulnerable. It must be humanized through concerted action to alleviate poverty, protect the environment and attain sustainable development for all.

ABDULQAWI A. YUSUF, Assistant Director-General of the United Nations Industrial Development Organization (UNIDO): The structure of the global economy has been radically altered, and globalization will change it more. Despite this, our ideas and institutions to manage the global economy remain rooted in the thinking of half a century ago. In a short period of two years, UNIDO has changed from a threatened agency to one with full confidence in its own business plan and strategy and with the full backing of its member States. The second phase of a joint UNIDO-UNCTAD project is being launched here during UNCTAD X, aimed at boosting the productive capacities of certain African countries. A new approach for investment is envisaged for each country, involving work to improve their enabling environments and their institutions.

A new generation of reform measures is required that will link macro- economic stability with micro-economic performance. The reforms will have to mobilize the skills, information technology and knowledge required to upgrade the private sector -- the engine of sustainable industrial growth. This means contributing to the development of new and medium-sized companies that can move towards high-productivity activities and thereby participate in international trade flows. This is what makes possible the “supply-side response” that developing economies need to connect their people to the global economy.

M.M. MALIE, Minister of Industry, Trade and Marketing of Lesotho: Despite good performance over the last 10 years, unemployment in Lesotho is estimated at 40 per cent. Lesotho imports most raw materials for manufacturing. The end products are unable to meet the stipulated rules of origin and cannot therefore gain access to the international markets based on the preferential treatment accorded to LDCs and developing countries. The inability of local indigenous manufacturing enterprises to meet the quality standards set in international markets has also impeded access to the main international markets. This situation can be reversed if technical assistance can be secured for export product development. One of the major resolutions made for the twenty-first century is to develop strong cooperation between the Government of Lesotho and the private sector.

Experience has shown that the Government cannot run the economy efficiently on its own. The major challenge threatening the envisaged success of the partnership is the fact that the private sector, like the Government, has its limitations –- lack of entrepreneurial skills, ability to identify business opportunities and the need for services as they arise. The needs of my country over the next four years are technological capacity; competitive and effective trade and development strategies; efficient transportation and communication systems; and information technology. Deficiencies in these areas have rendered Lesotho an uncompetitive economy in the global context and one that is being marginalized in the multilateral trading arrangements.

ABDULAZIZ NASSER ALKOMAIM, Minister of Supply and Trade of Yemen: Yemen is a least developed country and therefore is in a race with time to merge into the new economic order. It has faced many challenges since it introduced in 1995 an economic reform programme in conjunction with the World Bank. Despite the successes of this programme, including stabilization of the currency and the reduction of inflation, we still have a long way to go. UNCTAD will play a key role in supporting our development, and Yemen calls on all friendly wealthy countries to provide UNCTAD with the support it needs to continue its technical assistance programme.

The impending Third Least Developed Countries Conference should provide new initiatives to assist in the integration of developing countries into the global economy. Developing countries’ debt should be cancelled, including those debts of countries of the former Soviet Union. Yemen supports the proposals presented to this Conference by the representative of the Netherlands, and other recent initiatives.

S.D. KALIYOMA PHUMISA, Minister of Commerce and Industry of Malawi: In spite of the efforts of UNCTAD, most LDCs remain marginalized in the world economy. Economic growth and sustainable development would be helped by the provision of improved social and productive infrastructure and enhanced preferential market access for export products from LDCs. Poverty alleviation, or even elimination, should be our goal. For the positive effects of accelerated globalization to be sustained and the risk of marginalization to be minimized, the least developed and the donor community must work together in creating stable macroeconomic conditions. The development of the private sector must be emphasized, along with the facilitation of FDI, and the enhancement of human resources. Malawi is committed to transparency and facilitation of trade in the world economy. The private sector is the engine of our growth.

Huge debt service payments reduce our capacity to invest in essential infrastructure, social services and human resources. Debt alleviation initiatives are therefore important. Developing and least developed countries look to UNCTAD to facilitate the provision of financial and technical support for the implementation of national programmes aimed at developing and enhancing small and medium-scale enterprises.

MOHAMED ELKEEB (Libya): Because of the communication revolution, the world has become a global village. Whatever happens on one side of the world soon affects another. Marginalization and inequities are the reality. Inevitably the economies of developing countries will be seriously affected. They will face serious problems that cannot be resolved even in the long-term. The principles and mechanisms of globalization are making the world economy very troubled and complex. This also hampers development. Consequently, solutions must be found immediately to avoid a total collapse of the world economic order -- an order which has witnessed frequent crises in recent years. UNCTAD, as the major forum, thus has a key role to play in issues of development, finance and trade and in the provision of technical assistance and advice to developing countries.

We must strengthen and increase UNCTAD’s efficiency, so that it can live up to the hopes placed in it. Development and human well-being need security and stability. This is why Libya has pushed for an end to hotbeds of tension in Africa. The agenda of this meeting is cooperation for development. The international community therefore must live up to its commitments. There is a need to acquire balance in international financial flows and achieve international financial stability to prevent speculation damaging industries. Commodity prices must also be protected and the prices of industrialized goods bolstered. There is a need to take advantage of multinational and transnational corporations to achieve balanced development as well.

ILEANA DI GIOVAN, Vice-Minister for International Economic Negotiation of Argentina: Globalization has led to new conditions for growth but also unfulfilled expectations. While controversy exists, we cannot halt time and close our markets, because this would just increase poverty and marginalization. We cannot stand by and wait for the benefits to spread to all sectors of all countries. We can act to make a better world, and avoid regressive acts, such as a return to protectionism. At UNCTAD X there is progress and initiatives from developed countries, particularly on tariff-free access for goods from LDCs along with debt relief initiatives. But if there is no political will to act in international trade negotiations on agriculture and textiles, then the other initiatives will be too little too late. The WTO must incorporate agriculture with the same disciplines as other products.

Strengthening the international financial system is perhaps the strongest need created by globalization. The new architecture should include financing mechanism at regional levels. In trade negotiations and moves to reform the financial architecture, we should resolve a problem that applies to both -- that of participation. We should ensure full participation of all interests and all countries in the decision-making frameworks. These frameworks must be revised to ensure that all opinions reach the bargaining tables.

LUIS MARIA RAMIREZ BOETTNER (Paraguay): The new round of negotiations on trade should correct the injustices in the international trade architecture. The scepticism seen in 1999 must be overcome. This scepticism had three causes. Industrialized countries have refused to negotiate seriously on agriculture, but want developing countries to apply trade liberalization to industrial goods. Attempts have been made to apply labour and environmental standards to trade in such a way as to make them a weapon of protectionism. And developed countries have applied pressure on developing countries such that they feel they have no choices in the negotiations. Reason should prevail and trade liberalization benefits should be distributed in an equitable and just fashion.

Liberalization in international trade is compatible with the economic integration in MERCOSUR and with its associated countries that Paraguay is engaged in. However, to ensure that benefits extend to landlocked countries such as Paraguay, standards must be found that overcome the disadvantages that lack of access to sea and the resulting transport costs create. Landlocked countries may need preferential treatment. Otherwise, an inequality that is not in keeping with the ethical and moral principles that should govern trade may occur.

AUDRIUS NAVIKAS (Lithuania): The fact that most FDI flows go to other developed countries or to a rather small number of developing countries is disappointing, raises concerns and requires deeper analyses of the causes. The first challenge is for potential recipient countries to make their internal investment environmentally sound and strong by ensuring democracy, good governance, respect for human rights and peace and stability. The second challenge is for the international community to make international trade and financial systems conducive to sustainable development by strengthening multilateralism and the global institutions charted with these tasks.

Regarding WTO accession, prospective candidates should be granted membership in the organization under fair terms and conditions that take their developmental needs or transition related realities and difficulties into account. It is our belief that the level of the commitments of the member States of the WTO should be a compass and limit for the obligations of the acceding countries. Considering its economy is already more liberal than some two thirds of the present WTO member States, Lithuania is looking forward to a successful conclusion of the accession negotiations. UNCTAD must continue to address the specific needs of countries in transition by further providing them with technical cooperation.

PETKO DRAGANOV (Bulgaria): Bulgaria is acquiring an open and transparent trading system and believes that this can contribute both to the achievement of its economic and development objectives as well as to maintaining and further developing the multilateral trading system which on its own can be an important factor for economic development. Protectionism cannot offer a solution to economic problems. It can only further aggravate them and lead to chain reactions that are detrimental to the international economic environment and which can negatively affect development prospects of all countries.

Bulgaria has demonstrated its commitment to the development of other countries. Regardless of the difficulties of its own development and the fundamental and often painful restructuring of its own economic system, it continues to offer generous trade preferences to the developing and least developed countries, including countries which have similar or even lesser economic problems. Bulgaria values UNCTAD’s analytical work in the areas of investment, debt management and trade -– issues of significance to countries in transition.

IRENE TEMBO (Zambia): With the establishment of a WTO setting multilateral trading rules, developing countries envisioned a speedy flow of knowledge and technology and enhanced market access, but the benefits thus far have been minimal to nil. A re-evaluation and proper management of globalization, including a conducive global environment and appropriate national policies, is needed. There should be greater coherence between the international trade and financial institutions. The WTO agreements on technology transfers should be implemented.

Despite substantial efforts to open up markets and formulate preferential policies, FDI flows to Africa are almost non-existent. The international community needs to undertake a critical review aimed at developing new, more inclusive international financial architecture, in the light of growing volatility of capital markets, fluctuations in exchange rates and persistent speculative capital flows. On the domestic level, the necessary regulatory framework for FDI must be created. Regarding debt relief, the HIPC Initiative has been constrained by failure to secure adequate resources from donors. It may be that debt relief is provided at the expense of other development assistance. More of both is needed.

HECTOR DADA SANCHEZ, Vice-Minister for Foreign Affairs of El Salvador: Today the debate is about what progress can be achieved and how to identify the impediments that are holding pack the population of nations. El Salvador has managed a growth rate of higher than 5 per cent in the last 10 years and brought inflation down to 2 per cent. There is also an ambitious process of privatization being fostered in the country. The telephone rate from El Salvador to California is now cheaper than calling from Miami to New York. We have proven that we are capable of attracting major investments in areas such as computer manufacture. Despite the fact that we have only traveled along a short path, we have achieved a special place on the globe. In addition, El Salvador and Chile were both recognized as special cases of economic success by the Wall Street Journal.

The challenge is still considerable, because social well-being is still not at the level where it ought to be. While it has been recognized that globalization has two faces, one of these faces is still the best opportunity for developing countries to improve the lives of their people and for development. Given this reality, we have to be aware of the fact that developing countries need an international context. We cannot ask the developed world to wait for us to catch up, but we can fight for an opportunity to take part in global trade on a fair and competitive basis. The best support that developing countries can receive is the ability to generate their own jobs through trade and investment.

PANOS KONANDREAS, Food and Agriculture Organization (FAO): Agricultural growth has proven to be an effective engine for development because it can meet two objectives simultaneously. It can provide employment and income for the poor, and growth in the supply of basic foodstuffs for the immediate benefit of the domestic population. The question to be asked is how best globalization and trade liberalization can contribute to the development of the agricultural sector of these economies. Both processes must be made to strengthen the competitiveness of the agricultural sectors of developing countries. Global agricultural markets continue to be highly distorted due to excessive subsidization and protection by the more affluent countries. Improved access to developed country markets is needed, especially in processed agricultural products, to allow developing countries to diversify their export base and benefit from value-added possibilities.

There is an inadequate level or resources invested in agriculture in developing countries, compared with the requirements to achieve the World Food Summit target. External assistance for agriculture is declining. A relevant question to ask is whether increased private capital inflows have made up for the decline in ODA. It is very doubtful whether this is the case, especially for the poorer of the developing countries. It is also doubtful whether private capital will adequately substitute for public investment in such important areas as agricultural research and extension, irrigation and infrastructure development. It is unlikely that we will reach our common goal of alleviating poverty and food insecurity in the world, unless the full potential of the agricultural sector in low-income countries is realized. This is an area where the international community should concentrate its efforts.

DANIEL K. KWELAGOBE, Minister of Commerce and Industry of Botswana: The Asian financial crisis, with all its ramifications, reveal systemic deficiencies in the international financial system and the need to have in place mechanisms for early detection and timely response to the collapse of the financial markets. It also underscores the need to have a balanced world economic order in which countries can have a certain minimum economic independence, which can help absorb external shocks.

As Botswana acts to tackle development issues -– trade liberalization, investment promotion, mobilization of finance, addressing technological issues and human resource development -– it becomes clear that it will need more support in terms of focused and integrated technical and institutional assistance. In this respect, it welcomes the critical role being played by UNCTAD in undertaking research and analytical work on such issues.

SEVERIN ADJOVI, Minister of Commerce, Handicraft and Tourism of Benin: There is a correlation between stability and development. Democracy also contributes to growth and stability. Democracy development and respect for human rights are all interdependent and this reality is incorporated in Benin’s national political system after more than two decades of a single-party Government. There is now a new constitution and greater participation by society in national affairs.

Benin is honoured to host the fourth major Conference on Democracy in December. Over the years, there has been growing enthusiasm for this meeting, with more and more new and restored democracies attending. UNCTAD X must now send out a wake up call that all countries with new and restored democracies must enter the new millenium with the ability to access the world economic system on an equal footing. Doing so will require strengthened institutional capacities and appropriate technologies.

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