URUGUAY URGES CONFERENCE TO BE WARY OF POWER OF DEVELOPED COUNTRIES" NON-GOVERNMENTAL ORGANIZATIONS AND TRANSNATIONAL CORPORATIONS

Press Release
TAD/1915

URUGUAY URGES CONFERENCE TO BE WARY OF POWER OF DEVELOPED COUNTRIES’ NON-GOVERNMENTAL ORGANIZATIONS AND TRANSNATIONAL CORPORATIONS

UNCTAD X Continues General Debate in Bangkok

(Received from a UN Information Officer.)

BANGKOK, 17 February -- In a statement to the Tenth United Nations Conference on Trade and Development (UNCTAD X), the representative of Uruguay called for a radical change in international organizations to match new global circumstances. At this meeting, 14 member States addressed the conference in its continuing general debate, as did representatives from three international organizations.

The main problems of the world economy transcended the mandates and competencies of any single organization, the Uruguayan representative, Carlos Perez del Castillo, continued. While the most logical solution to this would be to reconstruct the international system, a more achievable response would be an approach that left dogma aside and faced problems in an integrated and coordinated manner.

States must be wary of the power of non-governmental organizations from developed countries which had an important role but were self-appointed representatives of developing nations and not accountable. Any effort to include them in the decision-making processes of intergovernmental organizations was wrong. Similarly, international attention must be given to transnational corporations, the actions of which had repercussions for the world economy but which were beyond the control of most States.

The Angolan Vice-Minister for External Relations, Georges Rebelo Pinto Chocoty, proposed a “Marshall Plan” for Africa and for the least developed countries similar to that developed for Europe after the Second World War. Anything less, he warned, would mean his great-great grandchildren would be discussing globalization’s effects on the poor in the next millennium.

The Plan for Africa should be accompanied by a new mindset free of misconceptions about the actions that developing countries had taken, he continued. Many sub-Saharan countries have reformed their economies. It was important to highlight the many good things taking place and that foreign investments can flourish. The Secretary of State for Trade, Industry and Employment of Gambia, Musa H. Sillah, said that despite significant achievements in infrastructure, socio–economic development and economic liberalization, his country faced difficulties implementing development programmes, primarily due to lack of funds and of technical and managerial skills. Thus the Government continued to rely on development assistance.

With United Nations assistance, Gambia had prepared a Technical Cooperation Programme on trade, investment and private-sector development considered a model for least developed countries, he pointed out. This was presented at the Sectoral Consultations Meeting in Geneva in November 1999, but with little result because of low donor participation and the absence of firm pledges. This was not very encouraging, he added.

Statements in the general debate were also made by the Foreign Minister of Mexico, the representative of Hungary, the Trade Minister of Sweden, the Minister for Economic Relations and Development of Slovenia, the Minister for Trade and Industry of Papua New Guinea, the Minister for Commerce of Congo, the representatives of Zimbabwe, Burundi, Guinea, and Sierra Leone, the Vice Minister for Commerce and Industry of Panama, and the representatives of the World Health Organization, the Organization for Economic Cooperation and Development (OECD) and the Common Fund for Commodities.

The Conference will meet again at 2:30 p.m. today, when it expects to hear from a number of non-governmental organizations as part of its ongoing general debate.

Statements in General Debate

CARLOS PEREZ DEL CASTILLO (Uruguay): There are two matters that Uruguay believes should be included in the ministerial declaration to be approved at this Conference. The first is that the main problems that we face in the world economy transcend the mandates and competencies of any individual organization. Whereas in the past a narrow framework and a single international organization could usefully tackle issues, for example trade barriers at the World Trade Organization (WTO), that world is now gone, and the problem of unemployment, for example, cannot be solved within the International Labour Organization (ILO) alone. This must be recognized, along with its institutional implications. Coherence between agencies is necessary but not enough and, while the most logical solution would be to reconstruct the international system, a more achievable response might be a radical change in the manner we approach international organization -- leaving aside dogma and facing problems in an integrated and coordinated manner.

The second is that the paralysis and stagnation of international cooperation in recent years at the intergovernmental level has given way to two forces. The first is that the civil society -- in reality the main and more active non-governmental organizations (NGOs) from developed countries -- now play an important role. They have a role to play and should be heard, but they are self-appointed representatives of developing nations and are not accountable. They often distract governments from facing issues, thus inhibiting international organizations. Proposals to incorporate them in the decision-making of inter-governmental organizations would be wrong. The second force is silent and perhaps more dangerous -- transnational corporations, the behaviour of which is not subject to our control, with consequent repercussions on the world economy. These matters require our attention.

ROSARIO GREEN, Minister for Foreign Affairs of Mexico: UNCTAD X offers a space to reflect on the challenges of the century ahead, to consider progress, and to seek answers to many of the fundamental development related problems. There is also a need to make market expansion and free trade compatible with social progress. Globalization is not an enemy but a challenge and it is up to governments to implement appropriate systems for the distribution of benefits and the creation of policy instruments at the international level. Globalization urges us to design collective solutions for shared problems. Openness to international trade flows creates better remunerated jobs, societal standards and relations among nations. We therefore reject any process that obstructs trade liberalization.

Free trade offers more resources to deal with social, labour and environmental issues. The thrust must be to strengthen a free, non- discriminatory and balanced system of international trade. Mexico hopes UNCTAD X will inspire us to continue the debate begun in Seattle with fresher perspectives and resolutions. It is undeniable that a fundamental characteristic of globalization and liberalization is the growing integration of national financial markets. However, this has made some countries vulnerable to the fluctuations in other markets. There is, therefore, a need for strong macroeconomic policies and sound and transparent banking practices. Also required is a reconciliation of macroeconomic and financial policies with long- term social objectives, if we are to combat the negative aspects of globalization and protect the most vulnerable sectors of the population.

IVSTAN MAJOR (Hungary): Trade and investment liberalization should continue. There is still a need for a new round of broad-based trade talks. The failure of the WTO Ministerial Conference was caused primarily by substantive differences in the negotiating positions of WTO members and not by systemic deficiencies or by the opponents of globalization protesting on the streets. In the post-Seattle period, work should begin by taking appropriate confidence-building measures. These should include members’ real engagement in the mandated negotiations and tangible action in the area of implementation, with the aim of reviving trust and recreating lost momentum.

UNCTAD’s valuable work in the fields of investment and competition policy should be continued. Because of the scarcity of financial resources, Hungary will support an increased concentration of technical cooperation activities as well. Also, member governments and UNCTAD should put the specific problems of the least developed countries (LDCs) at the centre of attention. The task defined for the Conference -– to continue to facilitate the integration of developing countries and economies in transition into the international trading system -– is still valid. The Conference’s assistance should also be available on a needs basis.

LEIF PAGROTSKY, Minister for Trade of Sweden: The first good reason why the world community must start a new trade round is that dismantling of trade barriers increases trade and thereby the efficient use of resources. The world economy grows and this is a prerequisite for development. A second reason is that there is wide consensus on the need for all countries to be integrated into the wold economy, but globalization has not yet brought benefits to all countries or people. The world economy is thus under-performing. At Seattle, developing countries presented their justified demands for negotiations on agriculture, textiles and anti-dumping, and the developed world must respond positively.

Another problem leading to under-performance of the global economy is corruption, which leads to gross misuse of resources. Neither the WTO nor UNCTAD have come to grips with the problem; Sweden proposes that a work programme to do so be developed. Another source of under-performance is the way women are prevented from contributing to their full potential. Regarding labour standards, it is odd that States cannot agree to create a joint ILO/WTO forum to do so, but I must stress that neither Sweden nor the European Union seeks trade sanctions for non-observance of labour standards. A first step to address all these problems and create a coherent approach to development and trade should be quick and concrete results in the WTO on duty and quota-free access for all products from the least developed countries. The sooner we deliver the better.

MARJAN SENJUR, Minister for Economic Relations and Development of Slovenia: The Third Ministerial Conference in Seattle was a lesson for us all in the mismanagement of an important process. It was a debacle, because we were too far apart on a number of issues and there was no possibility of bridging the differences. Uneven globalization, “territorialization” of economic activities, differential mobility of production factors and the multi-functionality of economic phenomena are the characteristics of a modern international economy. Taking all of these into account, we cannot treat trade within the WTO alone. We cannot treat capital flows within the International Monetary Fund (IMF) alone. We also cannot treat labour issues within the ILO alone.

The United Nations and its institutions could regain momentum by promoting a developmental round of discussions. The time has come for a new development initiative. A new debate on developmental issues within the Organization should take place prior to the launching of a new round of trade negotiations in the WTO. It is not reasonable to broaden the scope of negotiations in the WTO with new issues or to develop new topics as they are put forward by street demonstrations. A new comprehensive discussion on world development questions is necessary in the area of policy -– the world public needs and requires this. On the flip side, such a comprehensive developmental discussion would enable the specialized international institutions to make progress. Individually, they cannot find proper solutions to their future role in the world financial architecture.

SUPACHAI PANITHPAKDI, Minister of Trade of Papua New Guinea: There is genuine fear that our part of the world will be overwhelmed too quickly by global corporations. This is likely to undermine our sovereignty and national security unless we are not only convinced of the benefits of such corporations, but also are assisted by developed countries and the United Nations and other agencies in becoming a part of the global family. If a country such as Malaysia is concerned over the growing power of the global corporations of developed countries, then our fears are genuine.

Globalization must aim to free humanity from the state of hunger, poverty and exploitation. The process will remain incomplete if we are unable to integrate all countries, understand each other’s constrains and capabilities and share the gains fairly and equitably. Papua Guinea acknowledges the efforts of the European Union in its commitment to understanding globalization from a development perspective.

PIERRE DAMIEN BOUSSOUKOU-BOUMBA, Minister for Commerce of Congo: Any consideration of the developing world economic situation shows that globalization has not brought the promised advantages, and Africa particularly is still marginalized. Many African States have taken action to reorganize their economies and improve governance. All these measures met the requirements of a liberalized economy. However, they have not yielded results, as structural problems are so deep and difficult to solve. The commodity sector must be redynamized to enable Africa to recover. African competitiveness must be strengthened, including through improved telecommunication structures. Transfer of technology must be assured. Agreements formulated in multilateral trade negotiations must be compatible with regional integration goals.

Congo is optimistic for Africa, as long as States continue their efforts and the international community adopts innovative policies aimed at spreading globalization’s benefits. We must undertake a critical evaluation of international initiatives to identify the real causes of failure and provide support to step up development. UNCTAD must seek new ways and means to raise funds for Africa, and official development assistance (ODA) must be reactivated. Furthermore, the international community should feel morally obliged to release Africa from the burden of this debt. Africa’s share of Foreign Direct Investment (FDI) has dropped, despite improved regulatory investment frameworks, foreign investment incentives and a more liberal regime for repatriation of capital. This must change. UNCTAD X should be a turning point for the promotion of African development.

B.G. CHIDYAUSIKU (Zimbabwe): While welcoming the emerging paradigm shift now being discussed at UNCTAD X, Zimbabwe urges swift action. The thrust of the new paradigm, achieving human-centred development, has always been a clear goal of Zimbabwe; thus this is not an emerging concept, but a critical and urgent programme deserving immediate action.

Also required is urgent action on issues of poverty eradication and technology transfer. Confronting these challenges cannot be left to market forces alone; State, regional and multilateral solutions are required. Greater market access opportunities are required in areas of export interest to developing countries. Eliminating tariff peaks and escalation, as well as the avoidance of abuses of trade defence instruments, will greatly reduce dependence on commodities and usher in the expansion and diversification of the export base.

ADOLPHE NAHAYO (Burundi): Women and children are increasing in the ranks of the poor, despite the major United Nations conferences of the recent past. Burundi appeals to the developed countries to commit themselves to genuine development through the transfer of technology, the creation of institutional frameworks and the establishment of financial policies that are intended for development, not just profit.

Two decades ago, an appreciation for law, democracy and human rights depended on political determinants, until the appearance of perestroika in the former Soviet Union. The international community should bear in mind that economic, cultural and social rights are as universal as civil and political rights. Also, any future United Nations conference on LDCs should not constitute a “diplomatic ballet”. It is imperative that those responsible have the necessary resources to carry out plans and commitments in this area.

MOHAMED BANGOURA (Guinea): UNCTAD X will have serious implications for the future of international trade negotiations. Globalization is growing, and with it, there is new hope and challenges and a certain danger for developing countries. Development institutions must review their role in this new world. Despite the lofty objectives set for UNCTAD at its foundation and laudable results from it over decades, the hopes of developing countries for an equitable share of international trade have not been fulfilled. Efforts to democratize political life and liberalize economies have not resulted in increased FDI. Foreign debt burdens mortgage the slim chances of real development of countries and thereby contribute to political instability. The Heavily Indebted Poor Countries (HIPC) Initiative from debt alleviation is welcomed, as are proposals to open industrialized countries’ markets to all goods from LDCs.

The Guinea Government places importance on commitments made to LDCs being implemented. For a wise observer, it is easy to understand that behind all debates on trade liberalization, there are very high stakes, especially for LDCs. The current international agreements have appeared to many developing countries as stifling constraints. UNCTAD must assist in strengthening the capacities of developing States in their preparation for the next round of trade negotiations in the WTO and assist them in understanding the impact of any new proposals that arise in them. Guinea shares the hope that UNCTAD X will adopt dynamic measures to enable all to derive benefits from globalization. Its conclusions should further strengthen resolve to build a universal balanced international trade system.

K.O. BAH (Sierra Leone): The meeting provides the first opportunity to assess the determination of member States to build a joint approach to international trade and development and to measure the distance covered on the issues that were the stumbling blocks in Seattle. Sierra Leone hopes that every State will renew its commitment to international trade liberalization and that true solidarity will be revealed that accounts for different levels of development. The qualitative restrictions imposed on imports have been abolished in Sierra Leone and licences and other forms of authorization for both imports and exports. More actions and legislation to free trade and encourage investment are anticipated.

We intend to request a multilateral evaluation of our trade and investment measures, through the WTO. Sierra Leone is willing to support any initiatives that improve the international trade environment and that, of course, take into account the interests of all members of the organization. The desired strengthening of the institutional capacity of LDCs must be matched by a strengthening of their supply capacities, in particular through the promotion of production and exports, infrastructure development and encouragement to regional integration.

GEORGES REBELO PINTO CHOCOTY, Vice-Minister for External Relations of Angola: If our economies are to compete in a fair and globalized environment, there should be a kind of Marshall Plan for Africa and the LDCs, as was the case for Europe in the aftermath of the Second World War. Anything less than this will mean that in the context of the next millenium, our great-great grandchildren, if there any at all, will come here again and discuss the effects of globalization on the poor economies. A Marshall Plan for Africa should be accompanied by a new mindset that will eliminate a number of the misconceptions of some of the developed countries. It seems that whatever measures we take to adapt to the challenges of the global economy, they are never enough, or are generally distorted by either the press or opinion in general.

Many sub-Saharan countries have done a lot to reform their economies, but they are still of no particular interest to the press in the developed world, unless they are affected by catastrophes such as armed conflicts, natural disasters or pandemics such as HIV/AIDS. While these problems should not be ignored and should be seriously and urgently addressed, it is also important to highlight the many good things that are taking place in sub-Saharan Africa and that foreign investments there can flourish. Nevertheless, despite the consolidation of peace, Angola has initiated a deep economic reform programme based on the principles of a free-market economy. This is intended to attract financial investments and technology in all fields.

ERNESTO I. FERNANDEZ, Vice-Minister for Commerce and Trade of Panama: Now under Panamanian control, the Panama Canal will be managed efficiently and will continue to benefit world trade, as well as Panama itself. Globalization has increased trade and competition, but it also entails injustices that must be addressed. At present, the rich get richer and the poor get poorer. International civil society feels relegated to second place in decision-making processes that affect all segments of society. UNCTAD must appeal to all actors to change this context -- which is both unfair and inhuman. Developed countries must realize that developing countries will only reach their optimal levels with access to technology and new markets.

Development requires that States internally devise policies to raise the standards of living of their citizens without international support but not external interference. However, the draft declaration being considered at this conference does not include any recognition of the problems identified here, and proposes no policies to address them. It proposes action to improve the international trade system, but does not acknowledge that a substantial reform is required so all can participate. Panama has submitted a formal proposal for a plan of action that will include measures to achieve economic growth in harmony with the environment, and to achieve development, through improved health, housing, education and access to food for the poorest among us.

MUSA HASSAN SILLAH, Secretary of State for Trade, Industry and Employment of Gambia: Despite significant achievements in the development of social infrastructure, socio–economic development and economic liberalization, Gambia continues to grapple with difficulties in implementing its development programmes. These difficulties are due primarily to inadequate financing and technical and managerial skills for the implementation of the programmes. Another contributing factor is the country’s high dependence on volatile economic activities. Confronted with these difficulties, the Government continues to rely on development assistance from bilateral and multilateral agencies with which Gambia seeks to further strengthen cooperation. It is in this context that a Technical Cooperation Programme on trade, investment and private sector development was prepared, with the assistance of UNCTAD and the United Nations Development Programme (UNDP). This programme was presented at the Sectoral Consultations Meeting in Geneva in November 1999. The outcome of that meeting was not very encouraging, due to the low level of participation by the invited donors and the absence of firm pledges. This was in light of the fact that the programme was to be considered as a model for other LDCs that require technical assistance under the Integrated Framework for trade-related assistance to LDCs. Gambia’s experience with the Integrated Framework further demonstrates the lack of effective coordination among the six member institutions: the IMF, the International Trade Centre (ITC), UNCTAD, UNDP, the World Bank and the WTO. Gambia was left out completely, without any way of receiving assistance by the six institutions. This clearly demonstrates the lack of decisiveness on and the commitment to the Integrated Framework, and the ineffective implementation, even at the apex, by an international body.

NICK DRAGER, Coordinator for Globalization and Cross-Sector Policies of the World Health Organization (WHO): Each year 3 million children die of vaccine-preventable illness. Malaria imposes major problem for developing countries. Treated mosquito nets could reduce this dramatically, but they are not used because of their high costs. Essential drugs are a public good, not another commodity, so pharmaceutical patents should be managed to benefit both the patent holders and the public. The key to a positive globalization is stronger links between the economic and social spheres, both of which recognize health as a public good. WHO shares the goal of UNCTAD X. Critical steps are needed to ensure trade and investment policies enhance health, rather than damage it. They should be judged by how they promote the health of the poor and the marginalized.

ROLF W.BOEHNKE, Managing Director, Common Fund for Commodities: The Common Fund for Commodities has adjusted to the requirements of the present day by concentrating on commodity development through market-based measures. The projects financed by the Fund address the fundamental long-term issues of concern to commodity producers. The unique multi-country focus of the Fund has the advantage of addressing general problems that affect commodities in many countries. Demand driven project selection and wide dissemination of project results are important aspects of the Common Fund’s approach. Target beneficiaries of Common Fund-financed projects are mainly small producers and the poorer strata of populations.

SEIICHI KONDO, Deputy Secretary-General, Organization of Economic Cooperation and Development (OECD): OECD is a global organization, willing to be a facilitator in efforts to equip the world's economic players and citizens with good governance, or with appropriate skills to maximize the benefits of globalization. There would be great value in strengthening our relationship with UNCTAD, because UNCTAD’s work on trade and development issues helps to enrich our understanding of trade and development issues, from a viewpoint of the developing world, for promoting global prosperity. The OECD’s analysis and institutional and policy know-how can benefit non-OECD countries, and UNCTAD can be of great help in adapting such information to the specific needs of a wider audience.

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