PRESIDENT OF ALGERIA TELLS UN TRADE AND DEVELOPMENT CONFERENCE THAT "NEW MAP OF WORLD" WAS BEING DRAWN, BUT AFRICAN CONTINENT WAS MISSING

Press Release
TAD/1917

PRESIDENT OF ALGERIA TELLS UN TRADE AND DEVELOPMENT CONFERENCE THAT ‘NEW MAP OF WORLD’ WAS BEING DRAWN, BUT AFRICAN CONTINENT WAS MISSING

African-Developed Resources, He States, Will Contribute to Prosperity for All and Create ‘New Globalization’

(Received from a UN Information Officer.)

BANGKOK, 18 February -- The Tenth United Nations Conference on Trade and Development (UNCTAD X) heard an address this morning by Algeria’s President Abdelaziz Bouteflika, who is current Chairman of the Organization of African Unity (OAU).

President Bouteflika said the hopes of globalization of the developing countries had been dashed, due to the new order’s lack of consideration for their concerns and fears. Their sacrifices had only met insignificant or limited compensation. The power of the market had reduced human development, aggravating inequalities and social precariousness. A new map of the world was being drawn and a whole continent, namely Africa, was missing.

Also this morning the Conference concluded its general debate with statements by eight delegations. In addition, statements were made by the President of the United Nations Economic and Social Council and by a representative of the European Commission.

In his address to the Conference, President Bouteflika said Africa was fully aware of its tremendous resources. Properly developed by Africans, with help from interest-based partnerships, it would ultimately contribute to the prosperity of all. And that would mean a new globalization -- fully reconciled with its human objectives, and opening up prospects for social progress, well- being and security for all.

Speakers in the concluding debate included the Netherlands Minister for Development Cooperation, Eveline Herfkens, who said a new consensus and balance were emerging in UNCTAD, after decades of dialogue of the deaf. All agreed that macro-economic policies mattered and that they should be pro-poor. All agreed that it took both national and global governance to achieve the right environment.

Much needed to be done to achieve one, she explained, but ultimately an open, rules-based multilateral trade system defended smaller countries against larger ones. However, that did not mean that everyone would experience the advantages of the system, because, while it would be positive overall, there would always be winners and losers. The challenges were to maximize benefits and ensure equitable distribution, but also limit the negative consequences and compensate those who must lose.

Other speakers this morning were the Under-secretary of State for Foreign Trade of Italy, the Parliamentary State Secretary of Economy and Technology of Germany, the Minister Delegate for Cooperation and Francophony of France, Norway’s Minister of International Development and Human Rights and the representatives of Venezuela and Barbados.

The Conference will meet later today at a time to be announced, when it is expected to approve UNCTAD X documents.

Address By President of Algeria

ABDELAZIZ BOUTEFLIKA, President of Algeria and Chairman of the Organization of African Unity (OAU): UNCTAD X offers an auspicious framework for a major exchange of views on the changes that have altered all levels of international relations in the last decade. There is a clearer awareness about the threats to the environment and the close solidarity required among the nations of the world. In assessing globalization, we have to admit that the hopes of the developing countries have been dashed due to lack of consideration for concerns and fears by the new order. The sacrifices made by the developing countries have only met insignificant, or at best, very limited compensation. Most of our countries have progressed very little and even regressed in terms of per capita income.

The power of the market has in fact downgraded the basic requirements of human development. This has aggravated inequalities and social precariousness in the developing countries. The developing countries are excluded from the process of consultation and collective decision-making. A new map of the world is being drawn and a whole continent, namely Africa, is merely erased. Africans, however, are now aware of the need for resolute action. Such an evolution is necessary, but its impact and very meaning will remain largely illusory as long as the continent continues to be adversely affected by a world environment that contributes to aggravating its backwardness and difficulties and in perpetuating the deep causes of such perversions.

Three elements have combined and contributed to the destruction of African efforts and the obstruction of the continent’s development efforts. The first is linked to the fluctuating prices of commodities on which a number of countries are vitally dependent. Such destabilizing periodic fluctuations occur in a general process of depreciation and devaluation of our countries’ terms of trade. The second element is related to insignificant foreign direct investment (FDI). In 1998, Africa received a little more than 1 per cent of FDI in the world and 5 per cent of the developing countries’ allocation. The unfair competition terms thus leads to the exclusion of the poor countries, mainly African, from the process of development. The third element is linked to the endlessly reconstituted debt of developing countries.

This debt burdens not only investment capacities, but also resources supposed to be allocated to social services while contributing to the shameful privation and backwardness of our era. Corruption phenomena are largely linked to an external environment that encourages and even stimulates their advent and spread. Moreover, the trauma caused in Africa by colonial action and the resulting rivalries and seeds of conflict should not be forgotten. Also, can the prerequisite of good governance continue to be laid down, while the minimal social harmony it supposes is undermined by structural adjustment policies? Africa does not question the principle of globalization, it questions its lack of adaptation. It questions its failure in taking into consideration the extremely diverse situations leading to perverse effects, exacerbated disparities and increasingly jeopardized collective security.

The mechanisms of international relations must be oriented towards reducing inequalities and eliminating the huge pockets of poverty, backwardness and frustration that can evolve into violence. Such violence threatens the entire planet. Initiatives undertaken to address the debt problem of the third world, while too limited, show an undeniable advance in attitudes towards the least developed countries (LDCs). The cancellation of their debt is merely a confirmation of obvious insolvency. Africa is fully aware of its tremendous resources. Such potential, if properly developed by Africans themselves, in cooperation with those who wish to initiate an interest-based partnership, will contribute to the prosperity of all at the end. Hence, a globalization, fully reconciled with its human objective, will open up prospects of social progress, well-being and security for all humanity.

Statements Made in General Debate

SILVIA BARBIERI, Under-Secretary of State for Foreign Trade of Italy: UNCTAD X has made it possible for the international community to reiterate the fundamental role of the Conference as a development-promoting institution. We should bear in mind that the ultimate goal of any socio-economic and environmental strategy should be sustainable development. This conference has focused on the need for trade and development policies to be continuously adapted to the significant economic changes, to globalization and to increased interdependence.

It is essential to find a way to react to the repeated crises that are mainly of a financial nature and are perhaps caused by structural weaknesses. It is therefore essential to take all the necessary actions to ensure greater stability and flexibility within the economic systems of individual countries. In this respect, small and medium enterprises can make an important contribution.

Stability and flexibility cannot only be guaranteed by large enterprises, which often have greater difficulties introducing and implementing rapid restructuring plans. On the other hand, an integrated system, based mainly on small and medium-sized enterprises, can quickly adapt to economic changes and promote an entrepreneurial spirit that encourages creativity and innovation. Italy largely owes its own economic development to the proliferation and creativity of such enterprises. It is for this reason that it offered a concrete contribution by sharing its own experience with different regional realities and by proposing its own model of economic development. The aim has not been to have an Italian model passively reproduced in other countries, but to adapt it to the different socio-economic conditions of each individual country, thus simultaneously stimulating a fruitful debate.

SIEGMAR MOSDORF, Parliamentary State Secretary of the Ministry of Economics and Technology of Germany: The West German economic miracle after the Second World War would not have been possible without support of friends, but also without skilled workers and entrepreneurs willing to take risks; democracy; the rule of law; an economic and fiscal policy aimed at stability; and investment in infrastructure. Discussions held at a Berlin seminar recently, in cooperation with UNCTAD, showed clearly that FDI makes a significant contribution to the development of host countries, through the creation of jobs, transfers of technology, sharing of know-how and market access. There is no blueprint for attracting it, but business has some preconditions. There must be stable, predictable and transparent legal regulations guaranteeing non- discrimination between foreign and domestic investors. An independent jurisdiction and an effective court system granting unrestricted access to national legal proceedings, as well as international arbitration and dispute- settlement mechanisms, are needed. It must be possible to freely transfer capital, profits and earnings. Finally, there must be unconditional protection from direct or indirect expropriation. Public/private partnerships offer great opportunities to all sides.

Without domestic policy efforts, no country will be able attract long-term investment, however national rules must be supplemented by international, multilateral agreements. In the future, no government will be able to avoid international agreements on direct investment. On trade, Germany wants to see continuing development of the world trade system, in the interests of growth and employment of the world economy. A comprehensive round of negotiations is in the interest of all World Trade Organization (WTO) members, and the built-in agenda restriction poses dangers. It is especially important that developing countries are integrated into the multilateral trade system; there must be consideration of their specific problems when existing agreements are implemented, as well as refinements to the rules for special and preferential treatment and tariff-free access for essentially all goods from LDCs. A relapse into protectionism and unilateralism should be avoided, and can only be avoided in the long term if we are prepared to develop the international trade system and multilateral investment agreements in a spirit of partnership.

EVELINE HERFKENS, Minister for Development Cooperation of the Netherlands: Once the ideological battles at UNCTAD ended in consensus, but over texts with no consequence. This time we will have a consensus with context. The statements of the participants in UNCTAD X actually kept me awake. A new consensus and balance is emerging after decades of dialogue of the deaf. Now we all agree that macro-economic policies matter, but they should be pro-poor. We also agree that it takes national and global governance. The developed world preaches liberalization, but practices it selectively, with protection remaining on agriculture, textiles and processed goods.. Other negative practices include escalating anti-dumping measures against products such as steel, and paying export subsidies to agricultural producers. Through these practices, we hurt the very farmers we are trying to help with our development programmes. Seattle taught us that the WTO must address the thorny issues facing developing countries in the agriculture and services negotiations about to be launched. In these negotiations, access to developed country markets must be provided. Export subsidies must be stopped. Time must be given to developing countries for implementation deadlines, and they must be offered technical assistance to do so.

An open, rules-based multilateral trade system defends smaller countries against unilateral action by larger countries. But that does not mean that every country or every individual will experience the advantages of the system. While the overall balance is positive, there will always be winners and losers. The first challenge is to maximize the benefits and ensure their equitable distribution. This means that developing countries will have to invest in their human capital, and wealthy countries will have to help them. Better education, better health, access to credit, a better infrastructure, land reform -- all these measures will increase the numbers of winners. But we must also limit the negative consequences and compensate those who must lose. The rewards of globalization are reaped in the long term, but the price must be paid right away. The World Bank Chief Economist has proposed setting up a global fund to offset the social costs of liberalization. Such safety nets are a good idea, but ministers of development cooperation should not foot the bill before they make sure ministers of trade do everything in their power to provide better market access.

CHARLES JOSSELIN, Minister Delegate for Cooperation and Francophony of France: UNCTAD remains topical since the trade-development link is coming back into its own. Today the link is important because we are committed to a major process of opening markets and globalization of the economy. To do this, we must have agreement on fundamental human values and how to promote them. The inclusion of civil society in the dialogue is good news. Such dialogue is difficult and sometimes contradictory, but it is necessary. In the human values that need to be defended, development occupies a vital place. It affects our ability to live together in peace. As a contribution to this struggle to develop, UNCTAD brings together political will and professionalism. The political culture is one of disputes. Europe and the South now both promote solidarity. But there is also a need for effectiveness in the sphere of professionalism, where actions are judged on results. We are told to “think globally, act locally”. For effective development we must “think politically, act professionally”.

UNCTAD must focus on a few priorities, such as support for least developed countries. Focusing on a few issues and areas will give its work impact. We must ask why LDCs have been more marginalized. The international community must deal with the poverty-increasing aspects of globalization, which is like an ancient two-faced god, producing both wealth and poverty. There is a growing consensus at UNCTAD X on the European Union proposal for granting quota and duty-free access to developed markets for basic products for least developed countries. Of course, we need to go further, but this initiative is an important first step. We must rethink the trade-development link, and then integrate the commitments of the Lome Convention into the WTO rules, which do not forbid positive discrimination in favour of the South, but require it to be defended. Opening markets is necessary but it is accompanied by risks. Development represents the very sense of globalization. Globalization and development must be accomplished in the right way, for the sakes of both developed and developing countries, and the right way is largely dependent on what happens in the developing world.

HILDE F. JOHNSON, Minister of International Development and Human Rights of Norway: In the 1990s, the private sector continued to drive the process of globalization forward with rapid capital movement, telecommunications, trade and other areas. We have not, however, seen a corresponding strengthening of the global intergovernmental system. The United Nations systems, the Bretton Woods institutions and other related organizations are still fairly modest in terms of resources and coordinated responses. This raises the question of whether the multilateral system has sufficient capacity or ability to take on the tasks of the new century. Despite institutional improvements in the multilateral trading system, there is a serious shortage of global public goods and services in areas such as health, employment, education, the environment and financial stability.

It is in the interest of all countries that the trading system is further strengthened and the barriers to trade further reduced. The situation must, however, be refined and become more sensitive to the situation of developing countries. UNCTAD’s primary importance should continue to lie in the areas of analysis and consensus-building. Member countries of the Conference should use it as an open forum to address issues affecting development, even the ones that are controversial. Moreover, Member States should become better at using UNCTAD and exploiting its potential to the fullest. We need more multilateralism, not less. As such, there is no real alternative to strengthening the process. We must work together to create a world based on the rule of law. The alternative is a globalization of brutality. We can no longer claim ignorance –- we have a moral obligation to care.

WERNER CORRALES LEAL (Venezuela): This conference must update UNCTAD’s mandate and draw up a programme of work for it for the next four years. We must also see to it that the international community gets a clear messages that globalization must be an instrument of development for all. Shared responsibilities have been discussed. Some say each country must achieve its own development by implementing national policies conducive to it; others, that it is up to the international community to create an international environment conducive to development. In truth, development is a dual responsibility. Developed and developing countries alike have important roles that cannot be sidestepped. Thus far, trade liberalization has not been offset by the opening of export markets. Liberalization of FDI has not resulted in increased production capital for developing countries to diversify their exports. Rather, it has been concentrated on services and on traditional export products. The opening of capital accounts has served to increase the vulnerability of developing States, as the recent financial crisis demonstrates. ODA levels -- in some cases the main funding for small and less developed economies -- have dropped, while debt servicing absorbs too much of official budgets.

The financial crisis and the tension at the WTO Seattle conference set off alarms that must be heeded. They demonstrated that it is not enough to be efficient, or to have a fresh round of trade negotiations. We need to rethink development policies that have not brought well-being to all. Developing countries must reshape their public policy to deal with the challenges of international competition. The international community must look at the problem of exclusion and find ways to promote development with equity. Developing countries must reinforce public policy, so the challenges that arise can be dealt with by capacity-building. This requires different types of cooperation. There must be strategic alliances built and multilateral bodies created to strengthen the negotiating positions of developing countries. There must also be support for developing countries undertaking investment and production restructuring policies. This is the challenge for UNCTAD.

MICHAEL KING (Barbados): must be enhanced so that it can play a more definitive role in a world characterized by changes. We stress the importance of increasing cooperation between UNCTAD, the WTO, the Commonwealth Secretariat and the Bretton Woods institutions. Development is a complex process that can only be achieved by a multi-pronged approach by the international organizations. They must cooperate and coordinate efforts to avoid duplication. UNCTAD also has a special role to play in addressing the development needs and concerns of small island developing States. The difficulties faced by these countries as they pursue sustainable development are complex. They also have limited access to the concessionary resources needed to address problems created by their inherent constraints.

It is imperative for UNCTAD to be actively involved in international trade. It can heal the wounds inflicted at Seattle while remedying the inherent faults that were revealed at the meeting. In the area of international trade, UNCTAD has to address the marginalization of smaller countries within the multilateral system. In today’s new international economic environment, small States begin the race to increased growth and prosperity at a distinct disadvantage based on their economies of scale. This problem has been further exacerbated by bitter experiences in trying to branch out into other areas involving international financing. A balanced approach must also be taken to address major concerns. Within the WTO framework, a select few States should not have the right to determine the rules for the rest of States.

MAKARIM WIBISONO (Indonesia), President of the United Nations Economic and Social Council: In 1962, the Council adopted a resolution establishing UNCTAD. It is pertinent to recall that the agenda of UNCTAD X is not very different from UNCTAD I, in 1964. That these issues continue to confront the international community some 40 years since UNCTAD’s establishment clearly show UNCTAD is a work in progress. The challenge of development, in an era of globalization, is two-fold. First, an open and free trading system, which provides equal opportunities to all countries, must be built. Second, the weak and the vulnerable must be protected from the risks of instability and turmoil in the global economy. In terms of facilitating development and the eradication of poverty, international trade can play a powerful role as an engine of growth. But if the majority of people in the developing countries are to benefit from the system, market access, among other things, must be assured.

This year the Economic and Social Council will address a central issue of our times -- how to bring developing countries, the least developed among them, into the knowledge-based global economy which is emerging as we enter the twenty-first century. Information technology is the key to this challenge. In this and other matters, the Council can greatly benefit from UNCTAD’s experience as a knowledge-based institution in the service of development. The valuable support of UNCTAD will be needed to deal with globalization and liberalization, particularly of trade. There is a clear need for intensifying dialogues between ECOSOC, UNCTAD and the WTO, as these dialogues will be critical to improved understanding of the relationship between trade and development, and to facilitate policy coherence. UNCTAD must also provide support for development and sustain the capacity of the Council to respond, in a timely fashion, to any problems arising in economic areas, such as the recent financial crisis. There is an acute need for a forum that will serve as a global town hall meeting, bringing together governments, international organizations, non-governmental organizations, business, academia and media for frank inclusive dialogue on critical development issues. UNCTAD provides that forum. PAUL NIELSON, European Commission: The Bangkok Plan of Action will guide the world for many years and it will determine the extent to which UNCTAD will be at the heart of the discourse on development on the international agenda. The European Union has long promoted an integrated approach to development. The multi-dimensional nature of development demonstrates the need for an overall and coherent strategy aimed at both reducing poverty and integrating developing countries into the world economy. Trade liberalization and an open rule-based multilateral system presents greater opportunities for developing countries. Our efforts are aimed at encouraging these countries to be more outward oriented. Sustainable development needs a framework conducive to trade, development and growth. The slogan “trade not aid” was a false one and should be “trade and aid” instead.

The integration of the developing countries into the world economy continues to be at the centre of the agenda. Harnessing globalization also requires managing the global economy and addressing social development, including such issues as the environment. Future trade negotiations cannot be confined to issues that are only of interest to a few countries. Future trade rounds should address more trade liberalization; improved market access for developing countries; basic rules on instruments and competition; and the need for the WTO to answer questions of public concern. We have proposed measures to restore confidence in the WTO, including securing negotiations on agriculture and services and getting members to implement Uruguay Round commitments. It is hoped that such proposals will help create an environment conducive to the start of a new round in the next few months.

* *** *