UNCTAD X URGES MORE INCLUSIVE, TRANSPARENT INTERNATIONAL DECISION-MAKING ARRANGEMENTS TO ASSURE THAT GLOBALIZATION BENEFITS ALL NATIONS

Press Release
TAD/1919

UNCTAD X URGES MORE INCLUSIVE, TRANSPARENT INTERNATIONAL DECISION-MAKING ARRANGEMENTS TO ASSURE THAT GLOBALIZATION BENEFITS ALL NATIONS

Adopting ‘Bangkok Declaration and Plan of Action’, Conference Says Democracy, Rule of Law, Combating Corruption Are Indispensable for Sustainable Development

(Received from a UN Information Officer.)

BANGKOK, 19 February -- The tenth session of the United Nations Conference on Trade and Development (UNCTAD X) concluded this afternoon, adopting a “Bangkok Declaration and Plan of Action” designed to make globalization an effective instrument for development.

In a closing statement to the Conference, UNCTAD Secretary-General Rubens Ricupero observed that informed public opinion had converged over the last decade towards liberal views of desired economic policies. Opinion was by no means homogenous, he added, but the range of deviation was greatly reduced, providing the basis on which developing countries could move towards the international standards that are involved in the globalization process.

At the same time, he said, such standards should not be set exclusively by the developed countries. They will have to be negotiated between all the parties that subscribe to them in a democratic and transparent manner. And once they are negotiated, the developed countries must be willing to be bound by them, even when they cut across their particular national interests.

Conference President Supachai Panitchpakdi, in a concluding address, suggested an annual conference of the leaders of key international organizations, together with ministers responsible for economic affairs. In addition, a global council for an important development target might be established to include all key international organizations. This council would aim to determine a joint plan using trade, finance, industrial and agricultural policies to create income-generating employment. Also for consideration was an expansion of the Group of Eight industrialized countries to include representatives of developing countries.

At this afternoon’s closing meeting, the Conference adopted a message of thanks to the King of Thailand, a resolution of thanks to the Thai Government and Thai people, and decisions regarding the status within the Conference of Lithuania and Uzbekistan. It took note of the report of the Trade and Development Board, called for the Board to approve a new calendar of meetings, and approved its report to the United Nations General Assembly.

The representative of Morocco, on behalf of the “Group of 77” developing States and China, as well as the representatives of China, Switzerland, United States, Iran, Portugal (on behalf of the European Union), Cuba, Colombia, Japan, Uruguay (on behalf of the Latin American and Caribbean Group), Australia, Egypt (on behalf of the African Group), Bangladesh, Hungary and Norway made closing remarks.

Statement by Secretary-General of UNCTAD

RUBENS RICUPERO, Secretary-General of UNCTAD, presented a brief history of economic discourse over the past decade. There had been a convergence of opinion regarding free trade, promotion of the private sector and the imperative of macro-economic stability over the past 10 years. This had provided a basis on which developing countries could move towards meeting international standards involved in globalization. These standards cannot be exclusively set by developed countries, and once negotiated, must be respected by those countries, who must be willing to be bound by them even the standards cut across national interest.

The notion that capitalism was an economic system that was vulnerable to explosive financial crisis was resisted for a long time, but the crisis in Thailand brought a much wider rejection of that than previously. International agencies could now see some virtues in certain capital controls. A more realistic evaluation of the limits of unrestricted capitalism was in evidence. Positive integration into the world economy remained the goal, but liberalization measures to achieve this must be phased, prudent and orderly. Some economies remained marginal, because they had a very narrow export basis of primary commodities. Their long run development was jeopardized by the fall in commodities against manufactures. This long downward trend in commodity prices was now accepted. Once it was accepted that when growth was achieved, matters of redistribution could be addressed, whereas now reduction of poverty was defined by the World Bank as its over-riding objective, and the relationship between growth and poverty-reduction is seen as mutually reinforcing.

These changes and their sources reveal a world rediscovering its sense of moral values -- a reason for hope, he said. The world is increasingly aware that both governments and the market need a moral basis to function properly, and development was impossible unless they both did function properly. Economies did not develop just because they existed, but rather economic development had historically been the exception, not the rule. It was more likely to happen when elaborate systems of human cooperation had evolved. Markets and governments were institutional embodiments of this cooperation.

He urged that both sides abandon extremism in economic policy. The building of an international community that will respect the aspirations of all its members must rest on generalized reciprocity. And this reciprocity must be real, not just conventional. Precisely because thus far globalization has positively affected only a dozen developing countries is precisely why the economic world is still divided. Real reciprocity must account for underlying asymmetries of economic structures. What so many at the Conference had called for was trade barriers dismantled on agriculture, textiles and clothing; recognition of their efforts to promote regional economic solidarity; and existing international economic institutions to evolve so that they were able to bridge the interests of developing and developed countries. Prospects were mixed. Much needed to be done in translating the UNCTAD X atmosphere into practical moves for institutional change at the international level. Statement by President of UNCTAD

SUPACHAI PANITCHPAKDI (Thailand), President of UNCTAD X: For those of us who might have been traumatized by the “Seattle saga”, the Tenth UNCTAD offers an opportunity to reconfirm the viability of the multilateral process. While we maintain our faith in the rules-based multilateral trading system, we also agree that we need to work together to make it strong and equitable. The active and interactive participation of the leaders of the key international organizations provides an encouraging sign that they appear to be thinking more or less in the same direction –- namely a holistic approach to development encompassing social, institutional, economic and financial aspects. Debt relief must be accompanied by full market access while institution-building must go hand-in-hand with human resource development. The leadership of these organizations indicates that partnership between their institutions in bringing together their combined capacities in a cooperative and transparent manner should provide the key to global solutions.

The awareness of the urgency of the least developed countries problems is most acute at this tenth UNCTAD. Immediate actions are demanded and should be undertaken. Several measures will have to be implemented at the same time, ranking from debt relief to full market access and increased foreign direct investment (FDI). The right response from the least developed countries (LDCs) themselves in putting up sound macroeconomic policies should be expected. At the same time, South-South cooperation should be focused on easing the traumas of the LDCs. The process of integrating developing countries into the world trading system cannot easily be achieved by the World Trade Organization (WTO) alone. UNCTAD’s emphasis on the development dimension of the trade and development axis would be most useful in turning developing countries into competitive partners with better preparation for their trade agendas. Moreover, in sorting out new trade complexities, the WTO can rely on the wide-ranging research work by UNCTAD, particularly in the field of investment, trade and development. We should stop taking for granted the positive consequences of trade on development but should diligently provide the proof of real benefits.

The Bangkok Conference has given us the opportunity to put aside the conflicts of unfettered interests and forge stronger partnerships. To be successful, development requires a mandate that is properly integrated, coherent and reflects mutual understanding. The world can longer afford a North-South division or a trading system based on confrontation rather than cooperation. To perpetuate our policy-coherence principle further, we may need to organize an annual conference of the leaders of key international organizations, together with the ministers responsible for economic affairs. Apart from this, a global council for an important development target can be established to include all key international organizations. This council would aim to determine a joint plan using trade, finance, industrial and agricultural policies to create income-generating employment. Along the same line of advancing policy coherence, we may have to consider expanding the Group of Eight industrialized countries to include representatives of developing countries.

The issue of LDCs marginalization should be tackled right away. Debt forgiveness should be accompanied by market access to prevent LDCs falling into another vicious cycle. Although we have widely discussed the need for official development assistance (ODA), now on the decline, I would venture to propose a different process of aid provision. I would recommend UNCTAD to consider adopting a “god-fathering” approach by which designated industrialized and middle-income countries can be assigned the task of guiding an individual or group of LDCs through their development process and integration into the world market. The UNCTAD, in addition to having to become stronger, must be considered as a partner of the WTO. The relationship between the two organizations is central to the trade and development question. It should be a model basis for wider and more productive cooperation among all the international economic institutions for the benefit of a people-centred development process.

Bangkok Declaration and Plan of Action

The Bangkok Declaration states that globalization can be a powerful force for growth and development, if properly managed. But it also places upon the international community a responsibility to create a global environment suited to more efficient and equitable globalization. Consensual solutions to globalization’s problems must be found, through dialogue that takes all countries and all interests into account.

Most speakers at the eight-day conference, which began on 12 February, viewed globalization as both inevitable and desirable, and saw the process, including trade liberalization, as a source of potential for development. But they were also clearly convinced that large sections of the world were yet to realize any benefits, and may even have suffered from the process.

The need to ensure that the process of globalization improved the economic and social standards of living of all people was a common theme, as was the need to develop inclusive international instruments and domestic policies to manage the globalization process, guaranteeing that all countries and people benefited from it.

In the Bangkok Declaration, the member States of the Conference declare that solidarity and moral responsibility must be the guiding lights of national and international policy. These are both ethical imperatives and prerequisites for a prosperous, peaceful and secure world.

More inclusive, transparent and participatory institutional arrangements for international economic decision-making are needed to ensure that the benefits of globalization are accessible to all, the Declaration continues, adding that the success of international development efforts would depend on all stakeholders being taken into account.

While expanding the prospects for integration into the world economy, globalization had also contributed to the marginalization of some countries, it states. Income gaps remain wide, more people now live in poverty, and economic imbalances and financial instability have intensified.

The need for increased national and international policy coherence and a decisive effort in favour of those at risk of marginalization is emphasized in the Declaration. The ultimate test for any community lay in the way it treats its weaker members, it adds.

The Declaration emphasizes the commitment of governments to a rules-based, non-discriminatory multilateral trading system operating for the benefit of all countries. Development dimensions should be included in a new round of multilateral trade negotiations, it states, and UNCTAD must make a substantial contribution to the pursuit of development objectives.

The Conference’s Plan of Action declares that, although globalization raises problems of instability and marginalization, experience shows that it also offers new perspectives for integrating developing countries in the world economy. Even countries with rapid growth are not immune from the recent financial crisis, the Plan observes. The international community must reconsider development strategies and policies, taking the human, social and environmental dimensions into account.

Maximizing the benefits of globalization requires sound domestic policies, supported by an enabling global environment and international economic cooperation, the Plan states. It also requires that the international community address imbalances and asymmetries in the international economy. Fast financial liberalization has sometimes delinked investment from trade, causing capital flow volatility, the effects of which must be addressed by the international community.

The Plan suggests that trade liberalization could be extended to areas of export interest to developing countries, which would contribute to development. It points out that labour markets have not opened to the extent that capital markets have. Liberalization can improve developing countries’ competitiveness and promote growth.

The Plan underscores that democracy, rule of law, transparent accountable governance and administration, including combating and eliminating corruption –- a global phenomenon affecting both developed and developing countries -- are indispensable for people-centred sustainable development. Human rights and freedoms, with the right to development as an integral part, must be promoted and protected. Macro-economic stability has proven important to growth and poverty alleviation. Social policies, especially those related to gender equality, yield high returns in growth, it also states.

The Plan examines the results of the Uruguay Round of trade negotiations, noting that it had resulted in improved market access, and an effective dispute- settlement mechanism. However, there were still tariff peaks and escalation on many products, including those of interest to developing countries, such as agriculture and textiles. Trade contingency measures, such as anti-dumping laws, have affected trade in sectors such as textiles and clothing.

Commenting on the United Nations New Agenda for the Development of Africa (UN-NADAF), the Plan states that despite national reforms and adjustments, Africa’s economic and social problems remain acute. Many of the commitments of the New Agenda are unfulfilled.

Development partners are encouraged to support African efforts based on the principle that Africa’s development is its responsibility, supported by international cooperation, the Plan continues. Debt remains a major obstacle to development. Despite policy efforts, the level of FDI in Africa remains low, and many African States rely on ODA, itself short of targets and a cause for concern, to bridge the financial gap. The Plan reports that highly developed country duties, quotas and non-tariff barriers still apply to textiles, clothing and shoes in some developed-country markets.

In looking at the Programme of Action for the LDCs for the 1990s, the document notes the commitments made had not been fully implemented. The external environment for such countries remains difficult, and their share in world trade remains extremely low, their economies vulnerable and their external debt burden high. It notes with regret that results of the priority given to LDCs by UNCTAD IX have not been up to expectations. Specific problems have not been addressed in an integrated manner or received adequate priority. It calls for contributions to the UNCTAD Trust Fund for LDCs to be maximized.

The Plan examines the major United Nations conferences held over the last decade, and notes that comprehensive plans of action and specific commitments have been adopted at them, but many of these have not been fully implemented.

The Plan notes that financial crises have highlighted the need to improve the international financial system, to prevent recurrences, provide better mechanisms for crisis management and to make it more conducive to trade and development. It calls for efforts to prevent assistance for development projects and programmes competing with other development assistance and emergency aid, and states that the decline in replenishments of concessional windows of multilateral development banks is of concern.

The volume of ODA should be progressively raised to the United Nations target of 0.7 per cent of industrialized countries' gross domestic product (GDP) and the target of 0.2 per cent for the LDCs, the Plan recommends. While the international community could consider bolder initiatives for human development, it is essential to ensure that existing development resources have a better impact. It urges continued efforts to untie ODA for LDCs.

Noting that debt problems have become worse since the global financial crisis, it states that debt relief should be part of a comprehensive framework to eliminate structural causes of indebtedness. Creditor nations must give the poorest countries a new start. African debt needs further research, with particular attention given to ways to improve the situation of the most indebted. The Plan calls for research on a clear framework to help medium- income countries facing fiscal crises negotiate quick restructuring with private creditors.

Noting the importance that private investment, particularly FDI, has emerged as a driving force in the world economy and is a key development resource, the Plan calls for developing countries to create favourable investment climates. It urges the international community to support their efforts to devise FDI strategies and frameworks imposing the least possible burden on fiscal resources. To minimize the risks of financial turmoil, capital-market liberalization should be supported by rules and market supervision.

While trade liberalization has enhanced opportunities for trade-based and export-based growth, the Plan notes, many consider that there are imbalances and asymmetries in the implementation of the WTO Agreements. Problems due to human, institutional and financial constraints need to be addressed urgently to ensure that all benefit from the trading system. Despite a greater need for policy flexibility, latecomers to the WTO face more stringent conditions.

Trade policies and trade liberalization should be made consistent with overall development objectives, the Plan states, and ways should be sought to ensure it makes a decisive contribution to alleviating poverty. Studies are needed on various impacts of trade’s role and effects, and should include monitoring of the developmental impact of multilateral trade agreements.

Developed countries must improve policy coherence, the Plan urges, and the conditions for the effective implementation of WTO agreements, particularly in developing countries, need to be ensured. New agreements should have adequate assistance provisions to enable developing countries to establish necessary conditions for implementation. International organizations must provide coordinated assistance to countries on their rights and obligations under the multilateral trading system. The Conference Plan of Action observes that WTO rules are stringent with respect to subsidies primarily used by developing countries, but not those of developed countries. The full participation of developing countries in the elaboration of international standards should be enhanced. The WTO accession processes should take into account the countries’ stages of development, and the principles of special and differential treatment. Modernization of existing special and differential treatment regimes may need to be updated. Those in the Final Act of the Uruguay Round should be implemented as a matter of priority, and new measures should be considered. Technical assistance and development financing must complement improved market access. Action should also be taken so more developing countries can benefit from preferential arrangements.

Noting that many developing countries remain highly dependent on commodities, the Plan states that diversification offers an opportunity for change, in line with existing comparative advantages. However, actual developments in the commodity sector have only rarely lived up to expectations because of tariff escalation, a lack of progress in diversification of agro- business, and falling and unstable commodity prices.

Wider use of commodities risk-management should be evaluated and be made available as appropriate, the Plan recommends. It notes that sanitary standards limit many developing countries’ ability to export. Existing mechanisms for stabilizing commodity export earnings should be improved. Cooperative arrangements among enterprises in developing countries should be considered. Market transparency and information should be improved, as should access to and use of information, with training to that end supported.

Technical assistance, training and other related measures to assist should be supported to allow developing countries to regulate in favour of competition, and countries with national competition rules must also have an appropriate enforcement system.

Elsewhere, the Plan observes that electronic commerce shrinks distances between producers and consumers and could transform industry structures to the advantage of developing country suppliers, but they need access to modern telecommunications infrastructures and networks at low cost. It also stresses that electronic commerce cannot be a substitute for easing restrictions on services through temporary movements of people.

The impact of the WTO commitments on national policies for small and medium-sized enterprises’ (SME) development have not yet been assessed, the plan notes. The growth and survival of SMEs in a globalizing world economy require national and international level of programmes that allow them to compete at home and abroad. Since SMEs excel at job creation, and job creation is key to reducing poverty, policies and programmes to support SMEs should be promoted.

The Plan calls for a reduction in the technology gap through the acquisition and cultivation of technology by the developing countries and the transfer and know-how by developed countries. In addition, the Plan states that all countries should establish an adequate regulatory framework to provide effective protection of intellectual property.

In the area of trade support services, the Plan stresses that for developing countries and economies in transition to benefit from their participation in the global economic system, adequate trade supporting services, such as trade facilitation, transport, customs, banking and insurance, human resource development and business information are necessary conditions. Attempts to increase the competitiveness of export goods in foreign markets will have to address both the cost and quality of land and ocean transport services available to traders in developing countries, the Plan observes. It is also essential to implement policies aimed at capacity-building and removing obstacles for operators.

In a section of the Plan of Action on UNCTAD’s engagement, the Plan suggests that the Conference continue to explore how to enhance the development opportunities offered by the globalization process at the domestic, regional and international level. UNCTAD is urged to act as a forum for intergovernmental discussions and undertake research and analysis and data collection in order to provide substantive inputs for the discussions of experts and government representatives. UNCTAD is also called upon to provide technical assistance tailored to the needs of the developing countries.

In its debates at the intergovernmental and expert level, UNCTAD is asked to continue to focus on four fields of activity: globalization and development; investment enterprise development and technology; trade in goods and services and commodity issues; and services infrastructure for development and trade efficiency, the Plan of Action states. Priorities within each of these should be identified and reflect the needs of developing countries and UNCTAD’s comparative advantages.

Addressing the management of globalization, the interdependence of trade, finance, investment and technology and the development prospects of developing countries, the Plan recommends that UNCTAD continue as the forum for the exchange of related views and perspectives.

At the national level, the Plan urges UNCTAD to contribute to sound domestic macro-economic and financial policies, administrative reforms and continuing efforts to promote a stable and transparent national legal and regulatory framework favourable to development. In addition, the document calls on UNCTAD to contribute to the coherence of global economic policy-making, continue to analyse the causes and effects of financial crises and contribute to the debate on measures for the prevention, management and resolution of such crises.

The Plan emphasizes that UNCTAD should continue to focus on the implications of globalization on sustained economic growth and sustainable development. This should include more analytic work on the specific problems of the LDCs and States with economies in transition. Focus on a gender perspective contributing to the to empowerment of women in order to achieve gender equality in all sectors of the economy is also a key area to be developed further.

In its work on globalization and development, UNCTAD is asked to identify priority areas for action at the national and sub-regional levels and propose programmes for land-locked and transit developing country. The Conference is also asked to continue to analyse trends of ODA flows and their impact on developing countries. In its analytical work, UNCTAD should analyse the debt problems of all developing countries, taking into account their specificities, with a view to identifying effective, development-oriented and durable solutions.

The Plan of Action asks UNCTAD to analyse the implications of foreign portfolio investment and international financial flows for development, the causes and impact of its volatility, its role in the generation of financial sustainability and the policy implications thereof. On issues of investment, enterprise and technology, the Plan recommends that UNCTAD continue to build on its comparative advantage in dealing with international investment issues and continue to address issues of technology and enterprise development, including their relation to investment. Particular account should be taken of the need to encourage cooperation among the developing countries.

Specifically, UNCTAD should focus on improving the understanding of FDI, technological capacity-building and enterprise internationalization, states the Plan. It should also concentrate on strengthening national abilities to formulate and implement policies to attract and benefit from FDI, enhancing technological capacities, fostering the development of enterprise and improving understanding of emerging issues, including the role of international arrangements for attracting and benefiting from FDI.

In the area of international trade, the Plan states that UNCTAD’s major objective should continue to be in assisting developing countries to integrate more fully into, and derive benefits from, the international trading system. The focus of the organization’s work should aim at policy analysis and consensus building to clearly identify the parameters of the development dimensions of the multilateral trading system. UNCTAD should also identify what the implications are of existing and emerging multilateral trade rules on the development prospects of developing countries.

The Plan also encourages UNCTAD to assist developing countries and economies in transition in efforts to identify trade policy tools to make their development policies more effective. This should pay attention to their general problems in relation to market access, insufficient institutional supply and supply capacity in export-oriented areas, as well as the lack of skilled human resources. On market access, the Plan points out that UNCTAD’s work should relate at first to analysis. Where appropriate it should contribute to consensus-building on reducing tariff and non-tariff barriers in export sectors of interest to developing countries; maintaining and improving the level of tariff-free or reduced tariff access to markets through national GSP schemes; maximizing market access benefits for the least developed countries; and anti- dumping and countervailing duties actions.

In trade in agriculture, it is suggested that UNCTAD assist developing countries in multilateral negotiations by helping them to find ways and means to improve market access for their products. On the domestic front, developing countries should be given support in the context of their efforts to increase productivity and food security. In its analytical work, UNCTAD should also address the needs and concerns of predominantly agrarian and small island developing economies. Addressing trade in services, the Plan calls on UNCTAD to help developing countries to identify priority sectors where early trade liberalization should take place; main barriers faced in services sectors, especially those which restrict exports of services; and preconditions at the domestic level which are necessary for developing countries to benefit from trade liberalization in the services sector.

Regarding special and differential treatment, UNCTAD is asked to provide developing countries with a justified degree of flexibility in such treatment to enable them to take measures essential to their development policies and reap the full benefits of the multilateral trading system. The organization is also asked to examine means of linking special and differential treatment provisions to economic and development criteria and the potential impact thereof on their effectiveness in achieving the overall aim of gradual integration into the multilateral system.

The Plan calls on UNCTAD to continue and expand its help to interested countries in developing their national regulatory and institutional framework in the area of competition law and policy. In cooperation with the United Nations Development Programme (UNDP) the World Bank and other organizations, UNCTAD is urged to strengthen the capacity of public institutions for competition and consumer protection in developing countries and help them to educate the public and representatives of the private sector in that field.

In relation to strengthening supply capacities in export-oriented sectors of commodities, the Plan charges UNCTAD with identifying ways to improve the supply capacity of commodity-producing countries, as well as obstacles hampering the development of processing industries. UNCTAD is also asked to assist commodity-dependent developing countries on how to fully exploit commodity diversification as a major potential avenue of industrialization. In addition, it is called on to identify changes that are taking place in the dynamics and the structure of international commodity markets, in order to make commodity- dependent countries more able to formulate policy responses to critical new developments.

Addressing the issue of trade and environment, the Plan mandates UNCTAD, in cooperation with other relevant organizations, to ensure balance in the trade and environment debate by highlighting issues of concern to developing countries and strengthening the development dimension. The Plan asks UNCTAD to continue to assist developing countries and those in transition to build up a new service infrastructure in the area of customs, transportation, banking, insurance and tourism, with a view to improving their competitiveness in the international marketplace. The Conference should focus on trade facilitation, institutional reforms and legislative adjustments, possible gains in efficiency and the specific problems of LDCs.

In the area of banking and insurance, UNCTAD is called on to carry out analytical and technical assistance work to help regulators and relevant industry association in upgrading the regulatory and institutional framework for this sector to adapt to international and best practices. The Plan underscores that the implementation of activities in favour of LDCs requires regular replenishment of the existing Trust Fund for those countries, as well as the provision of contributions in kind. Increased contributions are particularly required and UNCTAD is called upon to prepare an integrated programme of action for technical assistance for LDCs and undertake a realistic assessment of resource requirements for its implementation.

The Plan draws attention to the fact that measures are required to ensure concentration of efforts in technical cooperation that effectively exploit the interrelationship between policy analysis, intergovernmental deliberations and operational activities. UNCTAD’s approach to technical cooperation should be more consolidated, well focused and streamlined. Priority should be given to those activities that enhance the capacity of beneficiary countries to effectively participate in the international trading system. Activities should be demand-driven, based on needs and ultimately aim at raising the standards of living of people in developing countries through strengthening of capacity- building for trade, investment and development.

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