9:45 PM May 8, 1996
UNCTAD'S WORK
The roundtable was devoted to the future work of UNCTAD. In initiating the discussion, Secretary-General of UNCTAD, Mr. Rubens Ricupero, underlined the continued relevance of UNCTAD in the current global situation. Ricupero stressed that it was the most general global organization, and perhaps the only international organization with a mandate to cover all the elements constituting the international economy -- money and finance, trade, commodities, technology, investment and their interaction -- that enabled the institution to look at the forest instead of the trees, an advantage enabling it to take a comprehensive, holistic view of the international economy. UNCTAD, he said, was the mirror image of the UN General Assembly. While the Assembly dealt with a whole range of subjects important for the international community, but with broad emphasis on political aspects, UNCTAD as an organ of the General Assembly dealt with a whole range of economic issues. It was perhaps the only international organization with a mandate This explained to a large extent the frustration felt that the analysis was too generic and broad. While organizations like the ITU and the WTO dealt with technical issues, everything was within the jurisdiction of UNCTAD. This raised the question how for such an organization, with avocation for universality and comprehensive vision, priorities could be set, how to conciliate this global vocation with the need to concentrate on specific issues. Ricupero, however, believed there was a way of harmonizing the analytical and research capabilities of UNCTAD in dealing with the forest with the need of giving to that analytical and research capabilities an action-oriented content so that its analytical and research capabilities could be put to good use and help countries to deal with concrete problems. UNCTAD should try to give its analytical research the tangible goal of providing some guidance to policy-makers. Referring to the view that UNCTAD was some kind of an OECD for developing countries to develop strategies for development, Ricupero noted that the OECD had an homogenous membership, whereas UNCTAD had countries at different levels of development and integration into the world economy and world trading system. Everyone now knew there was no unique or exclusive path for development. There were different ways and approaches and one of the things UNCTAD could do is to study how some of the developing countries - in East Asia and some in Latin America - have succeeded in their economic and development, and which of these successful policies could be applied elsewhere. The developing country members of UNCTAD could be divided broadly into two groups -- those who had problems of access to markets, investment and technology to improve their capacities. There was a second group of countries, particularly the LDCs and some small economies with little to sell, except one or two commodities. Even if they are beneficiaries of very significant tariff concessions, they cannot use them because of lack of productive capacity and infrastructures. These two categories of countries had different needs. Referring to the view about need to avoid overlapping and duplication, Ricupero said UNCTAD had been responding to these concerns through its actions. It had established a working relationship with the WTO, as in the joint programme for technical assistance for Africa and in the joint document on strengthening the participation of developing countries in the trading system. Similarly, UNCTAD had established a cooperative programme with the Common Fund for Commodities. UNCTAD also had a programme with UNIDO, and will be having a meeting with UNIDO in June to determine division of labour in such areas as enterprise promotion, technology etc where the two institutions could build upon their synergies. UNCTAD was also in contact with the OECD and undertaking some joint work with the IMF, World Bank etc. Ricupero's views and outline of future UNCTAD work received strong support in the ensuring lively debate and comments. Pakistan's Commerce Secretary, Sulman Faruqui, suggested that to make UNCTAD more effective, there must be periodic evaluation of the operations in the light of the objectives. For example they should evaluate how far the partnership for development set at Cartagena at UNCTAD-8 had been achieved. Theoccasion of the four-yearly Conference should be used to make such an evaluation and make an action-oriented strategy for the future. There was need for such an evaluation of the analytical, promotion and implementation roles. The Pakistan delegate referred in this connection to the debate in the drafting committee on the difference between 'sustained' and 'sustainable' development a concept on which many developing countries had many reservations. Sustained development involved self-reliant development, while sustainable development involved a different approach. In its analytical role UNCTAD should define these two concepts. The Philippines suggested that UNCTAD's work should be 'demand' driven, demands as defined by the countries and the private sector. Given the new trade rules of the WTO, UNCTAD must focus on the problems of developing countries to cope with them. While agreeing with the initial comments and remarks of Mr. Ricupero, Indian Commerce Secretary, Mr. Tejendra Khanna, said that trade was an important element of economic development and this should have a high focus in the work of UNCTAD. However, without development there could be no trade. The two were linked. A country could have all the market access -- in agriculture, manufactures or in services -- but this could not be taken advantage of without productive capacities in the country. "If we want international trade to extend in a manner which would be positive, particularly for those who are at low levels of participation in international trade, we can not exclude from our purview the questions of development in key sectors," Khanna said. It was hence legitimate for UNCTAD to concern itself with the broad range of both domestic and international policies that would help countries to augment their domestic capacities. However, foreign direct investment is coming up as a kind of "general solution" to problems of development. India did not agree with the proposition that more (foreign) investment would mean more development. More foreign investment could lead to more development, but not necessarily. There could be more investments for example in the mineral sector, and more trade, but without development. The raw minerals could be exported, but without any value added, such as through smelting. It would be simplistic to say that liberalisation of investment would automatically lead to higher levels of development. India had a lot of reservations over this proposition. India supported UNCTAD activities focusing on trade efficiency, trade facilitation of goods and services sectors through improved customs procedures, trade-related infrastructures etc. UNCTAD should also focus on the issue of financial resources -- problems of liquidity faced by many developing countries, particularly the LDCs, the problems of external debt and debt servicing. UNCTAD should also focus, in a balanced way, on all new issues being proposed for trade negotiations - issues proposed by the industrial countries and those by others. UNCTAD should not merely look at investments, but also on movement of natural persons and the Restrictive Business Practices of the TNCs. Indonesia's Soemadi Brotodiningrat noted that in the debate so far, no one had said UNCTAD had become irrelevant. Practically every delegation had advocated UNCTAD improve its methods of work. Everyone agreed on the continuing relevance of UNCTAD and need to deal with new problems that had arisen, areas where UNCTAD had a comparative advantage and was best suited to deal with it. Among the major problems facing the developing countries, particularly the LDCs, is poverty alleviation and unless it was proved otherwise, UNCTAD had the expertise to deal with it. Similarly, UNCTAD was best suited to deal with the issue of commodities. UNCTAD in the past used to deal with what was invisibles, which have now become 'services' and was well equipped to focus on these and provide advice on these. There were also a set of new issues relating to investment, resource flows and debt. There was also the issue of trade efficiency and enterprise development. Some might say that this was 'business as usual and these areas of work should be eliminated from UNCTAD agenda. Indonesia would like to hear from them where these 'eliminated areas of work' would be dealt with in the current family of international organizations. If the General Assembly and the ECOSOC could deal with the areas of UNCTAD activity that were sought to be eliminated, it might help. But Indonesia was not convinced that in terms of the restructuring of the UN's social and economic sectors, neither the General Assembly nor the ECOSOC would be able to substitute as a forum to address the inter-related issues as UNCTAD was doing. Bulgaria wanted UNCTAD to focus also on problems faced by the transition economies and on their trade and economic relations with the developing countries. Many of the recommendations addressed to the developing countries were also of relevance to the transition economies. China said that the WTO trading system was not synonymous with the global multilateral trading system. In examining the mandate of UNCTAD, they should carefully examine its relationship with the WTO. There should be a mutually supportive and balanced relations between the two. UNCTAD should play the role of policy dialogue to build consensus over international trade. UNCTAD should be a component part of the international trading system. Otherwise it would be an observer and would be sidelined and would be unable to play an active role on trade and investment. Referring to the issues of technical assistance, Yemen called for coordinated and harmonious policies among UNCTAD, UN, IMF, and World Bank, taking into account the particularities of each country. Israel said the proposals for increasing participation of civil society in UNCTAD's work was 'music to our ears'. These have to take account of the facts within each country and in the global economy. This approach was already being addressed in terms of the economic cooperation issues in the Middle East peace process. Israel, however, had one reservation over the proposal for the 'Development Senate'. The Secretary-General's proposals and the pre-conference negotiating text provided for participation of business sector and the NGOs. But there was no mention of trade unions and labour, which was as much a part of the development process. With UNCTAD facing zero growth budget and cash flow problems, there would, however, be little chance of an additional UNCTAD forum for participation of civil society. The problem could, however, be resolved if every country included in its delegations, NGOs and business representatives. It would require no change in rules. Canada saw UNCTAD's comparative advantage as looking at trade aspects of development and development aspects of trade. But in terms of its analytical work, Canada saw no need for UNCTAD to duplicate work on macro-economics and analysis. These could be left to the IMF and the World Bank.