Vienna: 29 November 2007
Ladies and gentlemen,
At the outset, I would like to thank Mr. Kandeh K. Yumkella, Director-General of UNIDO for his kind invitation to this Ministerial Conference. I see my participation in this Conference as a demonstration of coordinated efforts of the United Nations system to address the special needs of the least developed countries and assist them in integrating in the world economy through poverty alleviation, accelerated and sustained growth and sustainable development.
I would also like to commend UNIDO for its unwavering support to the LDCs in coping with numerous obstacles, constraints and challenges in their socio-economic development. UNIDO’s focus on LDCs is clearly reflected in its Strategic Long Term Vision, Corporate Strategy, Medium Term Framework, all thematic priorities (poverty reduction through productive activities, trade capacity building and energy and environment) and projects.
I welcome the decision of the last session of the General Conference to further strengthen UNIDOs support to LDCs, in response to the recommendations of the midterm comprehensive review of the implementation of the Brussels Programme in 2006.
The Programme of Action for the Least Developed Countries for the Decade 2001-2010 is a comprehensive poverty reduction strategy. It reflects the new development paradigm which emerged in late 90s as a result of evolution in the international development thinking on the complex and interdependent nature of development. While recognizing the importance of trade liberalization, macroeconomic stability and market-oriented policies, this new holistic approach underscored the importance of social policies and safety nets, good governance, democratic institutions and environment protection for achieving sustained economic growth and sustainable development
More specifically, the Programme of Action provides a common framework for partnership between LDCs and their development partners, including the civil society and private sector, in seven areas 1) fostering a people-centered policy framework; 2) good governance at national and international levels; 3) building human and institutional capacities; 4) building productive capacities to make globalization work for LDCs; 5) enhancing the role of trade in development; 6) reducing vulnerability and protecting the environment and 7) mobilizing financial resources. These seven areas are based on three interdependent and mutually supportive pillars (economic, social and environmental) of the sustainable development defined as “the development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
Another distinctive feature of the Programme is results-orientation. The Programme includes 30 internationally agreed development goals, including the MDGs, which provide benchmarks for measuring progress, ensure transparency and accountability in the implementation, and serve the purpose of mobilizing international support and resources.
Furthermore, the Programme of Action comes with a roadmap for its implementation. Chapter III of the Programme contains specific recommendations for its follow-up, implementation, monitoring and review at all (national, regional and global) levels and identifies relevant mechanisms and processes. A separate part is devoted to the role of the United Nations system.
The ultimate objective of the Pogramme of Action is “to end marginalization in LDCs by eradicating poverty, inequality and deprivation in these countries, and to enable them to integrate beneficially into the global economy”. However, the midterm comprehensive review of the implementation of this Programme last year concluded that despite some progress, “the overall socio-economic situation in the least developed countries continues to be precarious […] and many least developed countries are unlikely to achieve the goals and objectives set out in the Programme of Action”.
Although globalization has offered unprecedented opportunities the LDCs have failed to reap the full benefits of globalization. With nearly 12 per cent of the world population, they accounted for an average of only 0.5 per cent of world export and 0.7 per cent of world imports in 2002-2005. Primary commodities still dominate the export basket and account for 75 per cent of total value of their exports. Despite improved market access, the average utilization rate of GSP schemes remains low (about 70 per cent) largely due to supply side constraints of LDCs.
Launched in 1997 and revamped later in 2000, the Integrated Framework (IF) for Trade-Related Technical Assistance for LDCs was aimed at reducing their supply side constraints. More specifically, the IF pursued the objective of improving the capacity of the LDCs to formulate, negotiate and implement trade policy, enable them to integrate into the multilateral trading system and benefit from its market opportunities. In 2005, the WTO Ministerial Conference in Hong Kong decided to make the IF “more effective and timely” by ensuring increased, additional and predictable funding, strengthening country ownership and improving the IF management. The Enhanced Integrated Framework (EIF) is due to come into force at the end of this year. Its implementation will require US$ 400 million over the next five years. From these funds, some US$ 110 has already been pledged for the first two years of operation at the Pledging Conference held on 25 September 2007 in Stockholm. This is a very encouraging beginning and I sincerely hope that this is the case when “well begun is half done”.
Trade can improve access of the poor to a wider range of goods and services, technologies and knowledge. It can stimulate the entrepreneurial activities of the private sector, attract private capital and increase foreign exchange earnings. It can increase country’s resilience to exogenous shocks, create employment and generate income. In short, trade can become an engine of sustained growth and sustainable development. It can dramatically transform the LDCs.
The Enhanced IF is the key tool of delivering Aid-for Trade for LDCs. Aid for Trade is part of overall development aid but with the specific objective of helping developing countries, in particular the least developed countries, to build the supply-side capacity and trade-related infrastructure they need to benefit from trade opening. However, Aid-for-Trade alone is not sufficient for transforming the LDCs. They also need technological progress, upgrading and diffusion, as well as capacity building to increase productivity, diversify production and create employment. Furthermore, they need vibrant private sector and efficient economic infrastructure (roads, railways, ports, telecommunication and energy networks) to link products to global markets. Finally, they need genuine entrepreneurship, which increases the returns by reducing costs and adding greater value.
As the key UN entity with the global mission to reduce poverty through sustained industrial growth, UNIDO plays a critical role in unleashing entrepreneurship and increasing the productive capacity of LDCs by providing assistance in technology “catch-up”, export and investment promotion, small and medium enterprise development and facilitating South-South cooperation.
The LDCs need UNIDO’s support and I am sure this support will be scaled up, to enable them to achieve the ambitious goals and objectives of the Brussels Programme by 2010