São Paulo, Brazil, 13 June 2004

Mr. Chairman, Distinguished Minister of the Sudan

Distinguished Ambassador of Benin

Dear colleague Secretary-General of UNCTAD // Director-General of WTO

Honourable Ministers,

Distinguished delegates,

I would like to start by thanking wholeheartedly the Group of the Least Developed Countries for organizing this important ministerial meeting on the eve of the Eleventh Session of the United Nations Conference on Trade and Development.

Let me take this opportunity to convey my deepest appreciation to the Foreign Minister of Benin, Mr. Rogatien Biaou, for his personal commitment and leadership as the global coordinator of the LDCs.

I also warmly greet Mr. Rubens Ricupero, UNCTAD Secretary-General, and would like to express my particular appreciation to him for the important contribution the UNCTAD LDCs Report for 2004 has made to the better understanding of how international trade can become a more effective mechanism for poverty reduction in the LDCs. Since I assumed my new responsibilities in 2002, Mr. Ricupero and I have been working in a mutually reinforcing way in our support for the cause of the LDCs.

I also would like to commend the WTO Director-General, Dr. Supachai, for the extensive support that his organization provides to the LDCs.

It is an honour and pleasure for me to participate at this gathering in my capacity as the High Representative of the United Nations working for the three most vulnerable groups of countries of the world – the Least Developed Countries (LDCs), Landlocked Developing Countries (LLDCs) and Small Island Developing States (SIDS).

Mr. Chairman,

The UNCTAD conference that will start tomorrow is convened at a highly crucial time and the whole international community looks at its outcome with much anticipation. In its 40 years of existence, UNCTAD structure and programme of work has been exposed to continuous challenges due to the evolving and ever more complex international trade environment.

UNCTAD XI is a milestone, not only for UNCTAD, but for the Group of 77 as well, as we also celebrate the 40th anniversary of the creation of the Group of 77, which now embraces 132 members, including 50 LDCs.

Over the years, the G77 has never failed to support the cause of the LDCs in various negotiating fora, and in particular, it has provided the LDCs with the umbrella support of the bigger group in their struggle to get the much-needed attention and commitment by the international community at the three UN Conferences dedicated to the LDCs.

The overriding aim of the Third LDC Conference in Brussels in 2001 was to rivet the world attention on the enormous development challenges facing the LDCs. Today, the population of LDCs stands at 736 million people, more than 11 per cent of the world population. By 2015, it is projected to reach 942 million people. This means that between now and 2015, when the Millennium Development Goals are expected to be met, there will be 206 million people more living in the LDCs and this makes our challenge even more daunting.

Recognizing that the previous two programmes for the LDCs had not produced the expected results, the 2001 Brussels Programme of Action for the LDCs called for an innovative approach to development, based on mutual commitments by both the LDCs and their development partners.

However, despite professed attention of the international community during the past years, the most vulnerable countries continue to be marginalized in the global development process. The agreed development assistance target, which is 0.20 per cent of the industrial countries GNP as ODA to LDCs, has not yet been reached for most of the donors. And while international trade can have a powerful role in poverty reduction in the LDCs, their capacity to benefit from it remains very weak.

The share of LDCs in world trade at present barely accounts for 0.4 percent of world trade. For most LDCs, the primary sector dominates the economy and in commodity-dependent LDCs, particularly in Africa, the ability of international trade to act as an engine of growth and poverty reduction is especially being short-circuited by falling and unstable world commodity prices. It is therefore urgently needed that we address the very damaging problems faced by the many commodity dependent LDCs and their producers. Thus, the LDCs’ efforts towards the establishment of a fairer playing field for international trade in agricultural products are of the utmost importance.

I believe it is no exaggeration to say that Cancún provoked a rethinking on the agenda for a development round of trade negotiations. How can the Doha Development Agenda be described as such if, indeed, special and differential treatment is not a priority issue? Can we say we have a development agenda if the longstanding challenge to implement measures that promote trade opportunities and provide safeguards is not appropriately addressed?

In Cancún, the LDCs and the African agenda had the removal of huge subsidies that distort production and export at its core. The “Cotton Initiative” was a milestone effort on the part of four very active members of your group. That agenda was reiterated and refined in your Dakar Declaration adopted last month, while asking the WTO Members to exercise restraint in applying technical barriers to trade and sanitary and phytosanitary measures to LDC exports.

As I underscored at the Dakar Ministerial Meeting, LDCs should not lose sight of the fact that the 30-year old Multi-Fibre Arrangement (MFA) is expected to be phased-out as of early next year. This development could have profound implications. The removal of MFA quotas will certainly imply changes in the location of the industry, with more direct competition to supply the world markets, and concentration of the industry in a smaller number of low cost locations. The relative competitiveness of countries will of course depend on many factors.

These factors, combined with the continued preferential market access enjoyed by the LDCs from the QUAD and other countries, will determine the extent to which LDCs are prepared to take advantage of the removal of MFA next year. Of course, there is no doubt that LDCs will face fierce competition from other developing countries. Much will therefore depend on actions by LDCs themselves, such as the integration of trade in their development strategies, the development of physical and economic infrastructure, the nurturing of business-friendly environment and development of entrepreneurship skills. Here again, increased financial and technical support will also be required from their development partners.

Finally, the removal of MFA may also provide opportunities for a shift of textile and garment industries not only from the North to the South, but also from the South to South, from one developing country to another. Some LDCs are positioned to benefit from this movement. I would therefore strongly urge policy-makers in LDCs to anticipate these changes linked to the MFA phase-out and design appropriate strategies to attract investments in the textile and garment industries, including through expanded South-South cooperation arrangements with special attention to LDCs.

As highlighted during the Marrakesh High-Level Conference in December last year, South-South cooperation has the potential of playing a significant role in promoting sustained growth and sustainable development for LDCs. After all, only 42 per cent of LDC exports enter industrial country markets, while nearly 50 per cent is directed to other developing countries. The LDCs should also ask other better-off developing countries for expansion of their non-reciprocal preferential system for imports from LDCs.

Let me conclude my statement with some remarks on the role and activities of my Office.

Since its establishment in April 2002, the Office of the High Representative has built a global advocacy role to ensure that the issues of the Least Developed Countries remain high on the international political agenda. The Office undertakes responsibilities related to the mobilization, coordination, monitoring and review of the international support as well as advocating and promoting of global awareness for the implementation of the Brussels Programme of Action. In order to ensure smooth coordination with the Member States, my Office has established a practice of monthly briefing and consultation meetings with the LDC Group in New York.

At the global level
, 19 UN system entities and other multilateral organizations mainstreamed the Brussels Programme in their respective programmes of work. In addition, the office undertakes close consultations with the World Bank, IMF and relevant regional and multilateral organisations for their recognition of LDCs as a special category in their activities.

At the national level, the Office of the High Representative, in close collaboration with LDC delegations in New York, encouraged the establishment of national mechanisms and National Focal Points in LDCs in order to enhance their ownership and capacity for the country level implementation of the Brussels Programme. It is gratifying to note that the number of National Focal Points has increased from 9 to 45 and the number of National Forums has increased from 9 to 18, as compared to last year.

In response to the request of the LDC Group, my Office organized a “Workshop on the implementation of the Brussels Programme of Action for the Least Developed Countries” last month in New York, in collaboration with other UN partners, including UNCTAD. The workshop has provided the unique opportunity to obtain first hand information on the country level implementation and follow-up and to identify concrete measures for implementation of the Brussels Programme by the LDCs and their development partners. As such, it has also made an invaluable impetus to the 2004 substantive session of ECOSOC that will be focusing on the special needs of the LDCs in three of its five segments.

It is indeed a particularly remarkable achievement for the LDCs group to have the 2004 High Level Segment of ECOSOC later this month focus on their own Programme of Action. The report on the theme of that segment, “Resources Mobilization and Enabling Environment for Poverty Eradication in the Context of the Implementation of the Programme of Action for the Least Developed Countries for the Decade 2001-2010”, will be presented by Secretary-General Kofi Annan with the participation of the group’s leader President Kerekou of Benin. I would like to congratulate the LDC Bureau in New York for its wonderful work in this regard.

I am fully convinced that the UNCTAD eleventh session will provide a major forum to voice the crucial concerns of the LDCs, based on a strongly supported common platform, and a strategic opportunity to capitalize on recent renewal of commitments by the industrial countries to the resumption of the WTO negotiations and to put the Doha Development Agenda back on track.

As you face this important challenge, let me assure you of my fullest support to the LDCs group. I believe strongly that your Ministerial Declaration will be a major input into the Conference opening tomorrow. I wish you all success in your deliberations.


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