Excellencies,

Honourable Ministers,

Ladies and gentlemen

It is a great honour to be on such a distinguished Round Table of high-level personalities from member states and international organizations to discuss policy challenges and responses for investment and enterprise development. I am particularly grateful to UNCTAD for inviting me to join you today. I take this as a testimony of strong ties and close collaboration between OHRLLS and UNCTAD.

 

My contribution will cover two issues: firstly, the crucial policy challenges in harnessing investment and entrepreneurship for sustainable development and secondly, ways to integrate enterprise development policies into countries’ overall development strategies with a view to maximising sustainable development benefits. Upon giving my thoughts on these two issues, I will conclude with the new initiatives for international cooperation and coordination in enterprise development.

 

I would try in my presentation to focus on the three groups of countries under the purview of OHRLLS, namely the least developed countries, landlocked developing countries and small island developing states

 

Excellencies,

Honourable Ministers,

Ladies and gentlemen

 

Before sharing my perspectives on these two issues, allow to say few words about the importance of investment and enterprise development.

 

Investment and enterprise development contribute—among others–to the establishment and growth of new firms, absorption of existing labour surplus, the improvement in productivity and the creation of linkages and value chains. These changes in turn drive and sustain structural transformation, growth and development, which are the core development aspirations of the least developed, landlocked developing countries and small island states—the three groups of countries under the purview of my Office.

 

Yet such inhibiting factors as insufficient technology and know-how, inadequate regulatory frameworks, limited access to finance, weak basic infrastructure and high transport costs hamper investment and entrepreneurship, particularly in LDCs, LLDCs and SIDs. Besides these supply-side constraints, narrow domestic markets, cumbersome customs and border crossing operations, unreliable transit transport logistics and severe safety requirements–including phytosanitary standards and traceability—also limit demand and trade opportunities for goods and services produced by these countries.

 

Many of these countries have deployed efforts to address these constraints. Most of these efforts have mostly concentrated in getting the institutions right, in particular restoring macroeconomic stability, promoting the rule of law—the protection of property rights, well-functioning of legal system–, and extending tax incentives to foreign investment. Efforts were also made by some of these countries to improve skills as well as the provision of electricity, efficient transport links, modern telecommunications services and transit border facilities and procedures have been streamlined and harmonized to increase efficiency. Improvements in these sectors have been rather modest, however, particularly in view of the huge needs in these countries.

 

Despite these efforts there is a number of policy challenges in harnessing investment and entrepreneurship for sustainable development. Although constraints to investment and entrepreneurships are multiple, policy responses tend in most cases to be sector-specific therefore segmented and lacking proper articulation. For instance, skill gaps and concerns over provision of energy and other essential production inputs are sometimes addressed as stand-alone issues without being necessarily framed as productive capacity issues and being informed by deep consultations with other important stakeholders and actors. This shortcoming should be addressed in a holistic manner through stronger coordination among ministries and close consultation with the private sector and in the context of formulation, implementation and follow-up of national development strategies or plans.

 

 

Besides the issue of policy coherence, another challenge in harnessing investment and entrepreneurship for sustainable development relates to policy content, particularly as regards to the reforms that aim at setting the policies right.  Most countries face the tension between maintaining macroeconomic stability and having the space and flexibility necessary to deliver specific policies and interventions to address for instance gaps in infrastructure and human development —in the context of an overall national development strategy and plan.

 

Even if countries are able to bypass these tensions by balancing the pursuit of macroeconomic stability and the need to impart targeted interventions, one policy challenge ahead is how to design and implement well-intentioned support policies for investment and enterprise development without instigating and sustaining patronage, rent-seeking and the inadvertent promotion of inefficient and low-productivity firms as some countries experienced in the 1960s and 1970s.

 

Another policy challenge is limited scope to exploit existing-although limited- space in today’s interventions of multilateral trade and financial agreements in order to promote investment and enterprise development.

 

Having touched the first question, allow me now to move to the second question which pertains to ways to integrate enterprise development policies into countries’ overall development strategies with a view to maximising sustainable development benefits.

 

As challenges of enterprise development differs across countries, the formulation and content of enterprise development policies should be guided by countries’ constraints and needs. The first step in formulating informed enterprise development policies is to identify these constraints and needs and policy options with the participation of all major stakeholders. This exercise should be run in the context of the formulation or revision of overall national development strategies and sectoral strategies so as to avoid duplication and to build synergies among various sectors and actors. Ensuring the implementation of enterprise development policies and interventions, particularly those that lie on the shoulders of governments, would require that these policies and interventions be costed and such costs be reflected in medium-term frameworks expenditures and annual budgets.

 

Excellencies,

Honourable Ministers,

Ladies and gentlemen

 

With your permission, I will now turn to the question pertaining to the new initiatives for international cooperation and coordination in the field of enterprise development policies. One of the important commitments made in the Istanbul Programme of Action was to explore the possibility of establishing a Technology Bank and a Science, Technology and Innovation –supporting mechanism dedicated to least developed countries. The establishment of these instruments—which require the involvement of the LDCs and their development partners, including UN system organizations—will improve access and use of technology by, and productivity  and competiveness of,  LDC enterprises.

 

Excellencies,

Honourable Ministers,

Ladies and gentlemen

 

With regard to landlocked developing countries, new initiatives on investment and enterprise development have great potential to spur their economic growth and help them overcome the development obstacles linked to their geography. The first ten years of the implementation of the Almaty Programme is drawing to a close and in accordance to the General Assembly resolution 66/214, my Office is currently undertaking preparatory work towards a comprehensive ten-year review conference of the Almaty Programme of Action to be held in 2014. In this regard I hope that this review conference will bring forth new initiatives for international cooperation and coordination on investment and enterprise development that can truly make a positive difference in landlocked developing countries.

 

With these few thoughts and remarks which I am certain the Ministerial Round Table will carry further, let me wish you Excellencies, Honourable Ministers, Ladies and gentlemen productive deliberations.

 

I thank you for your kind attention.