G77 reaffirms UNCTAD’s role as focal point for trade & dev

UNCTAD Logo. Creative Commons

Geneva, 6 Oct (Kanaga Raja) – The Group of 77 and China, in its Ministerial Declaration to the fifteenth session of the UN Conference on Trade and Development (UNCTAD-15), reaffirmed the important role of UNCTAD as the focal point in the United Nations for the integrated treatment of trade and development and inter-related issues in the areas of finance, technology, investment and sustainable development.

The Ministers of the Group of 77 and China, who gathered virtually in Bridgetown, Barbados for UNCTAD-15, reiterated their call for enhancing consensus-building in UNCTAD on key trade and development issues.

The results of UNCTAD discussions have yielded important lessons on the types of issues which can be explored deeply through intergovernmental discussions, they said.

These activities have also generated useful ideas that could be applied in UNCTAD and considered elsewhere, they said. “Yet the limitations of the negotiating pillar of UNCTAD have not allowed member States to express the full potential of these ideas,” they added.

The Ministers also underscored the need to not only build consensus, but al so set a developmental narrative on issues affecting global trade and the global economy.

In this context, the Ministers looked forward to continuing to strengthen the negotiating function of the UNCTAD intergovernmental machinery, especially the Trade and Development Board (TDB), and for these outcomes to make a meaningful and direct contribution to the broader work of the United Nations on development.

The Ministers further underscored the importance of the research and analysis, and technical cooperation pillars, which should be equally strengthened with a view to achieving a balanced and synergetic approach among all the three pillars of UNCTAD work.

In their Ministerial Declaration (TD/522), the Ministers of the Group of 77 and China recalled that, since UNCTAD XIV (held in Nairobi, Kenya in July 2016), fundamental development challenges remain and are exacerbated by the COVID-19 pandemic.

These challenges include, but are not limited to, inequality, vulnerability , the effects of climate change, unilateral coercive measures, biodiversity loss, natural and man-made disasters, the escalating debt crisis, lack of competitiveness , commodity dependence, unsustainable patterns of consumption and production, less diversified production base, unemployment, food insecurity, shortages of basic services and infrastructure, illicit financial flows and activities that underlie their occurrence and health-related shocks, which impact on trade, impede the development and livelihood of nations and individuals, and violate their right to development.

The Ministers recognized that COVID-19 has triggered a humanitarian and socioeconomic crisis that is already devastating societies and reversing vital gains made in human development and sustainable development goals.

In addition, the COVID-19 pandemic has accentuated inequalities in several areas and exposed the strategic vulnerabilities of developing countries that are disproportionately affected by the pandemic.

Above all, it has a significant impact on the lives and livelihoods of ordinary people, particularly the poor and the most vulnerable, who struggle to make a living in an already highly unequal world.

The Ministers noted with concern the uneven pace of COVID-19 vaccine rollout and, in this regard, reaffirmed the need for fast, effective, affordable and equitable delivery of vaccines for all, especially in developing and least developed countries, including the ongoing consideration at the World Trade Organization on a temporary waiver from certain provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for the prevention,

containment and treatment of COVID-19 and other proposals relating to the World Trade Organization response to the COVID-19 pandemic.

The Ministers expressed their aspiration for the Bridgetown Covenant to provide a framework for moving from actions to concrete results in tackling these challenges.

“The covenant we seek to seal provides a platform for action to catalyze the needed changes, including in the multilateral system,” they said.

“For the Group of 77 and China, this means restoring UNCTAD to its rightful place as a United Nations forum for meaningful consensus-building and decision-making on key trade and development inter-related issues and issue s that impact development,” they added.

The Ministers reaffirmed their call for “a new global consensus on revitalizing multilateralism, to strengthen the voice of developing countries to effectively address the pervasive global health and socioeconomic challenges, a requirement that is urgently needed as demonstrated by the COVID-19 pandemic, by harnessing the collective will of humanity to tackle both the longstanding challenges of development, as well as the existential threats that we face together, decisively.”

“We must focus our thinking on making global economic governance truly development-oriented, especially through ensuring that developing countries are able to meaningfully participate in the decision-making that affects their present and their future.”

The Ministers said that they are gravely concerned that the threats to multilateralism, in particular the promulgation and application of unilateral coercive measures, have reached a dangerous level, with clear signals of a multi-dimensional crisis that can only be solved through the political will of member States and vigorous international coordinated action.

According to the Ministers of the Group of 77 and China, these measures and legislation are contrary to the Charter of the United Nations, the norms and principles governing peaceful relations among States and violate gravely international law, human rights, including the right to development, international humanitarian law and the rules and principles of the World Trade Organization.

The Ministers recalled that Africa continues to participate unequally in international trade, suffers from weak productive capacities and structural transformations and needs support in achieving the goals set in the 2030 Agenda and Agenda 2063.

Landlocked developing countries have special trade, investment, infrastructure, transit transport and development needs, given their landlocked condition.

While small island developing States face trade logistics obstacles, it is necessary to address other challenges they confront, which are linked to debt vulnerability, climate vulnerability and to the small size of their economies, they said.

The least developed countries, including those on the graduation track from the least developed country category, and other structurally weak, vulnerable and small economies have special needs and problems due to their small size, defective infrastructure, lack of product diversification, and the lack of economies of scale.

They need support in maintaining sustained economic growth, attracting productive investment, and improving their productive capacity and competitiveness.

The Ministers further recalled that middle-income countries face increased vulnerability due to higher economic and financial openness, exposing themselves to global flows of goods and capital without proper safeguards and, thus, run the risk of being affected more by global crises than others while continuing to suffer from poverty, inequality and high unemployment, being faced with the middle-income trap and a slow pace of structural transformation and economic diversification.

The Ministers of the Group of 77 and China called for the continued consideration of measures to respond to the COVID-19 pandemic including through a TRIPS waiver, as well as other proposals on how to tackle the COVID- 19 pandemic by building economic resilience, promoting sustainable and inclusive structural transformation and creating fiscal policy space, allowing States to maintain macroeconomic stability to attract and sustain private investment, increase public investment and secure fiscal sustainability.

The pandemic will only be over once it is over everywhere, and this entails an inclusive economic recovery which reduces inequalities, they underlined.

The Ministers therefore underscored the urgent need for developing and least developed countries to have equal, unhindered and timely access to vaccines and therapeutics and, in this regard, called for the ramping-up of production and distribution thereof, so as to enable, as early as possible, an equal and sustainable recovery from the pandemic.

They noted with grave concern that the COVID-19 crisis has caused a dramatic fall in foreign direct investment, with global foreign direct investment flows dropping by 35 per cent to $1 trillion in 2020.

In light of this decline, said the Ministers, investment flows to sectors relevant for the Sustainable Development Goals in some developing countries have collapsed, undoing the progress that has been achieved since 2015.

At the same time, the Ministers noted that, although global sustainable finance increased by 80 per cent from 2019 to reach some $3.2 trillion in 2020, most of this funding is domiciled and spent in developed countries.

Therefore, the Ministers called “for global efforts, by all countries and stakeholders, to engage in transformative action to promote investments, financing for development in order to build productive capacity in our economies and achieve sustainable recovery from the pandemic and eliminate all obstacles in this regard.”

They also underscored the nexus between trade and health policies. “Developing countries face health challenges, including chronic communicable and non-communicable diseases and COVID-19, which can hinder efforts at wealth creation, productivity enhancement and could increase social and economic inequalities and inequities within and among countries, leaving the poorest and the most vulnerable even further behind.”

They recognized the significant contribution of South-South and triangular cooperation in the area of trade to the post-pandemic recovery and sustainable development, and in this regard “reaffirm our determination to strengthen South-South trade cooperation building upon existing intergovernmental cooperative frameworks, consistent with the Buenos Aires outcome document adopted at the second United Nations High-level Conference on South-South Cooperation.”

The Ministers further underscored that international trade is key to fostering inclusive economic growth and development, as well as poverty eradication.

“In this context, the significance of the principle of special and differential treatment for developing countries in harnessing the developmental benefit of international trade remains crucial. For trade to be a real vehicle for growth and development, the multilateral trading system as embodied in the World Trade Organization must remain open, transparent, inclusive, non-discriminatory and rules-based, with an effective mechanism to address different levels of development.”

The Ministers reiterated the increasingly important role that digitalization is playing in the world economy. The rapid technological changes, however, present immense socioeconomic challenges to developing countries due to the already existing gap between them and advanced countries in the digitalization process. Developing countries face great challenges to effective participation in the fast-growing digital economy, they said.

Therefore, they called for efforts to narrow the technological gap and closing the digital divide between developed and developing countries, in the spirit of the implementation of the 2030 Agenda principle to leave no one behind, through the deployment of available, accessible and affordable broadband infrastructure and services, which is particularly urgent considering the acceleration of digitalization brought about by the COVID-19 pandemic.

Digital transformation should not reinforce the economic course of action which preserved inequality and allowed to create the gap between developing and developed nations in the past.

The Ministers said that “coordination and adoption of agile and collaborative public policies are required to address the asymmetric capacity of developed and developing countries and the high level of concentration of the digital industry. Developing countries need policy space to promote digital industrialization.”

The Ministers reiterated that technology development and transfer are core priorities of the developing countries in implementing the 2030 Agenda. The need to accelerate the transfer of technology on favourable terms, including on concessional and preferential terms, should be prioritized.

The Ministers of the Group of 77 and China reaffirmed that the commodity-driven development model, with limited value addition and product diversification, has not enabled countries to develop their own national productive capacities to successfully achieve structural transformation and economic diversification.

“In this regard, locally driven and homegrown development approaches which focus on local particularities and on building resilience among countries and regions should also be taken into consideration.”

The Ministers reiterated the vital importance of ensuring food security as a necessary condition for achievement of the Sustainable Development Goals, especially Goal 2, through tackling various challenges linked to it, such as climate change and the environment.

Due consideration should be given to the needs of the net food-importing developing countries to tackle this challenge exacerbated by the COVID-19 pandemic and affiliated world high food prices.

They also highlighted the importance of supporting the empowerment of rural women, youth, small-scale farmers, family farmers and livestock farmers, fishers and fish workers as critical agents for enhancing agricultural and rural development and food security.

The Ministers called for a shift away from a commodity-driven growth model by prioritizing domestic policies and strategies for enhancing productive capacities as well as redirecting development finance with equal emphasis on the productive sectors of the economy.

They emphasized the importance of achieving economic growth and sustainable development. This would require providing developing countries with the mea ns of implementation, including access to technology, finance and capacity-building.

They reiterated that the loss of access to a range of international support measures, including some significant trade-related special and differential treatment and exemptions, after graduating from the least developed country category, creates severe challenges to the newly graduated countries.

Therefore, it is essential for international support measures to continue f or an extended period after graduation, to ensure their smooth transition, the Ministers said.

The Ministers called on the international community to design and implement a new generation of international support measures to support the expansion and strengthening of productive capacities of developing countries and to accelerate their structural economic transformation.

The new generation of international support measures, defined with the support of UNCTAD, needs to be adapted to current realities for developing countries, especially small and vulnerable economies and the least developed countries, including those having graduated. These new international support measures should cover, inter alia, the lingering effects of the COVID-19 pandemic-induced crisis, the aggravation of climate change and the accelerating digitalization of the world economy.

The international support measures should consider the need to establish coherence and synergy in trade, finance, technology and capacity-building.

The Ministers reiterated their deep concern over the long-standing occupation of the Palestinian territory which prevents the Palestinian people from developing their available natural resources (e.g. water, oil, natural gas).

They said that this costs the Palestinian people billions of dollars in unrealized economic potential.

Moreover, the economic costs of occupation and the leakage of Palestinian fiscal resources to the Israeli treasury impose enormous costs on the Palestinian people, which is estimated by UNCTAD to be much higher than 13 per cent of Palestinian gross domestic product.

“The economic costs of occupation and the inability of the Palestinian people, under occupation, to utilize their oil and natural gas wealth, among other resources, make it extremely difficult for the Palestinian government to make tangible progress towards achieving the Sustainable Development Goals and f or the international community’s commitment to building an independent and viable Palestinian State.”

The Ministers also stressed that climate change is one of the greatest challenges facing the international community.

The Paris Agreement under the United Nations Framework Convention on Climate Change is a major milestone in this global effort to combat climate change.

They expressed their concern about the mounting stress facing the global ecosystem, with environmental damage at unprecedented levels.

In view of the importance of ensuring the sustainability of marine resource s, the Ministers stressed the urgency of concluding the World Trade Organization negotiations on prohibiting certain forms of fisheries subsidies that contribute to overcapacity, overfishing and eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation.

The Ministers reaffirmed the important role of UNCTAD in providing technical assistance and capacity-building to developing countries and countries with economies in transition before, during and in the follow-up to the process of accession to the World Trade Organization, which should be universal and non-discriminatory.

They reiterated their grave concern about the resulting impact on inclusive and sustainable development for all developing countries.

Geographical location, high dependence on agriculture, lack of product diversification, strong reliance on ecosystem services, existing high debt stocks, rapid growth, concentration of population and relatively poor health system s make developing countries more vulnerable to any impacts originating from or exacerbated by climate change.

The Ministers reiterated the connection between financing for development and eradicating poverty in all its forms and dimensions, including extreme poverty, which is the overarching goal of the 2030 Agenda and an indispensable requirement for sustainable development.

They noted with concern that middle-income countries are still home to most of the world’s people living in poverty (62 per cent of the world’s poor, according to World Bank data) and inequalities and gaps still remain.

They continue to face significant challenges to achieve sustainable development.

“There is an urgent need to identify ways and means to ensure that the diverse and specific development needs of middle-income countries are appropriately considered and addressed, in a tailored fashion, in their relevant strategies and policies, with a view to promoting a coherent and comprehensive approach towards individual countries.”

In this context, the Ministers said that the United Nations development system must improve its support to different country contexts, including how to provide efficient, effective, more coordinated and better and focused support to middle-income countries.

In this regard, the Ministers called for financing for development to focus on resource mobilization through the provision of support from developed countries and channelling resources towards poverty eradication strategies.

They reiterated their concern about the accumulation of unsustainable debt by developing countries, especially external debt.

Debt is sustainable when it increases real output sufficiently and, in the case of sovereign debt, when Governments can capture enough of that increase to service the debt.

Unfortunately, this has not been the case during the past decade, leading to higher risk of debt stress, causing alarms worldwide, they said.

The Ministers reiterated their urgent call to reform the international financial architecture to improve the efficiency of the global financial system, improve debt sustainability and foster sustainable development.

There is a need for continued discussions on the establishment of a multilateral legal framework on sovereign debt restructuring processes, in line with United Nations General Assembly resolution 68/304.

There is also a need to search for ways to neutralize the effects of an anticipated external debt crisis on the ability of developing countries to achieve the Sustainable Development Goals by 2030.

The Ministers also called for an interim solution to address the grave debt crises encountered by the developing countries, of which foreign exchange reserves have drastically reduced due to the COVID-19 pandemic and affiliated loss of proceeds from the export of goods and services.

They recalled that the United Nations system has been playing a leading role in the discussions on sovereign debt restructuring and remains well positioned to do so.

“The work of UNCTAD is highly needed and appreciated in this regard. Therefore, we call on UNCTAD to continue playing a leading role in supporting global efforts towards a durable solution to the problem of developing country indebtedness in cooperation with the relevant international agencies.”

The Ministers stressed that the implementation of the 2030 Agenda at all levels requires provision of means of implementation and a revitalized global partnership, in accordance with Sustainable Development Goal 17.

In this regard, further support is needed from developed countries, especially regarding the transfer of technology, capacity-building and financing to developing countries.

To enable the Group of 77 and China, especially the Geneva Chapter, to tack le the above challenges and meet the ambitions outlined, the Ministers decided upon the following:

“First, the Geneva Chapter should be captured with the strategic issues con fronting developing countries to advance our collective thinking and collective action. Therefore, it would be fitting for the Gamani Corea Forum, established in commemoration of our joint fiftieth anniversary, to serve as the principal mechanism for our preparations for the future, including our joint sixtieth anniversary.

“We call on the Geneva Chapter to work with UNCTAD, the South Centre, as well as other friends in Geneva, to organize regular sessions of the Forum at a high-level standing. The Forum would be dedicated to focusing on strategic issues of importance for developing countries with the aim of translating these ideas into action through intergovernmental agreement in UNCTAD and beyond.

“Second, working with UNCTAD and other friends in Geneva, such as the Unite d Nations Institute for Training and Research, we call to build on the import ant work of the Paragraph 166 initiative which provides training to the experts of the Group of 77 and China, including, where possible, beyond Geneva, to enable the Group to approach key development issues better and more strategically with more effective collective action in pursuit of the Group’s objectives.

“Third, we invite the New York Chapter, along with the other chapters of the Group, to enhance cooperation with a view to building stronger linkages between UNCTAD and the United Nations General Assembly in the development of its resolutions related to trade and development, as well as to start consultations on considering the establishment of a high-level group of eminent persons to provide a platform to discuss how to accelerate the implementation of the 2030 Agenda taking into account national policies and priorities. The forthcoming Third South Summit could be a launching pad for this initiative, with an initial report that could be presented during a ministerial meeting of the Group on our joint sixtieth anniversary.

“We invite all Chapters of the Group of 77 and China to contribute to the implementation of the decisions contained in this declaration and to decide in favour of establishing a mechanism within the Geneva Chapter of the Group of 77 and China to monitor the implementation of the decisions of this declaration and report to the Ministerial Meeting of the Group of 77 and China to be held on the margins of the sixteenth session of the United Nations Conference on Trade and Development.”

- Third World Network