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UNCLAS GENEVA 000029 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: UNCTAD ECON ETRD
SUBJECT:  UNCTAD - Trade and Development Board, 55th Session, 
September 15-26,2008, Geneva Switzerland 
 
¶1. Begin Summary. The United Nations Conference on Trade and 
Development (UNCTAD) held the 55th Session of its Trade and 
Development Board (TDB), UNCTAD's governing body, in Geneva from 
September 15-26, 2008. IO DAS Gerry Anderson represented the US 
during the high-level segment of the TDB, September 15-16, which 
addressed progress in achieving the Millennium Development Goals 
(MDGs).  The Board elected Ambassador Debapriya Bhattacharya, 
Bangladesh's Ambassador in Geneva, as President for its 55th 
session.  During the two week period, member states concluded that 
governments must focus on job creation and economic growth to 
generate sufficient revenues to achieve the MDGs, and called upon 
the UNCTAD Secretariat to reallocate its regular budget to provide 
funding for production of the flagship LDC report. A report of the 
meeting will be transmitted to the UN General Assembly in November. 
End Summary. 
 
----------------------- 
High-Level Segment: Trade and Productive Capacities for Achieving 
Internationally Agreed Development Goals, Including Millennium 
Development Goals (MDGs) 
----------------------- 
 
¶2.  UNCTAD Secretary General Supachai Panitchpakdi and five key note 
speakers discussed the MDGs and development finance, in particular 
aid for trade.  According to Supachai, many nations are not on 
target to achieve MDGs since infrastructure to support a productive 
economy is lacking and Official Development Assistance (ODA) is 
insufficient. Supachai opined that MDG related policies must be more 
comprehensive including adaptation to climate change, food security 
and short-term emergency funds for natural disasters and the 
agricultural sector.  Presentations given by Rwanda and the Japanese 
Export Agency (JETRO) emphasized that many nations are investing in 
infrastructure to support advanced telecommunications and utilities, 
but their investment needs to be diversified to include tourism, 
manufacturing and other productive sectors of the economy, not just 
telecommunications and utilities. Speakers emphasized that the 
private sector can be a partner in productive investments, and 
thereby multiply the positive impact of ODA to improve productive 
capacities. 
 
¶3.  International Organizations (IO) Deputy Assistant Secretary 
Gerry Anderson served as a lead discussant for the high level 
segment.  He asked panelists about their views on balancing ODA 
between expenditures to improve productive capacities and 
expenditures on social issues. Anderson's statement highlighted 
grants given by the Millennium Challenge Corporation to developing 
countries that are committed to governing justly and economic 
freedom, as examples of country-owned and country-led development 
projects that can support balanced growth. 
 
----------------------- 
Review of Progress in the Implementation of the Programme for Action 
for the Least Developed Countries (LDCs) for the Decade 2001-2010. 
------------------------ 
 
¶4.  UNCTAD's LDC report advocated increased government intervention 
to regulate the markets and encourage local investment or profits, 
rather than capital outflows.  The report praised Southeast Asia's 
success in producing value-added products, diversifying its 
economies and increasing domestic savings.  The report questioned 
the sustainability of commodity based growth in LDCs, and expressed 
concern over the impact on LDCs of a potential sharp decline in 
commodity prices, related to the ongoing financial crisis and 
consequent economic downturn.  Panelist Professor Carlos Branco from 
the Institute of Social and Economic Studies in Mozambique opined 
that national governments should implement policies that allow the 
state to govern market prices and interest rates and thus buffer the 
impact of price fluctuations on LDCs.  Central banks should control 
local economies/markets and encourage profit re-investments from 
domestic enterprises, according to UNCTAD. 
 
¶5.  Branco recommended that LDCs increase south-south and trilateral 
trade to develop new markets and growth models. Branco emphasized 
the importance of local solutions to spur growth.  He also stated 
that LDCs should work to end corruption, which will give greater 
legitimacy and credibility to their governments, and engender trust 
 
in LDC governments by donor countries. In parallel to 
anti-corruption efforts by LDCs, donors should provide technical 
assistance to LDC so they are more capable of effectively managing 
their ODA budgets. Bangladesh commented that ending corruption and 
increasing ownership is not sufficient to ensure economic growth; 
donor nations must coordinate their multilateral aid efforts to 
reduce transaction costs and increase projects' efficiency. 
Zimbabwe for G-77 opined that LDCs lack suitable local personnel to 
undertake project management so must devote large amounts of ODA to 
administrative fees to pay for project management by expatriates. 
 
----------------------- 
Economic Development in Africa: Trade Liberalization and Export 
Performance in Africa 
------------------------ 
 
¶6.  A Secretariat panel and five key note speakers introduced the 
2008 Report: Economic Development in Africa: Export Performance 
after Trade Liberalization. According to UNCTAD LDC office Director 
Habib Ouane, whose office authored the report, liberalization of 
markets within Africa has not led to economic development for many 
nations because poor physical infrastructure, inadequate technology 
and lack of financial credit prevent African businesses from taking 
advantage of preferential trade arrangements.  Although the quantity 
and value of Africa's exports has increased since 1980, Africa's 
share of the world exports has decreased from 6% in 1980 to 3% in 
2007, meaning the rest of the world has done even better in terms of 
quantity and value of exports so Africa has fallen further behind. 
 
¶7.  Arne Bigsten a panelist from the University of Gothenburg stated 
that liberalization was necessary for African economic growth to 
occur; liberalization weeded out bad firms that were inefficient and 
which only survived because of high tariff walls.  Bigsten 
attributed Africa's poor economic performance to the high risk and 
high cost of investment in Africa.  Zimbabwe reacted negatively to 
this presentation stating that Bigsten's pro-liberalization focus 
and negative message about the investment environment in Africa were 
contradictory to the main points of the 2008 Africa report. 
Ambassador Arsne Balihuta (Uganda) focused his presentation on 
African regional integration as a source of economic growth. He 
recommended that small and medium-sized enterprises build upon local 
markets to become large businesses participating in regional markets 
and in the global value chain. Senegal supported this approach. 
 
¶8.  Ouane recommended that countries benefiting from high priced 
commodity exports use that surplus income to finance infrastructure 
to expand domestic and regional markets. Mexico, speaking on behalf 
of the Group of Latin American countries (GRULAC) suggested that the 
agricultural sector needs restructuring, in particular, increasing 
the production potentials and research and development in the 
fishing and horticultural sectors. 
 
-------------------------- 
Investment for Development; Transnational Corporations, 
Infrastructure and Development 
-------------------------- 
 
¶9.  UNCTAD SG Supachai introduced the 2008 World Investment Report 
and guest speakers made presentations on Infrastructure Development 
in Africa and Good Governance in Public-Private Partnerships. 
Global Foreign Direct Investment (FDI)flows rose for the 4th 
consecutive year by approximately 20%, with record FDI to LDCs.  The 
largest sources for developing nations investing outflows were Hong 
Kong, China and the Russian Federation.  Supachai highlighted the 
importance of work by the International Monetary Fund to draft 
guidelines to increase transparency and accountability for sovereign 
wealth funds, which now play an important role in overall FDI. 
 
¶10.  Thomas Scott, a panelist from the Development Bank of Southern 
Africa, encouraged transnational corporations to work in developing 
countries through public-private partnerships, which allow increased 
access to capital and more certainty of project outcome. Such 
public-private partnerships also encourage technological innovation 
and a transfer of risk from the government.   Geoffrey Hamilton from 
the United Nations Economic Commission for Europe (UNECE) stated 
that the key challenges of public-private partnerships are: projects 
 
may be cancelled for a variety of reasons, project administrators 
may have conflicts of interest, LDCs do not attract a lot of 
investment for infrastructure as returns on investments are not 
assured, local markets are small and there is competition with other 
regions.  Public-private partnerships must be mindful of training 
government staff to support growing industries and related 
regulations, defining the public interest and attempting to achieve 
social and environmental improvements for the nation. 
 
----------------------- 
Report on UNCTAD's Assistance to the Palestinian People 
----------------------- 
 
¶11.  Under the annual Palestine agenda item mandated for inclusion 
in the TDB by the General Assembly, 19 national delegates made 
interventions that attributed economic hardships in Palestine to the 
Israeli occupation of Palestinian territories.  Zimbabwe on behalf 
of the Group of 77 and China stated that Israeli taxation of 
Palestine removes necessary revenue for the local economy and makes 
it hard for local officials to fund policy and development projects. 
 Speakers opined that economic progress can be achieved within 
Palestine by increasing ODA to Palestine and implementing 
recommendations in the UNCTAD Report.  The EU expressed support for 
the UNCTAD technical assistance program. Israel made a short 
statement expressing support for UNCTAD's work and a desire that 
UNCTAD's technical assistance (TA) program in Palestine be treated 
like other UNCTAD TA programs and not be singled out for politicized 
treatment.  Israel suggested that UNCTAD identify research and 
innovation opportunities, emphasize the positives of private sector 
investment, and investigate how Israeli technology can be utilized 
through information sharing to aid capacity building in Palestine. 
The US did not intervene under this agenda item since the report was 
anodyne and Israel had requested that the US not bother to 
intervene, since Israel hoped to shorten the discussion. While an 
entire afternoon session (three hours) was allocated to the 
Palestine agenda item, the discussion lasted only just over an hour, 
making the Israeli approach largely successful. 
 
 
----------------------- 
Negotiated Outcomes 
------------------------ 
 
¶12.  Only two agenda items at the fall TDB result in negotiated 
outcomes, the LDC report and the Africa Report.  Both negotiations 
were straight forward.  The Africans pushed unsuccessfully for more 
aid and a statement that free markets and trade liberalization has 
not lived up to expectations.  The LDC group also invited more aid 
and with the prompting and support of the US and EU, succeeded in 
calling for a reallocation of UNCTAD's regular budget to pay for 
production of the LDC flagship report.  This budget reallocation was 
opposed by the UNCTAD Secretariat, which has used regular budget 
funds to support projects in other divisions and let the LDC and 
Africa Division rely on voluntary funding. These negotiations 
highlighted the weak position of the LDCs within the G-77, since 
only after much cajoling by the US did the LDCs agree to speak up 
and demand their publication be funded. 
 
---------- 
Comment 
---------- 
 
¶13.  This was the first post Accra meeting of UNCTAD's governing 
body, the TDB. Despite high hopes that the TDB would be more 
interactive and less reliant on presentations by panelists; many 
reports were released too late for nations to prepare interventions 
so the dialogue was limited.  End Comment. 
 
TICHENOR