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UNCLAS GENEVA 000984 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD UNCTAD
SUBJECT:  UNCTAD - Trade and Development Board, 55th Session, 
September 15-26, 2008, Geneva Switzerland 
¶1. 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 investments need 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 Program 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 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, by 
increasing the production potentials and by 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 percent, with record FDI to 
LDCs. The largest sources of outward FDI among developing nations 
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: 
conflicts of interest among project administrators; insufficient 
returns on investments in infrastructure; and for LDC's, in 
particular, competition with other regions with larger markets and 
higher potential returns on investment. Hamilton emphasized that 
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 from the local economy and makes 
it hard for local officials to fund 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 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.  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 Outco 
BUSTED