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UNCLAS GENEVA 001048 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR DEPT for IO/GS, IO/HS, IO/MPR, EEB/OIA, EEB/ODF, EEB/MTA, 
OES/EGC, OES/ENV, AF/EPS 
 
E.O. 12958: N/A 
TAGS: UNCTAD ECON ETRD XA EAID
SUBJECT:  UNCTAD - Trade and Development Board, 56th Session, 
September 14-25, 2009, Geneva: Financial Crisis, Climate Change, and 
African Integration 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1.  (U) Summary.  The United Nations Conference on Trade and 
Development (UNCTAD) held the 56th Session of its Trade and 
Development Board (TDB), UNCTAD's governing body, in Geneva from 
September 14-25, 2009. The meeting focused on LDC's, African 
economic integration, and the impact of the financial crisis and 
climate change on development.  There was consensus that donor 
countries must maintain aid levels in spite of the financial crisis 
and that all countries must avoid protectionist trade measures. 
Delegates discussed the expanded role of governments in economies in 
response to the financial crisis. Developing countries repeatedly 
stated that they are not responsible for climate change, yet must 
suffer the consequences and need more aid to mitigate its effects. 
 
¶2. (U) A heated debate concerning UNCTAD's work in the Palestinian 
territory was the most unproductive session.  Other contentious 
issues included the role of UNCTAD's Working Party and approval of 
UNCTAD's new publications policy and communications strategy. 
Nevertheless, the U.S. achieved all its objectives in the meeting. 
Results of the Trade and Development Board's High-Level segment is 
reported septel.  Please see www.unctad.org for a complete listing 
of agreed conclusions. 
END SUMMARY. 
 
 
----------------------- 
Review of Progress in the Implementation of the Program for Action 
for the Least Developed Countries (LDCs) for the Decade 2001-2010. 
----------------------- 
 
¶3.  (U) There was consensus that the Doha Development Round should 
conclude as soon as possible, that LDC's have been hit especially 
hard from the economic crisis, that regional cooperation and 
integration can aid the recovery, and that there is a new paradigm 
in development that involves more state intervention in the 
economy. 
 
¶4.  (U) The G77 and China called for debt cancellation, increased 
"policy space," technology transfer, especially for climate change 
mitigation and agriculture, and greater South-South cooperation. 
Delegates focused on paragraph 41 of the Accra Accord, which calls 
for UNCTAD to increase its work within Africa and the LDCs. Several 
developing countries called for an independent evaluation of 
UNCTAD's implementation of paragraph 41. Group B (developed 
countries) opposed this proposal on the grounds that it would be too 
costly to undertake such a broad evaluation. 
 
¶5.  (U) Kandeh Yumkella, Director-General of UNIDO (UN Industrial 
Development Organization) made an impassioned and well-received 
speech on development prospects for LDC's. His four points were: 1) 
Diversification challenges: countries cannot succeed by only 
exporting primary commodities; 2) New Green Growth: Green 
enterprises offer potential for diversification and growth; 3) 
Policy Space is necessary for rapid growth as shown by India and 
China whose pragmatic strategies, including the understanding that 
you cannot fight poverty without creating wealth, are successful 
models for the developing world 4) Carbon-tax/Green protectionism: 
developed countries must not use clean energy goals to create new 
trade barriers. 
 
¶6. (U) Terry McKinley, Professor at School of Oriental and African 
Studies at Oxford, discussed his "Development-oriented Macroeconomic 
Agenda," which makes the following recommendation: LDCs need to: 
hold the line on reducing tariffs, tax more, reduce capital 
outflows; improve market incentives [guarantee loans], and link 
formal institutions to the informal sector. He proclaimed the 
Washington consensus wrong and called for government-driven economic 
 
 
growth. 
 
¶7. (U) There was a long debate over resources in coming to the 
agreed conclusions on LDC's. The agreed conclusions request UNCTAD 
to review the human resources of the LDC division and report back to 
the TDB, thus delaying a decision as to whether to increase the 
division's budget. The agreed conclusions also require that a 
section of each UNCTAD flagship publication be devoted to LDCs. The 
U.S. added to the agreed conclusions, the words "within existing 
resources" to ensure that any increase in resources for the LDC 
division is done by reallocating resources from another UNCTAD 
division to the LDC division, and not by an overall budget increase. 
 
 
----------------------- 
Economic Development in Africa: Strengthening regional economic 
integration for Africa's development 
----------------------- 
 
¶8. (U) UNCTAD Secretary General Supachai expressed concern about 
increasing poverty in Africa. According to Supachai, 2009 saw the 
first decline in African GDP per capita since 1994. Three quarters 
of the countries in Sub-Saharan Africa will experience a rise in 
poverty. Supachai tasked UNCTAD with strengthening African 
integration through work on diversification, structural change, and 
economies of scale. Transportation, both the physical barrier of no 
infrastructure and the very difficult border crossings because of 
tariffs, are major concerns in Africa that were highlighted by many 
of the speakers. 
 
¶9. (U) The focus of UNCTAD's report (Economic Development in Africa: 
Strengthening regional economic integration for Africa's 
development) and that of most speakers, was the importance of 
regional integration and how best to achieve it. The EU and ASEAN's 
experience were presented as models. There was major concern 
expressed over the state of infrastructure within Africa. The roads 
are abysmal, the infrastructure deficit is at USD 80 billion/yr and 
there are 54,000km of missing road links. There are also major 
concerns about the airline industry and barriers to easily flying 
within Africa. There were repeated calls for "Open Skies." 
 
¶10. (U) Habib Ouanne, Director, UNCTAD Division for Africa, LDC and 
Special Programmes, discussed the challenges facing African 
integration:  integration has been poorly implemented [ex. travel in 
Central Africa], weak infrastructure, increased trading costs, lack 
of diversification. He pointed out that Asia, Latin America, and the 
Middle East are all investing in Africa, which is compensating for 
reduced investment from the U.S. and Europe. Intra-African 
investment is also on the rise. 
 
¶11. (U) Many delegates spoke on inefficiencies in regional 
cooperation and the overlapping mandates and memberships of the 
regional organizations. Speakers called for merging of groups and 
trying to come up with a more unified, less convoluted system of 
regional membership. Many delegates opined that the MDG's could not 
be achieved by 2015. 
 
¶12. (U) The changing development paradigm, where developing 
countries support each other's development, was frequently 
mentioned. In 2007, China invested more in Africa than the World 
Bank. South-South cooperation was trumpeted, while International 
Financial Institutions were targeting as untrustworthy and working 
against Africa. Panelists and developing country delegates 
pronounced the "Washington Consensus" dead and doubted if 
liberalization has brought about improved living standards. 
 
¶13. (U) Economic Partnership Agreements (EPA's), which are 
reciprocal trade partnerships that will take the place of European 
 
 
Union trade preferences to Africa, were hotly debated. Ademola 
Oyejide, Professor at the University of Ibadan, Nigeria, said that 
EPAs will strengthen African unity because African nations will 
negotiate as a group with the Europeans. He supported those 
negotiations, but cautioned that they are imposing strains on 
regional integration since they divert attention from regional trade 
to Africa/Europe trade. The EPA negotiations are heightening 
antagonisms between LDCs and non-LDCs within Africa, and the EPA's 
themselves will create a hub-and-spoke system with most trade still 
going outside the continent. 
 
¶14. (U) Peter Thompson, Director of EPAs for the European 
Commission, argued that they will strengthen regional institutions, 
develop regionally integrated markets, create business 
opportunities, connect infrastructure, and lead to sustainable 
development. Thompson claimed that the former unilateral trade 
preference system has not worked [net export decrease, no 
diversification] and that a new, reciprocal trade partnership, as 
envisioned by the EPA's was needed. 
 
----------------------- 
Evolution of the international trading system and of international 
trade from a development perspective: Impact of the crisis 
----------------------- 
 
¶15. (U) The panel of experts agreed that the current global 
financial crisis was caused by factors within developed countries, 
yet it affected all countries and caused severe social and economic 
concerns in developing countries. The financial crisis has caused an 
increase in extreme poverty and rendered the achievement of the 
Millennium Development Goals by 2015 practically impossible. 
 
¶16. (U) Developing countries want global solutions, including a 
stronger partnership among the different international 
organizations. A common wish from developing countries was to 
replace the G20 with a so-called "G192," which would come up with 
truly global solutions. 
 
----------------------- 
Development strategies in a globalized world: Meeting the 
development challenge of climate change 
----------------------- 
 
¶17. (U) Panelists and developing countries had three major concerns 
concerning climate change: 1) the countries that are not responsible 
are being forced to shoulder disproportional effects; 2) the need 
for intellectual property leeway in terms of mitigation technology; 
and 3) the possible creation of new, unwanted, trade barriers. 
 
¶18. (U) Developing countries also expressed hope about: 1) green 
jobs and the ability to play a role in the global energy 
infrastructure through new renewable sources; 2) UNCTAD's 
contribution in pushing this issue and working towards structural 
change to facilitate new green industry; and 3) climate change 
negotiations to be held in Copenhagen and the possibility of more 
ambitious targets. 
 
 
----------------------- 
Report on UNCTAD assistance to the Palestinian people 
----------------------- 
 
¶19. (U) The discussion was more about the political situation in the 
Palestinian territory than a technical discussion of UNCTAD's work. 
Several delegations made statements calling for a Palestinian state, 
with East Jerusalem as its capital, and the freezing of settlements. 
 At the same time, delegations took the opportunity to attack 
Israel. H.E. Bassim Khoury, Minister of National Economy, 
 
 
Palestinian Authority, outlined how Israel is stifling the 
Palestinian economy by not allowing trade with other states and 
imposing many barriers to free movement of people and goods. He 
claimed that recent economic growth in the West Bank had nothing to 
do with Israeli softening of restrictions. Several Middle Eastern 
and North African countries called for Palestinian accession to the 
WTO. 
 
¶20. (U) The Israeli delegation responded by asking delegations not 
to politicize UNCTAD's work, which Israel finds very productive. 
Israel expressed concern that the UNCTAD report conveyed only the 
Palestinian perspective. Israel issued its own report describing 
Israel's efforts to support the Palestinian economy. 
 
¶21. (U) In its statement, the United States statement attempted to 
refocus discussion on technical assistance.  Both Minister Khoury 
and the Israeli delegation thanked the U.S. constructive approach. 
Following the session, Minister Khoury appealed for U.S. support for 
Palestinian WTO accession. 
 
 
----------------------- 
Hearing with Civil Society 
----------------------- 
 
¶22. (U) UNCTAD's annual half day meeting with civil society focused 
on the international financial crisis. Pedro Paez, Minister for 
Economic Policy Coordination of Ecuador and Coordinator of the Bank 
of the South, stressed that financial decisions should be made by a 
universal body, the G-192, and not smaller groupings. He theorized 
that the economic crisis is not over, but rather has entered a new 
destructive phase. Paez attacked "the North's use of printing 
machines to fix the crisis," and said such inflationary actions by 
the North would force the global south to follow suit. He called on 
the USG to give up its Special Drawing Rights allotment and allow 
the UN to redistribute them. Robert Bissio, executive director of 
the Third World Institute and coordinator of Social Watch, echoed 
many of the same ideas, and called for establishment of a "Global 
Financial Coordinating Council," which would coordinate a new global 
financial system, and reform of the Bretton Woods system. Many other 
members of Civil Society spoke and joined the chorus favoring global 
monetary reform and less reliance on the US Dollar. 
 
¶23. (U) Panelists representing civil society agreed that LDC's have 
no responsibility for climate change, yet are hurt most by it. 
Panelists called for: a debt moratorium, grants over loans, and 
SDR's being distributed based on need, not quota. They expressed 
general concern and animosity towards International Financial 
Institutions. 
 
----------------------- 
Publications policy and communications strategy 
----------------------- 
 
¶24.  (SBU) For the first time ever UNCTAD has a communications 
strategy and operational publications policy.  The U.S. succeeded in 
creating a mandate for UNCTAD's communication strategy and 
publication policy in the Accra Accord (para 187) and succeed at 
this TDB in realizing the full and effective operationalization of 
that paragraph.  This was difficult since developing countries were 
content with the status quo and suspicious that any changes to 
UNCTAD's publications processes or efforts to codify a 
communications strategy might be a backhanded way to reduce UNCTAD's 
resources, divert resources from G-77 priorities or censure UNCTAD's 
free expression.  Staff in the UNCTAD Secretariat were also 
concerned about greater intrusion by member states in their work, 
where previously there was no member state guidance and hence no 
accountability. 
 
 
 
¶25. (SBU) The communications strategy aims to make UNCTAD's work 
more accessible, demand-driven and cost-effective by targeting 
defined audiences, requiring publications proposals to include a 
distribution and promotion strategy, and requiring member states to 
agree on priorities for the annual communications strategy. The 
strategy will allow cost savings through greater use of digital 
technologies.  It marks an enormous step forward for the UNCTAD 
Secretariat in terms of prioritizing its work, institutionalizing a 
more responsive relationship with member states and creating a 
process that will lead to greater accountability. 
 
----------------------- 
Reports of the Working Party on the Strategic Framework and the 
Programme Budget 
----------------------- 
 
¶26. (SBU) This was the most contentious agenda item at the Board. 
The Board typically just rubber stamps Working Party conclusions, 
but this time Canada with full U.S. support, blocked their approval. 
Canada and the US were concerned that in one of its conclusions the 
UNCTAD Working Party had addressed itself to the UN General 
Assembly, seeking additional resources for a division within UNCTAD. 
 While the US and Canada agreed that the division in question, the 
LDC and African division, needed more resources, we could not accept 
that the Working Party would request those from the overall UN 
budget rather than through recommending a reallocation of existing 
UNCTAD resources.  When developing country delegates tried to repeat 
the contentious language in another context, we realized that if 
agreed the language could become a terrible precedent.  Around 
midnight, on the final day of the TDB, the session was suspended due 
to our unwillingness to approve the Working Party's agreed 
conclusions in their entirety. 
 
¶27. (SBU) The US agreed to informal consultations and a resumed 
session on the condition that the Communications and Publications 
strategy would be addressed prior to the Working Party budget issue, 
which was a G-77 priority.  While the G77 and China were unwilling 
to amend the Working Party's agreed conclusions, the US and Canada 
succeeded in neutralizing them through a clarification in the TDB's 
decision that approved the conclusions. 
 
---------- 
COMMENT 
---------- 
 
¶28.  (SBU) Opening up the Working Party's agreed conclusions at the 
TDB created a furor within the G77 and China, but demonstrated that 
the Working Party's conclusions are not valid until approved by the 
TDB. The United States will no longer be a member of the UNCTAD 
Working Party in 2010, so it was extremely beneficial to assert the 
TDB's role since that will be the only forum we have to block 
unhelpful language agreed in the Working Party. 
 
¶29.  (SBU) Along with asserting the authority of the TDB over the 
Working Party, the US succeeded in starting a process to more 
clearly define the role of the Working Party and its oversight 
responsibilities with regards to UNCTAD's budget and strategic 
framework.  The TDB's decision clarifies that the Working Party 
reports to the TDB, that the Working Party has no direct 
relationship with bodies in NY, and that Working Party conclusions 
have no status unless they are approved by the TDB. The decision 
also revamps the calendar of meetings for the Working Party so that 
the schedule of meetings will allow the Working Party to submit its 
conclusions for consideration to the TDB and that decisions approved 
by the TDB will be submitted to the UNCTAD Secretary General who 
will reflect them in his budget proposals to the UN Secretary 
General prior to his submitting any proposals to the UN SG.  This 
 
 
should mean that for the 2012-2013 biennial budget, for first time 
the UNCTAD Secretary General's submission to the UN SG will be 
informed by and reflect member states priorities, not just 
Secretariat staff preferences. 
 
¶30.  (SBU) Another success for the US was that the TDB's decision 
approving UNCTAD's communication strategy and publication policy 
also calls on the UNCTAD secretariat to implement recommendations 
contained in members' statements.  The US statement, annexed below, 
has many recommendations that we should press UNCTAD to pursue and 
implement, including a proposal that "UNCTAD should establish a 
member state portal on the UNCTAD website where member states can 
access information about UNCTAD staff travel plans, so that Geneva 
delegates can facilitate meetings between UNCTAD staff and 
interested government officials."  Mission notes that along this 
could also go a long way towards improving transparency and 
accountability for UN travel expenditures. 
 
---------- 
Annex 1: Statement by the United States on 
UNCTAD Communication and Publication Policy 
September 23, 2009 
---------- 
 
¶31. (U) It is my pleasure to welcome UNCTAD's communication strategy 
and publications policy. We asked in Accra that UNCTAD produce such 
documents and are delighted to see that UNCTAD has delivered.  These 
are exciting and important first steps towards improving UNCTAD's 
outreach and its impact helping developing countries successfully 
integrate into the world economy. 
 
¶32. (U) We believe that effective communication is essential to 
UNCTAD's work and relevance. UNCTAD's communications strategy 
targets the right audiences and proposes effective tools to reach 
those audiences.  We congratulate UNCTAD staff on their work and 
encourage the Secretariat to maintain the momentum. 
 
¶33. (U) UNCTAD should now devise a concrete plan for implementation 
of the communications strategy and publication policy, including 
deadlines for recommended actions, budgets for necessary 
technological upgrades, equipment, training and outreach events, and 
benchmarks to measure effectiveness of all work and expenditures. 
And I was delighted to hear in Deputy Secretary General Draganov's 
presentation that is UNCTAD's plan. We recognize that important 
improvements in UNCTAD's communications have already been made and 
ask that those, and more improvements, continue.  We ask that UNCTAD 
provide its detailed plan for implementation of the communications 
strategy and publications policy, including any budget implications, 
to the next Working Party.  We believe that UNCTAD should implement 
its communications strategy within existing resources, and that 
dedicated resources should be allocated to communications for this 
purpose. 
 
¶34. (U) While we endorse the communications strategy, we also will 
take this opportunity to recommend additional concrete improvements. 
First, we believe UNCTAD could do more to mobilize Geneva delegates 
as partners in UNCTAD's communications efforts.  To that end, UNCTAD 
should establish a member state portal on the UNCTAD website where 
member states can access information about UNCTAD staff travel 
plans, so that Geneva delegates can facilitate meetings between 
UNCTAD staff and interested government officials.  The member state 
portal should also include lists of who has registered for which 
meetings, so Geneva delegates stay informed as to which experts from 
their countries are attending UNCTAD meetings. 
 
¶35. (U) Second, to fully implement the communications strategy and 
keep it alive and updated, we ask whether UNCTAD has sufficient 
staff and resources.  Does UNCTAD have enough staff with specialized 
 
 
skills, such as web design and e-tools expertise? Does UNCTAD have a 
sufficient number of excellent writers to produce web content 
quickly in multiple languages?  If not, what are UNCTAD's plans and 
budget for implementing the strategy and hiring such necessary staff 
or retraining existing staff to meet those needs? 
 
¶36. (U) Third, the UNCTAD website is currently very difficult to 
navigate and contains multiple subsidiary websites that are not 
linked or accessible via the current weak search engine.  What are 
UNCTAD's plans to upgrade its search engine and website?  As part of 
the upgrade to UNCTAD's website, we encourage UNCTAD to add an 
interactive map that links country specific technical assistance and 
research to the map, to make registrations for all its meetings 
available on-line, and to install counters so UNCTAD knows how many 
people are downloading its material and from which locations.  This 
information can help UNCTAD to better understand its users and 
tailor its products to meet their needs. 
 
¶37. (U) Finally, we encourage UNCTAD to continue work to define its 
corporate image and message.  In the Accra Accord UNCTAD has a 
wonderful, clear mandate.  Per paragraph 171 UNCTAD's purpose is to 
help developing countries integrate successfully into the global 
economy.  Per paragraph 173 UNCTAD should mainstream 3 issues into 
all its work: gender equality and the empowerment of women, the 
promotion of sustainable development, and full and productive 
employment.  Per paragraph 171 and paragraph 8 of the Accra Accord, 
UNCTAD does 3 types of work:  research and analysis, convening of 
meetings and technical assistance, and UNCTAD serves as the focal 
point for the UN system for the integrated treatment of trade and 
development. The mission is clear.  The issues to mainstream are 
clear and the modes of work are defined. 
 
¶38. (U) Unfortunately, this clarity gets lost in UNCTAD's 17 
thematic funds for technical assistance, 100 plus publications and 
myriad of Powerpoint presentations that never seem to have a common 
look.  We encourage UNCTAD to continue to cull its publications, and 
to continue to improve its clearance process and peer review, so 
more energy gets focused on fewer high quality publications. We 
encourage UNCTAD to consider consolidating its 10 thematic trust 
funds that each accounted for less than 3 percent of 2008 technical 
assistance expenditures into one fund for pilot projects.  Finally 
we encourage the Secretariat to develop a set of templates for 
UNCTAD products and presentations and to enforce their use, so that 
the Secretariat presents a consistent corporate image. In 
communications, less is often more. 
 
---------- 
Annex 2: Statement of the United States on UNCTAD Technical 
Assistance to the Palestinian People September 22, 2009 
---------- 
 
¶39. (U) The United States appreciates the work of UNCTAD's 
Secretariat for the program of assistance to the Palestinian people 
and its support of the Palestinian people. The United States 
continues to support the Palestinian Authority and its efforts to 
improve the livelihoods of all Palestinians in the West Bank and 
Gaza.  The Palestinian Authority deserves great credit for its 
efforts over the past two plus years. A program of reform and a 
strategy for development first laid out by Prime Minister Fayyad in 
2007 is producing results.  The IMF is now forecasting significant 
growth in the West Bank economy in 2009. The Palestinian Authority's 
program of reform, support from donors, and Israel's easing of 
internal movement and access restrictions in the West Bank have 
contributed to these positive indicators.  We agree that more 
progress is needed to maintain this momentum and create the 
conditions for sustainable economic growth. 
 
¶40. (U) We thank UNCTAD for its efforts to support Palestinian 
 
 
reform and development efforts by providing technical assistance and 
trade facilitation in the region, and we encourage UNCTAD to 
continue its efforts.  We are particularly impressed by the 
implementation of the Automated System for Customs Data (ASYCUDA) 
which will modernize the Palestinian customs process and aid in 
enhancing needed customs revenue collection. While we note UNCTAD's 
investment of resources over the past few years, we understand that 
this figure will diminish and express concern.  We hope to see 
UNCTAD able to invest additional resources in the West Bank and Gaza 
in the near future to support the vital work being done in the 
region. 
 
¶41. (U) Now I would like to take this opportunity to ask UNCTAD 
which of its technical assistance programs it considers most 
effective in assisting the Palestinian people.  We would like to use 
this meeting to learn about specific UNCTAD technical assistance 
efforts and how they can be enhanced.  We look forward to hearing 
from UNCTAD in this regard. 
 
GRIFFITHS#