| The NGLS handbook of UN Agencies, Programmes and Funds Working for |
|United nations conference on trade and development (UNCTAD)|
A. The Institution
UNCTAD discharges its mandate through policy analysis; intergovernmental deliberations, consensus building and negotiation; monitoring, implementation and follow-up; and technical cooperation. These functions are interrelated and call for constant cross-fertilization between the relevant activities. UNCTAD members aim to achieve sustained growth in all countries and lo accelerate the development of developing countries, so that all people can enjoy economic and social well-being.
UNCTAD is composed of 188 Member States. Many intergovernmental and nongovernmental organizations participate in its work as observers. UNCTAD also collaborates with the private sector and the business community in a variety of ways. The UNCTAD secretariat forms part of the united Nations secretariat. with a staff of about 450. Located in Geneva, it is headed by a Secretary-General, currently Mr. Rubens Ricupero (Brazil). UNCTAD's annual operational budget is approximately US$55 million, which is drawn from the United Nations regular budget. Technical cooperation activities, which have developed as a result of UNCTAD's sectoral expertise and financed from extrabudgetary resources, amount to approximately US$22 million a year.
The conference is the organization's highest policy-making body. It normally meets every four years at ministerial level to formulate major policy guidelines and decide on the programme of work.
Since 1964, nine conferences have taken place: 1964 (Geneva); 1968 (New Delhi, India); 1972 (Santiago, Chile); 1976 (Nairobi, Kenya); 1979) (Manila, Philippines); 1983 (Belgrade, Yugoslavia); 1987 (Geneva); 1992 (Cartagena de Indias, Colombia); and 1996 (Midrand, South Africa).
B. Main Issues
The most recent session of the conference, UNCTAD IX, held in Midrand (South Africa) from 27 April-l l May 1996, reaffirmed UNCTAD's role as the focal point within the United Nations for the integrated treatment of development and interrelated issues in the areas of trade, finance. technology, investment, and sustainable development.
Member States, recognizing UNCTAD's clear comparative advantage in tackling trade-related development issues, agreed that UNCTAD should continue to facilitate the integration of developing countries and countries in transition into the international trading system in a complementary manner with the World Trade Organization (WTO). They also agreed that UNCTAD should continue to promote development through trade and investment in cooperation and coordination with the International Trade Centre UNCTAD/WTO, relevant institutions of the United Nations system and other international organizations. UNCTAD's work should be geared to the special needs of developing countries, particularly the least developed countries (LDCs), focus on development issues, be action-oriented, and provide guidance on national policies and an enabling environment conducive to trade and development.
UNCTAD provides a forum for discussions aimed at considering development strategies and policies in a globalized world economy. In this respect, special attention is given to analyzing and exchanging successful developmental experiences and drawing lessons from them. In its analytical and deliberative work, UNCTAD focuses on the following areas:
• globalization and development;
• international trade in goods, services, and commodity issues;
• investment, enterprise development and technology; and
• services infrastructure for development and trade efficiency.
C. Intergovernmental Structure
UNCTAD IX agreed on the following institutional implications, which reflect new priorities, more focused activities and continued efforts to increase effectiveness and better coordination and cooperation with relevant international organizations in order to strengthen complementarities.
The intergovernmental machinery has been tightly structured to reduce the number of meetings, encompass all important areas of the work programme, and concentrate on programmes of interest and practical value to developing countries, in particular the LDCs. Cross-sectoral issues such as the problems of the LDCs, poverty alleviation, economic cooperation among developing countries, sustainable development and the empowerment of women have been integrated into the work of the organization.
The Trade and Development Board (TDB) is the executive body of UNCTAD It is responsible for ensuring the overall consistency of UNCTAD's activities with agreed priorities. It also ensures that the activities of its subsidiary bodies are in conformity with their mandates and are carefully coordinated with other relevant international organizations. In executing its mandated functions, the TDB meets in regular or executive sessions. The regular session of the board takes place in the autumn for approximately ten working days. At this session, a segment is included to deal with a substantive policy item to attract high-level participation. Personalities from the public, private/business and academic sectors in areas related to UNCTAD's work are invited to attend. The board deals with interdependence and global economic issues from a trade and development perspective, and reviews progress in the implementation of the Programme of Action for the LDCs for the 1990s and the United Nations New Agenda for the Development of Africa in the 1990s, with policy lessons drawn from successful development experiences.
The board may meet in executive session, three times throughout the year with six weeks' prior notice, to deal with policy, management and institutional matters, as well as with urgent matters that cannot be deferred to the regular session. Executive sessions are normally confined to one day in duration.
Three Commissions of the Board were established by UNCTAD IX to perform integrated policy work in their respective areas of competence:
1. Commission on Trade in Goods and Services. and Commodities;
2. Commission on Investment, Technology and Related Financial Issues; and
3. Commission on Enterprise, Business Facilitation and Development.
The commissions meet once a year, unless otherwise decided by the board. for a duration of five days.
In order to benefit from a higher level of technical expertise, each commission may convene expert meetings of short duration, which do not exceed three days. The total number of expert meetings shall not exceed ten per year.
All UNCTAD Member States are eligible to participate in the work of these bodies. External actors such as the private sector, the business community, trade unions, the academic community and non-governmental organizations, as well as other international bodies are closely associated with UNCTAD's work.
In order to enhance the participation of civil society and to build a lasting relationship for development between non-governmental actors and UNCTAD, UNCTAD IX requested the Secretary-General of UNCTAD to pursue consultations with these actors and to report with recommendations to the board.
Work Programme of the Commissions
1. Commission on Trade in Goods and Services. and Commodities
Globalization and liberalization have increased the potential for international trade to become an engine of growth and development and a mechanism for integrating countries into the global economy. However, not all countries are in a position to seize these new opportunities, and there is a risk that a number of countries. particularly least developed ones, will become marginalized further.
The International Trading System
The commission examines how to maximize the positive impact of globalization and liberalization on sustainable development by assisting in the effective integration of developing countries and countries in transition into the international trading system to promote their development.
The completion of the Uruguay Round has created a more secure trading environment. The challenges facing the weaker economies in this new context consist of implementing domestic policy reforms. identifying and exploiting trade opportunities created by the Uruguay Round, and pursuing polities that could enable them to derive maximum benefits from these opportunities. Through its analytical work, the commission helps developing countries and countries in transition in this regard. It supports developing countries' efforts to implement their new commitments and take full advantage of their rights, as well as improve transparency of their trade regimes and identify impediments to trade. The commission also provides a forum for examination of issues related to trade preferences and the future role of the generalized system of preferences (GSP) as an instrument for the expansion of trade.
The Agreement on Trade in Services (GATS) has opened possibilities for expanded trade in services. Developing countries face the challenge of strengthening their domestic services capabilities to derive full benefits from the implementation of the GATS. The lack of efficient and transparent trade-related services, such as customs, banking and insurance, transportation, telecommunications or business information, is a major impediment to the integration of weaker economies into international trade and poses a risk of exclusion. The commission is entrusted with recommending ways and means to reduce the problems faced by these countries in this area. Access to training, finance, marketing and information services can play a crucial role.
Trade, Environment and Development
An area of growing importance is that of integrating trade, environment and development. A concern here is that environmental policies and measures could be used for protectionist purposes. The commission examines trade and environment issues from a development perspective, particularly in the field of competitiveness, market access. eco-labelling, multilateral environmental agreements, positive measures (such as capacity building, improved access to finance, and access to and transfer of technology), and trade liberalization and sustainable development.
Developing countries that are heavily dependent on commodity exports face special challenges in promoting through trade their economic growth in the context of sustainable development. The commission addresses issues of relevance to commodity-dependent countries. It examines successful commodity diversification experiences, contributes to the transparency of commodity markets, and analyses trends in these markets. It promotes the management of commodity resources in the context of sustainable development and assists producers to make use of risk-limiting instruments.
2. Commission on Investment Technology and Related Financial Issues
Foreign direct investment (FDI) can play a key role in the economic growth and development process. FDI is now considered an instrument through which economies are being integrated at the level of production into the globalizing world economy by bringing a package of assets, including capital, technology, skills and access to foreign markets. Experience has shown that FDI is attracted by a variety of policies and conditions conducive to economic development. The commission provides a forum that helps to improve general understanding of trends and changes in FDI flows and related policies; the interrelationships between FDI, trade, technology and development; and issues related to transnational corporations.
It contributes to enhancing the capacity of developing countries and countries in transition to improve their overall investment climate, obtain relevant information, and formulate policies to attract and benefit from FDI.
The commission's analysis also encompasses the implications for development of issues relevant to a possible multilateral framework on investment. The interests of developing countries and the work already carried by other organizations will be taken into account.
It monitors the investment policy reviews carried out by UNCTAD with member countries that so desire. in order to provide information on the country's investment environment and policies. The commission examines issues related to competition law of particular relevance to development. It carries out analytical work on restrictive business practices. assists developing countries in formulating competition policies and legislation, and formulates technical cooperation activities in this field.
The commission also monitors the reviews on science, technology and innovation policy undertaken by the secretariat with interested countries in order to identify options for national action. It also identifies policies to favour technological capacity building, innovation and technology flows to developing countries.
3. Commission on Enterprise, Business Facilitation and Development
Enterprises are now widely recognized to be one of the main engines of growth and development. It is the economic unit that organizes production, creates employment, enhances skills, absorbs and promotes technological change and harnesses it for production, and invests for the future. In undertaking these functions, enterprises also contribute to broader social and economic objectives, such as reducing poverty and accelerating structural adjustment. Development policies need to be directed specifically at fostering viable and internationally competitive enterprises. including an entrepreneurial culture.
The commission assists interested developing countries with policyrelated issues and training activities concerning entrepreneurship development. It facilitates the exchange of experiences on the formulation and implementation of enterprise development strategies. including questions related to privatization, public sector/private sector cooperation and the special problems relating to enterprise development in countries in transition.
The commission also analyses the specific contribution that FDI can make to indigenous enterprise development and promotes ways to facilitate efficient domestic resource mobilization. It assists developing countries in generating trade-supporting services such as customs, transportation, banking and insurance, telecommunications or business information, with a particular focus on services addressing the needs of the informal, micro, small and medium-sized enterprise sectors. In this regard it takes particular account of the recommendations adopted by the united Nations International Symposium on Trade Efficiency ( 1994) and monitors the consolidation of the Trade Point Network by making Trade Points fully operational and by establishing new ones.
D. UNCTAD's Evolving Role
UNCTAD's role since 1964 has been a difficult one because agreements to introduce change in the prevailing order do not come about easily. There are no doubts, however, that the organization has helped to forge new perceptions, concepts, approaches and actions on issues of international economic cooperation.
UNCTAD's early years were marked by high rates of trade and economic growth (particularly in developed countries), worsening terms of trade for developing country commodity exports, and an increasing income gap between developing and developed countries. Recognition of these factors led to consensus on needs to increase financial flows to developing countries, strengthen and stabilize commodity markets, and support developing countries' participation in world trade. The specific actions agreed at UNCTAD I in 1964 reflected this consensus, as did those at UNCTAD II in 1968 and UNCTAD III in 1972.
The 1970s saw an erosion of the multilateral trading system and a slowdown in world economic growth, with adverse consequences for the trade and economic development of developing countries. Significant decisions were taken as a result of negotiations under UNCTAD auspices on commodity market stabilization (Integrated Programme for Commodities) and preferential treatment for the exports of developing countries (Generalized System of Preferences). The Group of 77 also pushed forward with the call for a New International Economic Order (NIEO), leading to tensions among Member States using UNCTAD as a forum for negotiations. The situation worsened through the 1980s, which came to be known as the Lost Decade for Development. One result in the mid-1980s was that dialogue and negotiations between developed and developing countries became deadlocked in most forums. A perceptible loss of confidence occurred in UNCTAD's role as a facilitator of consensus and a conciliator of divergent views. Multilateral methods of dealing with international trade and development problems were eroded, and several countries began to prefer bilateral approaches.
But the momentous changes that took place in the world in the 1980s forced a reassessment of international economic cooperation. A fresh consensus emerged in the early 1990s on the need for new actions to support the international trade and economic development of developing countries. This consensus took shape at UNCTAD VIII in 1992, which was held against a background of dramatic political and economic changes in the world. Also, the concept of development had evolved considerably. From a narrow focus on economic growth and capital accumulation, development came to be understood widely as a multidimensional undertaking and a people-centred process in which the ultimate goal of economic and social policies is to improve conditions for individuals. Consensus emerged on the urgency of making the international trading and financial systems more responsive to the needs of economic growth and development. Emphasis was placed on economic interdependence and the shared responsibility of all countries to take supportive action. Greater recognition was given to the needs for improved policy coordination, the importance of inter-linkages between the external environment and domestic policies. and the contribution of the public and private sectors.
Seizing these trends towards a development consensus for the 1990s, UNCTAD VIII became a fuming point in cooperation for development and UNCTAD was revitalized as an institution. The conference took a giant step toward laying to rest the reciprocal misgivings of developed and developing countries, which had caused deadlock in the economic cooperation dialogue during the 1980s. The Cartagena Commitment adopted at UNCTAD VIII pledged a New Partnership for Development. It gave priority to development as a means of securing economic, social and human security but also affirmed UNCTAD as the focal point for facilitating and implementing the new development consensus. UNCTAD VIII undertook far-reaching reforms of UNCTAD's intergovernmental machinery and methods of work. It established four Standing Commissions with a life-span of four years to deal with topics of a broad policy nature: Commodities; Poverty Alleviation; Economic Cooperation Among Developing Countries; and Developing Services Sectors. It also established four Ad-Hoc Working Groups with a life-span of two years to deal with questions of a more technical nature. The board, which decided to abolish the Ad Hoc Working Groups after they successfully completed their programme of work, created three new ones: Trade, Environment and Development; the Role of Enterprises in Development; and Trading Opportunities in the New International Trading Context. These three Ad Hoc Working Groups and the tour Standing Commissions successfully completed their work in 1996 leading the way to preparation for UNCTAD IX.
In May 1993, the United Nations General Assembly assigned to the UNCTAD secretariat responsibility for the substantive servicing of two subsidiary bodies of the Economic and Social Council (ECOSOC):
• The Commission on Transnational Corporations is the focal point within the United Nations system on foreign direct investment and translational corporations. At its 49th session the General Assembly endorsed ECOSOC's recommendation that the commission become a commission of the board under the new title of Commission on International Investment and Transnational Corporations.
• The Intergovernmental Group of Experts on International Standards of Accounting and Reporting, a subsidiary body of the Commission on Transnational Corporations, was established in 1982 to review developments in accounting and reporting, including the work of standard-setting bodies. Its main objective is to improve the availability and comparability of information disclosed by transnational corporations. The mandate of this expert group was confirmed by UNCTAD IX.
• The Commission on Science and Technology for Development is the focal point within the UN system on issues related to science and technology for development. The commission, which meets every two years. focuses on the following themes: technology for small-scale economic activities to address the basic needs of lowincome countries; gender implications of science and technology for developing countries; science and technology and the environment; the contribution of technologies, including new and emerging ones, to industrialization in developing countries; and information technologies and their role in the field of science and technology, particularly in relation to the needs of developing countries. UNCTAD IX invited the General Assembly and ECOSOC to consider the relationship between the Commission on Science and Technology for Development and UNCTAD, taking into account the particular responsibilities of UNCTAD in this field, including its programme of work.
E. Main Achievements
Intergovernmental activities under the auspices of UNCTAD have resulted in a number of international commodity agreements, or commodity study groups involving producing and consuming countries:
• the adoption of the generalized system of preferences (GSP), involving tariff concessions granted by the developed countries to the developing ones (1971);
• a resolution on retroactive adjustment of terms of the official devel opment assistance debt of low-income developing countries (1978);
• guidelines for international action in the area of debt rescheduling (1980);
• a set of principles and rules for the control of restrictive business practices (1980), which is the only universally-applicable international instrument on competition policy;
• the establishment of the Common Fund for Commodities, which is intended to facilitate the financing of commodity agreements and support research and development activities for individual commodities (1989);
• the Agreement on the Global System of Trade Preferences (GSTP) among developing countries (1989);
• conventions in the area of maritime transport, such as participation in liner shipping conferences (1974), the multimodal transport of goods (1980), conditions for the registration of ships (1986), and the Convention on Maritime Liens and Mortgages (1993); and
• the Global Trade Point Network (GTPN), launched in 1994 as a result of the United Nations International Symposium on Trade Efficiency.
UNCTAD has played a leading role in mobilizing support for the least developed countries by providing the organizational framework and substantive support for two United Nations conferences on the least developed countries. The first of these conferences (Paris, 1981) adopted the Substantial New Programme of Action for the 1980s for the Least Developed Countries (SNPA), which defined the measures to be taken by these countries to promote their own development together with international support. The second conference (Paris, 1990) reviewed the implementation of the SNPA and adopted a strengthened programme of action, which the LDCs and their developed partners have undertaken to implement throughout the 1990s. A
Mid-Term Review on the Implementation of the Programme of Action (1995) provided an opportunity to identify concrete measures to accelerate the implementation of the programme adopted in 1990. At a Symposium for the Land-Locked and Transit Developing Countries (1995), agreement was reached on the development of a global framework for transit transport cooperation with the support of the international community.
In addition, the work of UNCTAD has given political impetus to action in other international forums. Examples are the setting of the official development assistance target at 0.7% of the gross national product (GNP) of donor countries, the improvement of the International Monetary Fund's (IMF) compensatory financing facility for export earnings shortfalls of developing countries. and the creation of special drawing rights (SDRs).
UNCTAD's assessment of the outcome of the Uruguay Round contributed to the recognition of the need for specific compensatory measures at the international level to mitigate the adverse effects on African countries, particularly least developed ones. UNCTAD has pioneered analysis on trade and environment, which is one of the major issues on the post Uruguay Round Agenda. The quality of the analysis contained in the Trade and Development Report, issued once a year in September, is widely recognized. In particular, the report repeatedly warned against the risks of vulnerability of short term capital flows to Latin America, which was borne out by the crisis in Mexico. It analyzed the implications of structural adjustment and economic reform in Africa and looked at the East Asia growth and development experience. This gave rise to broader discussions and debates on the causes of the East Asian "miracle," and on lessons to he learned for its potential application elsewhere. The World Investment Report, issued once a year, is the main information source on trends in foreign direct investment and activities of transnational corporations.
F. Technical Cooperation Activities
UNCTAD's technical cooperation programme is an important element in UNCTAD's overall effort to focus its work on activities that provide practical assistance to developing countries. It aims at assisting governments to create the necessary enabling environment for development and strengthening the ability of beneficiary countries to participate fully in the world economy, particularly in international trade and investment.
Some examples of Technical Cooperation Activities:
• ASYCUDA—UNCTAD's Automated System for Customs Data assists governments on matters related to the simplification and harmonization of trade formalities and procedures. The system is used in over 60 countries.
• TRAINFORTRADE—This innovative programme was designed by UNCTAD in cooperation with ITC to develop human resources for international trade and related services to allow developing countries to enhance competitiveness. The programme has produced a series of training packages responding to the priority needs of developing countries. Training packages include: commodity trading—futures and options markets, physical markets; trade policies—national trade policies, competition policies. trade and environment; and trade perspectives—trade with EU single market countries.
• DMFAS—UNCTAD has developed a technical cooperation package known as the Debt Management and Financial Analysis System. At the core of this package is a computer-based debt management system. Its objective is to assist developing countries and countries in transition to develop appropriate administrative, institutional and legal structures for effective debt management. Its objective is also to establish an adequate information system with detailed and aggregate data on loan contracts, past and future disbursements, and debt service payments.
• ACIS—To assist African countries to develop their transport sector and overcome the problem of high costs linked to transportation in Africa, UNCTAD has developed a revolutionary transport management tool called the Advance Cargo Information System. ACIS is the generic name given to a "tool box" of computer applications designed to produce management information to address multimodal cargo transit and transport problems. ACIS can track cargoes anywhere in the multimodal transport chain and now covers Southern, West-Central and East-Central Africa.
For a detailed description of UNCTAD's technical cooperation programmes, see brochure entitled Meeting the Development Challenge (UNCTAD/PSM/TCP/1/Rev. I ).