UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT
INTERVIEW WITH SUPACHAI PANITCHPAKDI
UNCTAD, SECRETARY-GENERAL
ERICA MELTZER (UNCTAD)
Tell us something about yourself,
and what drew you to working with
UNCTAD.
Economic development has been a passion
for me throughout my life, and has become
the central theme of my career. After completing
my academic training in economic
planning and development, I worked for
the Bank of Thailand and later joined the
government, where I was Deputy Finance
Minister and then Deputy Prime Minister.
In the latter capacity, I was in charge of the
country’s economic and trade policy-making
during some crucial years for Thailand, helping
to shape regional agreements in Asia
and seeing at first hand how trade can contribute
to prosperity, but also how financial
instability can devastate a country and undo
years of progress. I was also, as you know,
Director-General of the WTO from 2002 to
2005. All of these experiences brought home
to me how critical sound policies are in
steering a country onto a healthy development
path and showed me the importance
of an inclusive international trading and financial
system.
UNCTAD, as the only United Nations body
addressing global trade and development issues,
and as a think tank for developing
countries that provides innovative, “ahead-ofthe-curve” policy analysis, has always struck
me as an organization with great potential for
helping to advance economic development.
I joined UNCTAD with the hope of using
my national and international experience to
enhance that potential.
What are the main challenges
involved in fulfilling UNCTAD’s original
and still-valid mandate – that
of putting trade to the service
of development?
UNCTAD’s mandate indeed continues to be
very valid today, as there are still many obstacles
to making trade and integration into the
world economy an effective tool for development.
Interestingly, if you look at the report
of UNCTAD’s first Secretary-General, Dr. Raul
Prebisch, to our first Ministerial Conference in
1964, many of the challenges identified then
are equally formidable today, despite some
significant changes in the world economy
since then. For example, developing countries
still face major barriers in key sectors of interest,
such as agriculture and textiles.
Another such sector is that of services. Here,
the supply of services through the movement
of natural persons (mode four of the General
Agreement on Trade in Services, or GATS)
plays a particularly important role, as developing
countries have a significant comparative
advantage in this area. It is has been estimated,
for example, that welfare gains from
liberalizing the movement of workers could
amount to US$ 156 billion a year if developed
countries increased their quota for the entry
of workers from developing countries by 3%.
This is more than twice what is currently
spent on development assistance. Commodity
dependence is yet another tenacious challenge.
Even though the current commodity
price boom has allowed producers to reap
windfall gains, they still need to use those
gains to diversify their economies, so as to put
growth on a more sustainable footing. We are
also increasingly aware that the poorest countries
– many of which lack supply capacities
and the infrastructure required to get their
goods to market – will be unable to benefit
from trade liberalization unless they are first
given the opportunity to build productive
capacities. But UNCTAD’s mandate is not
limited to trade issues alone. In the monetary
and financial area, for example, we have still
not found an effective mechanism for preventing
and resolving financial crises, which
can have a particularly adverse effect on developing
countries. There is, in short, great
scope for a more multilateral approach to
global finance, which UNCTAD has been
advocating for quite some time.
How do you see UNCTAD fitting into
broader UN development and reform
efforts, including the creation of “One
United Nations”?
As the focal point for the integrated treatment
of trade and development and interrelated issues,
UNCTAD’s work fits clearly into UN
systemwide efforts to achieve the MDGs,
and is focused mainly on MDG 1 (poverty reduction)
and MDG 8 (the global partnership
for development). Unfortunately, progress
towards the MDGs is not advancing fast
enough, and UN Member States have been
calling for a stronger UN development pillar.
As the UN SG said in addressing UNCTAD’s
Trade and Development Board in March, we
have to reenergize our efforts towards the
MDGs – a task in which he views a stronger
UNCTAD as central.
UNCTAD is also proactively adapting to UN
systemwide reform efforts to strengthen our
ability to “Deliver as One” at country level. As
a Geneva-based organization with no country
representation, UNCTAD is taking a number
of measures to ensure that trade and development
issues are adequately considered
in the development programmes of individual
countries. These measures include specific
training for UN Resident Coordinators on
trade and development issues and the creation
of an interagency cluster on trade and
productive capacities, so as to strengthen
the coordination of our technical assistance
activities with sister agencies. This is already
beginning to show encouraging results in
the eight “One UN” pilot countries. Ultimately,
I am convinced that the reform will
strengthen the role, impact and effectiveness
of the UN overall.
UNCTAD is about to hold its 12th quadrennial
conference in Accra, Ghana,
this April, on “addressing the challenges
and opportunities of globalization
for development”. What do you
see as the main issues to be tackled
there by your member States?
UNCTAD XII is being held at an important
juncture in the world economy, and can
make an important contribution to addressing
a number of challenges. Perhaps most
significantly, the Conference follows a global
economic expansion that has transformed
the world economy. Growth has been more
broad-based than ever, allowing many developing
countries to become major players.
Between 1996 and 2006, developing countries
as a group increased their real incomes
by 71%, compared to 30% growth in developed
economies. This is a truly unprecedented,
and very positive, trend for development.
It has also meant that the relative
weight of the developing countries in the
world economy has increased dramatically;
they now account for more than a third of
world exports and inward flows of foreign
direct investment (FDI). Trade among developing
countries has quadrupled over the
past decade. The South has become much
more significant in international finance,
acting as net lenders to the developed world
and garnering a greater share of outward
FDI. Nevertheless, the picture is not uniformly
positive, and many of the poorest
countries have not yet benefited. Much more
is needed to help developing countries benefit
from these changes, including expanding
the scope of South-South cooperation
beyond trade to encompass other aspects of
economic relations. The Accra Conference
will help us address how the dividend generated
by the recent global growth – and by
what I have called the “second generation”
of globalization – can be translated into
meaningful benefits for the poor in the developing
world.
UNCTAD XII is also taking place at a pivotal
moment in the Doha Round of multilateral
trade talks. A lot more needs to be achieved
if the Round is to justifiably claim its development
name. I hope the Conference will
provide major impetus to the negotiations.
Beyond the trade arena as such, however,
the world economy today is in a period of
uncertainty, with credible fears of recession.
The subprime mortgage crisis in the US has
affected the availability of credit elsewhere,
and rising energy and food prices are beginning
to result in inflationary tendencies.
All of this is cause for concern, as is the related
risk of a protectionist backlash, particularly
against key investments by sovereign
wealth funds of developing countries. We
count on UNCTAD XII to help identify the
policies needed to avoid a global slowdown,
reduce vulnerability to financial crises and
find pro-development solutions to such
emerging challenges as energy scarcity and
climate change.
UNCTAD XII is also being held just after the
midpoint to the MDG target year of 2015. Notable
progress has been made towards some
of those goals: the number of people in developing
countries living on less than $1 a
day, for example, fell to 980 million in 2004
from 1.25 billion in 1990. If current trends
continue, the proportion of people living in
extreme poverty will be halved in most regions.
But this is not true everywhere; no single
country in sub-Saharan Africa, where the
Conference is being held, is on track to
achieve all the goals. Again, we expect UNCTAD
XII to explore how to make globalization
more inclusive and use trade and investment
flows to achieve the MDGs. Mr.Ban Ki-moon has consistently stressed the
importance of trade and economic development
in achieving poverty reduction; UNCTAD must be in the front line of this
global endeavour.
UNCTAD XII will also be the first
UNCTAD conference in Africa since
1996, and the UN’s first major conference
in Ghana. In addressing
UNCTAD’s Trade and Development
Board in March, the UN SG termed
sub-Saharan Africa “the epicentre
of a development emergency”. How
will the Conference spotlight the problems
of the continent? And how can
the Conference – and UNCTAD’s work
more generally – make a difference
on the ground?
The development challenges of Africa indeed
deserve our special attention. Despite
the global expansion, sub-Saharan Africa as
a whole continues to account for a mere 2%
of world trade, and only about 0.8% of global
FDI flows. The total number of poor people
in this region is also only just beginning to
level off. And while the commodity price
boom has helped many African commodity
exporters, they still need to use their windfall
gains to create a more sustainable basis for
growth. Similarly, net importing countries
need help in coping with higher import
prices for both energy and food, which risk
offsetting any benefits from debt-relief initiatives.
We must also find ways to promote
greater flows of FDI into Africa and other
marginalized regions, and to ensure that such
investment is not concentrated in extractive
industries but benefits the entire economy.
Addressing these problems calls for a range
of measures. UNCTAD is already hard at
work on many of them, but our work will
have to continue long after the Conference
ends if it is to bear fruit. A prime example is
helping Africa build crucial productive capacities;
in this area we hope that discussions
in Accra on the aid-for-trade initiative,
and the launch there of the UN’s new trade
and productive capacity “cluster», will contribute.
Africa’s creative potential offers
tremendous economic opportunities and
will be showcased at the Conference in an
exhibit of African arts and crafts, a concert
and a fashion show. The continent will also
be spotlighted in UNCTAD XII’s high-level
segment on 21 April, entitled “Trade and
development for Africa’s prosperity: action
and direction”.
What do you view as the most important objectives
to be achieved by this Conference
overall? UNCTAD’s quadrennial conferences
are United Nations ministerial conferences
on trade and development issues. They
serve primarily to build consensus on the
state of the world economy and the crucial
challenges facing policy makers in developing
countries, and to help identify the
policy measures needed to address them.
And as I outlined earlier, I think there are
many issues on which this is urgently
needed. On the more immediate and practical
level, the Conference will also decide
the work programme for the organization
over the next four years. On another, perhaps
more fundamental, level, however,
UNCTAD conferences can generate and incubate
ideas that bear fruit over the long
term, both within UNCTAD and in other forums.
At UNCTAD XI, several such ideas
were launched and have since taken root, including
“policy space” and “assuring development
gains from international trade”.
These innovations offer a legacy upon which
UNCTAD XII can build, strengthening the
contribution of trade to the realization of
the MDGs.
