Interview with UNCTAD
Secretary-General
Supachai Panitchpakdi
Follow-up to UNCTAD XII:
The Way Forward
Ahead of UNCTAD’s 5th Hearing with Civil Society and the Private Sector taking place on 17 September 2008,
NGLS conducted an interview with the UNCTAD Secretary-General, Dr. Supachai Panitchpakdi, to get his
perspective and views on a number of issues that will be discussed during the Hearing, including the global
food crisis and the current financial crisis and its impact on sustainable development. The Hearing is taking
place within the context of UNCTAD’s 55th session of its Trade and Development Board.
The food crisis has been described by the United Nations
Conference on Trade and Development (UNCTAD) as a “crisis
of development” and is one of the main themes being
addressed at UNCTAD’s 5th hearing with civil society and
the private sector. Can you give us some specific examples
of what UNCTAD is doing to help bolster world food security?
Do you have any ideas as to how civil society can engage
more effectively with UNCTAD in this area?
Dr. Supachai: Nearly every area of our work is being brought to
bear on international, regional and national solutions to the food crisis. At our 12th ministerial conference in Ghana this past April – at
a time when global concern about the crisis was reaching its current heights – member States asked us to help alleviate the crisis
through our work on commodities, trade and investment. They highlighted the need to address the implications of volatile energy and
food prices and ensure a proper balance between food security and
energy concerns. This work is already under way in the context of the
UN Secretary-General’s High-level Task Force on the crisis, in which
we cooperate closely with other UN bodies.
Where UNCTAD is concerned, we are addressing the crisis through
the three pillars of our work: research, analysis and policy advice;
technical cooperation; and consensus-building.
For example: We have a new project in the making to help devel-
oping countries formulate and implement import policies for food
commodities. The project aims to strengthen their capacity to buy
food directly from the source. It will help net food-importing developing countries – those most severely affected by the crisis, many
of which are also among the world’s poorest nations – reduce the
transaction costs involved in buying and distributing food. By providing advice and capacity-building, we can also help these countries
develop long-term food procurement arrangements with net food
exporters or food-exporting companies so as to secure favourable
prices and sufficient supply.
In addition, UNCTAD is helping commodity-dependent developing
countries – a category that includes most of the 49 least developed
countries (LDCs) – design the right strategies to boost agricultural
production, including food crops, for both domestic consumption
and export, while ensuring a better balance between the two. Such
strategies involve enhancing institutional capacity, building backward and forward linkages, improving small-scale producers’ participation in value chains and developing solid legal and regulatory
frameworks. At the same time, these strategies should aim to promote sustainable agricultural practices and protect the most effective use of resources.
The development of emergency food aid management practices is
another area of our work. Good practices in this area should respond
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to emergency food shortages without discouraging domestic food
production or broader agricultural and commodity sector development. Similarly, we help countries identify obstacles to increased
food security and viable actions to overcome them. All of this calls
for an integrated perspective, one that makes good use of national
resources and combines the domestic market element with international markets. Finally, our experience with producer-consumer
cooperation is being mustered to help countries assess the feasibility of using such schemes to enhance both national and global food
security.
Let me touch on another area in which we can help solve the food
crisis: trade rules and policies. Under the WTO’s rules, food and agriculture are considered special commodities that cannot be treated
in the same way as other goods. One of the most crucial issues in
the Doha Round of multilateral trade negotiations is the reduction
or elimination of agricultural tariffs, trade-distorting domestic subsidies and export subsidies. These measures in developed countries
have hurt agricultural development in many developing countries.
By reducing the incentive for developed-country governments to
provide such subsidies or other supports, the current high prices and
strong demand for food could facilitate their substantial reduction
or phasing-out under the Doha Round. The financial resources thus
freed up could then be reallocated to advancing agriculture in the
South. In this respect, one of UNCTAD’s long-standing roles is to help
countries promote their development concerns in the negotiations,
including in terms of food security and tariff flexibility for supporting
local food production capacities and trade. Our intergovernmental
consensus-building, in which countries share experiences and lessons learned, also contributes to this process.
You ask how civil society can work with UNCTAD on food security.
I think the answer is simple: by continuing to do what you do best
– advocacy and awareness-raising. Urge governments to design
and execute sustainable food security and agricultural development strategies that will help their countries to be less dependent
on external food supplies while also reducing poverty and building
healthy, diversified economies. Urge the private sector to contribute
to the development of alternative energy sources and more environmentally friendly land use. Use your expertise on the ground to promote cooperation on food security at the community level as well
as nationally, regionally and internationally. Encourage donors to allocate funds to agricultural and infrastructure development that will
promote sustainable access to food. And continue to share with us
and other UN bodies your ideas, experiences and concerns.
In Africa, where the food crisis is being felt the most, what
would you consider the most pressing issues to address in order
to draw investment back into the agricultural sector? What kind
of policy shifts are needed, and with what kind of approach?
Dr. Supachai: Let me preface my answer by arguing that throughout the developing world, one of the main causes of the food crisis
was precisely the neglect of agriculture, including R&D to develop
new technologies, seeds and fertilizers. If investment is to help ease
the food crisis, it must necessarily target infrastructure, especially
the transport and distribution networks essential for moving food
to hungry populations and to export destinations. Investment – as
well as aid – is also urgently needed for training, domestic food aid
and food reserves, and as subsidies for low-income, resource-poor
farmers. Both domestic and foreign investment will be required,
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including South-South investment and economic cooperation, for
example from the sovereign wealth funds amassed by energy-exporting countries.
Having said that, I believe that the best way for Africa – and for that
matter, all developing regions – to attract investment in agriculture
is to build an investment-friendly environment. This means a transparent, reliable legal and regulatory framework, especially with regard to land tenure and use; good governance; compliance with environmental regulations; a healthy domestic enterprise sector; and,
in many cases, a domestic market for the goods or services being
produced or sold by the investors. An investment-friendly environment must also be development-friendly, by which I mean that it
should develop local skills and technology transfer, foster competitiveness, create backward linkages and in general bolster the host
economy by contributing to its diversification. Commodity-dependent countries, for example, especially those whose primary magnet
for investors is the extractive industries, will not easily achieve the
MDGs [Millennium Development Goals] if they cannot ensure an
equitable distribution of the benefits of investment to their entire
population. Encouraging investment in other growing sectors of the
economy, where there may be more value added, would be highly
recommended in this regard. One thinks immediately, for example,
of the creative industries, where Africa already possesses some enviable comparative advantages. Development-friendly investment
should also emphasize small-scale operators, in order to promote
maximum participation and benefit for local rural populations. But
a caveat is in order here: where transnational corporations are involved, the resultant production of agricultural products and food
crops must be made available to the local market; the land must
be used sustainably; the appropriate technology must be used and
transferred to local producers; and payment to local producers must
reflect market price signals.
Looking further, what do you feel needs to be done in
order for African countries to gain greater access to world
markets, and to diversify and strengthen their economies?
Dr. Supachai: Accounting for a mere 3% of global trade, Africa is
undoubtedly the continent that has least benefited from world markets. However, market access is only one of many obstacles that are
preventing a better integration of African countries into the world
economy. Many of the poorest countries in sub-Saharan Africa have
already been granted duty- and quota-free market access by major
developed countries through schemes like the European Everything
but Arms initiative for LDCs and the US Africa Growth and Opportunity Act (AGOA). Several other developed countries and even some
fast-growing developing countries, such as India, now have similar
schemes.
For many of the poorest countries, then, tariffs are no longer an
important obstacle to trade. Nevertheless, there are other administrative requirements and exceptions that make it difficult for poor
countries to take full advantage of these preferential schemes. These
include complex and restrictive rules of origin, exacting product
standards and certification requirements, and a large number of excluded products in particularly promising sectors, such as agriculture
and textiles and clothing. These problems should be addressed if we
are to make such preferential schemes real tools for development,
and there are efforts under way in this direction. In particular, we
must endeavour to expand the coverage of these schemes to include
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all tariff lines, [as reflected in the WTO’s Hong Kong Ministerial Declaration], and to ensure that such preferential treatment is granted
on a permanent basis, rather than being an uncertain voluntary tool
open to political manipulation.
However, despite relatively free market access, African countries have
not been able to take advantage of the trade opportunities, primarily
because they lack the productive capacities. Market access opportunities are of little use if you are unable to produce the kind of products
needed, have no infrastructure to transport your goods, or cannot
meet the required standards. Many African countries suffer from all
of these problems. Just consider that only 22% of the roads in LDCs
are paved, while the figures for developing and developed countries
are 43% and 88%, respectively. Currently, only 20% of the LDCs’
population is estimated to have access to electricity, and even then
it is often highly unreliable. Resolving these problems would often
have a greater impact on trade than further tariff reduction. A recent
study on road quality in Africa, for example, concluded that paving
all inter-state roads of the members of the West African Economic
and Monetary Union would increase trade by a factor of three.
The implications are clear: If Africa is to gain a greater share of world
trade, it must urgently build productive capacities. The current Aid for
Trade initiative can play an important role in financing much-needed
trade-related infrastructure. In addition to official development assistance and government funds, private investment, including FDI
[foreign direct investment], will also be needed. Unfortunately,
Africa’s share in global FDI flows remains as pitiful as its trade share.
We must therefore assist the continent to attract greater FDI flows
and then to harness those flows for their development.
The current boom in commodity prices has allowed several African
commodity-exporters that for decades suffered from the secular decline in prices to reap windfall profits. But the current boom will not
continue forever. A reversal of speculative investments, an economic
slowdown, and evolving tastes in many emerging economies may
return several commodity prices to their downward trend. Commodity producers should thus harness the current boom to build a
solid foundation for future growth, by investing their gains in other
promising sectors of the economy. They could begin by investing in
higher value-added activities in the commodity value chain. We
must also ensure that the revenues from commodity exporters are
equitably distributed among the population. If we seize this opportunity, commodities may at last become a development opportunity,
rather than a liability.
The second hearing theme relates to the global financial
crisis and its impact on sustainable development. What is
UNCTAD mandated to do in this arena, and how can civil
society help out?
Dr. Supachai: The lingering financial crisis in the United States and
its impact on the rest of the world has again highlighted the close
link between international finance and broader trade and development issues. This was recognized by UNCTAD’s member States at our
Accra ministerial conference last April, where they reiterated UNCTAD’s strong mandate to identify «specific needs and measures arising from the interdependence between trade, finance, investment,
technology and macroeconomic policies from the point of view of its
effect on development».
In line with this longstanding mandate, UNCTAD has carried out de-
tailed policy analysis on the causes of the subprime market crisis in
the US and its impact on the rest of the world. Already a year ago,
UNCTAD highlighted – as is now widely accepted – that the subprime market crisis was due largely to a lack of transparency and
insufficient regulatory oversight of financial institutions. The crisis
then spread, creating an ongoing credit crunch in many other advanced economies. As such, it has become one of the factors precipitating a global slowdown, with significant consequences for development. UNCTAD was also one of the first to draw attention to the
potential link between the sub-prime mortgage crisis and the global
food crisis, as speculators affected by the fall in equities sought new
investment opportunities in commodity markets, thereby exacerbating the rise in food and energy prices. More detailed research on this
will be required to determine the precise nature and importance of
this link.
More broadly, however, for UNCTAD, the recurrence of financial crises
every three or four years is a sign that there is something more fundamentally wrong with the international financial system, and that
greater efforts are needed to devise institutional arrangements that
ensure greater stability. A new financial system should also be built
to avoid prolonged misalignments of exchange rates of the kind that
have led to the build-up of the global imbalances now threatening
the stability of the global economy. In our view, this will require
a more multilateral approach to global finance. Just consider that
while there is a comprehensive set of binding rules governing international trade relations, nothing of the kind exists in the area of
finance, even though the adverse effects of financial crisis can wipe
out gains from trade liberalization in almost an instant.
I think that civil society has an important role to play in advocating
a reform of the international financial architecture. Indeed, many
NGOs have highlighted the shortcomings of the existing system, and
I look forward to their contributions to the debate.
During UNCTAD XII, Ghanaian President John Kofi Agyekum
Kufuor spoke of the new mood of “development solidarity”
around the objective of narrowing gaps between countries
and attaining the MDGs. Do you agree? What do you think
this means?
Dr. Supachai: There is no doubt in my mind that people are becoming more aware of the urgency of achieving these goals, perhaps in part because of the frightening results of the food, energy
and financial crises and the visible signs of climate change. John
Donne’s oft-quoted phrase – “No man is an island, entire of itself”
– resonates especially strongly in this era of globalization. The development solidarity to which President Kufuor was referring has
many strands. It encompasses the growing awareness in developing
countries that, with their new role in world economic relations, they
can accomplish more together than they would on their own. More
generally, it reflects changing values on the part of governments
and individuals, including “enlightened self-interest”. And, where
civil society is concerned, it offers an unprecedented opportunity to
galvanize people, States and international institutions into action to
achieve the MDGs.
But in our efforts to reach those goals – and let us remember that as
things presently stand, they are unlikely to be met in many countries
by the target year of 2015 – we must ensure that our zeal is not
misdirected. Donors justifiably prioritize solutions to the most im-
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mediate, and visible, forms of suffering. But as I have said earlier, in
the rush to reduce poverty, hunger, disease and illiteracy we must
not neglect the “hardware” of development – the roads, ports, institutions and governance that are the preconditions of human welfare.
To do this, we will have to rebalance the distribution of international
aid so that productive sectors and economic infrastructure receive
due prominence.
The Accra Accord called for UNCTAD to increase its
engagement with civil society. How do you see this
manifesting itself, particularly in the lead-up to UNCTAD
XIII, to be held in Doha in 2012?
Dr. Supachai: As you know, UNCTAD was one of the first UN agencies to proactively engage civil society and NGOs and seek partnerships. Today, our member States hold regular hearings with civil society during the annual meetings of our Trade and Development Board,
and civil society organizations have made important contributions to
our ministerial conferences. As I told the Civil Society Forum in Accra,
I believe that civil society and the United Nations are natural partners
and play important complementary roles. In particular, our intergovernmental work benefits from your grassroots perspective, and your
hands-on experience of what works and what does not.
I am therefore very pleased that member States have recognized
these complementarities and asked us to increase our engagement
with civil society organizations. Indeed, I see this as part of a much
broader effort in-house to strengthen our communications and outreach capacities. Also in view of the MDG of creating a “global partnership for development”, we are currently devising a new communications strategy for UNCTAD, which will include ways of increasing
our engagement with civil society and the private sector. As part of
this process we will be consulting with NGO representatives in the
coming months on what they have liked about our past efforts to
engage with them, and how we can best improve our dialogue. This
will effectively bring civil society into the consultation process, and I
look forward to your feedback on our proposals and to your creative
suggestions.
UNCTAD and Civil Society
UNCTAD has recognized that civil society is playing an increasingly
important role in support of the objectives of sustainable human
development, poverty alleviation and economic and social development.
UNCTAD has been cooperating with civil society in respect of development-oriented research and technical cooperation in areas
affecting international trade. The recent successive UNCTAD Conferences have called for further collaboration between UNCTAD and
civil society. Member States agreed that better integration of NGOs,
the private sector and academia into the work of UNCTAD would
benefit both UNCTAD and its member States. More recently, paragraph 187 of the Accra Accord emanating from UNCTAD XII, held in
Ghana in April 2008, calls for the UNCTAD secretariat to have better
communication and outreach to civil society entities.
CSOs have played an important and constructive role in furthering the purpose and principles of UNCTAD and in contributing to
the institution’s work. They have been very active during UNCTAD’s
quadrennial Conferences and, between sessions, work closely with
its intergovernmental organs and its secretariat.
UNCTAD has pursued a policy that allows cooperation with civil society actors by setting up formal and informal mechanisms for their
participation in the activities of UNCTAD, including participation in
conferences, workshops and seminars, producing co-publications,
information-sharing and policy analysis through formal and informal exchange of ideas and implementation of technical cooperation programmes.
CSOs with observer status with UNCTAD may participate in its
intergovernmental meetings as observers. They may make oral
statements on matters within the scope of their activities as well
as circulate written materials on matters related to an item of the
agenda of the meeting. CSOs are encouraged to participate in the
annual sessions of the Trade and Development Board (TDB), its
Commissions and expert meetings.
Contact
Amel Haffouz,
Civil Society Liaison/Outreach Officer, Civil Society Outreach (CSO),
Communications, Information and Outreach (CIO), Office of the Secretary-General,
UNCTAD, Palais des Nations, CH-1211 Geneva 10, Switzerland,
telephone +41-22/917 5048, e-mail <amel.haffouz@unctad.org>,
website (www.unctad.org).
NGLS is an inter-agency programme of the United Nations system that facilitates dialogue, cooperation and constructive engagement
between NGOs and the UN system. The NGLS mission statement, endorsed by its then governing body, the Joint United Nations Information
Committee (JUNIC), states: “The Non-Governmental Liaison Service (NGLS) promotes dynamic partnerships between the United Nations
and non-governmental organizations. By providing information, advice, expertise and support services, NGLS is part of the UN’s efforts to
strengthen dialogue and win public support for economic and social development.”
Go Between, published four times a year, is produced with support from DESA, DPI, FAO, IFAD, ILO, UNAIDS, UN-HABITAT, UNCTAD, UNDP,
UNEP, UNESCO, UNFPA, UNHCR, UNICEF, WFP, and WHO.
Officer-in-Chief–Elisa Peter, Editor–Beth Peoc’h, Contributor, Hamish Jenkins
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