The Trade and Development Board, at its forty-seventh executive session held on 30 June 2009, approved the following topic for a single-year expert meeting: "Contribution and Effective Use of External Resources for Development, in particular for Productive Capacity-Building".
It is increasingly recognized that productive capacities should be at the heart of national and international policies to promote sustained growth and poverty reduction in least developed countries (LDCs). That requires a policy shift from a narrow focus on the Millennium Development Goals (MDGs) to a broader focus on promoting economic growth as well as achieving the MDGs. Growth policies in turn should not simply be concerned with allocative efficiency, but should also seek to harness natural and human resources, accelerate capital accumulation and build technological capabilities.
Building productive capacities requires scaling up investment. Governments need to establish incentives for capital formation for both public and private investment and to promote a financial system that effectively mobilizes and appropriately channels funds. Governments should also seek to attract foreign direct investment (FDI) and harness it to develop domestic enterprises, while official development assistance (ODA) should complement private investment.
The Twelfth UNCTAD Conference recognized the significance of the development of domestic productive capacity for optimal use of external resources for economic development. In addition, UNCTAD XII also affirmed that monetary and financial stability at the national and international levels and crisis prevention are important for sustainable development and growth. The conference also emphasized that further cooperation among development partners and relevant international institutions can improve country ownership, more closely align external resources to national development priorities and enhance mutual accountability.
UNCTAD´s expert meeting will examine the enduring and emerging features of external resource flows to developing countries, in particular the nature and impact of current global capital flows, aid, debt and FDI on the building of productive capacity that can sustain growth and development. These will be discussed in light of the recent global financial crisis and its implications for global capital flows and external resources available for development.
The subject of the meeting is of strategic importance for the current account stabilization of developing countries, implications of rapid accumulation of foreign exchange reserves, international macroeconomic and financial policy cooperation to contain speculative capital flows, aid effectiveness in the context of MDGs, ODA for infrastructure and productive sectors, and finally, debt sustainability in the wake of the financial crisis.
