Trade and Development Board, 74th executive session (opening session)
20 November 2023
His Excellency, Mr. Febrian Ruddyard of Indonesia, President of the Trade and Development Board,
I very much look forward to working with you, Mr. President. Thank you for your support and for your words – very encouraging.
I also would like to take this opportunity to thank His Excellency, Mr. Khalil Hashmi of Pakistan, for his great support during his tenure as TDB president.
Your Excellencies,
Distinguished Delegates,
Dear Friends,
It is a pleasure to have you all here. Thank you for coming.
In the last two months we had both a TDB consultation and an extensive Working Party, and on both occasions, I briefed the membership at length on UNCTAD’s activities and delivery of key mandates and promises. This includes our work at the Global Crisis Response Group, our work at the interdivisional working groups within UNCTAD, the Results-Based Management, our work at the G20, the latest numbers from Comms, and much, much more. Last month at the Working Party I gave a full briefing; a report of that meeting is also one of the agenda items of this TDB session. So please allow me to avoid repetition and be much briefer today, as there is also less time available for the whole session.
I will divide my remarks in three parts.
First, I will say a few things about each of the flagship reports that are being presented in this TDB – namely, the World Investment Report, the Economic Development in Africa Report, and the Report on UNCTAD’s Assistance of the Palestinian People.
After this, I will brief you on most recent work at UNCTAD, especially in reference to your recent ‘asks’ you have made.
And third, lastly, I will share some short updates on next year’s activities, especially in reference to our 60th Anniversary Celebration.
I will start with the reports, beginning with some general remarks.
Our reports altogether show a slowdown of the world economy, which we expect will grow at around 2.4 per cent this year, down from 3 per cent last year. Behind this slowdown is a triple divergence.
First, a divergence between economic growth and trade growth – this year, we expect trade to grow at 1 per cent, only 1 per cent much below GDP growth. This confirms a general trend where global trade is no longer the biggest engine of growth in the world economy. This signals a new phase in the history of globalization from what we used, or it was used to be called ‘the hyberglobalization period’ that goes until around 2010, to what I am starting to call ‘polyglobalization’, marked by more regional trade patterns, the return of industrial policy, and the growing incursion of geopolitics into trade and development discussions.
The second divergence is in the Global North, where we expect the US economy to have a soft landing, while the European economy teeters near recession.
And the third divergence is in the Global South, where the large emerging economies are showing much greater GDP growth numbers than the rest of the developing world.
So, we are seeing slowing growth with weak trade and with weak investment – that are the main pillars for the developing countries recovery – and, on top of that, a growing debt problem, with 3.3 billion people now living in countries that spend more on debt servicing than on either health or education; and with Least Developed Countries spending TWICE as much on debts servicing than on health. So let me go to the World Investment Report:
In the World Investment Report the analysis reveals a significant investment gap in achieving the SDGs in developing countries. We now estimate this gap at $4 trillion, up from $2.5 trillion in 2015, so the gap has grown not decreased. 2015 is when the 2030 Agenda was approved and when the first estimate was made.
Our report also highlights the divergences I mentioned earlier, this time in terms of FDI. According to the report, global FDI fell by 12 per cent last year, but this fall was concentrated in the developed economies, and particularly in Europe. In the developing world, FDI grew by 4 per cent, but again here there was great divergence. FDI in Latin America took off massively, with an increase of 51 per cent. FDI in Africa, on the other hand, fell by 44 per cent. In Asia, it remained stable.
Allow me to add here that this Report was the highlight of our recent World Investment Forum, which took place in Abu Dhabi last October, and which was extremely successful. Let me give some figures. Our forum drew 8000 participants from 157 countries; among whom we had 700 business leaders, 69 ministerial officials, and 8 heads of state and government. I want to take this opportunity to congratulate Mr. James Zhan and his team once more for this achievement.
Regarding the Economic Development in Africa Report here we have Paul Akiwumi, the head of Africa division.
As I mentioned in the working party, it was an honor to launch this report in Kenya, where I was on official mission over the summer and where I was received by president Ruto.
This report underscores Africa's potential to become a high-tech hub for global trade in the medium term. The report introduces a framework for understanding export complexity, advocating for a shift towards more advanced manufacturing, services, and high-tech industries.
The report argues that key factors like availability of critical minerals and demographics are providing Africa with a historic opportunity, in a context where global supply chains are realigning, and Africa is becoming an attractive alternative on the back of the African Free Continental Trade Area.
Africa's rich mineral resources, particularly critical for renewable technologies, and its young, tech-savvy population, are pivotal assets.
For reference, Africa is home to 48 per cent of the world’s reserves of cobalt and manganese, 80 per cent of the world’s reserves of phosphate rock, and 92 per cent of the world’s reserves of platinum-group metals. All these minerals are key in areas such as electric cars, lithium-batteries, and hydrogen batteries. They are, almost literally, the new oil. So, the mission now is to apply the lessons we learned in the 20th century and use this wealth of commodities to push for structural diversification in the continent and get away from commodity dependence. (Today, 76 per cent of all LDCs are commodity dependent, meaning that more than 60 per cent of their revenues come from commodities. 15 years ago, there were 15 less countries who were commodity dependent)
Lastly, in this TDB we present the Report on UNCTAD’s Assistance to the Palestinian People. We do this in very trying times, where the conflict between Israel and Gaza brings unimaginable suffering to millions. Since, I last presented the report, the situation for the Palestinian economy, which was already dire before these hostilities, with over 1.6 million people dependent on humanitarian aid, has, as we all know, significantly worsened.
I want to echo the call of the UN’s Secretary General, Antonio Guterres condemning the horrific loss of civilian lives on both, the attack perpetrated by Hamas on 7th October and the continued bombardment of the IDF hitting civilians, hospitals, shelters, schools and UN facilities in Gaza. The protection of civilians must be paramount, no party to an armed conflict is above international humanitarian law.
The images of suffering are heart breaking and soul crushing, we must find a way to hold on to our common humanity
The way forward is clear. A humanitarian ceasefire. Now. All parties respecting all their obligations under international humanitarian law. Now. This means the unconditional release of the hostages in Gaza. Now. The protection of civilians, hospitals, UN facilities, shelters, and schools. Now. Unfettered access to deliver supplies to all people in need in Gaza. Now. And the end of the use of civilians as human shields. Now. None of these appeals should be conditional on the others.
This report, which uses data from 2022, highlights the dire humanitarian and economic crisis that was present in Gaza and the Occupied Palestinian Territory even before the war started.
It shows that despite a GDP growth of 3.9 per cent in 2022, the per capita real GDP in Palestine was still 8.6 per cent below its pre pandemic levels. This decline was more pronounced in Gaza, where real GDP was 11.7 per cent below the 2019 level, indicating a severe economic regression.
Unemployment rates remain alarmingly high, with 24 per cent in the Occupied Palestinian Territories and 45 per cent in Gaza, particularly affecting women and youth, and driving a substantial part of the population towards humanitarian aid.
Our upcoming report, “Trade and Development in the State of Palestine: Through a Gender Lens,” will provide further insights into these dynamics.
A steep decline in donor aid has further strained the Palestinian government's capacity. Aid to Palestine was $550 million in 2022, almost a quarter of the 2 billion it received in 2008.
Throughout this week, you will receive full briefings of all these reports, and some other ones including the report on the Joint Advisory Council as prepared by ITC, and as well as the Status of Implementation of the Doha Programme of Action for Least Developed Countries. We look forward to your comments and statements during these sessions.
Going now to the second part of my intervention today – I have three important announcements to make.
One relates to UNCTAD’s work on climate change and the environment, which was a very common ask in our last TDB. I briefed the membership on this during the Working Party, but there are some updates I would like to make vis a vis COP which is only weeks away.
The second refers to our work at IGM revitalization that the president of the Board has touched upon that was a broad request from our membership in the last TDB.
And the third relates to the recently shared SIDS framework, an important achievement in line with the Bridgetown Covenant.
So, on climate change and the environment.
Here I want to emphasize the work that our inter-divisional working group on trade and the environment has achieved, and which has been instrumental in ensuring that UNCTAD brings a cohesive and coordinated package to the COP.
This year’s COP has a very important ‘first’, which is the establishment of a joint trade pavilion with WTO, ITC, and ICC.
To the COP, we are bringing very important inputs from all our divisions, in terms of climate finance commitments (where we are presenting a paper on Loss and Damage); in terms of supply chain decarbonization, where we will have an important event highlighting our recent Review of Maritime Transport, which comes with very specific policy recommendations for the shipping industry; in terms of Critical Minerals, where we will convene an event alongside the Special Advisor to the Secretary General on Climate Action; we will also have an important event on the Blue Economy and plastic pollution; and we will follow up on work we started during the World Investment Forum with the UNFCCC on climate finance and investment.
What I want to underline here is that all that we are bringing to COP is supported by very robust research, across all our divisions. I am confident that this year UNCTAD will have the greatest showing at the COP we have ever had.
In terms of IGM revitalization.
In fulfilling the mandate received by Member States in last TDB, the Secretariat has prepared a non-paper that compiles the background of the work of the various levels of the UNCTAD intergovernmental machinery. This non-paper was circulated last Friday.
This compilation includes information on the decision that originates the establishment of each part of the machinery, as well as its mandate and, in some cases, the way in which you, as Member States, have adapted that mandate. It also reflects the type of outcomes and the duration and timing of the meetings.
I hope this document will provide a level ground for all members to start a very relevant discussion on how the IGM could be better used to promote development through the three pillars UNCTAD’s work. I look forward to the Member State’s driven process of consultations and I reiterate you will have the support of the Secretariat in every step of the way. Revitalizing the IGM machinery is a key mandate from UNCTAD15, and a common aspiration of us all as the president has also said.
In terms of the SIDS strategy, which we have recently shared with our friends at the SIDS Group at their request.
Allow me to just say here that this UNCTAD strategy, if properly funded, may become a trailblazer in the way we cooperate with countries. We envision it as a multi-pillar work, including research, consensus building, and technical cooperation on the ground. Thank you, Paul, and Team, for your wonderful work.
The strategy involves multiple interventions, including building productive capacities, enhancing transport and digital connectivity, implementing customs modernization (ASYCUDA), promoting sustainable investment and the ocean economy, and supporting private sector development. It also focuses on mobilizing external financial resources, fostering South-South cooperation, and implementing trade facilitation reforms.
These interventions aim to facilitate SIDS' integration into the global economy, enhance economic resilience, and promote inclusive and sustainable growth. The strategy recognizes the diverse nature of SIDS and tailors’ interventions to their specific needs. The strategy has now been delivered and we hope to start with pilot programs as soon as possible.
I am very glad to see that this strategy has generated a lot of interest among our members, and I thank those of you who have already approached us to support it.
As mentioned at the beginning, last month in the Working Party I gave a full briefing of activities. So, allow me to close this segment by just adding a few comments on recent missions.
After the World Investment Forum, I had my first official visit to Saudi Arabia during the 21st to the 23rd of October, where we had our annual gathering of the EMPRETEC network.
After that, I went to Santiago de Chile, to deliver ECLAC’s Prebisch Lecture, which focused on the topic of the shift in the model of globalization I mentioned earlier.
And after Chile I went on my first official visit to the People’s Republic of China, where I spent close to a week in both Shanghai and Beijing. In Shanghai, I attended China’s International Import Export Expo, and had a bilateral with Vice premier He Lifeng and Commerce Minister, Mr. Wang Wentao.
And just last week I was in New York for the gathering of the Chief Executives Board of Coordination.
I want to take this opportunity to thank the delegates of Saudi Arabia and China for their excellent support during these very important missions and to the UAE for the hosting of the WIF.
Mr. President,
Distinguished Delegates,
To close, allow me to share some details about something we are all very excited about, which is UNCTAD’s 60th anniversary next year.
We are planning for the celebration to take place in the second half of June next year, here at the Palais des Nations. The UNSG already confirmed to me in New York his attendance for the inauguration.
We are already in the process of preparing formal invitation letters to eminent heads of state, top-tier economists, influential investors, and policymakers from prominent global institutions. Together, we aim to foster meaningful discussions on UNCTAD’s main mandate on trade, development, and interrelated issues in the areas of finance, technology, investment, and sustainable development.
We hope that this celebration will underscore a revitalized UNCTAD, well-prepared to support our membership in the challenges of this new era.
I will stop my remarks here. I look forward to your comments and statements in coming sessions, and I wish us all a very successful TDB.
Thank you.
