60 years of UNCTAD: Charting a new development course in a changing world (session 1)
14 May 2024
UNCTAD in 60 years: Have developing countries been better placed on the global economy?
Your Excellency, Pak Tri Tharyat, Director General for Multilateral Cooperation, Ministry of Foreign Affairs of Indonesia,
Your Excellency, Pak Pahala Mansury, Vice Minister for Foreign Affairs of Indonesia;
Your Excellency, Pak Febrian Ruddyard, Ambassador and Permanent Representative of Indonesia to the UN in Geneva and President of the UNCTAD Trade and Development Board,
Dear panelists,
Ladies and Gentlemen,
Good morning, Selamat Siang,
I first want to thank the Government of Indonesia for hosting this conference in honour of UNCTAD. Indonesia has always been a strategic partner of us. It is thus a great pleasure to be with you today and share our reflections on the global economy and on the road to a better future, not for some, but for all.
UNCTAD was born in 1964, but its inception started well before, in all corners of the world. As new nations emerged in the post-colonialism era, they also started claiming their rightful place in the global economy. In Asia, and particularly here in Indonesia, Asian and African nations gathered in 1955 for the landmark Bandung Conference. The goal was clear: Foster cooperation, address common concerns, and promote peace and self-determination among those nations.
It is with the same spirit that nine years later the United Nations Conference on Trade and Development, UNCTAD, was born. At that time, UNCTAD was the largest conference ever held, with over 5’000 delegates. This was a landmark event described by some media as a drama of global bargaining between the North and the South.
In a deeper sense, the conference became the embodiment of an emerging global South that asserted its right to be part of the global economy and its quest for prosperity for all.
Throughout the last 60 years, UNCTAD has been a voice of the aspirations and concerns of the Global South for a more inclusive global economy:
From establishing the Least Developed Countries (LDCs) category, to advocating for an aid target for developing countries – the famous 0.7 per cent of Gross National Income (GNI), or introducing the Generalized System of Preferences (the GSP). Today, all these points are taken for granted, but all of them were the results of analysis and long discussions in UNCTAD. Today, they are cornerstones of our global effort to foster equitable distribution of wealth and opportunities.
Since the inception of UNCTAD six decades ago, we have seen significant shifts in the global economic landscape: The rise of the global South, the digital revolution, the significant strides in poverty reduction and hunger, among many others.
However, despite the progress, other challenges have emerged, such as growing inequalities, environmental disasters, and a pressing need for a revamped system of global governance and finance.
In recent years, multiple crises have challenged the global economy, including the disruptions caused by the COVID-19 pandemic, geopolitical tensions and growing risks of economic fragmentation. We can say that our world has lost its capacity to recover sustainably and inclusively and has fallen out of track. As a result, key development indicators - extreme poverty, food insecurity, the human development index or gender equality - have been in dangerous regress in the last four years.
And as the world changes, so do we.
UNCTAD has been at the vanguard of the changes of the last six decades, advocating for a globalization that leaves no one behind.
We see the 60 years of UNCTAD as an opportunity to forge new directions in a world that is increasingly interconnected and multi-polar.
Ladies and gentlemen,
Our mission is a new UNCTAD for a new world.
We want to provide policy options to developing countries that can lead to more and better development outcomes, and to advocate for a more justice and fairness in global for a.
Let me be concrete.
In terms of trade and investment, regional integration remains a key area of opportunity for developing countries. Exports to nearby markets typically have higher value -added and higher technological content than those to far-away markets. Countries not only need more trade. They need better trade with more sophisticated products.
In the concrete case of Asia, the Regional Comprehensive Economic Partnership (RCEP) is the largest trade and investment pact in the world.
The agreement contains major provisions liberalizing and promoting intraregional trade, investment and services, including on developing e-commerce. These provisions are key to promote regional value chains and market-seeking investment as the provisions will lower cross-border transaction costs.
And more broadly South-South trade remains an opportunity. It has been growing fast, in fact faster than the world average. Today, South-South trade accounts for 54 per cent of developing countries’ exports, and most of this trade takes place here, in Asia.
We also need more investment. And one of the ways to attract it is by reducing operational costs and enhancing transparency and streamlined procedures, supported by digital tools like business portals and online single-window systems. In other words, investment facilitation.
This brings me to digitalization.
Developing countries need to be ready to participate and benefit from the digital economy. We need to ensure that developing countries have the skills, infrastructure and regulatory frameworks to benefit from digitalization and technological advances. This requires national policies to build the required skills and infrastructure but also international cooperation, such as in competition law enforcement, to ensure that digital markets are fair.
International cooperation is also needed to address the debt burden that strangles many developing countries and to scale up development finance.
Here, the issue is that the reform of the international financial architecture remains unfinished business.
Let me now address one of the biggest challenges humanity faces: Climate change. So far, our progress has been tied to CO2 emissions. We must decouple prosperity from the gases that foster global warming. This can be an area of opportunity for many developing countries as there is increasing demand for greener products and technologies. Many developing countries have untapped potential in renewable energy sources, like critical minerals, solar or wind, to explore new energy markets and green products.
And as countries explore new opportunities on this front, they need policies that help them avoid the mistakes of the past. Developing countries need strategies to enhance local value addition, especially in downstream activities, and break away from the pattern of being only commodity exporters.
This requires another type of investment - investment in productive capacities and technological capabilities. This will enable countries to climb value chains in existing sectors and move to new industries with higher value added. Industrial and innovation policy can be valuable tools. The revenues generated by their resource wealth also offer opportunities to strengthen their competitiveness and to invest in accompanying policies to ensure that diversification leads to broader benefits.
Let me expand as this is an area that is on top of the global agenda: Critical minerals. These minerals offer a once in a lifetime opportunity. The UN Secretary-General has just launched a Panel on Critical Energy Transition Minerals. This panel comprises about 40 countries and non-state actors who are working together to “develop common and voluntary principles to guide extractive industries in the years ahead in the name of justice and sustainability” in support of developing countries. It is a uniquely inclusive process committed to building trust and promoting justice along the value chain of critical minerals. UNCTAD, jointly with the Climate Action Team of the Executive Office of the Secretary-General and the UN Environment Programme are the Secretariat of the panel. Indonesia is also part of the Panel and co-facilitator of a workstream. Indonesia’s commitment to the Panel is highly appreciated.
This process highlights the value of cooperation. And this is valid for many challenges, from addressing debt burdens, fighting climate change, or expanding trade. We should be mindful that in a global and integrated economy, we always need more and never less cooperation.
Dear friends,
The world has changed remarkably since the creation of UNCTAD sixty years ago. But our commitment to support developing countries remains as steadfast as ever. With our universal membership, we want to provide countries a platform for exchange to find solutions that are fair and actionable.
The role of UNCTAD is about reimagining the global landscape. Our work on gender, climate change, trade, technology, investment, and development finance, among others, is not just responding to the calls of today but is proactive, setting the agenda for a sustainable and equitable future.
As we mark UNCTAD’s 60th anniversary, we rebranded the organization to UN Trade and Development to make our vision and commitment more visible.
It is also a moment to reevaluate our role and strategies together with our partners. And that is why this event is so valuable for us.
Thank you for your attention.
