Developing countries need more aid to benefit from globalization

Developing countries need more aid to benefit from globalization – UN trade official

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Developing countries need more aid to benefit from globalization – UN trade official

Supachai Panitchpakdi

4 October 2006 – Openness and market access are sometimes not enough to allow developing countries to benefit from economic globalization because they lack the knowledge and infrastructure to produce goods and services and need increased foreign aid and investment, a top United Nations trade official said today.

“In fact, some have argued that trade liberalization has in some cases resulted in de-industrialization and even greater poverty,” UN Conference on Trade and Development (UNCTAD) Secretary-General Supachai Panitchpakdi told a high-level panel discussion in Geneva on the topic of “UNCTAD, development, and the way forward.”

“Only investment in the productive sector will create employment, increase household income and reduce poverty over the long term,” he said, citing especially the world’s 50 least developed countries (LDCs).

Such countries “simply lack the capacity” to benefit from globalization, Mr. Supachai noted. They do not have “the ability to produce goods and services, the knowledge needed to create a broad industrial base and the infrastructure that enables countries to trade and communicate.”

It is necessary to strengthen managerial and entrepreneurial skills in developing countries and to bolster the Aid for Trade programme, which aims at helping such countries take advantage of export opportunities, he added.