United Nations


General Assembly

Distr. GENERAL  

30 May 1996



General Assembly
Fifty-first session
Item 97 (a) of the preliminary list*

    *   A/51/50.

                      TRADE AND DEVELOPMENT
   United Nations Conference on Trade and Development:  Review
              of institutional and programme issues
                  Note by the Secretary-General

    The Secretary-General has the honour to transmit to the members of
the General Assembly the report of the Joint Inspection Unit entitled
"United Nations Conference on Trade and Development:  Review of
institutional and programme issues" (JIU/REP/96/1).


               Review of institutional and programme issues

                     Prepared by Homero L. Hernandez

                         Joint Inspection Unit

                               April 1996


                                                    Paragraphs   Page

     Acronyms ...................................................  iv

     EXECUTIVE SUMMARY AND RECOMMENDATIONS ......................   v

  I. INTRODUCTION ....................................  1 -  6      1

 II. MANDATE, ACHIEVEMENTS AND CHALLENGES ............  7 - 25      3

     A. Development Mission ..........................  7 - 11      3
     B. Major Achievements ........................... 12 - 18      4
     C. Challenges ................................... 19 - 25      7

III. REFORM PROCESS .................................. 26 - 40      9

     A. UNCTAD VlII .................................. 26 - 34      9
     B. Restructuring of the United Nations
        in the economic, social and related fields
        and its implications for UNCTAD .............. 35 - 40     11


     A. Role of UNCTAD in the area of trade .......... 42 - 46     14
     B. Complementarity between UNCTAD and WTO ....... 47 - 53     14


NOTES ...........................................................  20


ACTS       Advance Cargo Tracking System
ASYCUDA    Automated System For Customs Data
DAC        Development Assistance Committee (of OECD)
DMFAS      Debt Management and Financial Analysis System
ECOSOC     United Nations Economic and Social Council
FAO        Food and Agriculture Organization of the United Nations
GATS       General Agreement on Trade in Services
GATT       General Agreement on Tariff and Trade
GDP        Gross Domestic Product
GSP        Generalized System of Preferences
IDA        International Development Association
lMF        International Monetary Fund
IMO        International Maritime Organization
ITC        International Trade Center
ITO        International Trade Organization
ITU        International Telecommunication Union
JIU        Joint Inspection Unit
LDCs       Least Developed Countries
ODA        Official Development Assistance
OECD       Organization for Economic Cooperation and Development
SDR        Special Drawing Rights
TRIPs      Trade-Related Intellectual Property Rights
UNCED      United Nations Conference on the Environment and Development
UNCTAD     United Nations Conference on Trade and Development
UNESCO     United Nations Educational Scientific and Cultural Organization
UN-NADAF   United Nations New Agenda for the Development of Africa
           in the 1990s
UNIDO      United Nations Industrial Development Organization
WIPO       World Intellectual Property Organization
WTO        World Trade Organization


     Current efforts to strengthen and revitalize the role of the
United Nations in the economic, social and related fields provide
the institutional context for this report, which is the first
ever prepared by the Joint Inspection Unit on UNCTAD, a major
actor in international economic relations.

     Despite the many profound changes that have occurred in the
global economic environment over the past three decades, such as
the ever deepening economic interdependence of nations, the
emergence of regional trading blocs and economic integration
movements, and the recent creation of the World Trade
Organization, the rationale that led to the creation of UNCTAD in
1964 remains as valid today as it was`s three decades ago.
Notwithstanding the differences and shifts in the economic
philosophies of the Member States that have tended to inhibit its
full potential and effectiveness in the past decade or so, UNCTAD
can be given credit for a long record of tangible achievements
since its creation, as reviewed in chapter 11. The Inspector's
findings leave no doubt that UNCTAD has thus far provided the
international community with more than value for money.

     At the same time, the Inspector observes that UNCTAD is
faced with a number of challenges; some of these stem from the
fact that many of the problems in trade and development, for
which the institution was established to address, continue to
bedevil the majority of the developing countries, and more
acutely the least developed, landlocked and island developing
countries for which UNCTAD has institutional responsibility
within the United Nations system. UNCTAD's lack of field
visibility, and its apparent inability to fashion a
field-oriented and priority driven technical cooperation strategy
supportive of developing countries, represent a major challenge
to be tackled by the institution. UNCTAD should not only be
producing high quality reports and technical documents; it should
also intensify its technical cooperation activities by promoting,
inter alia interregional information systems or networks in
trade, science and technology, commodity markets and trade, and
investment flows, in partnership with other relevant entities
within the^ United Nations system.

     The report also assesses the results of reforms within
UNCTAD and the United Nations secretariats, as well as the
strengthening of cooperative linkages between UNCTAD and other
institutions. While the restructuring process has definitely
strengthened the intergovernmental machinery and programme
outputs of UNCTAD, the Inspector believes that subsequent reform
initiatives should aim to deepen - and not broaden - UNCTAD's
mandate. They should also seek to institute, as a matter of
policy, greater synergies between UNCTAD Secretariat and other
parts of the United Nations Secretariat in addressing high
priority issues in the area of trade and development. The
Inspector also welcomes the emerging cooperation between UNCTAD
and WTO.

     The reinforcement of cooperation and coordination between
UNCTAD and the Bretton Woods institutions at the policy-making
and secretariat levels would appear highly desirable taking
advantage of on-going efforts to revitalize the overall
policy coordination role of the United Nations in the economic,
social and related fields, as provided for in the Charter.
Additionally, greater use could be made of existing Relationship
Agreements between the United Nations and the multilateral
financial institutions in order to enhance cooperation and
coordination on global development issues.

     In the light of the above, the Inspector offers the
following main recommendations:

RECOMMENDATION 1: Strengthening the role of UNCTAD

(a) As part of the continuing restructuring process throughout
the United Nations, the Secretary-General of the United Nations
and the Secretary-General of UNCTAD should further enhance
cooperation between the UNCTAD Secretariat and the secretariats
of the regional economic commissions and other Departments at
United Nations Headquarters in the economic and social sectors.
Such improved collaboration should, among other things, lead to
the harmonization and streamlining of related programmes of work
within the Secretariat, and should enable the secretariats of the
regional commissions and Headquarters entities to contribute
substantive inputs to the Trade and Development Conference and
Board, while UNCTAD secretariat could play a more active role in
the substantive servicing of the Second Committee and ECOSOC.

(b) Further strengthening should concentrate on UNCTAD's
action oriented research capacity of relevance to the national
level, and on working more closely with the private sector and

RECOMMENDATION 2: Building System-wide partnerships for

(a) UNCTAD should continue to expand the cooperation arrangements
and joint activities it has developed with other parts of the
United Nations System, such as FAO. UNEP, UNIDO, WIPO, UNESCO IMO

(b) The above mentioned organizations as well as the regional
commissions and other Secretariat entities could be invited to
participate in the systematic building of interregional
information systems or networks in the fields of trade, science
and technology, commodities, and investment promotion .

RECOMMENDATION 3: Strengthening the technical cooperation

     In the context of on-going efforts to restructure and
revitalize the United Nations in the economic, social and related
fields, and . adapt the UNCTAD programme of work to the evolving
international setting, consideration should be given to a
significant strengthening of the technical cooperation role of
UNCTAD in the principal areas of its responsibility. The UNCTAD
secretariat should play a bigger role in building interregional
technological networks involving other organizations of the

RECOMMENDATION 4: Least Developed, Landlocked and Island
developing countries.

     In its future programmes of work UNCTAD should continue to
give due prominence to the unique development needs of the LDCs,
landlocked and island developing countries and should project
their concerns more systematically throughout the UNCTAD
secretariat and at the level of other organizations within the
United Nations system.

RECOMMENDATION 5: Cooperation with WTO

     The complementarity of functions between UNCTAD and WTO
appears quite clear. Member States cannot but benefit from such
complementarity as well as from the related synergies between the
two institutions. The General Assembly has made specific
recommendations in this respect. The recent steps taken to
develop UNCTAD-WTO cooperation both at the secretariat and
institutional levels should continue to be encouraged.

RECOMMENDATION 6: Cooperation with the Bretton Woods Institutions

(a) The General Assembly and the Economic and Social Council
could seek to strengthen consultations, technical exchanges and
reciprocal rights of attendance at meetings between the
multilateral financial institutions, on the one hand, and United
Nations economic and social entities, especially UNCTAD, on the
other. The current process restructuring and revitalization of
the Organization in the economic, social and related fields
should take this fully into account.

(b) More frequent use could be made of the provisions of existing
Relationship Agreements between the United Nations and the
multilateral financial institutions in order to enhance
cooperation and coordination on global development priorities.
Both UNCTAD and the Bretton Woods institutions could more often
take advantage of these instruments in the policy consultations.

                        I. INTRODUCTION

1. The present report has been prepared pursuant to General
Assembly resolutions 1/ on the restructuring and revitalization of
the United Nations in the economic, social and related fields. In
preparing the report, the Inspector was guided in particular by
the views expressed by delegations at the General Assembly and
Economic and Social Council in 1994 and 1995 on the need to
enhance the unique role of the United Nations in promoting
international economic cooperation for development, as envisaged
in its charter. The Inspector equally took into account the
recommendations offered by the United Nations Secretary-General
in his report on Agenda for Development. 2/

2. The decision to conduct the present review was also prompted
by several considerations. Firstly, UNCTAD has never before been
reviewed by the Joint Inspection Unit, and this report is
intended to fill that gap. Secondly, UNCTAD's institutional
evolution is likely to be affected, probably more than any other
United Nations entity, by current; trends in the global economic
setting, such as the increasing transnationalization of the world
economy, the growing linkages between peace and security, and
economic, social and environmental issues, the emergence of
trading blocs and economic integration patterns in different
parts of the world. and the establishment of the World Trade
Organization (WTO).

3. These considerations emerge as UNCTAD has a fundamental
responsibility for the development of the developing countries
whose improved economic prospects would benefit from and
contribute to an increase in international trade. And lastly, the
international community has entrusted UNCTAD with institutional
responsibility for the Least Developed, Landlocked and Island
Developing Countries, whose special development needs deserve to
be given special attention.

4. Furthermore, developing countries are increasingly
characterized by regional, sub-regional and country specificities
in their political, economic, social and technological evolution.
While some developing countries have registered significant
economic growth in the past ten years, others are either
struggling to make the transition to market economies, or still
implementing macro-economic reforms necessary for sustainable
economic growth and development. Meanwhile, the debt issue which
emerged in Latin America in the 1980s devasting its economies,
has emerged again, this time in Africa, as a major factor
affecting the economic prospects of many developing countries. ln
these circumstances, the Inspector sought to assess the extent to
which UNCTAD is effectively addressing these differing priorities
of its constituency in the key areas of trade and development and
in its integrated treatment of the development aspects of trade,
finance, investment, technology and services.

5. The Inspector has adopted a broad approach in this report in
order to better situate UNCTAD's current and future role in the
overall institutional context of the United Nations system,
including the regional economic commissions, WTO, and the Bretton
Woods institutions. The report is more specifically addressed to
the forthcoming UNCTAD IX, under item 8(d) of its provisional
agenda dealing with institutional issues. The report will also be
relevant to the work of the General Assembly and Economic and
Social Council relating to the United Nations restructuring
process in the economic, social and related sectors.

6. The report prepared in 1995 on UNCTAD by the United Nations
Office of Internal Oversight Services (OIOS) focuses essentially
on the internal administration and management of UNCTAD, whereas
the present JIU report is more concerned with the
mission, mandate, role, functions and programmatic aspects of
UNCTAD within a new framework of international development
cooperation, as articulated in relevant General Assembly


A. Development mission

7. UNCTAD was created in 1964 as an expression of the belief that
a cooperative effort of the international community was required
to bring about changes in the world economic order that would
allow developing countries to participate more fully in a
prospering world economy. UNCTAD was the product of efforts aimed
at countering self-perpetuating asymmetries and inequities in the
world economy, strengthening multilateral institutions and
disciplines, and promoting sustained and balanced growth and
development. The creation of UNCTAD marked the commitment of
Member States "to lay the foundations of a better world economic
order" through the recognition that "international trade is an
important instrument for economic development".

8. Despite profound economic and political transformations in the
world in the last thirty years, the essence of UNCTAD's
development mission has not changed. Its thrust continues to be
to enlarge opportunities in particular for developing countries
to create their own wealth and income and to assist them to take
full advantage of new opportunities.

     9.   The themes addressed by UNCTAD over the years have

- expanding and diversifying the exports of goods and services of
developing countries, which are their main sources of external
finance for development;

- encouraging developed countries to adopt supportive policies,
particularly by opening their markets and adjusting their
productive structures;

- strengthening international commodity markets on which most
developing countries depend for export earnings and enhancing
such earnings through their increased participation in the
processing, marketing and distribution of commodities, and the
reduction of that dependence through the diversification of their

- expanding the export capacity of developing countries by
mobilizing domestic and external resources, including development
assistance and foreign investment;

- strengthening technical capabilities and promoting appropriate
national policies:

- alleviating the impact of debt on the economies of developing
countries and reducing their debt burden;

- supporting the expansion of trade and economic cooperation
among developing countries as a mutually beneficial complement to
their traditional economic linkages with developed countries: and

- special measures in support of the world's poorest and most
vulnerable countries.

10. UNCTAD's early years coincided with economic growth
particularly in developed countries, worsening terms of trade for
developing countries' exports, especially for commodities, and an
increasing income gap between developed and developing countries.
The situation became even more difficult through the 1980s which
came to be known as "the lost decade for development". One
consequence was that the multilateral economic negotiations
between developed and developing countries became deadlocked in
most forums. As a result, a perceptible loss of confidence
occurred in UNCTAD's role as a facilitator of consensus and
conciliator of divergent views. Multilateralism as a method of
dealing with international trade and development problems was
eroded and several countries opted for bilateral approaches.

11. But the profound changes that took place in the world in the
late 1980s forced a reassessment of international economic
cooperation. A fresh consensus emerged in the early 1990s on the
need for new actions to support the international trade and
economic development of developing countries. UNCTAD, and in
particular UNCTAD VlII, added impetus to the forging of the
development consensus for the 1990s and of a new partnership for
development as envisaged in the Declaration on International
Economic Cooperation, in particular the revitalization of
Economic Growth and Development of the Developing Countries,
adopted by the General Assembly at its eighteenth special session
held in April-May 1990.

     B.   Major achievements

12. The functions of UNCTAD comprise four building blocks:

(i) policy analysis:

(ii) intergovernmental deliberation, consensus-building and

(iii) monitoring, implementation and follow-up; and

(iv) technical cooperation.

UNCTAD VlII added a new dimension, namely the exchange of
experiences among Member States so as to enable them to draw
appropriate lessons for the formulation and implementation of
policies at the national and international levels. These
functions are interrelated and call for constant
cross-fertilization between the relevant activities. Thus, UNCTAD
is at once a negotiating instrument, a deliberative forum, a
generator of new ideas and concepts, and a provider of technical
assistance. As a result of this multifaceted mandate, UNCTAD was
entrusted with a wide spectrum of activities cutting across
several dimensions of development.

13. Its achievements have therefore been of different kinds and
of varying impact. Among the most significant achievements
reported to the Inspector by the UNCTAD secretariat could be

- the agreement on the Generalized System of Preferences (GSP)
(1971), under which over $70 billion worth of developing
countries' exports receive preferential treatment in most
developed country markets every year;

- the setting up of the Global System of Trade Preferences among
Developing Countries (1989);

- the adoption-of the Set of Multilaterally Agreed Principles for
the Control of Restrictive Business Practices (1980);

- negotiations of International Commodity Agreements, including
those for cocoa, sugar, natural rubber, jute and jute products,
tropical timber, tin, olive oil and wheat;

- the establishment of transparent market mechanisms in the form
of intergovernmental commodity expert and study groups, involving
consumers and producers, including those for iron ore, tungsten,
copper and nickel;

- the negotiation of the Common Fund for Commodities (1989), set
up to provide financial backing for the operation of
international stocks and for research and development projects in
the field of commodities, and which did not fulfil many
expectations of the developing countries;

- the adoption of the resolution on the retroactive adjustment of
terms of Official Development Assistance (ODA) debt of low-income
developing countries under which more than fifty of the poorer
developing countries have benefited from debt relief of over $6.5

- the establishment of guidelines for international action in the
area of debt rescheduling (1980);

- the Agreement on a Special New Programme of Action for the
Least Developed Countries (1981);

- the Programme of Action for the Least Developed Countries for
the 1990s ( 1 990);

- the negotiation of conventions in the area of maritime
transport: United Nations Convention on a Code of Conduct for
Linear Conferences (1974), United Nations Convention on
International Carriage of Goods by Sea (1978), United Nations
Convention on International Multimodal Transport of Goods (1980),
United Nations Convention on Conditions for Registration
of Ships (1986), United Nations Convention on Maritime Liens and
Mortgages (1993).

14. In addition, UNCTAD made some contributions on matters for
implementation in other fora, such as:

- the agreement on ODA targets, including the 0.7 per cent of GDP
target for developing countries in general and the 0.20 per cent
target for LDCs;

- the improvement of the IMF's compensatory financial facility
for export earnings shortfalls of developing countries;

- the creation of the Special Drawing Rights (SDRs) by the IMF;

- the reduction of commercial bank debt for the highly indebted
countries promoted by the World Bank;

- the principle of "enabling clause" for preferential treatment
of developing countries which were later reflected in GATT legal
instruments, e.g., Part IV of GATT on trade and development.

15. Many of the instruments negotiated within UNCTAD have been
implemented, providing benefits to the world economy generally
and to the groups of countries concerned more particularly.
However, there has never been a comprehensive evaluation of the
actual functioning and impact of many of these instruments.

16. It is worth noting that both negotiations and the
instruments, by bringing important issues to the forefront of
international attention and discussion, have helped to shape
national policies and legislations. This is certainly the case of
the Code of Conduct for Linear Conferences and the negotiations
on a Code of Conduct for the Transfer of Technology. The
achievements therefore go beyond the negotiations on and the
adoption of the instruments themselves.

17. UNCTAD has also made a valuable contribution at the practical
level, especially in the formulation of national policies,
instruments, rules and regulations, as well as in the development
of national institutions, infrastructure and human resources, in
practically ali its fields of activity. These achievements,
usually involving an important technical cooperation component,
have proved their value and have been much appreciated by the
Governments concerned. Special mention should be made of UNCTAD's
computerized systems in the area of customs (ASYCUDA) and debt
management (DMFAS) which are considered among the best products
on the market.

18. Furthermore, UNCTAD supported the Uruguay Round negotiations
by assisting developing countries in understanding the
implications for their economies of discussion on various issues
or sectors and in defining their position for the negotiations.
For this purpose, UNCTAD prepared special studies on specific
issues, provided relevant trade information and advice at
regional and national level within its technical assistance
programme. Through its three annual flagship publications, namely
the Trade and Development Report. the World Investment
Report and the Least Developed Countries Report, the UNCTAD
secretariat has made a significant contribution to international
understanding of major economic and development issues.

C. Challenges

19. Notwithstanding its achievements, however, the question
arises as to whether UNCTAD has to date fulfilled all the major
expectations raised at the time of its creation in the mid 1960s. The
fact that most developing countries continue to face
serious problems in trade and development, such as declining
terms of trade and export earnings, persistent tariff and
non-tariff barriers, limited export capacities and opportunities
for many LDCs, landlocked and island developing countries, poorly
functioning international commodity agreements, etc. is
certainly indicative of the major limitations facing the
international community, including UNCTAD in the discharge of its

20. One particularly serious constraint that has inhibited the
potential and effectiveness of UNCTAD in the past decade relates
to the fact that it has had to operate against the background of
prolonged economic difficulties and crises, in parallel with
shifts and differences in perceptions regarding the international
development situation and appropriate responsive actions. In
addition to differences in economic philosophies among the Member
States, there were also divergent attitudes regarding
interactions between domestic policies and the international
environment, between the public and private sectors, and between
bilateral, regional and multilateral arrangements. While these
clashing perceptions and visions in the past served to cast a
shadow over UNCTAD's record of achievements, since Cartagena the
politicization of UNCTAD has been on the wane with some positive
effects on the establishment of the current climate and
businesslike approach to issues.

21. Another problem has been the inadequate field-level
visibility of UNCTAD in the developing countries in general and
the LDCs, landlocked and island developing countries in
particular. This problem stems partly from the comparatively
limited resources for technical cooperation in relation to the
needs of the developing countries, and partly from the lack of a
field representation-which would allow UNCTAD to interact with
other development partners within and outside the United Nations
system, at the global, regional and country level. Consideration
could also be given to building interregional and global
cooperative networks in the areas of UNCTAD's mandate, as
recommended in a recent JIU report on United Nations System
Support for Science and Technology in Asia and the Pacific
(JIU/REP/95/7) .

22. At present, the United Nations Resident Coordinators in the
developing countries also serve as UNCTAD's field
representatives. However, the Resident coordinators generally
lack resources and expertise in programme areas covered by
UNCTAD's mandate and consequently may not always be in a position
to incorporate trade and development dimensions in country
programming exercises which constitute the framework for the
development of technical cooperation projects supported by organizations of
the system.

23. While the above comment on UNCTAD's technical cooperation
role concerns the developing countries in general, it is
especially relevant to UNCTAD's inadequate operational role in
the LDCS, landlocked and island developing countries for which it
has institutional responsibility within the United Nations
system. A 1993 JIU report on this category of countries, 3/ (A
review of the Specific Development needs of Small Member States
and the Responsiveness of the United Nations Development System
to these needs) highlighted some unique development problems facing them, such

- limited resource endowment, usually resulting in dependence on
a narrow range of primary commodity exports;

- a very small or virtually nor.-existent manufacturing sector,
with a consequent need to import most manufactured goodŽ:

- heavy dependence on imported food;

- rudimentary financial markets, with very weak local or regional

- foreign ownership of most commercial banks and insurance

- high levels of both urban and rural unemployment.

24. The Inspector takes the view that UNCTAD's support to these
countries should be geared to a more action-oriented approach
going beyond the production of reports and technical papers but
should develop a more practical thrust to the maximum extent
possible. For example, UNCTAD could work more frequently, if not
regularly, with the Governments of these countries in order to
generate and design special initiatives for support by the United
Nations system and bilateral donors in the Problem areas listed
in paragraph 23 above.

25. As observed in a recent JIU report entitled "Evaluation of the
United Nations New Agenda for the Development of Africa in the 1990s
(UN-NADAF). UNCTAD is making a palpable contribution to the
development of Africa. This effort however needs to be
intensified in more concrete ways along the lines outlined by the
new Secretary-General of UNCTAD (see TAD/INF/2642) within Fe
context of the new United Nations System Initiative on Africa.
Possible structural adjustments in the UNCTAD secretariat could
also be considered in that light.

                       III. REFORM PROCESS


26. Although successive UNCTAD Conferences over the years have
endeavoured to adjust the work of UNCTAD to the changing
international environment, the most far-reaching reforms were
introduced by UNCTAD VlII, held at Cartagena, Colombia, in 1992.
This reform embraced practically all aspects of the institution:
its intergovernmental machinery and working methods, its mandate
and programme orientations. Thus UNCTAD was the first United
Nations institution to be completely reformed through
intergovernmental agreement.

27. Besides introducing reforms specific to UNCTAD, the
Cartagena Conference also addressed a number of innovative themes
that have come to dominate international economic discussions in
various fora, such as the importance of good governance and
management, recognition of the role of market forces and
competitiveness as well as entrepreneurial initiatives in the
development process, and the need for effective coordination of
the national policies of countries having great weight in the
world economy.

28. The Cartagena Conference introduced reforms in four main

(a) Work on policy analysis was refocused to emphasize national
policies and domestic experiences with trade and development;

(b) the Trade and Development Board's subsidiary bodies were
given new orientations in traditional areas of work, such as
commodities, investment and financial flows, trade and trade
facilitation, science and technology, etc.;

(c) the mandate in the area of services was broadened

(d) its mandate was also extended to include new areas of work,
in particular poverty alleviation and comparative experiences
with privatization .

29. The Conference additionally established a mechanism for the
periodic review of progress in the implementation of its
recommendations in order to ensure the necessary institutional
adaptation to the evolving context. For example, the work
programme was to be subject to periodic revision with the
objective of.

(a) providing an enriched substantive and technical basis for
policy discussion, negotiation and decisions;

(b) increasing UNCTAD's effectiveness in addressing national and
international development issues; and

(c) stimulating a greater participation of officials responsible
for policy formulation at the national level in the work of the

30. The Trade and Development Board conducted, midway between
Conferences, in June 1994, a review and evaluation of the work
programme of its intergovernmental machinery, including:
technical assistance programmes and, bearing in mind the calendar
established in this regard, the programme budget and medium-term
plan, so as to ensure full integration of all work undertaken by
UNCTAD, establishing priorities for the period leading up to the
next Conference.

31. In the mid-term review, the general conclusion of Member
States was that the policy and institutional reforms initiated at
UNCTAD Vll had proved beneficial and that UNCTAD's work had
become more useful and relevant to the needs of Member States.
The exchange of national experiences on various issues
(privatization, trade efficiency, investment and financial flows,
technology transfer) was very valuable and had had a direct
impact at the domestic policy-making level. The functioning of
the ad hoc working groups had been characterized by a high level
of discussions on specialized issues and by a substantial volume
of work. the quality of the analytical work produced by the
UNCTAD secretariat in support of the deliberations of the
intergovernmental bodies was also recognized.

32. At the same time, the review identified areas in which
further improvement was possible. Several countries felt that the
last stage of the "progressive and dynamic sequence" envisaged by
the Cartagena Commitment, involving identification of issues,
analysis, consensus-building and negotiations, had been neglected.

33. The Board also drew some important lessons from experience to

- both the structure of its subsidiary bodies and their working
methods needed further streamlining in view of resource and
calendar constraints;

- unnecessary duplication should be avoided, both within UNCTAD
and between the work of UNCTAD's intergovernmental bodies and
that of other organizations;

- the concerns of some countries, particularly the LDCs, need to
be better reflected in UNCTAD's work and their participation at
meetings facilitated; and

- more practical follow-up should be given to intergovernmental

34. Overall, it may still be too early to attempt a definitive
assessment of the lasting beneficial impact of reforms introduced
by the Cartagena Conference. By hindsight, and taking stock of
developments following UNCTAD VlII and the conclusion of the
Uruguay Round negotiations, the Cartagena Conference could have
perhaps devoted more attention to deepening and fine-tuning -
rather than stretching - UNCTAD's mandate in order to render it
indisputably distinct and distinctive within the multilateral system.
Although the Conference institutionally reshaped UNCTAD and fully anticipated
the creation of WTO, it did not fundamentally alter the core
functions of UNCTAD outlined in paragraph 12 above.

B. Restructuring of the United Nations in the economic, social
and related fields and its implications for UNCTAD

35. The institutional reform of UNCTAD at the Cartagena
Conference, which was endorsed by the General Assembly in
resolution 47/183 4/, was a major contribution to the restructuring
and revitalization of the United Nations in the economic, social
and related fields, initiated by the Eighteenth Special Session
of the General Assembly on International Economic Cooperation,
held in April-May 1990. One of the conclusions reached at the
Cartagena Conference was that UNCTAD was the most appropriate
focal point in the United Nations for the integrated treatment of
development and interrelated issues in the areas of trade,
finance, investment, services and technology.

36. In keeping with this holistic approach, the United Nations
Secretary-General, in his first major report on the restructuring
of the United Nations Secretariat 5/, recommended the transfer to
and incorporation within UNCTAD of the programmes on
transnational corporations and science and technology for
development, both of which had until then been autonomous
entities within the United Nations Secretariat. While the
Commission on transnational corporations has been effectively
integrated within the UNCTAD intergovernmental structure, the
Commission on science and technology for development continues to
function as a subsidiary body of ECOSOC.

37. Although various UNCTAD reports, including especially the
1994 mid-term review by the Board, would seem to confirm the
substantive and cost benefits flowing from the "new critical
mass" of expertise created in UNCTAD to deal with investment and
technology issues, the Inspector believes that any future
evaluation of the merger should focus on whether the two
programmes in question have continued to maintain their erstwhile
vitality and spectrum of action.

38. It is recalled in this connection that, in reviewing the
above-mentioned recommendation of the Secretary-General on the
transfer of the two programmes to UNCTAD, some delegations at the
General Assembly did advocate the preservation of the distinct
and separate identities of the two programmes in the context of
new organizational arrangements in UNCTAD. This approach appeared
all the more sensible as the previous autonomous Programme on
Science and Technology for Development, for example, addressed
issues that transcended purely trade and development questions.
At the time of its transfer to UNCTAD in 1993, much of the
Programme's core activities were increasingly focused on
promoting science and technology self-reliance, or the building
of science and technology endogenous capacities in the developing
countries. The Programme also served as an important node for
promotional science and technology activities within the United
Nations system as a whole.

39. The Inspector is of the opinion that these important roles of
the science and technology programme should continue to be
nurtured within UNCTAD's overall work programme, with special
emphasis on the needs of the LDCs, the landlocked and island
developing countries, as well as countries in transition to
market economies. The integrated treatment of various issues
falling under UNCTAD's mandate need not necessarily override the
requirement for a free-standing strategy and programme for
science and technology for development, that would relate, in
addition to the Board, to other relevant subsidiary bodies of

40. In view of the fact that the restructuring of the United
Nations is a continuing process, the Inspector recommends that
the Secretary-General's future initiatives include a
strengthening of potential areas of collaboration and division of
labour between the UNCTAD secretariat and other United Nations
entities. For instance, UNCTAD, with its strong analytical
capacity could provide substantive backstopping to the Second
Committee of the General Assembly and to ECOSOC, thus
complementing the departments in New York in the servicing of
these legislative bodies. The systematic building of collaborative
partnerships and synergies among United Nations Secretariat
entities for the solution of high priority problems of the
developing countries would facilitate the effective discharge by
UNCTAD of its mandate, which cannot be viewed in isolation from
developments in other parts of the Secretariat and System as a


41. The creation of the World Trade Organization (WTO) prompted a
debate on the respective roles of UNCTAD and WTO. Views were
expressed that, with WTO in existence, UNCTAD became redundant as
it would duplicate the work of WTO. WTO provides a new
institutional and contractual framework for the implementation of
the multilateral trade agreements negotiated in the Uruguay

A. Role of UNCTAD in the area of trade

42. On the basis of specific requests from the General Assembly
and from its last two Conferences, UNCTAD addressed developments
and issues in the Uruguay, Round of particular concern to
developing countries. The UNCTAD secretariat had provided regular
analytical reports and studies on this matter and carried out a
comprehensive programme of technical cooperation which
facilitated substantially the participation of developing
countries in the negotiations.

43. The General Assembly has reaffirmed 6/ UNCTAD's role as the
most appropriate focal point, within the United Nations proper,
for the integrated treatment of development and interrelated
issues in the areas of trade, finance, technology, investment,
services and sustainable development. This implies in the first
instance that UNCTAD is particularly suited to deal with global
policy issues which are multifaceted and involve mutual linkages,
such as trade, technology, investment and finance and which are
of interest to all its Member States. The transfer to UNCTAD of
the Programmes on Transnational Corporations and on Science and
Technology for Development has strengthened the role of UNCTAD in
these areas. And in the second instance, that UNCTAD is required
by its mandate to approach the above issues from the development
perspective, that is to say, to examine the economic and policy
implications of new developments, policy proposals and
negotiations from the point of view of the development concerns
of developing countries.

44. The consensus building function of UNCTAD has been
particularly important in the trade field. UNCTAD provides a
universal forum for policy analysis, as well as for seeking an
international consensus on trade policy issues to prepare for
later negotiations within WTO or other fora. In the past,
principles established and decisions taken in UNCTAD were later
reflected in GATT legal instruments, e.g., Part IV of GATT 7/ on
trade and development and the " enabling clause n for
preferential treatment of developing countries. This is
especially relevant to the Generalized System of Preferences
(GSP) established and monitored by UNCTAD.

45. UNCTAD is also playing a key role in undertaking technical
cooperation activities in the area of international trade. For
example, UNCTAD has been executing a programme to assist the
integration of developing countries and countries in transition
into the international trading system. Other programmes, aimed at
assisting Governments to address policy issues, have been
developed on customs reform and computerization (ASYCUDA), shipping,
port management, multimodal transport and management of transport
routes, and transit traffic for the landlocked countries. trade
and environment and trade efficiency.

46. The United Nations International Symposium on Trade
Efficiency, organized by UNCTAD, which involved the participation
of over eighty Ministers, of private enterprises and of local
government, brought a new dimension to UNCTAD's work in the area
of trade. Its outcome - a Ministerial Declaration 8/ and a set of
recommendations on trade efficiency in six sectors, including
customs, transport, telecommunications, trade information,
financial services and business practices - provided a way forward for efforts
at facilitating trade. These measures will reduce red tape and through modern
technology, lower trade transaction costs and increase trading
opportunities, particularly for small and medium-sized
enterprises in developing countries. The Inspector believes that
UNCTAD's efforts in these new directions could be intensified in
the future in the context of a significantly strengthened
technical cooperation role.

B. Complementarity between UNCTAD and WTO

     47. The outcome of UNCTAD VlII provided for strengthened
complementarity between UNCTAD and GATT. While the possibility of
the establishment of the WTO was already foreseen in the
Cartagena Commitment, member Governments nevertheless reaffirmed
UNCTAD's mandate and its important role in the international
trading system, and subsequently endowed UNCTAD with new mandates
in trade and trade-related areas, including matters deriving from
the conclusion of the Uruguay Round. As the main functions of WTO
are the implementation and negotiation of contractual trading
rules and disciplines, there is considerable scope for
complementarity between WTO and UNCTAD whereby the roles of the
two organizations can be mutually supportive. This was recognized
by the General Assembly at its 49th and 50th sessions 9/ and by the
Trade and Development Board. The WTO Preparatory Committee also
recommended that the WTO should establish arrangements with
UNCTAD for effective cooperation at an early stage.

48. More specifically, the policy analysis and consensus building
functions of UNCTAD can make essential contributions to the
maturing of the intergovernmental consideration of trade issues
to the point where they can be fruitfully negotiated in WTO. It
can carry out groundwork covering the identification and
normative/analytical exploration of the issues and the policy
options - particularly in their developmental aspects - as well
as the building of consensus on the basic parameters of possible
international agreements. Such potential contribution has already
been recognized internationally in the case of trade and
environment and competition policy. A decision by the Commission
for Sustainable Development at its second session and the General
Assembly resolution 49/99 10/ recognized that the work undertaken
in the Trade and Environment Committee of WTO would benefit from
cooperation with UNCTAD and UNEP.

49. UNCTAD's intergovernmental bodies have established
arrangements for the implementation of, and follow-un to the
Uruguay Round agreements and to the participation of Member State
therein. The Trade and Development Board, in its decisions
410(XL) 11/ and 419(XLI) 12/, has called for more policy analysis in
order to identify new trading opportunities for developing
countries and economies in transition arising from the
Agreements. Upon request by the General Assembly, in its
resolution 49/99, the specific challenges faced by the least
developed and net-food importing developing countries are also to
be examined with a view to making proposals for translating the
relevant Marrakesh Ministerial Declaration into concrete action;
and technical cooperation activities are to be intensified so as
to enhance the capacity of developing countries and economies in
transition to participate effectively in the international
trading system.

50. The Trade and Development Board has equally called for
constructive and, effective cooperation between UNCTAD and WTO in
the field of technical cooperation. Similar views were expressed
by many Member States during UNCTAD's Thirtieth anniversary
celebrations. Cooperation between the two institutions can be
developed under Article V of the WTO Agreement, which stipulates
that the General Council of WTO "shall make appropriate
arrangements for effective cooperation with other
intergovernmental organizations that have responsibilities
related to that of the WTO". The relationship would be primarily
operational and technical, and could include:

(i) intensified cooperation in statistical and other technical

(ii) joint undertaking of studies or research on issues of common
interest; and

(iii) enhanced coordination in the development and, where
feasible, joint execution of technical cooperation projects.

51. Such a working relationship could be initiated in a number of
substantive areas, for example in services, trade and environment
and technical cooperation, particularly with respect to the
evaluation of the impact of the Uruguay Round agreements at the
country level, as well as the accession of new countries to the
WTO. In addition, depending on future decisions relating to its
work programme, WTO could be requested to collaborate with UNCTAD
in the examination of new and emerging issues (such as trade and
competition policies) for which UNCTAD has a great deal of
experience and has been mandated by its member Governments .

52. Two recent concrete actions indicate that the complementarity
of functions between UNCTAD and WTO can go beyond the theoretical
debate. The first relates to the decision taken by the executive
heads of UNCTAD and WTO 13/ to establish cooperative arrangements
at the Secretariat level in order to maximize the synergies
between the two institutions and obtain full benefit of the
complementarity of their functions. Specific areas of work have
been identified for joint action. One example is the agreement
reached to provide technical assistance to African countries in the process of
implementation of the Uruguay Round agreements. The second concrete action
refers to the decision of the 50th session of the General Assembly 14/ which
invited UNCTAD IX to transmit its assessment of the challenges
and opportunities arising from the Uruguay Round to the WTO
Ministerial Conference, scheduled to take place in Singapore in
December 1996.

53. The discussion of UNCTAD-WTO relations so far seems to place
the onus of institutional and functional adjustments on UNCTAD
vis-a`-vis WTO. The Inspector believes that WTO should also be
encouraged by its Member States, who also happen to be UNCTAD's
Member States, to avoid duplication and promote cooperation with
UNCTAD and existing relevant mandates of other organizations
within the system.


54. The Bretton Woods institutions are invited, on a regular
basis, to participate at the meetings of UNCTAD's
intergovernmental machinery. UNCTAD has been regularly invited to
attend, as an observer, the meetings of the Interim and the
Development Committees as well as the annual meetings of the
World Bank and the IMF. Since 1975, UNCTAD has provided technical
support to the Group of 24, mostly in the form of research papers
on issues under discussion and negotiation in the IMF and the
World Bank. The purpose of this project has been to assist
developing countries in strengthening their technical
preparedness and ability to participate in and contribute to all
phases of the discussions and negotiations taking place
within~the framework of the IMF and the World Bank. The emphasis
of current research activities is on the new implications of the
integration of, developing countries into the international
financial system, including the effects of the macroeconomic
policies of the major industrial countries.

55. Several of UNCTAD's technical cooperation activities involve
the Bretton Woods institutions. In the area of debt management,
UNCTAD has developed over the years the Debt Management and
Financial Analysis System (DMFAS). UNCTAD offers assistance in
the installation of DMFAS and provides the necessary training.
There has been a joint programme with the World Bank in this
area, and the installation of DMFAS in a number of countries is
financed out of World Bank trust funds and by the borrowers
themselves. In the area of transport, several borrowers of the
Bank are using IDA credits to install UNCTAD's Advance Cargo
Tracking System (ACTS). Likewise, World Bank borrowers are using
loans/credits for customs reform and computerisation, including
the installation of UNCTAD's specialized software (ASYCUDA).
Similarly, UNCTAD is closely cooperating in the area of customs
with the IMF. Further, the World Bank has shown interest in
UNCTAD's Trade Point Programme and in using UNCTAD's Trade
Control Measures Information System.

56. The cooperation between UNCTAD and the Bretton Woods
institutions with respect to UNCTAD's assistance to debtor
countries in the Paris Club debt renegotiations has been
consistently close. It took essentially the form of exchange of
information and statistical data on the latest economic
developments in the respective countries as well as of
discussions on substantive issues. UNCTAD also participated, on
an ad hoc basis, in a few consultative group meetings organized
by the Bretton Woods institutions (Bangladesh, Madagascar, Guinea

57. In general, however, cooperation between UNCTAD and Bretton
Woods institutions remains quite limited. It is focused
essentially on technical assistance activities. The dialogue at
policy level is almost nonexistent. The question is how to
develop and strengthen cooperation between UNCTAD and these
institutions taking into account the benefit the Member States
might derive from increased policy dialogue between UNCTAD and
the Bretton Woods institutions. The following considerations
might be taken into account in this respect.

58. Implicit in the broad responsibility for promoting the
economic and social purposes laid down in the United Nations
Charter is the recognition that this vast enterprise cannot be
accomplished without the concerted efforts of a large number of
autonomous agencies, each having responsibilities in different
fields. But the Charter goes further, by setting forth in
Articles 58 and 63 a considered scheme of coordination through
consultation and recommendations, under the leadership of ECOSOC,
whereby these various agencies would be associated with the
Organization in working towards common ends, acting as a team
where necessary and maintaining a high degree of cooperation.

59. The major changes that have taken place in the world economy
in recent years have underlined the crucial importance of the
relationships between the United Nations and the Bretton Woods
institutions in particular. Over the years these relationships
have been fruitful. Consultation and, in some cases,
collaborative activity on substantive matters of mutual concern,
have been maintained between the United Nations and these
institutions, including exchanges of information and

60. Concerns have been expressed by some developed countries
about discussion of international financial and monetary issues
in United Nations bodies on the grounds that these might
constitute improper interference in the independent exercise by
the IMF and the World Bank of their respective responsibilities.
It is to be hoped that these concerns will be dispelled by the
international consensus, articulated for instance at UNCTAD VlII,
that on issues where other institutions were vested with the
necessary powers of decision or rulemaking, UNCTAD, and by the
same token other United Nations bodies, should intensify
cooperation with these institutions in the discussion of issues
within their competence. Similarly, specialized institutions,
including the Bretton Woods institutions, should provide
substantive inputs to major United Nations undertakings and
should endeavour to take fully into account the outcome of such
undertakings in their own activities as decisions by Governments
which are part of their own membership .

61. Considerable scope exists for strengthening the relations
between the United Nations, in particular UNCTAD, and the Bretton
Woods institutions. New impetus may be given to the arrangements
for consultations and exchanges already mentioned. The existing
practice as regards reciprocal representation at meetings could
also be enhanced. Just as United Nations bodies have benefited
from the extensive participation of the IMF and the World Bank
staff members in the discussion of issues falling within their
competence, so would these institutions gain from extending to
the United Nations, in fuller measure, reciprocal rights of
participation in their meetings, at least in the discussion of
broad international financial and monetary issues where
considerations of confidentiality are not paramount. Such
symmetrical observer rights would enlarge the opportunities open
to United Nations representatives to pursue consultations with
these institutions as required by the Relationship Agreements,
and to provide explanations of United Nations approaches to
relevant issues as they emerge in the appropriate
intergovernmental bodies.

62. The United Nations Charter has assigned a particularly
important harmonization and coordination role to the General
Assembly and the Economic and Social Council. This issue is now
being addressed in the ongoing processes of restructuring and
revitalization of the intergovernmental bodies concerned.
Experience shows that because of inadequate coordination of
national positions, policy inconsistencies are apt to appear in a
number of key policy areas, such as:

- those between the efforts of debtors to meet their debt service
obligations through export expansion and the protectionist
policies of some of the creditor countries;

- those between aspects of structural adjustment programmes and
the sluggish growth of the world economy as a whole;

- those between the development objectives set by the
international community and the stagnating flows of concessional
and, as regards some parts of the world, non-concessional

- those between the recognition of the urgent need of developing
countries for additional impact capacity and the inadequacy of
financial resources commensurate with the generally accepted
scale of the problem; and

- those between the broad policy approaches adopted to deal with
political and economic problems, respectively.

63. The United Nations is ideally situated, and is indeed
mandated by its Charter, to contribute, through consultation with
all the organizations concerned and through recommendations to
the relevant entities, to the achievement of coherence in global
economic policy making. UNCTAD, with its integrated approach to
development, could make a significant contribution in this
respect if its full potential can be tapped by the Member States.


1. General Assembly Resolutions 45/264 (1991); 46/235 (1992); and
48/162 (1993).

2. United Nations document A/49/665 (1994).

3. A review of the Specific Development needs of Small Member
States and the Responsiveness of the United Nations Development
System to these needs (JIU/REP/93/4).

4. Eight session of the United Nations Conference on Trade and
Development (22 December 1992)

5. Review of the administrative and financial functioning of the
United Nations (A/C.5/4/47/88), 1992

6. General Assembly resolution 50/95 on International trade and
development (20 December 1995).

7. See the Results of the Uruguay Round of Multilateral Trade
Negotiations: the Legal Texts published by the WTO Secretariat,
1994, 1995.

8. See TD/SYMP.TE/6 of 4 November 1994 entitled "Report of the
United Nations International Symposium on Trade Efficiency, held
at Columbus, Ohio, from 17 to 21 October 1994.

9. General Assembly resolution 49/97 and 50/95, Ibid.

10. General Assembly resolution 49/99 on International Trade and
Development 119 December 1994). Ibid.

11. See TDB agreed conclusions 410(XL) Uruguay Round (29 April

12. See TDB agreed conclusions 419(XLI) Uruguay Round (30 September

13. WTO. Overview of developments in international trade and the
trading system. Annual report of the Director General
(WT/TPR/OV/1) General Assembly resolution 50/95, para. 24.

14. General Assembly resolution 50/95, para. 18,Ibid

This document has been posted online by the United Nations Department of Economic and Social Affairs (DESA). Reproduction and dissemination of the document - in electronic and/or printed format - is encouraged, provided acknowledgement is made of the role of the United Nations in making it available.

Date last posted: 28 December 1999 17:35:10
Comments and suggestions: esa@un.org