The meeting’s other co-Chair, Poul Nielson,
Commissioner for Development and Humanitarian Aid, European Commission, drew
attention to the fluctuation of commodity markets, saying that it
should also be a central theme of discussion.
Since many commodity prices, except petroleum, were in a permanent
decline, was commodity trade a viable development strategy? Could it work without being complemented by
an increase in traditional agricultural production? Was technological leapfrogging a realistic strategy for
LDCs?
On the issue of tourism,
several panellists highlighted the importance of tourism for development and
mentioned the Canary Islands Declaration, the product of a high-level meeting
on tourism in LDCs in March. The Declaration
was being submitted to the Conference in the hope that all stakeholders would
approve commercial, economic and social measures to strengthen tourism in the
LDCs. Among the measures needed to
develop the tourist industry, the speakers cited the promotion of coherent
transport systems, developing infrastructures and strengthening people’s
professional skills.
Other panellists at today’s session
were: Pascal Lamy, Commissioner for
Trade, European Commission; Ould Nany, Minister for Economic Affairs and Development
of Mauritania; Rolf Boehnke, Managing Director, Common Fund for Commodities;
Salvador Namburete, Deputy Minister of Industry and Commerce of Mozambique;
Rafael Rodriguez-Ponga, Secretary General, Agency for International Cooperation
of Spain; A.B. Yoda of Burkina Faso; and Francesco Frangiali,
Secretary-General, World Tourism Organization.
At 3 p.m.
today, the Conference will hold a thematic interactive session on energy.
Thematic Session
Background Materials
A book prepared by the
World Tourism Organization and the United Nations Conference on Trade and
Development (UNCTAD), entitled Tourism in the Least Developed Countries,
was published for the Conference, the product of the High-Level Meeting on
Tourism and Development in Least Developed Countries (LDCs), held in Maspalomas
Gran Canaria, Spain, 26-29 March 2001.
At some 400 pages, the book brings together background notes prepared
for the Meeting, papers submitted by invited experts, monographs presented by
29 countries and the Canary Islands Declaration.
In a foreword, UNCTAD’s
Secretary-General, Rubens Ricupero, says that services, in general, and
tourism, in particular, are increasingly viewed as the best opportunity and the
most viable option for the sustainable economic and social development of the
LDCs. Tourism is already the leading
service export sector in 24 LDCs and the first source of foreign currency
exchange earnings in seven of them. If
properly incorporated into development strategies, he says, tourism could be a
“cornerstone of new productive systems aimed more generally at eradicating
poverty and integrating the LDCs into the global economy”.
The Canary Islands
Declaration, adopted at the conclusion of the Meeting, underscores the
importance of tourism and the comparative advantages enjoyed by most LDCs. It also addresses the obstacles they face in
promoting tourism development, such as deficiencies in physical infrastructure
and telecommunications, as well as the lack of any comprehensive reference in
the previous two programmes of action for the LDCs to tourism as a “potential
engine of economic development”, as well as insufficient recognition of this
importance in the draft programme of action under consideration for the current
Conference.
The Declaration submits a
plan of action to support tourism development, based on: strengthening the capacity of governments to
develop sustainable tourism; developing entrepreneurial capacity and managerial
skill; promoting synergies between transport and tourism policies; and increasing
national capacities to use the multilateral trade framework. It also asks for the insertion of a section
on sustainable tourism in the programme of action for the LDCs 2001-2010, which
states, in part, that “International tourism is one of the few economic sectors
through which LDCs have managed to increase their participation in the global
economy.” It goes on to suggest
specific actions to be taken by countries and development partners, in order to
make tourism a priority for socio-economic development.
Opening
Statements
The
co-Chair of the session, IDDI SIMBA, Minister for Industry and Trade of the United
Republic of Tanzania, said that over the past two decades the United
Nations had convened two conferences to agree on the means of facilitating the
consequences of globalization through multilateral agreements. In the meantime, the number of LDCs had
grown. Even as the international
community was stumbling to implement the decisions of the second LDC
Conference, the World Trade Organization (WTO) had come into being, giving new
momentum to the twin forces of globalization and liberalization.
While most LDCs were just
beginning to understand the real issues, he continued, the developed world
seemed to be advocating a new round of multilateral trade negotiations. Poor countries were asking if the world was
ready for that and, if not, what the alternative was. Even if the countries went along with the new round, what was in
it for the LDCs? If any new
arrangements were adopted, what were the implications for the LDCs at this
stage? Those were the questions he
wanted to address today.
Had the
implementation of trade arrangements created a new crisis? he asked. A flow of cheap export goods had weakened
domestic markets, and the competitiveness of domestic industries was
weakening. Could the multilateral
trading system intervene to help? The
LDCs were also still struggling with lengthy negotiations on regional
cooperation. Unfortunately, progress
had been slow. He was aware that, despite
the recent expansion of trade flows, the share LDCs had in that trade was
shrinking, because they often depended on single commodities. Their capacities were also restrained by the
fluctuating prices on world markets.
As an example, he spoke
about his country’s fish exports to the European Union, which were subject to
strict standards and regulations. Not
many LDCs had in place the necessary data bases, which were needed for
participation in the European markets.
Assistance from international organizations, however, including the
United Nations Industrial Development Organization (UNIDO), had made a big
difference for his country. With
assistance, LDCs could enter the world markets. While in Europe, the avocado was treated as an exotic fruit, in
his country it was considered a gift of nature to be enjoyed by birds and
people. That situation could be turned
to the advantage of poor countries.
It
was also necessary to further develop the service industry and tourism in the
LDCs, he said. At present, the balance
was heavily skewed, in favour of countries from which tourists came -- and not
of those they visited. It was important
to see what could be done to address that situation.
POUL
NIELSON, Commissioner for Development and Humanitarian Aid, European Commission
and co-Chair, said that in many LDCs there was a perception that the Uruguay
Round Agreements had not been implemented.
He had a number of questions.
First, “how do we bridge the negotiation gap between the strongly
articulated trading policies of the major trading blocks and the scattered
coalitions of developing countries”?
How could LDCs become participants in the WTO instead of
spectators? How could improved market
access be turned into real trade flows?
Also, how did one promote more investment in LDCs, when it was known
that investments and trade went hand in hand?
Beyond commodities and
agricultural raw exports, did LDCs produce anything that developed countries
cared to buy? he asked. What were the
priorities that LDCs should give to world trade and regional trade,
respectively? He said the question of
the fluctuation of commodity markets should also be a central theme in the
discussions. Since many commodity
prices were in a permanent decline, except petroleum, was commodity trade then
a viable development strategy? Could it
work without being complemented by an organic growth in traditional
agricultural production? Was
technological leapfrogging a realistic strategy for LDCs?
He said tourism was risky
business. Bringing the wealthy to sunny
beaches was a volatile venture. Tour
operators from the North enjoyed great flexibility in shifting among preferred
destinations in the South. Such
shifting was necessary, in what was almost a fashion industry. How did LDCs choose between targeting
high-priced tourism, which offered fewer visitors, or going after the cheaper
mass tourism product, with all the negative environmental consequences? Least
developed countries needed strong regulatory frameworks to strike a balance between
preserving and, at the same time, allowing access to a vulnerable natural
environment or wildlife habitat. Maybe
some lessons could be drawn from Bhutan, which had a well defined tourism
policy.
International
Trade
Mike Moore, Director General, World
Trade Organization (WTO), said this was a crucial year for the
multilateral trading system. In
November, there would be a fourth WTO Ministerial Conference, in Doha, Qatar. The aim was to launch a new set of
multilateral trade negotiations that were wider in scope and would take into
account the needs of developing countries, which now comprised four out of five
of his organization’s membership. The
WTO was not the General Agreement on Tariff and Trade (GATT). No new round could, therefore, start or
conclude without the interests of the developing countries occupying a key
slot. Developing countries had won, and
although their victory had been hard fought, their interests were now at the
centre of the WTO agenda.
He said
the world had benefited from world trade more than anything else and individual
countries had gained a great deal from more open trade. Developing countries with open economies,
for example, had grown six times faster than those with closed economies. Yet, while trade liberalization was
essential for growth and development, it was not enough. A new WTO round would do little for a nation
if it was torn apart by strife, where its export revenue was being spent on
arms or where there was an absence of good governance. It was also of little benefit to those
countries whose lack of domestic capacity or infrastructure prevented them from
taking advantage of the world trade environment.
He said there
had been significant improvement in market access opportunities for LDCs. The average non-weighted tariff applied by
major industrial countries to LDCs exports had fallen from 10.6 per cent in
1997 to 6.9 per cent today. Up to 30 countries, including Canada, the
United States, the European Union and Japan, had also made strong steps to
improve access by poorer nations. Yet,
that was not enough, even though it showed that members of the WTO had either
gotten or were getting the message.
More could be done through a wider set of negotiations, rather than by
knocking at the door one by one. There
were compelling reasons to do to do something more than just talk.
Least developed countries needed
increased, focused and sustained technical assistance and capacity-building, he
said. International agencies had
delivered a redesigned Integrated Framework for Trade-Related Technical
Assistance. That would help LDCs
mainstream trade into their national development plans and strategies for
poverty eradication. Trade-related
technical assistance and capacity-building would be delivered in coherent
manner, rather than in the stand-alone fashion of the past. He said another deliverable was the outcome
of the first joint seminar of six core agencies of the Integrated Framework on
“Mainstreaming Trade into Development Plans” that was held in January. It demonstrated the rationale and techniques
for mainstreaming trade into development plans and poverty-reduction strategy
papers.
He said WTO trade policy review
mechanisms had been improved. There
were expanded training and policy courses, while there were now reference
centres connecting LDCs to the WTO on the Internet in every capital. He said that if it was felt that the status
quo was unjust, then that point should be argued, especially when one considered
that the status quo was just yesterday’s compromise. Knocking on doors would not achieve the desired result, and
developing countries were realizing that.
The problem of those countries was not globalization, but
marginalization.
“History is grim master, and we
were all victims of it”, he said. Many
countries were lured by a seductive demon of hope -- Marxist economics. That was followed by the cold war, which
gave leaders grim leverage. During that
era, there was no shortage of donors, and debts mounted. Poor people in developing countries,
however, now had a new form of leverage -- the WTO, an organization whose
members had equal powers because it operated on the basis of consensus. “All of our members sit on our council and
all have the power of the veto”, he said.
“I urge LDCs and developing countries to use that power not to stop a
negotiation, but to start one”, he said.
Unless those countries had confidence that their issues were being
addressed in a meaningful way, no new round would conclude.
He said cutting barriers to trade
in agriculture, manufacturing and services by a third would boost the world
economy by $613 billion. That was
equivalent to adding an economy the size of Canada to the world. Doing away with all trade barriers would
boost the world economy by nearly $1.9 trillion -- the equivalent of adding two more Chinas to the world
economy. Now was the time to move from
words of support for a new round to making the compromises needed to launch
one. The world economy needed the
confidence a new WTO round would give.
“If we are happy with the status quo and comfortable with the injustices
brought by compromises, then let us continue to nibble at the edges of change”,
he said. “But if we want real change,
then let us start a balanced, wider set of negotiations.”
PASCAL LAMY, Commissioner for Trade, European
Commission, said the policy in development strategy could be an ongoing
discussion. However, that was not what
the participants had come to discuss here today. Trade was not necessarily a case where one side won and the other
lost. It was important for the LDCs to
open their markets in a controlled fashion.
When organizing their trade policy, the developed countries needed to put
their money where their mouth was.
Also, a strong multilateral system was needed to determine a set of
ground rules to address the current imbalances.
Turning
to specific measures, he mentioned the “All but Arms” initiative, which
provided duty- and quota-free access for all products originating in the LDCs,
with the exception of arms, saying that it had become possible largely due to
the Conference. It was not enough to
just open market access, however; it was also important to take advantage of
that opportunity. The concerns of the
LDCs regarding standards and rules needed to be looked into. The European Union was prepared to join
multilateral initiatives not to use anti-dumping measures against the
LDCs. The Union was also continuing its
technical assistance programme.
Regional
integration remained one of the main conditions of liberalization, he
said. Continuing, he also noted the
need to ensure the LDCs better access to essential pharmaceuticals, in order to
combat communicable diseases. Specific
measures were being discussed in that respect.
On the new negotiation round, he said that the Conference was taking
place along with the Organization for Economic Cooperation and Development
(OECD) Ministerial Meeting in Paris, which was also discussing the concerns of
the developing countries. It was
important to take their concerns into account.
By being clearer about the European trade policy, the Union could ensure
the opening of trade policy if governed by collective rules, including, but not
restricted to, the WTO rules. That was
the basic direction to follow.
OULD NANY, Minister for Economic Affairs and
Development of Mauritania, said that this decade should be put under the
flag of trying to reverse some of the effects of globalization on LDCs. It was necessary to realize the difference
in the development levels of various countries and to increase the well-being
of the LDCs. Sometimes those countries
had little to offer for world markets, and assistance from industrialized
countries could lead to significant results.
One thing was very clear: it was very difficult to overcome the technical and
administrative policy barriers that stood in the way of LDCs, but it was really
important to do it, he said. Another
important element was the need for the developed world to bring the levels of
official development assistance (ODA) back to reasonable levels. The conditions of trade for the LDCs were
not acceptable in their present state.
There had been many opportunities for cooperation, and the LDCs
themselves had been doing everything possible to improve their capacity. Now, multilateral organizations needed to
take measures to allow the LDCs to participate in world trade.
In the subsequent dialogue, the speaker said a
successful conclusion of new trade negotiations was possible if the
negotiations were driven not by narrow interests, but by a broader development
perspective. The LDCs had much to gain
from a new round of negotiations. As
the weakest, they had a special interest in the rule-driven system, provided
those tools took their interests into account.
Also mentioned was a study of the consequences of
the extension of duty- and quota-free market access to all LDCs, which showed
that such an approach would significantly increase the share of LDCs in
trade. The possible negative effects of
such an extension on other developing countries would be negligible. The representative of Canada, advocating an
integrated trade framework and stating support for the new round of trade
negotiations, announced a contribution of
$1 million to the integrated trust fund.
Another
speaker stressed the great potential of the industrial sector in solving LDC
problems. It must be noted that the
requirements and standards of international trade presented a serious problem
for the LDC and a relevant infrastructure needed to be built to help exporters
meet those standards.
Commodities
Rubens
Ricupero, Secretary-General of UNCTAD, said the commodity
sector was the backbone of the LDCs:
for 32 of them it represented 50 per cent of their exports, and for 22
others it represented 80 per cent.
Despite that fact, those countries had experienced serious losses of
market share in areas where they had previously enjoyed advantages. That was one of the tragic stories of the
last 25 years. In addition, LDCs were importing $9 billion
in commodities, while only exporting $6 million plus of their own products.
He said that while no one
was advocating a return to the old system that had governed commodity policies,
no one could deny that the void created had not been filled by a substantial
replacement. What then should be done
with commodities? There was no single
bullet to kill the tiger. A
multifaceted approach was needed to deal with crises, supply, horizontal and
vertical diversification, and trade negotiations.
He said
commodity prices could not be fixed, and collapsing prices were the result of
increased productivity. As diversification was being attempted by so many, why
were multilateral and regional banks still financing projects in coffee, when
there was glut in that market? Was there any rationale behind that? There was scope for improvement in trade
negotiations, to enhance the quality of commodity exports.
Rolf Boehnke, Managing Director, Common Fund for Commodities,
said there was a close link between
commodity dependency and debt. Many of
the commodity-dependent LDCs were heavily in debt. Debt relief could positively impact development efforts, while
commodities could help build capacities and infrastructures.
He said some common points identified by LDCs were the need
for: quality assurance and safety
standards; safe harvesting measures; marketing; development and financing; and
strategic partnerships. The Fund had
also urged the stronger commodity traders to come forward with projects that
would enable LDCs to achieve synergies.
The LDCs also wanted the points he had just raised to become
“deliverables” of the Conference.
SALVADOR
NAMBURETE, Deputy Minister of Industry and Commerce of Mozambique, said
assistance to commodity-trading States was declining, despite the fact that
preferential access to markets had been provided to LDCs. Even when there were other advantages
because of a variety of constraints and difficulties, LDCs were unable to make
use of any leverage.
He said
that in the area of research and development there was a need for
capacity-building. It was also
necessary to diversify into non-traditional commodities. Special and differential treatment, and
technical and financial support, were also needed to enhance the productive
capacities of LDCs. The right climate
for foreign investment also had to be created.
Newer and more stringent measures in favour of LDCs were required in any
further multilateral trade negotiations.
Least developed countries wanted to expand their trade and upgrade their
industries, so that they could develop well diversified economies.
In the
discussion that followed, an LDC representative said the question of
commodities was of the utmost importance.
Lower than expected levels of direct financial investment were coming
in, and countries wanted to benefit from preferential trading conditions to
enjoy better access to markets, effectively diversify production and reduce the
level of poverty. Countries also needed
assistance in meeting the international standards of trade.
Several
speakers shared their national experiences, stressing restructuring and other
difficulties and the problems with armed conflicts in some LDCs. They called for international assistance in
strengthening national capacity and developing the industry of the LDCs. It was pointed out that the price of many
primary products had fallen, causing serious imbalances in many economies,
while the prices of other commodities, including oil, had increased. Adequate policy controls were needed to
correct that imbalance.
A speaker said that countries could not concentrate
exclusively on access to international markets. It was also necessary to develop national and regional
markets. Without export, it was
difficult to pay for imports. Access to
modern agricultural technology and credit were also emphasized. Without advanced technologies and
fertilizers, farmers caused deforestation in search of new lands. Measures were needed to prioritze small- and
medium-scale farming, taking into account environmental concerns.
Another speaker pointed out that the United Nations
Environment Programme (UNEP) and UNCTAD had recently created a task force to
provide assistance in overcoming the inequities in market access, while taking
into account environmental and development concerns.
Tourism
RAFAEL
RODRIGUEZ-PONGA, Secretary-General of the Agency for International Cooperation
of Spain, said that tourism could significantly contribute to the
development of the LDCs. The Canary
Islands Declaration was being submitted to the Conference in the hope that the
commercial, economic and social arguments in favour of strengthening the LDCs’
tourism sector would be met with a positive response by all the
stakeholders.
The attention attached to
the tourism sector at the Conference was a novel phenomenon, he said. An inventory of projects had been introduced
in order to develop tourism in the LDCs.
The promotion of coherent transport systems, developing infrastructures
and the strengthening of the professional skills of people responsible for
tourism were among the possible measures.
Currently, the LDCs represented a small percentage of world tourism, but
they were interested in developing that sector. A great diversity of situations in the LDCs meant that measures
should be specific for each country, taking into account the interests of local
communities.
The national governments
in the LDCs needed to attach due importance to the tourism industry, and the
international community needed to provide the required assistance in
strengthening the national capacities and formulating policies on tourism. Respect for the rule of law, citizenship and
other cultures were needed in order for tourism to flourish. Trade, crafts and environmental issues went
hand in hand with tourism. Spain was
providing support to LDCs in their efforts to promote tourism.
A.B. YODA
(Burkina Faso) expressed hope that the action plan launched at the
Canary Island meeting would soon be launched.
Tourism had become an essential sector in all the LDCs, for which it
represented a way to break out of poverty and marginalization. Financial and technical support were needed
to develop that industry.
FRANCESCO
FRANGIALI, Secretary-General, World Tourism Organization, said that tourism was
already a second source of income for the LDCS. The rate of growth of tourism in those countries had been higher
than the world average, and no other sector had seen such an advance. His organization’s studies forecast a
tripling of tourism in the near future.
Today, the economy of countries like the Maldives and Cambodia were
based on tourism earnings. Investments
in accommodations infrastructure and transportation were needed to further
develop tourism. Tourism created jobs
and provided opportunities to poor populations. It also made it possible to pay for imports and reduce the burden
of debt.
During
the following discussion, a speaker said that it was time to diversify LDCs’
economies and develop tourism. The
action plan drawn up in the Canary Islands needed to be implemented. The strategic guidelines provided by the
plan needed to receive special attention from the international community,
especially since tourism had never before been among the development priorities.
One speaker called for the discussion on the issue
of commodities to be put back on the international trade agenda and for the
establishment of a common fund. It was
also stressed that tourism presented avenues for diversification. An appeal was, therefore, made that
developed partners assist LDCs to develop their tourism products, since they
presented great opportunities for poverty reduction.
Mr. BOEHNKE
said a Common Fund for Commodities had been established by the United Nations.
Mr. LAMY said the members
of the European Commission were aware that non-implementation of the Uruguay
Round Agreements had caused difficulties to a number of developing countries,
particularly the LDCs. That issue was
now up for discussion in the European Union.
He said the dispute
settlement mechanism was complex and fraught with procedure, as guarantees had
to be given to all parties.
Nevertheless, it constituted progress.
It would not do now for developing countries to ask to backtrack on it.
Concluding
Remarks
In his concluding remarks,
Mr. SIMBA said he could not help but draw the conclusion, after the number of
interventions today and after various conversations in corridors, that there
was a coordinated position on behalf of the developed world vis-à-vis another
trade round. The LDCs, however, were
more open-
