LIBERALIZATION WITHOUT MEASURES FOR EQUITABLE DEVELOPMENT REINFORCES INEQUALITIES, SOUTH AFRICAN LABOUR MINISTER TELLS UNCTAD IX

TAD/1829
6 May 1996

LIBERALIZATION WITHOUT MEASURES FOR EQUITABLE DEVELOPMENT REINFORCES INEQUALITIES, SOUTH AFRICAN LABOUR MINISTER TELLS UNCTAD IX

6 May 1996


Press Release
TAD/1829


LIBERALIZATION WITHOUT MEASURES FOR EQUITABLE DEVELOPMENT REINFORCES INEQUALITIES, SOUTH AFRICAN LABOUR MINISTER TELLS UNCTAD IX

19960506

(Received from a UN Information Officer.)

MIDRAND, South Africa, 3 May -- Globalization and economic liberalization in the absence of pro-active measures from the State to resolve inherited inequities would merely reinforce them, the Labour Minister of South Africa, Tito Mboweni, told the ninth session of the United Nations Conference on Trade and Development (UNCTAD IX), as it concluded its general debate this afternoon.

Therefore, he said, a managed approach to integration into the global economy was essential. While the World Bank classified South Africa as a middle income country, in reality, it had a low income world in which the majority of the black people lived juxtaposed against a sophisticated modern economy. Such classification was akin to asserting that "if an individual puts one foot on a block of ice and the other on a hot plate or on burning charcoal, this person is, on the average, warm".

The emergence of a democratic South Africa coincided with renewed efforts to promote regional cooperation in southern Africa, Mr. Mboweni continued. However, the disparities between the countries in the subregion were immense and that complicated the process of integration. Liberalization alone, in the absence of other policies to foster equitable development, might merely aggravate domestic and regional inequalities. South Africa was keen to promote regional integration, which combined trade liberalization with industrial development.

As overwhelmingly stressed during the four-day general debate, the representative of Brazil drew attention to the symbolic significance of convening UNCTAD IX in South Africa, a country that had firmly shown its determination to adopt democracy as an essential principle to achieve social and economic development. South Africa was today a paradigm of a society in search of fair rights and opportunities for all, he stated.

A peaceful life and the freedom to work for a better standard of living were fundamental rights of any nation, the representative of Afghanistan said. He proposed that the final document of the Conference should condemn the interference of stronger nations in the internal affairs of smaller neighbours and demand a cessation of such actions.

The representative of Lebanon said that as the twenty-first century approached and the international community looked back at the global progress achieved so far, it could be seen that "we are still too far away from the rainbow". He added: "We need to hold on to the most important thing to a developing nation: hope."

Also making statements were the representatives of Cyprus, Togo and Namibia. Representatives of the Food and Agriculture Organization (FAO), as well as of the International Olive Oil Council, the Consumers International, the World Federation of United Nations Associations and the World Confederation of Labour also spoke. The representative of the United Kingdom exercised his right of reply.

Statements

The first speaker this afternoon, as the ninth session of the United Nations Conference on Trade and Development (UNCTAD IX) continued its general debate, was SOTIRIO ZACKHEOS (Cyprus): Cyprus offers itself as a successful case study on development. In 1974, in the aftermath of the invasion, 37 per cent of the country, the most developed part, was lost to occupation. Twenty- five per cent of the country's resources were left to provide for 82 per cent of the population. One third of the population became refugees. Tourism was ruined overnight, and unemployment rose to more that 25 per cent. Twenty years later, the per capita income is about $13,000, and unemployment is about 13 per cent.

The prerequisites for achieving economic development and prosperity include the existence of a vibrant private sector operating in a free market economy and pluralistic society, and a business environment that encourages local and foreign investment. Small and medium-size business is an important engine for driving the economy and creating employment. Continuous training and human resources development are essential for the economy to be effective in a highly competitive environment. Moreover, women are a national asset with a dynamic contribution to make to the national economy. Lastly, there is no country that does not need reform and modernization of the State and State institutions in order to increase its effectiveness and efficiency.

RANDOLPH YAOVI (Togo): Togo has implemented many economic reforms, but, as other developing countries, it needs international support to face the challenges of globalization and liberalization. Africa has enormous natural wealth but it also has the highest infant mortality rate. The International

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Monetary Fund (IMF) and other institutions have offered Africa a bitter pill. The debt of the third world has passed a historical milestone and cannot be solved without the help of the developed world. Among developing countries suffering from the debt crisis, the low income countries of Africa are among those suffering the most. New thinking is required to find a solution to the debt problem.

Nothing will be possible without solidarity between North and South. Africa is awakening and standing on its feet. Africa believes in international cooperation; it requires such cooperation in various fields in order to reduce instability, foster growth and generate employment. The Uruguay Round Agreements will have enormous costs to least developed countries and net food importing nations. Hence, measures to alleviate the plight of those countries in implementing the Round's conclusions must be implemented as a matter of priority. The international community must do everything to increase the export earnings from commodities. Structural adjustment programmes must help the establishment of enterprises and UNCTAD should continue to serve as a forum to discuss matters relating to privatization and foreign direct investment.

W.I. EMVULA, Deputy Minister for Trade and Industry of Namibia: Activities of UNCTAD for the next four years should focus on trade development and investment, consensus-building, enterprise development, capacity-building and trade efficiency, and analytical work and research. Solidarity among developed and developing countries and the commitment to address issues of mutual international trade concerns, such as people who need to be integrated in our economies, would be better addressed in UNCTAD. The organization should continue to carry out its mandate with respect to trade and development. It should also have increased involvement in the policy formulation on investment. Further, UNCTAD should play a role in the development of the private sector. It should work towards putting into place appropriate policies concerning a competitive industrial base, financing, human capacity, technological capacity and market access.

The majority of the excluded 2 billion are women. The UNCTAD should take up the challenge of addressing the problems of women within the broader mandate of trade and development and finding practical solutions to facilitate and enhance participation of women in the productive sector. The success of UNCTAD in addressing the challenges arising from globalization will require a revamped and revitalized structure. Namibia hopes that the proposal to restructure the intergovernmental machinery of UNCTAD will be consistent with current needs and realities.

TITO MBOWENI, Minister for Labour of South Africa: South Africa's history and place in the region call for looking at the trends of globalization and liberalization through a trifocal lens. These trends need to be viewed from the imperatives on South Africa to transform the domestic

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economy to resolve the inequities inherited from the past. They need also to be seen in relation to the role South Africa is expected to play within southern Africa, and in relation to South Africa's need to modernize its economy so as to redefine its role and place in the global economy. While the World Bank classified South Africa as a middle income country, in reality, it has a low income world in which the majority of the black people live juxtaposed against a sophisticated modern economy. The classification of South Africa as a middle income country, or as a developed country in the World Trade Organization (WTO), is akin to asserting that "if an individual puts one foot on a block of ice and the other on a hot plate or on burning charcoal, this person is, on the average warm". Nothing could be further from the truth.

South Africa has the "largest discrepancy in the world between gross national product (GNP) per capita and the Human Development Index". Unemployment runs at about 40 per cent, and under-employment is rife among the majority of the population. The country has a missing middle so that its economic structure is dualistic, both in terms of structures of production and access to assets and income. There is a ten-fold gap in the incomes of the richest and poorest provinces, the level of human capital development is low, there is a high dependency on imported technology and inputs, and the levels of illiteracy are very high. The market has tended to reproduce and reinforce these inequalities. South Africa's experience indicates that the liberalization of its economy in the context of globalization and in the absence of other pro-active measures from the State to resolve the inherited inequities, would merely reinforce them. Therefore, a managed approach to integrating into the global economy is essential.

The emergence of a democratic South Africa coincides with renewed efforts to promote regional cooperation in southern Africa. However, the disparities between the countries in the subregion are immense and complicate the process of integration. Liberalization alone in the absence of other policies to foster equitable development may merely aggravate domestic and regional inequalities. South Africa has been keen to promote regional integration through an integrated approach, combining trade liberalization with industrial development. With its partners in the Southern African Development Community, it has launched studies in support of a regional industrial location strategy. Another challenge is to transform the engine of growth of the South African economy from a dependence on primary exports to a modernized and competitive manufacturing-based export economy. It needs support in accessing developed economy markets, capital and technology.

The role of UNCTAD, as the forum for articulating the needs of developing countries in the global arena and as a vehicle for promoting their interests, needs to be strengthened. Its intergovernmental machinery and work programme should be streamlined; its work guided by focus, specialization, prioritization and action-orientation; and its priorities informed by the need

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to make concrete contributions to addressing developmental problems. Particular attention should be accorded to the critical problems facing the least developed countries.

GILBERTO SABOIA (Brazil): It is of a symbolic significance that such a major United Nations conference takes place in South Africa. This country has firmly shown its determination and confidence in adopting democracy as an essential principle to achieve social and economic development. South Africa is successfully coping with the challenge of political and social transition, and represents today a paradigm of society in search of fair rights and opportunities for all.

The profound changes that have affected international relations in all fields have to be adequately translated in the institutions and instruments at the international communities' disposal. Brazil is conscious of the need to promote reform of the United Nations and other international organizations. The purpose of those reforms must be, in the first place, to enhance their efficiency. The role of the United Nations in the treatment of economic issues, particularly that of development, should be strengthened.

The role of UNCTAD can be developed around two basic axes: as a think- thank for the preparation, debate and possibly negotiation of the future international economic agenda; and as an institution supporting developing countries in the implementation of multilateral agreements, as well as providing technical cooperation. The organization should also examine two central issues of the new trade agenda on a technical and systematic basis: competition policy and foreign direct investment. One of the main challenges faced by developing countries is the need to modernize their productive and services sectors. The UNCTAD should also contribute to the analysis of matters related to science and technology and its impact on development, as well as the linkages with trade and investment.

HAYALULLAH AZIZI, President and Managing Director, Banke Mille Afgahan, Afghanistan: The Conference must take a serious look at the relations among its members if it aims at sustained progress and development in the next century. An atmosphere of mistrust, enmity, interference and warmongering between the member countries cannot help the cause of harmony among nations. All of Afghanistan's infrastructure is being destroyed and much of its manpower and resources are being swallowed up by a brutal war imposed on it by neighbouring States which are members of the Conference.

A peaceful life and the freedom to work for a better standard of living is the fundamental right of any nation, including the suffering Afghan people. Afghanistan proposes that the final resolution of the current meeting include a paragraph condemning the interference of stronger neighbours in the internal affairs of smaller neighbouring nations. The final document should demand a cessation of such action.

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CHARBEL STEPHAN (Lebanon): Read out a message from the Minister for Economy and Trade, YASSINE JABER: "As we embrace the twenty-first century and look back at the global progress that has been achieved so far, we find that we are still too far away from the rainbow. We need to hold on to the most important thing to a developing nation: hope." Lebanon is proud to rise from a long war that is too complicated to call civil; proud to hold on to its land regardless of all the efforts done to rip off its territory, its natural resources and most of all its determination. As Lebanon rises again to take its place in the global economy, it finds itself in a friendly exchange of technologies with many States. "We find friends that appreciate the role that Lebanon can play in promoting peace." The importance of Lebanon for stability in the region cannot be overemphasized. Reconstruction efforts of the infrastructure, communication and public utilities have been extremely successful. In most of Lebanon, electricity is no longer rationed. Telephone systems are available and efficient. Strategically located, Lebanon is a nation of consumers and of services, and also a facilitator of trade. Lebanon is an ideal trading partner. Its geographical size does not permit it to ever become a threat to any one country's economic development. Apologizing for not being able to come to the Conference, Mr. JABER stated in his message: "As we bury our dead from the last aggression against our civilians, I re-emphasize our solid determination in playing our role as your trading partner with the highest standards set. I thank UNCTAD for its efforts and extend the appreciation of my country to all of you who supported the people of Lebanon."

H. DE HAEN, Assistant Director-General, Economic and Social Department of the Food and Agricultural Organization (FAO): The FAO has a number of important responsibilities emerging from the Marrakesh Final Act. Its main area of work is assistance to developing countries. This includes assistance to developing countries in assessing the need to change their food and agricultural policies to meet their commitments under the Uruguay Round and to take full advantage of market opportunities; in the area of food quality and safety standards as well as sanitary and phytosanitary measures, in preparing for the next round of trade negotiations, and in undertaking studies on the impact of the implementation of the agreements. A related commodity issue is that of commodity diversification, a subject on which UNCTAD has done some valuable work and one on which FAO also collaborated in preparing the proposal for a diversification fund for African Commodities for the United Nations General Assembly. The FAO hopes that donor support for this modest, but useful proposal to strengthen the project preparation phase will be forthcoming soon and adequately. If there were a good supply of bankable projects in this area, there should not be a shortage of development finance, either private or public, to bring them to fruition.

FAUSTO LUCHETTI, Executive Director, International Olive Oil Council: The 15-member Council, based in Madrid and is made up of olive oil producing countries, is the international intergovernmental organization responsible for

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implementing the objective of the International Olive Oil and Table Olive Agreement. Its brief is to foster action to achieve the harmonious development of the world olive economy. The Agreement emphasizes technical cooperation and aims at stimulating research and development to devise techniques for modernizing olive cultivation, lowering the cost of production. It encourages the transfer of technology and training. The Council has close ties with the Common Fund for Commodities. The UNCTAD can act as a catalyst and a reference point for past and future initiatives in international economic and trade cooperation. Supporting and helping the bodies responsible for administering international commodity agreements must remain a key element of UNCTAD functioning.

PRADEEP S. MEHTA, of Consumers International: The Consumers International, formerly the International Organization of Consumer Unions, is the only global federation of over 215 consumer organizations in about 85 countries of the world. Consumers International is not at ease with UNCTAD's new avatar of promoting foreign direct investment as the means for development, and in the process buttressing the role of transnational corporations as the engines of growth. Much against the spirit of multilateralism, the Organisation for Economic Cooperation and Development (OECD) has launched discussions on a multilateral agreement on investment within and among themselves as a part of the same scheme. This is further evidence of increasing marginalization of the majority of the world's governments and people. When liberalization is being globalized regulations and their enforcement should be of a global nature.

The other new issues of trade and environment, and trade and labour standards are protectionist devices to further marginalize the developing world. It is a radical departure from the commitments made by all parties to the WTO Agreement. The consumers of the world, call upon the international community to: freeze all discussions on new trade issues until the existing agreements are implemented equitably; assess losses and gains to all parties and address problem areas, such as the needs of the poor; address the problems of environment and trade as issues of sustainable production and consumption; devise and implement global regulatory mechanisms for regulation of business; develop global affirmative action plans for the benefit of the poorer people of the world; and strengthen the international structures and mechanisms to undertake these actions.

HAROLD O.M. ROCHA, of the World Federation of United Nations Associations (WFUNA): The Association urges the Conference to consider supporting initiatives and projects proposed by its members on the reform and strengthening of their legal systems. It also urges the Conference to consider encouraging the development of systems based on the rule of law, applied with transparency and predictability -- systems which recognize the right to life, liberty and the pursuit of happiness, and to enjoy the fruits of one's labour. They should be systems which hold their government officials

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accountable for their actions and which hold private and corporate citizens accountable for their practices abroad.

Non-governmental organizations and other institutions of civil society offer an increased level of participation in the policy-making and implementation processes of UNCTAD. They also offer their unique position of direct contact with the agents of international trade and with the beneficiaries of economic development. Above all, they would like to offer UNCTAD their energy, idealism and commitment to build a strong partnership to achieve common goals and objectives.

AUDREY ELIZABETH ROSE, General Secretary, United South African Trade Unions, on behalf of the World Confederation of Labour: Job-creation policies are developed everywhere, but unemployment is on the increase. It is urgent to pull out of this situation. The interest of money dictate that decisions are made without any limit and without any interdict. This goes beyond the law of the jungle, where the weakest can fill his stomach in relative quiet as long as he himself is not eaten.

The interests of money have to be submitted to interdicts prescribed by laws democratically enacted by political leaders who are concerned about the common good. There must be an account of the real needs and aspirations of each person and each group, and there is a need to define democratically the strategies to satisfy them. It is essential that the large financial and commercial institutions within the United Nations, rather than advocating structural adjustments, devote themselves to the implementation of international intervention policies so as to restore the financial and budgetary balances of the States.

Right of Reply

TIM MORRIS (United Kingdom), speaking also on behalf of the United States, replied to the statement made by Iraq on 1 May: The allegations made by the Iraqi representative are untrue. He referred to a "blockade", but failed to tell that what is in place is a sanctions regime adopted by the Security Council. Iraq did not tell the reasons for the Council's decision. Food and humanitarian supplies are not covered by sanctions. The Sanctions Committee allows Iraq to import legitimate requirements in accordance with Security Council resolutions. Last year the Committee authorized the import of goods by Iraq worth some $4 billion.

Council resolution 986 (1995) allows the Iraqi leadership to buy humanitarian supplies that the civilian population desperately needs. Many opportunities have been open to that leadership. But all have been rebutted by it. The truth is that the United Kingdom and the international community seem to care more for the well-being of the Iraqi people than the President of Iraq and his associates.

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For information media. Not an official record.