U n i t e d n ations Conferen C e o n t r a d e a n d d e v e l o p m e n t

Development-centred globalization: Towards inclusive and sustainable growth and development doha - qatar - 2012 Creating Shared Value From farm to fork

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UNCTAD XIII

United Nations Conference on Trade and Development

Development-centre d globalization: T o w a r d s inclusive an d s u s t a i n a b l e g r o w t h a n d d e v e l o p m e n t

Doha, Qatar, 2012

Published by International Systems and Communications Limited (ISC) in conjunction with the United Nations Conference on Trade and Development (UNCTAD) on the occasion of the quadrennial ministerial conference UNCTAD XIII.

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T +974 4405 1000 E [email protected] F +974 4405 2000 www.meeza.net Contents

UNCTAD XIII

INTRODUCTION Policy responses to higher food prices 78 Message from the UN Secretary-General By José Graziano da Silva on the occasion of UNCTAD XIII 8 The multilateral trading system of the Message from the Secretary-General of future 82 UNCTAD 10 By Pascal Lamy UNCTAD at a glance 14 Helping vulnerable countries develop in a challenging world economy 86 Qatar – Host Country of UNCTAD XIII 18 By Patricia Francis UNCTAD ministerial conferences 24 Arab uprisings: New realities and Message from the President of Ghana 26 challenges 88 By Rima Khalaf ARTICLES FROM UNCTAD A fresh start for economic growth with INTERNATIONAL CONTRIBUTIONS social equity 30 The right of political and economic By Heiner Flassbeck participation for Arab women 96 UNCTAD’s moment 34 By Professor Mona Makram Ebeid By Guillermo Valles Making progress with the eradication of Shaping a new investment and enterprise poverty in Brazil 101 agenda for sustainable and inclusive By Avanildo Duque development 38 Millennium Development Goals and the By James Zhan development agenda in Africa 103 Making growth an engine of poverty By Alfred G. Nhema reduction and inclusive development: Overcoming governance issues in Africa 107 The post-crisis challenge for LDCs and By Mo Ibrahim* other low-income economies 42 Food security and global governance: By Taffere Tesfachew Waiting for coherence 110 Data on LDCs 46 By Jeremy Hobbs Technology and innovation, a cornerstone Gender equality, economic development of development policies 50 and climate change 114 By Anne Miroux By Mary Robinson*

ARTICLES FROM THE FAMILY OF Ethical ecotourism and sustainable INTERNATIONAL ORGANIZATIONS development 118 By Kathryn Pardo Rio+20: Preparing the future we want 58 An Asian perspective on the world food By Sha Zukang crisis and its impact on development 124 The importance of investing in Africa 62 By Chandran Nair By Dr Kandeh Yumkella Acknowledgements 128 Global action for productive investments and decent jobs 68 By Juan Somavia *Members of the Group of Eminent Persons created by the UNCTAD Secretary-General in 2005 to enhance the role and impact Inclusive growth – an enduring challenge of UNCTAD. for equitable globalization 72 The opinions and views expressed by the authors in this book are not By Helen Clark necessarily those of UNCTAD, its Member States or the publisher. While every care has been taken in the preparation of this book, they The green economy: Delivering social, are not responsible for the authors’ opinions or for any inaccuracies in environmental and economic benefits 74 the articles. By Achim Steiner Unless otherwise stated, the dollar ($) values given in this book refer to the US dollar. Contents

5 Together we can do more

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and the WORLD

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Standard Bank Plc which is a member of the London Stock Exchange, the London Bullion Market Association and the London Metal Exchange and a firm authorised and regulated by the Financial Services Authority has approved this notice for distribution in accordance with the United Kingdom regulatory and legislative requirements. SBSA 95405-08/11 Moving Forward is a trademark of The Standard Bank of South Africa Limited Message from the UN Secretary-General on the occasion of UNCTAD XIII UNCTAD XIII By Ban Ki-moon, United Nations Secretary-General

introduction

NCTAD XIII faces challenges as daunting as any the international community has addressed in the history of these quadren­ Unial gatherings. Since the last ministerial conference, the world has seen major upheavals across the world economy and political landscape. A spike in global food prices in the summer of 2008 threatened food security for millions of poor people, and led to violent demonstrations in several countries. Later that same year, the biggest financial crisis since the 1930s sent the advanced economies

r i g h t into recession, and led to a sharp slowdown in Ban Ki-moon: many developing countries, threatening a reversal UNCTAD has been of their recent development gains. The recovery has a voice for the been fragile, and is now stalling. concerns of the developing world In the Arab world, the recent unrest has shown since 1964. that a lack of economic opportunity and political voice are not sustainable. Similar protests have erupted in other regions, including in long- crisis and help to define the policy measures, both established developed-country democracies, in short and long-term, needed to reset the world response to a growing awareness of inequality and economy on a sustainable path of growth. As social injustice and a sense that the playing field is measures by the G20 have shown, cooperative tilted in favour of entrenched interests and elites. solutions will be more effective than individual Since its founding in 1964, UNCTAD has been a voice nations acting alone. The most vulnerable econo­ for the concerns of the developing world and a source mies deserve greater help in dealing with the of policy ideas on trade and development problems. consequences of a crisis they did not cause, such as The current global slowdown risks throwing ensuring that official development assistance does millions of people back into abject poverty, further not contract when it is needed most. threatening progress towards the Millennium Second, UNCTAD XIII should consider what rules Development Goals. This is taking place against the and institutions will be needed to prevent any backdrop of stalled trade negotiations – a process future crisis of such proportions. An important that was meant to produce sizeable dividends for element will be harnessing the power of financial development, but to date has generated only more flows for development, while safeguarding against resentment at the inequities and inefficiencies of the the problems that can occur should such flows current trade regime. slacken or, in the worst cases, suddenly disappear. To create the building blocks for fairer globali­ Third, there are lessons to be learnt from the zation, and to move the world more determinedly in crisis that can be more broadly reflected in the dir­ection of inclusive, equitable and sustainable development policy. Investing in developing development, UNCTAD XIII must address four main countries is in everyone’s interest; these countries Message from the challenges. are great sources of economic dynamism. Short- UN Secretary- First and foremost, the conference must build term austerity should not deflect us from our long- General on the international consensus on the causes of the current term commitment to the world’s poorest people. occasion of UNCTAD XIII

8 UNCTAD XIII

introduction

Cutting aid will not balance budgets, but it will hurt to a robust outcome to the Rio+20 UN Conference the poor. Assistance is not charity; it is smart on Sustainable Development. And I welcome investment in security and prosperity, and an engine UNCTAD’s efforts to focus on gender, including a of growth that creates jobs and expands markets. High-Level Event in Doha on women and develop­ Fourth, the conference should advocate for a ment. While often overlooked in aggregate statistics, successful Doha trade round. It has now been more women tend to be the most vulnerable members of than a decade since the negotiations were launched. poor households, and are often deprived of educa­ The cost of lost opportunities has already been tional opportunities, medical care and adequate enormous; further delays simply add to an already nutrition. We must do more to make trade and unacceptable toll in lost revenue and declining trust. development policies more gender-sensitive. Despite the recent crisis, there has been impor­ After the largest crisis since the Great Depression, tant progress. Africa has made unprecedented gains we now face the momentous task of building a more in economic growth and educational access. The equitable and inclusive world economy that can world as a whole remains on track to achieve the deliver sustainable development for all. I encourage MDG poverty-reduction target: the global poverty all partners – governments, business, civil society rate has declined to less than 15%, well below the and others – to bring their best ideas and a strong 23% target. However, this is largely the result of sense of purpose to UNCTAD XIII. Time is of the fast growth in a number of populous Asian coun­ essence. Let us use this opportunity to steer the tries. Vulnerabilities persist almost everywhere. world on a more prosperous, equitable, inclusive UNCTAD XIII can explore ways to accelerate and sustainable path towards the future we want. progress towards the MDGs and help in the design of a post-2015 United Nations development Ban Ki-moon is the Secretary-General of the agenda. The conference is well timed to contribute United Nations.

l e f t A community meet­ing to discuss village reconstruc­tion, Yogyakarta, Indonesia. The important role played by women in development will be discussed at a High-Level Event in Doha.

Message from the UN Secretary- General on the occasion of UNCTAD XIII

9 Message from the Secretary-General of UNCTAD UNCTAD XIII By Supachai Panitchpakdi, Secretary-General of UNCTAD

introduction

lobalization has been a central theme of UNCTAD conferences since the mid-1990s. It is now so much taken for granted that we Glive in an interdependent world that it hardly merits attention. However, the global system that has emerged over the past two decades has become increasingly unstable, unbalanced and unequal, skewed above all by the dominance of unregulated financial markets. Breaking with “business-as- usual” is a prerequisite for achieving equitable and sustainable outcomes.

From Accra to Doha At our last conference, in Accra, few anticipated the financial maelstrom that was over the horizon. Things changed dramatically in September; in quick succession credit markets froze, equity prices r i g h t Dr Supachai collapsed, leading financial institutions failed, Panitchpakdi. while many others turned to their governments for support. The speed of contagion was breath­ taking, and the sense of panic in the financial The impact of finance-driven globalization markets and among policymakers was palpable. Over the last three decades, the extensive A concerted collective effort by leading econo­ deregulation of the financial sector, dismantling of mies, including some of the large developing controls on cross border financial activities, and the countries, prevented a repeat of the Great ensuing surge in capital flows have signalled a Depression of the 1930s. However, recovery, radical break with the postwar international policy particularly in the advanced economies, has framework established at Bretton Woods. The rapid been sluggish and is now faltering due to the ascent of financial interests has eroded the checks combined drag of accumulated debts and weak and balances that previously helped channel market demand. The Euro situation is adding to a growing forces into the kind of creative, productive activities mood of crisis and uncertainty with knock-on needed for long-term growth, and instead effects felt across the world through adverse encouraged short-term, and at times destruc­tive, trade and financial flows. behaviour by banks, businesses and households. As a result, UNCTAD XIII is taking place in a Ideological support came from the efficient market very different global setting from UNCTAD XII. hypothesis, which made the case for a hands-off However, despite a harsh economic outlook, policy approach applicable to all economic there is reason for optimism. The crisis provides circumstances and challenges. the opportunity for real change. Conventional Finance-driven globalization (FDG) has effectively wisdom has been challenged and more and more established a new kind of growth model – one people across the globe are voicing their discontent. which has proved to be extremely unstable due the Fresh ideas and forward thinking are the order excessive reliance on mounting debt, rising asset Message from the of the day. prices and ever more feverish and impenetrable Secretary-General of UNCTAD

1 0 UNCTAD XIII

introduction

financial innovation. Extensive economic imbalances balanced integration with the global economy. The – with credit-fuelled consumption booms, mounting challenge is less about “getting prices right” and income inequality, exchange rate misalignments, more about “getting development right” through a current account imbalances and balance of pragmatic, proactive, and socially inclusive approach payments crises – have been the result. to macroeconomic, trade and industrial policies. This environment has produced some winners but Reforming the financial system is the obvious many have lost out. In some cases, such as the agri­ place to begin this challenge. Even before the crisis, cultural sector, lives and livelihoods have been lost. it was clear that stable and inclusive development was incom­patible with speculative market Moving towards development-led behaviour, boom–bust cycles, and the austerity globalization programmes to which they invariably lead. It is The desire to rebalance the globalization process, telling that the emerging success stories from the ensure more inclusive outcomes and make it South have, in large part, pursued policies that properly managed is back on the agenda. At avoided these dangers. Finance needs to get back UNCTAD, we have used the term development-led to the business of providing security for people’s globalization (DLG) to describe principles and savings and mobilizing resources for pro­ductive policies that need to take priority in the global eco­ investment. Reforms are also needed to replace nomic agenda if the faltering recovery is to become unruly, pro-cyclical capital flows with predictable a more prosperous future for all. Funda­mental to and long-term development finance, to regain DLG is an emphasis on equity and inclusion. stability in currency markets and to support DLG is not intended to provide an off-the-peg expansionary macro­economic adjustments. policy package for all countries. Indeed, it firmly Surveillance and regulation will need to be rejects this approach in favour of more pragmatic strengthened at all levels, and new insti­tutional responses to addressing the challenges and arrangements may need to be considered. Regional constraints facing inclusive and sustainable financial cooperation, despite the current difficulties outcomes at the national and international levels. in the Eurozone, will, in particular, have a much There has to be an important place for markets, but larger role to play in a more balanced inter­national markets must also know their place. Governments architecture. need the policy space to take an active role in Stable monetary and financial arrangements are a managing balanced outcomes. But in an inter­ precondition for making trade and investment work dependent world, the rebalancing challenge will for inclusive growth and development. But require collective support and action from the inter­ rebalancing requires that financial and other national community. resources are chan­nelled towards the right kind of It is a basic truth that people everywhere want productive activities. Industrial development much the same thing: a decent job, a secure home, remains a priority for many developing countries a safe environment, a better future for their children because of the opportunities it provides to raise and a government that listens and responds to their productivity and incomes, and to get the most from concerns. UNCTAD has consistently suggested a international trade. But a wider approach, including battery of policy measures and institutional reforms a focus on the primary sector in many least at national and international levels to support rising developed countries (LDCs), is needed to ensure living standards in developing countries, build their that measures to diversify economic activity are Message from the resilience to external shocks and help them pursue a consistent with job creation, the security of food Secretary-General of UNCTAD

1 1 UNCTAD XIII

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and energy supplies, as well as effective responses The emerging South to the climate challenge. Over the past two decades, and particularly in An inclusive development agenda cannot depend the last 10 years, the locus of growth has shifted on economic policies alone. Under FDG, the stresses South. Annual average growth rates across all and burdens of unregulated markets have, all too developing regions have outpaced those in the often, been shifted to individuals and households advanced coun­tries, often by a considerable margin. and, in countries where social welfare systems exist, Since the Accra conference, the share of developing to gov­ernment budgets. In many cases, unprece­ countries in world income has risen by more than dented increases in income inequality have gone three per­cen­tage points, to 30%. Trade and invest­ hand-in-hand with underfunded public services and ment patterns have shifted accordingly, and new rising levels of household indebtedness. The result­ political alliances and groupings have emerged, ing cost to econo­mic security and social cohesion suggesting that a new world order is already has been enormous. Even when growth has acceler­ taking shape. ated, as it did in many developing countries between The resilience to, and rebound from, the crisis in 2002 and 2008, too many people were left behind. parts of the developing world marks an important A balanced economy depends on a strong social com­ break with the past and has raised hopes of a pact which, in turn, requires a range of universal prolonged period of convergence ahead. UNCTAD and targeted social policies, tailored to specific has always looked to an emerging South as key to a circumstances, to ensure that the benefits of growth more balanced global economy. However, a degree are widely enjoyed and its risks are fairly shared. of caution is warranted. To date, this shift has been

r i g h t Laem Chabang Port in Thailand; UNCTAD sees the emerging South as vital to a more balanced global economy.

Message from the Secretary-General of UNCTAD

1 2 UNCTAD XIII

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uneven, with large differences between developing regions and among individual countries. Many LDCs are seeing widening income gaps between them and other countries. Moreover, many emerging markets remain dependent on leading economies and vulnerable to changes in policy and economic conditions. The impact of the Northern debt crisis on developing countries must be monitored carefully. The emerging South is still a work in progress and new forms of cooperation and partnership are needed to consolidate recent gains and meet the challenges ahead. Still, as I have suggested in my report for

UNCTAD XIII, we can learn from the successful l e f t development experiences of the past three decades. Access to clean energy and decent One of the paradoxes of FDG is that its success housing remain stories have resisted the logic of global financial priorities on the markets and found solutions tailored to local needs development agenda. and conditions. They have done so by employing state capacity to mobilize different interest groups However, a starting point will be a change in around national development as an urgent priority, mindsets and policy measures so finance works for building confidence in its own actions and continu­ society rather than the other way round. ously adapting to shifting economic circumstances. Over the past four years, the world has seen They have, moreover, often developed strong ties immense changes, much of them unanticipated with neighbouring countries. Extending and and unplanned. With the constructive participation deepening such ties over the coming decade will of all stakeholders here in Doha, it is time to work have a profound impact on the shape of the together for a transition to a more equitable and global economy. sustainable world. In our interdependent world, a more secure A Conference for change and inclusive global economy requires strong The current system of globalization is unsustainable international leadership and carries collective on many fronts. Financially, many households and responsibilities. There are hard questions to governments are heavily indebted; economically, job answer about whether current arrangements creation has been lagging even when growth has can help to build socially inclusive alternatives been strong; socially, there has been rising to FDG, and what governance structures might inequality while political unrest has been growing; support DLG. UNCTAD XIII in Doha provides an environmentally, the strains are becoming more opportunity for the international community to evident almost daily. In short, business-as-usual is a discuss these challenges in a frank, open and dead end. A new kind of growth path that is constructive manner. inclusive and sustainable is urgently required. Not all constraints can be addressed at once and the Supachai Panitchpadku is the Secretary-General Message from the priorities will be different for each country. of UNCTAD. Secretary-General of UNCTAD

1 3 UNCTAD at a glance

UNCTAD XIII Prosperity for all

introduction

UNCTAD is the United Nations body ◆ Trade and commodities collaborates with more than 80 countries responsible for trade and interrelated dev­ UNCTAD’s programmes on international in different special categories to improve elopment issues, serving governments and trade promote development through their development prospects, particularly enhancing dialogue among stakeholders international trade; provide analysis and the through productive capacity building. The towards achieving prosperity for all. data to improve understanding of curr­ent division also works to enable effective It makes policy recommendations on issues in international trade; support develop­ participation by LDCs in the global trade, finance, investment and technology, ing countries’ participation in international economy. It provides timely, targeted based on development-focused research trade negoti­ations and trade agreements; research and analysis and innovative policy and analysis. strengthen ser­vice sectors in developing recommendations on issues relevant to As an intergovernmental forum, UNCTAD countries; promote the integration of trade, these subjects. provides a platform where countries can environment and sus­tainable development; debate and build consensus on policies best analyze issues related to competition law, ◆ Technology and logistics suited for overcoming disparities and generat­ policy and consumer protection; and Through policy research and capacity ing people-centred sustainable development. enhance the contribution of the commodity building, the Division on Technology It is committed to helping developing sector to development through diversifi­ and Logistics supports the economic countries reach international develop­- cation and risk management. develop­ment and competitiveness of ment goals. developing countries and economies in It delivers tailor-made technical assist­ance ◆ Investment and enterprise transition in a knowledge-driven, globalized to developing countries and econo­mies in This division is recognized as a global world economy. This division seeks to transition, and helps them to build the centre of excellence on issues related to increase access to knowledge and capacities they need for fair integration into investment and enterprise for sustainable technology – including information and the world economy and for improving the development. Built on several decades of communication technologies – and to well-being of their citizens. successful experience, its staff of 100 foster innovation in such countries. provides international expertise in research Activities include helping them design and Areas of work and policy analysis, inter-governmental implement technology and innovation ◆ Globalization and development consensus-building and technical assistance policies for economic growth and sus­ UNCTAD’s programme on globalization, to more than 150 countries. Its flagship tainable develop­ment. The division also interdependence and development products are the “3Ws”: the annual World carries out a large work programme aimed contributes to international debate on Investment Report, the biannual World at developing efficient trade logistics management of the consequences of Investment Forum, and the interactive services for trans­port, trade facilitation globalization for developing countries. This World Investment Network, which has and customs. programme promotes macroeconomic more than 9,000 members. It also produces policies at the national, regional and Investment Policy Reviews, Issues in Basic facts international levels that are conducive to International Investment Agreements, Headquarters: Geneva, Switzerland economic growth and poverty reduction. It Investment Trends and Policy Monitors, Membership: 194 Member States maintains UNCTAD’s statistical database, FDI/TNC databases, the Transnational Secretariat: 400 staff members examines economic trends and prospects, Corporation Journal, and Investment Secretary-General: Supachai Panitchpadki and undertakes studies of successful Facilitation Compacts. It is active in the (Thailand) since September 2005. development strategies. The division also fields of international accounting standards, Deputy Secretary-General: Petko Draganov carries out analysis of debt issues affecting corporate governance, and entrepreneur­ (Bulgaria) since May 2009. developing countries and provides them ship development Budget: UNCTAD has an annual with technical support in their efforts to regular budget of approximately manage external debt. And it provides ◆ Least developed countries and Africa US$68 million from the United Nations and assistance to the Palestinian people and The Division for Africa, Least Developed $30 million in extra-budgetary technical supports their economic development. Countries (LDCs) and Special Programmes assistance funds.

1 4 UNCTAD XIII

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UNCTAD’s Côte d´Ivoire* Ireland* New Zealand* Swaziland membership Croatia* Israel* Nicaragua* Sweden* The following 194 Cuba* Italy* Niger Switzerland* countries are members Cyprus* Jamaica* Nigeria* Syrian Arab Republic* of UNCTAD. Czech Republic* Japan* Norway* Tajikistan Afghanistan* Democratic People´s Jordan* Oman* Thailand* Albania* Republic of Korea* Kazakhstan* Pakistan* The Bahamas Algeria* Democratic Republic of Kenya* Palau The Central African Andorra the Congo* Kiribati Panama* Republic* Angola* Denmark* Kuwait* Papua New Guinea* The Former Yugoslav Antigua and Barbuda Djibouti* Kyrgyzstan* Paraguay* Republic of Argentina* Dominica* Lao People´s Democratic Peru* Macedonia* Armenia* Dominican Republic* Republic Philippines* The Holy See Australia* Ecuador* Latvia* Poland* The Netherlands* Austria* Egypt* Lebanon* Portugal* Timor-Leste Azerbaijan* El Salvador* Lesotho* Qatar* Togo* Bahrain* Equatorial Guinea* Liberia* Republic of Korea* Tonga Bangladesh* Eritrea Libya* Romania* Trinidad and Tobago* Barbados* Estonia* Liechtenstein* Russian Federation* Tunisia* Belarus* Ethiopia* Lithuania* Rwanda* Turkey* Belgium* Fiji Luxembourg* Saint Kitts and Nevis Turkmenistan Belize Finland* Madagascar* Saint Lucia Tuvalu Benin* France* Malawi Saint Vincent and the Uganda* Bhutan* Gabon* Malaysia* Grenadines Ukraine* Bolivia* Gambia Maldives Samoa United Arab Emirates* Bosnia and Herzegovina Georgia* Mali* San Marino United Kingdom of Botswana* Germany* Malta* São Tomé and Príncipe* Great Britain and Brazil* Ghana* Marshall Islands Saudi Arabia* Northern Ireland* Brunei Darussalam Greece* Mauritania* Senegal* United Republic of Bulgaria* Grenada* Mauritius* Serbia* Tanzania* Burkina Faso* Guatemala* Mexico* Seychelles United States of Burundi* Guinea* Micronesia (Federated Sierra Leone* America* Cambodia* Guinea-Bissau States of) Singapore* Uruguay* Cameroon* Guyana* Moldova* Slovakia* Uzbekistan Canada* Haiti* Monaco Slovenia* Vanuatu Cape Verde Honduras* Mongolia* Solomon Islands Venezuela* Chad* Hungary* Montenegro* Somalia* Viet Nam* Chile* Iceland* Morocco* South Africa* Yemen* China* India* Mozambique* South Sudan Zambia* Colombia* Indonesia* Myanmar* Spain* Zimbabwe*

Comoros Iran (Islamic Republic Namibia* Sri Lanka* The members of the Trade Congo* of)* Nauru Sudan* and Development Board, the governing body of UNCTAD, Costa Rica* Iraq* Nepal* Suriname* are marked with*

1 5 Mannai Corporation QSC

The Mannai Corporation was established in 1950. The in the power generation and distribution, water treatment many activities of its subsidiaries and associate companies and distribution, and many other sectors. make it one of Qatar’s largest trading and services groups Industrial Supplies and Building Materials: Distributor with more than 3,300 employees. for industrial tools and machinery, welding equipment Core activities include engineering services to the oil and consumables,­ building and roofing materials, turbine and gas sector, automotive and heavy equipment spare parts, service and repair. distribution and service, information and communication UBMO Mannai: Construction and building materials technology, home appliances and electronics, logistics distribution. and warehousing, geo­technical, geological, environ- Mannai Air Travel and Mannai Holidays: IATA agency for mental and material testing services, facilities main- full service business and leisure travel solutions. UK Visa tenance and management services, travel services, trading processing agents. and representation. Space Travel: GSA for Korean Air, Kenya Airways, The company operates from Mannai’s headquarters Philippine Airlines and FlyDubai. and showrooms at the Ramada Junction in Salwa Manweir: Providing high precision machining and Road, Doha, and from the Mannai Complex in Salwa engineering support to the oil and gas industry. API and Industrial Area. ASME certified. Transfield Mannai Facilities Management Services: Mannai Business Units Facilities management for commercial and residential (Products & Services) property. Installation and maintenance of infrastructure Automotive: Cadillac, GMC, Subaru Cars. Sales, rental and copper and fibre-optic cable jointing. and service. Qatar Logistics: Clearing, forwarding and logistics Heavy Equipment: DAF, Daewoo Bus and Eicher trucks, services, representing Hellman Worldwide Logistics, a JCB, Grove, TCM, Compair, Holman and Thermo King worldwide freight-forwarding company, and drawing equipment. Sales, leasing and service. upon its network and infrastructure to provide a Information and Communication Technology: comprehensive logistics service in Qatar. HP, Toshiba, Oracle, Cisco, Microsoft. Integrated solu- Gulf Laboratories: Main activities include geotechnical tions encompassing network, hardware and software site investigations, laboratory testing and drilling services. technology. Specialist testing includes hydrological studies, geo­ Home Appliances and Electronics: Distributor and physical surveys and pile integrity testing. service agents for Toshiba, TCL, Moulinex, Seiko, Ignis, ManSoft System Private Limited: Focused on the Bompani, Coleman, HVAC airconditioning system and development and implementation of business solutions other consumer and household products. such as enterprise applications, systems integration and Energy and Industrial Markets: Representing principals application outsourcing.

Qatar and the Gulf states

UNCTAD XIII By Georgia Lewis, Deputy Editor, ISC

introduction

Qatar developed rapidly from the 1940s with with pearls being the major export during the Greco- the discovery of large oil and gas reserves but Roman period and even being exported as far east as the independent Arabian Gulf state has a long China in the 13th century. In the 16th century, history. The country, under the leadership of Portugal used Qatar as a trading port. HH Sheikh Hamad bin Khalifa Al Thani, extends From the seventh century, Islam swept the Arabian over a peninsula that is about 200 kilometres region including Qatar and this played a serious role in long and 100 kilometres wide, covering a total shaping the social and cultural values of the nation. area of 11,850 square kilometres. From 1635, British relations were established with Qatar. This started out as a trade relationship and Qatar is part of the Gulf Cooperation Council (GCC) established its hold on the Gulf states under the group of nations, formed in 1981, whose members pretext of protecting shipping routes in the region. In also include the United Arab Emirates, Oman, Kuwait, 1820, a General Treaty of Peace with the Gulf Arab Saudi Arabia and Bahrain. states was signed. The earliest archaeological evidence suggests Qatar The Gulf states were to go through a period of was inhabited as early as the Stone Age or Neolithic exciting change over the 20th Century with the b e lo w The Pearl fountain on period and there was early trade, mainly of pottery and discovery of oil in the region. Qatar’s then ruler, Doha’s corniche is a dried fish with Mesopotamia in the fifth and fourth Sheikh Abdullah bin Qassim Al Thani, granted the reminder of the millennium BC. Trade between Mesopotamia and what first exploration permit for oil in June 1930. Oil was importance pearl is modern-day north-west India also went through discovered in Qatar in the late 1930s but World fishing has played throughout the Qatar during the Bronze Age. For centuries, however, War II intervened and oil exports did not begin until history of Qatar. Qatar was most renowned as a pearl-fishing nation December 1949. Following British withdrawal from

1 8 UNCTAD XIII

b e lo w HH Sheikh Hamad bin Khalifa Al Thani officially inaugurating Qatargas 2 in 2009. Qatargas now ships a staggering 77 million tonnes of LNG per year. introduction

the Gulf, Qatar assumed full responsibility for defence and foreign affairs and joined the United Nations in 1971, heralding a period of spectacular growth and development.

Qatar’s economy Qatar’s long history of trade goes back 6,000 years and it continues today with Qatar now being the world’s largest exporter of liquefied natural gas (LNG). This is the cornerstone of the Qatari economy. In 1971, the North Gas Field was discovered in Qatar by Wintershall. It is the world’s largest single field for natural non-associated gas and the govern­ ment devised a three-stage plan for its development. This included starting gas production for local use, establishing plants in Qatar’s north-east for lique­fying gas and starting the export of gas to Japan and then Qatar today expanding to South Korea and laying pipelines to For Qatar, the period since 1971, largely thanks to the pump gas to neighbouring Gulf states. revenues from oil and natural gas, has seen the By 2006, Qatar was exporting 23 million tonnes of country make significant progress in terms of infra­ b e lo w Pearl GTL, which LNG to Asia, Europe and North America, overtaking structure, education, healthcare, culture, tourism and recently started Indonesia as the world’s top exporter of LNG, and today as a regional and international hub for business and production, will be has the capacity to produce 77 million tonnes a year. the media. Education City is home to branches of some the world’s largest Within the realm of natural gas production, Qatar of the world’s most prestigious universities, such as source of gas-to- liquids products, has diversified with natural gas liquids plants being Georgetown University and Carnegie Mellon producing 140,000 developed not just for exporting purposes but also to University. Qatar Airways, the national carrier, has also barrels of GTL provide feedstock for local industries such as Qatar proven to be a commercial success. products each day. Petrochemical Company (Qapco). Meanwhile, the Qatar General Petroleum Corporation (from 2000, Qatar Petroleum) had been set up in 1974 and all oil operations were nationalized in 1977. Today, Qatar produces 1.5 million barrels of oil a day from on- and offshore fields. Qatar has also sought to diversify its economy with such ventures as Mesaieed, a major industrial estate which is home to a wide range of companies including Qatar Steel and Qatalum, an aluminium plant. Other diversification plans include construction, real estate, education, tourism and financial services, with 2005 seeing the establishment of the Qatar Financial Centre. Between 1996 and 2006, Qatar’s GDP doubled in real terms and the country continues to manage the challenges and enjoy the benefits that come with such rapid economic growth.

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r i g h t Opened in 2008, the Museum of Islamic Art provides the perfect setting for the display of the collection’s works from the 7th to the 19th Century.

Today, Qatar is a popular destination for conferences Qatar. The landmark Museum of Islamic Arts opened with venues such as the Doha Exhibition Centre, in 2008 and was designed by renowned architect IM Pei. premium hotels and resorts ideal for such events. Maintaining links with Qatar’s heritage, the Souq As well as providing world class conference facilities, Waqif sells traditional handicrafts, spice, perfumes and b e lo w the Qatar Tourism Authority has worked hard to art in a Bedouin-style marketplace. The Heritage The Georgetown University building in promote the nation’s other tourist attractions. Tourism Village and newly opened Cultural Village are also part the Qatar Science is proving to be an important source of employment of this plan. There are also historic forts such as the Al and Technology Park, and revenue for Qatar. Zubara Fort, the Al Wajba Fort and the Umm Salal one of several high On the cultural front, museums include the Museum Muhammad Fort, all dating back to the 19th Century. profile international universities that have of Islamic Art, the Qatar National Museum and the New attractions have been developed alongside branches in Qatar. Museum of Orientalists. Theatre is also popular in the promotion of traditional sites, galleries, theatres and museums. Sporting events are another of Qatar’s attractions with a full annual calendar that includes tennis, motorsport, football, golf, sailing, triathlon, equestrian, athletics and fencing. In 2022, Qatar will be hosting the FIFA World Cup. The Asian Games have also been hosted by Qatar in 2006.

The Qatar Foundation The ruling family has established the Qatar Foundation for Education, Science and Community Development with HH Sheikha Mozah bint Nasser Al Missned as the chairperson and driving force behind the organization. It is a non-profit organization to support the develop­ ment of people’s abilities in Qatar and improve quality of life through investments in human capital, techno­ logy and partnerships with elite organizations.

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It was established in 1995 by HH the Amir Sheikh Hamad bin Khalifa Al Thani. Qatar has been on a journey from a carbon eco­ nomy to a knowledge economy and to continue this journey, human potential needs to be unlocked. The foundation is aiming to meet this goal using the Qatar l e f t National Vision 2030 as a blueprint. Qatar has been The Barzan Towers fortunate enough to acquire vast revenues from hydro­ at Umm Salal Muhammad were carbon resources and these will help enormously in the built by Sheikh nation’s transformation into a knowledge economy. Mohammed bin “Unlocking Human Potential” is the headline aim. Jassim Al Thani. The three pillars of the foundation are Education, Science & Research and Community Development. By The important role equestrian pursuits have played ensuring Qatar’s young people have world-class in Qatari society is reflected with the creation of Al education, work experience and career opportunities, Shaqab, a state-of-the-art centre for the breeding of this will benefit Qatar, the Gulf region and the world. horses as well as the development of talented eque­ A progressive society, enhancing cultural life and strian athletes. protecting Qatar’s heritage while addressing the Partnerships between the foundation and seven community’s immediate social needs are imperative to universities in Qatar have proved enormously bene­ the foundation’s aims. Innovation and technology will ficial for important research projects. The foundation is be developed through education and sciences with a supporting the Weill Cornell Medical College with strong commercial focus. research on issues such as obesity, diabetes, metabolic Many important and diverse projects have been syndrome, cardiovascular disease, nervous system organized by the Qatar Foundation since 1995. These disorders and cancer. b e lo w Maintaining their projects aim to enrich the social and cultural life of Qatar Faculty of Islamic Studies also has a partner­ cultural heritage is Qatar, provide opportunities for education and ship with the foundation and its areas of research important to the employ­ment and enhance the importance of a cover a broad base including moderate thought, Qatari people. knowledge-based economy. The Qatar Careers Fair assists students and recent graduates to determine meaningful career paths. They can meet potential employers and attend useful work­ shops to help make the transition from university to the workplace. Around 50,000 visitors attend each year. In partnership with BBC World News, the Qatar Foundation has promoted free speech and lively exchanges of ideas with the globally televised Doha Debates. Such high profile figures as Bill Clinton, Archbishop Desmond Tutu, Shimon Peres and leading Hamas officials have taken part in these debates. Cultural projects undertaken by the foundation include development of Mathaf, the Arab Museum of Modern Art, and a joint publishing venture with Bloomsbury to produce fiction, non-fiction, reference, educational and academic books.

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and to fully participate in public life. Qatari women aged 18 and older are eligible to vote and run for munici­pal election and in April 2003, the first woman cabinet minister was elected in Qatar’s second municipal council elections. In 2006, a woman was appointed as Minister for Education and Teaching and another was appointed as a deputy chairperson in the National Human Rights Committee as well as one elected position in the 17-person Chamber of Commerce and Industry. Currently, there are more female than male students at Qatar’s state schools, women represent 52% of the workforce at the Ministry of Education and more than 50% of the administrative and staff members at Qatar University. Women are also playing a major role in healthcare with 500 Qatari women working in the field a b ov e Islamic finance, governance, architecture and compared to 357 men. Qatari women make up 21% Women are contemporary societies. of the nurses working at the Ministry of Public Health encouraged to play As well as looking after Qatar’s development, the and are also active in the field of preventive health. an active role in all parts of Qatari Qatar Foundation’s projects for meeting social needs In the Ministry of Justice, women head the sections society. Developing spread further afield. The Reach Out To Asia project responsible for Fatwah and Research, Legislation, IT skills will equip has committed $30 million over the next five years to Translation and Official Newsletters. There are also five them for the educational and development projects across Asia. women working as legal advisors in Fatwah and changing times ahead. Links between Qatar’s educational institutions and Legislation House and one in the State Cases Section. those of developing countries have been established to More than 200 Qatari women are working in assist in sharing information, knowledge and resources. national and foreign banks. To further encourage Emergency relief is provided to developing Asian female participation in the financial sector, the Qatar nations in times of natural and man-made disaster, Ladies Investment Company was established in 1998 focusing primarily on ensuring access to education is and the Businesswomen Forum set up in 2000. maintained during these difficult times. Qatari women are also making significant contributions in the fields of the arts, entertainment, Qatar and the role of women media and tourism industries. At UNCTAD XIII, HH Sheikha Mozah, wife of the Emir, will be addressing delegates on the role of women and The future of Qatar she has been especially prominent in encouraging the full The people and leaders of Qatar are optimistic about a participation of women at every level of Qatari society. positive future – as a nation that has become a leading In 1996, the Women’s Affairs Department was esta­ host of world events, investment in long-lasting blished. This department’s role is to find work opportu­ infrastructure has been strong and economic nities for Qatari women, proposing policies to assist confidence is high. with services for mothers and children and organizing Further major investment is planned in banking, cultural, religious and social activities for women. financial services, education and industrial plants. It is The Supreme Council for Family Affairs established also expected that more developers and companies will the Women’s Affairs Committee in 1998. This com­ relocate to Qatar with the country offering incentives

Qatar and the mittee proposes policies to encourage women to meet for new businesses as well as an airport that is a hub Gulf states their potential culturally, economically and politically for Arab nations as well as the rest of the world.

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quadrennialconferences7 Mr. Pierre Aubert, President of the Swiss Confederation,Cartagena, Geneva, 1992 1987 inaugurated by 8 Mr. Cesar Gaviria Trujillo, President of Colombia, 1 Mr. Ludwig von Moos, President of the Swiss 9 Mr. Nelson Mandela, President of South Africa, Geneva, 1964 Confederation, Midrand, 1996 2 Ms. Indira Gandhi, Prime Minister of India, New Delhi, Santiago, 1968 1972 10 Mr. Chuan Leekpai, Prime Minister of Thailand, Bangkok, 2000 3 Mr. Salvador Allende Gossens, President of Chile, 11 Mr. Luiz Inácio Lula da Silva, President of Brazil, São Paulo, 2004 4 Mr. Mzee Jomo Kenyatta, President of Kenya, Nairobi, 1976 12 Mr. John Agyekum Kufuor, President of Ghana, Accra, 2008 5 Mr. Ferdinand E. Marcos, President and Prime Minister of the Philippines, Manila, 1979 13 Doha, Qatar, 2012

6 Mr. Mika Špiljak, Chairman of the Presidency of Yugoslavia, Belgrade, 1983

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11 9 technical cooperation 3 The quadrennial Conferences take place at the government ministerial level. They include participation UNCTAD by high-level corporate officials and other representatives The quadrennial Conference of the private sector. is the highest decision-making body of UNCTAD. At these sessions, member States make assessments of current research trade and development issues, They are also attended by representatives of civil society discuss policy options, and organizations. The locations rotate formulate global policy responses. geographically. The thirteenth United Nations Conference The Conference also sets on Trade and Development UNCTAD’s mandate and work (UNCTAD XIII) will be held in Doha, priorities for the following Qatar, 21–26 April 2012. four years. consensus technical cooperation The development agenda of UNCTAD – the issues from Accra to Doha UNCTAD XIII By John Evans Atta Mills, President of Ghana

introduction

The Thirteenth United Nations Conference on focuses on trade and development, has taken a leading Trade and Development (UNCTAD XIII) will be role in analyzing the challenges and providing the held in Doha, Qatar from 21 to 26 April 2012. framework for more specific country focused The theme of the Conference is Development- development strategies that address the complexities Centred Globalization: Towards Sustainable and and challenges of achieving economic growth and Inclusive Growth and Development. UNCTAD development in a globalizing world. XIII will be the first UNCTAD Conference taking place in the Arab region. Issues and strategies In that search, the UNCTAD X conference in Bangkok, It is worthy of note that exactly four years ago the Thailand in the year 2000, had concluded and noted twelfth Conference (UNCTAD XII) was held in Accra, that globalization and interdependence have opened Ghana from the 20 to 25 April, 2008. The theme of new opportunities, through increased trade liberali­ the UNCTAD XII conference was “Addressing the zation and advancement in technology, for the growth Opportunities and Challenges of Globalization for of the world economy and development. The acceler­ Development”. UNCTAD XII was also the first ation in the pace of globalization had brought high UNCTAD conference to be held in Africa since 1996. expectations, that growth and development based on The preceding conferences of UNCTAD X in global market forces would be more rapid, more sus­ Bangkok, Thailand and UNCTAD XI in São Paulo, Brazil tainable and more widely shared. similarly had globalization-centred themes. The Since the acceleration of globalization from the 1990s, globalization phenomenon and the opportunities it and the assertion that the world has now become provides, as well as the challenges it poses for all “flat”, these expectations have not been met. The nations, irrespective of their level of development has, UNCTAD X Conference was right in concluding that therefore, evidently engaged the attention of economic the record is mixed. Some countries have successfully b e lo w analysts and policy makers across the world. adapted and benefited from globalization, however, HE John Evans Atta It is to be expected and absolutely imperative that the rewards of participating in the global economy Mills, President of Ghana meeting with UNCTAD as a knowledge-based institution and the have not accrued to all nations, and the challenges of Ban Ki-moon. organization within the United Nations system that the lack of effective regulatory mechanisms in both finan­cial and trade sectors have contributed towards the strained circumstances of the global economy today. Further, there is still a large gap between the developed and developing world, especially LDCs which global development initiatives have not addressed. This poses a serious challenge to the mandate of UNCTAD as an institution. As noted by UNCTAD XI, UNCTAD was created in 1964 as an expression of the belief that a cooperative effort of the international community was required to successfully integrate developing countries into the world economy. In rising to that challenge, UNCTAD has made a substantial contribution to the efforts of developing countries to participate more fully and to adapt to changes in the world economy. It has also provided an invaluable forum for advancing the interrelationship between trade and development from

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l e f t Ghana’s port city of Takoradi has been transformed by the oil industry. both national and inter­national perspectives. This ◆ Governance of the international financial system; and, notwithstanding, the facts show that there is clearly a ◆ Gender. lot more work to be done. In addition to the choice of appropriate topics and It is in line with that tradition, and acknowledging issues for examination UNCTAD XIII, as with previous the challenges of uneven economic growth and conferences, will set the UNCTAD mandate and work development among and within countries arising from priorities for the next four years, as informed by the globalization, that UNCTAD XIII in Doha, Qatar will conclusions of the conference. seek to re-define the causes and remedies for The conference, as UNCTAD’s highest decision-making addressing the inequitable world economic situation, body also has an important political function, in fostering under the broad subject of “Development-Centred intergovernment consensus building and collaboration Globalization: Towards Sustainable and Inclusive regarding the development of effective global, regional Growth and Development.” and national development policies and strategies. In my capacity as outgoing President of UNCTAD, The UNCTAD Agenda I take the opportunity of this publication to convey to The UNCTAD XIII conference will, therefore, provide the UNCTAD Membership, the Trade and Development yet another valuable platform to define the most appro­ Board and the Secretary-General our appreciation and priate strategies for achieving inclusive development. thanks for the immense support and cooperation we rec­ It is noted with satisfaction, that some of the critical eived. I am confident that we will have a successful and issues emerging for deliberation include: outstanding conference in Doha and I wish my succes­ ◆ The role of the developmental state; sor to the presidency a very successful term of office. ◆ The dangers of unemployment growth; The development ◆ The future of the multilateral trading system; John Evans Atta Mills is the President of Ghana. agenda of UNCTAD ◆ The role of new partners in development cooperation; The last UNCTAD conference was held in Accra, – the issues from ◆ Principles of responsible investment; Ghana in 2008. Accra to Doha.

2 7 THE GHANA CHAMBER OF MINES

The Ghana Chamber of Mines is the main minerals industry association in Ghana. The Chamber represents the collective interests of companies involved in mineral exploration, production and processing in Ghana.

Its activities are entirely funded by its member companies, which produce over 80 per cent of the Ghana's mineral output. The Chamber has represented the industry's interests since 1928.

Mr. Dan Owiredu Vision: Core Values: (President) To be a respected, effective and unified voice for the The principles that guide decision making which the mining industry. members of the Chamber will not compromise whilst achieving the mission and pursuing the vision are: Mission Statement: · Honesty To represent the Mining Industry in Ghana using the · Transparency resources and capabilities of its members to deliver · Good Governance services that address members, government and · Good Corporate Citizenship community needs, in order to enhance development. Commitment, and· · Unity

Dr. Joyce R. Aryee Objectives of the Chamber (CEO) Considering the strategic challenges for achieving its vision, the Chamber's objectives are: · Promote and protect the interests of the Mining Industry; · Promote and protect the image of the mining industry; · Establish and maintain effective membership governance; and · Provide thought leadership for the solution of national issues related to mining.

#22 SIR ARKU KORSAH ROAD, AIRPORT RESIDENTIAL AREA P. O. BOX 991, ACCRA | TEL: +233 302 760652 / 0243690023 | FAX: +233 302 760653 E-mail: [email protected] | Website: www.ghanachamberofmines.org The Ghana Chamber of Mines – Promoting environmentally and socially responsible mining UNCTAD XIII

Articles from UNCTAD

This section is a series of articles from UNCTAD’s leaders. ◆ Heiner Flassbeck, Director of the Division on Globalization and Development Strategies, says a fresh start is needed to ensure that economic growth occurs in a way that ensures social equity (page 30). ◆ Guillermo Valles, Director, Division on International Trade in Goods, Services and Commodities, asserts that UNCTAD’s moment has arrived and now is the time to make bold strides towards encouraging fair trade as a pathway to sustainable development (page 34). ◆ James Zhan, Director, Division on Investment and Enterprise, emphasizes the importance of creating a new agenda for investment and enterprise that will result in sustainable and inclusive development, especially in conjunction with other organizations (page 38). ◆ Taffere Tesfachew, Director, Africa, the Least Developed Countries (LDCs) and Special Programmes Division, discusses the developmental challenges faced by LDCs and low-income countries in a post-crisis economic environment. Detailed data on LDCs follows his contribution (page 42). ◆ Anne Miroux, Director, Technology and Logistics Division, writes about the ongoing role technology and innovation will play in formulating development policies and how this is especially vital for developing countries (page 50).

2 9 A fresh start for economic growth with social equity UNCTAD XIII By Heiner Flassbeck, Director, Division on Globalization and Development Strategies

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UN Secretary General Ban Ki-moon has emphasized that the wave of popular revolt that has erupted in the North Africa and Middle East region constitutes a “situation which calls for bold reforms”. Indeed, these momentous events also reflect massive social discontent and crises. The push for political change has been mirrored by equally vocal calls for alleviation of poverty, more and better jobs, better wages and social security, access to basic commodities at affordable prices and equitable distribution of national income.

r i g h t In its economic dimensions, the upheaval represents a Heiner Flassbeck: day of reckoning for the trade and economic policy This is an opportune choices made in the region over past decades. But for moment to rebuild neglected public policy-makers in countries facing similar pressures, this institutions. is an opportune moment to rebuild neglected public institutions so they can lead the process of reshaping economic and labour governance. This can provide a growth in economies ill-prepared to absorb burgeoning platform for a reassignment of macroeconomic policies urban and rural labour forces in productive and decent for sustained growth in ways that trigger a virtuous employment. While policy “reforms” proceeded apace, circle of investment, productivity growth, income and even generated GDP growth, it was accompanied by growth and employment creation so that the income bubbles of wealth and skewed, unsustainable income gains from productivity growth are distributed distribution, which has improved only marginally in equitably between labour and capital. many such countries. Having pursued export growth strategies to their The socio-economic fallout from globalization limits, at best many developing countries have wit­ The downside of rapid and poorly sequenced liberali­ nessed jobless growth episodes whereby workers laid zation, sweeping privatization programmes, restrictive off in the formal sector in bad times often tend to macroeconomic policies and export-led growth strat­ move into the informal economy because of the lack of egies has manifested itself vividly in the first weeks of social safety nets. the second decade of this third millennium. Vulnerable In more open economies, strengthening a country’s countries in North Africa and the Middle East, especi­ international competitiveness has often resulted in ally non-oil exporters, face significant social and poli­ downward pressure on wages, a dynamic strengthened tical pressures. However, the economic policy space by the move of surplus rural labour into the urban or necessary for appropriate responses to these pressures formal sectors. However, wage competition can only has been shrinking over the last decades. More often be sustained for a limited period of time in some, but than not, liberalization has not been able to prevent not all, countries – the lack of adequate domestic income concentration and the emergence of legions of demand generation would eventually affect economic educated, unemployed urban youth whose job and employment growth and could fuel social unrest. prospects are dim. This is the new policy challenge facing developing A fresh start for economic growth One of the defining features of the globalization countries whose export markets have been hit by with social equity process in the last three decades has been to create global recession and exchange rate fluctuations and

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where tolerance to wage compression has been of a wider policy malaise that has inspired a rapidly stretched to the limit. evolving social transformation agenda. In North Africa for example, acceleration of GDP Labour pays the price of the structural growth in the first decade of this century has been adjustment accompanied by higher labour productivity and Policy reforms in developing countries since the 1980s declining incidence of vulnerable employment and of involved reorientation of macroeconomic policies, with the working poor. But otherwise, labour market priority given to combating inflation, attracting foreign characteristics have remained largely unchanged since direct investment, and greater openness to trade and the 1990s. Participation rates increased marginally, and b e lo w capital flows. With market liberalization, the economic in the late 2000s were at about 44% of the labour UNCTAD’s Trade and role of governments was reduced, and the goals of full force. Registered unemployment has shrunk from Development Report 2011 focuses on the employment and equitable income distribution lost around 15% in the late 1990s, although, at between post-crisis policy their former pre-eminence. 10-13% in countries of North Africa, it remains high challenges in the According to the structural adjustment paradigm relative to other developing regions. world economy. that has since been widely advocated, the leading role in development hitherto accorded to industrialization was deemphasised and prominence was accorded to whichever sector was seen as reflecting a country’s comparative advantage. In this view of what best promotes development, liberalization was expected to permit a reallocation of productive resources from protected, inefficient industries to export-oriented competitive sectors that were supposedly more employment-intensive. As shown in the Trade and Development Report (TDR 2010), more than 20 years of policy reform have had a limited impact on strengthening the potential for rapid and sustainable growth in many developing countries. Financial liberalization since the 1990s altered growth trajectories in ways that were obstruc­tive to employment generation by preoccupy­ ing central bankers with exchange rate stabilization instead of investment promotion and promoting full employment. Furthermore, when governments in the region opened up to foreign capital, the investment they attracted was concentrated in capital-intensive sectors, with limited linkages. Typically, recessionary episodes with high unemployment weakened the bargaining power of organized workers and lowered their share in national income. This also encouraged greater labour market flexibility and aggravated wage compression. What has taken place recently in the Middle East and North Africa region is thus, inter alia, symptomatic

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wage share in most Share of compensation of employees in developing countries in gross national income, selected country the 1980s and the 1990s groups, 1980-2008 was mostly due to wage compression, with wor­ kers bearing the burden 50 of export-oriented

(Percent) industries losing com­ 40 peti­tiveness in inter­ national markets. At the 30 root of the problem was restrictive monetary 20 policy involving high interest rates to attract

10 foreign capital, which led to weakened competi­

0 tiveness by fostering real 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 exchange rate apprecia­

Latin America Asia Sub-Saharan Africa North Africa tion and at the same time

r i g h t discouraged dom­estic Source: UNCTAD calculations based on UN/DESA, UNdata database, National Accounts Official Country Data, Table 4.1; Figure 1. Despite and Lindenboim et al., 2010 (see source to Chart 5.1 in TDR 2010). investment by raising the sustained GDP Latin America comprises Argentina, Brazil, Chile, Colombia, Mexico and Peru. Asia comprises: Bahrain, China, Hong Kong cost of credit to growth and labour (China), the Philippines and the Republic of Korea. Sub-Saharan Africa comprises: Kenya, Mozambique, Namibia, Niger, Senegal and South Africa. North Africa comprises: Egypt, Morocco and Tunisia. producers. productivity gains, Note: Unweighted averages. the wage share has declined. Starting anew: policy action is within reach The limited available data on the evolution of the for socially vulnerable developing countries share of wages in national income suggests that it TDR 2010 emphasized that employment growth criti­ has been, with some exceptions, on a declining trend cally depends on the expansion of aggregate demand, over the past three decades in both developed and and much less – if at all – on the price of labour developing countries. For the group of three North relative to that of capital. The conventional wisdom African non-oil producing countries for which data about “export-led growth” has focused policymakers’ is available (Egypt, Tunisia and Morocco), despite attention on lowering unit labour costs to improve a sustained GDP growth and labour productivity gains, country’s global competitive position, some­times to the the wage share has not tracked that path. Rather, the detriment of economic growth prerequi­sites and social share of wages for this group of countries hovered justice goals. around 33% of national income until 2005, after But there are still alternatives that policymakers which it has declined (see Figure 1). In Egypt, the can consider even in a period of crisis and institutional wage share has fallen recently below a quarter of transformation. To begin with, a more sustainable national income. macroeconomic strategy would rely more on invest­ This trend is explained partly by greater labour ment and new capacity creation for absorbing surplus market flexibility and export orientation, which tended labour and on domestic demand expansion based on A fresh start for economic growth to limit increases in wages to boost inter­national com­ wage increases in line with aggregate labour product­ with social equity petitive­ness. But the decline in real wages and in the ivity increases. For countries facing severe social

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pressures, it is critical that the resulting gains from such From this perspective it is not greater wage a strategy are distributed between consumption of flexibility that leads to faster employment growth, domestically produced goods and services and for but rather the orientation of changes in the general investment in activities that create more employment. wage level along the path of average productivity Such strategic criteria are central to a successful growth in the eco­nomy. This will not only create recovery and reconstruction strategy and to maintain­ additional jobs that produce additional value added, ing the “social contract” between the state and labour. but also allow for the emergence of profit differentials For a virtuous circle of investment, productivity and an incentive structure that strengthens inno­ growth, income growth and employment creation to vation, the dynamic forces in the economy and, thus, occur, policies need to be oriented towards ensuring investment in productive capacity. that the income gains from productivity growth are In TDR 2010, UNTCAD has proposed several distributed appropriately between labour and capital. labour policy instruments that could be considered Over time there should not be a decline in the share of in the context of such a broad macroeconomic wages and incomes from self-employment in agricul­ reorientation, especially: encouraging collective ture and non-agricultural informal activities in national bargaining, consider­ing legal minimum wages, income. This is not enough, however: this social equity funding public employment schemes, improving goal calls for complementary policies to avoid declines incomes of small rural producers and finding the in relative and absolute real incomes of the vast right balance in taxation. majority of the population, and to empower public institutions to lead the private sector along a new Heiner Flassbeck is the Director, Division of national development path. Globalization and Development Strategies, UNCTAD.

l e f t A vocational educa­ tion and training centre in Morocco. Employment creation is an important part of the virtuous circle of sustainable growth.

A fresh start for economic growth with social equity

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UNCTAD XIII By Guillermo Valles, Director, Division on International Trade in Goods and Services and Commodities

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Trade is a powerful engine of growth that can also be harnessed to promote more sustained economic growth and inclusive development. A vital challenge in the crucial period ahead will be for international, regional and national efforts to pursue trade in a manner that fosters a process of globalization that is development-centred.

Much has been written about the bleak global situ­

r i g h t ation – including the prolonged financial and economic Guillermo Valles: crisis, unemployment, social unrest, demographic UNCTAD’s original pressures, climate change, depletion of natural mission remains as legitimate and resources, and grave food and energy security issues. necessary as ever. These interlocking crises have intensified the tensions between globalization and national interests, and unsurprisingly, protectionist pressures are increasing especially with a view to accelerating economic and trade multilateralism is being eroded. development...”.1 In terms of global agreements, no new conventions In order to achieve these goals, UNCTAD is have emerged over the last decade, in the way that the mandated and well-equipped as a forum to promote Law of the Sea, the Kyoto Protocol and the Marrakech an integrated treatment of trade and development; to Agreement came into being in previous decades. forge global partnerships to maximize equitable and In the field of trade, the Doha Round deadlock and inclusive access to the benefits of globalization arising the simultaneous proliferation of regional and bilateral from trade; and to enhance coherence among the preferential trade agreements may indeed constitute a international monetary, financial and trading systems. further step in this decline of multilateralism and in the To this end, UNCTAD’s working methods in the fragmentation of the global trading system. Nobody trade area are and should continue to be based on will benefit from this situation, and it does not corr­ectly UNCTAD’s “three pillar” approach of (a) research and address any of the current global threats. Legiti­mate, analysis; (b) intergovernmental deliberations and multilateral institutions are needed now more than consensus-building; and (c) technical assistance. ever – and perhaps a different approach to consensus- UNCTAD XIII should ensure that, in the coming building is required before entering the always difficult difficult years that the world economy will face, process of hard-rule international legislation. domestic policies and international cooperation are UNCTAD’s original mission remains as legitimate and mutually supportive in bringing about inclusive and necessary as ever. Among the issues to be considered sustainable growth and development through trade. in multilateral efforts to make trade more successful in fostering development are its contributions to sustain­ Some priority areas and how they will manifest ability, income equality and overall inclusiveness. themselves at UNCTAD XIII Trade and development, and trade for develop- ◆ Non-tariff measures ment, are in UNCTAD’s genetic code. Almost half a Regarding the first pillar (research and analysis), century ago, on adopting the resolution that is UNCTAD will strive to be a prime mover in data UNCTAD’s founding instrument, the United Nations collection and in the production and dissemination of General Assembly listed, as the first of UNCTAD’s

UNCTAD’s moment principal functions: “to promote international trade, 1 See General Assembly resolution 1995 (XIX) of 30 December 1964.

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trade information, as well as the diffusion of analytical reviews, which assess policy and regulatory frame­ and research-based knowledge on trade matters. In works as well as the impact of liberalizing the services this connection, non-tariff measures (NTM) are trade in specific sectors and countries. This instrument becoming more relevant than traditional tariffs, and – along with UNCTAD’s Multi-Year Expert Meeting on could become real “disruptors” of inclusive and Services, Development and Trade – will further assist sustainable development. Therefore, in a joint project developing countries in strengthening their knowledge with the World Bank, the African Development Bank of the services sector, increasing their participation in and the International Trade Centre, UNCTAD is services trade, and realizing development benefits. launching an initiative entitled “Transparency in Trade” (TNT). This programme is intended to become another ◆ Preferential trade agreements and trade “public good”, by providing a solid database, free policy reform access, and analytical tools on NTM. Given its undeniable importance, UNCTAD’s work on preferential trade agreements will be developed ◆ Services further, with a view to strengthening and consoli- In recognition of its growing importance and its impact dating trade and economic integration processes, on development, special attention will be given at particularly in Africa. UNCTAD will continue to UNCTAD XIII to the services sector. The Services support member States in their effective implemen­ Global Forum will be launched, with the participation tation of the Global System of Trade Preferences. of numerous private and public sector entrepreneurs To help consolidate trade and economic integration and coalitions of services providers. In the area of processes, work needs to be enhanced on the design services, UNCTAD conducts national services policy of and support for new mechanisms and tools

l e f t An employee at a garment factory in Bangladesh. Measures to assist LDCs to integrate into the global trading system must also benefit workers in these countries.

UNCTAD’s moment

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specialize in sectors that have been among the least dynamic parts of the global economy in recent years and have the lowest domestic value added. A major challenge is to increase innovation through investment, production, and trade in new and dynamic products and services. As we endeavour to implement the Istanbul Plan of Action for the LDCs, UNCTAD XIII should review progress in this area and discuss giving new impetus to such programmes for LDCs, as well as setting up new forms of partnership with the private sector and with multilateral and regional institutions.

◆ Competition policy, and some lessons regarding consensus-building Competition policy is a recognized tool for achieving sustainable and inclusive development. Strong insti­ a b ov e strengthening North-South, South-South and tutional capacity is frequently absent in developing UNCTAD will triangular cooperation. At UNCTAD XIII, a special countries, and UNCTAD has a well-known track record endeavour to roundtable session will be held at which government for assisting the building-up of such capacities, parti­ implement the Istanbul Plan of ministers may discuss these issues. cularly in Latin America. We have helped many Action agreed at Our main challenge in the coming years will be to countries to adopt the Model Law on Competition, of the 4th UN ensure that preferential trade agreements bolster trade which UNCTAD is the repository. The successful use of Conference on and productive integration and support economic a unique peer review system, in combination with LDCs that took place in diversification among countries at different levels of UNCTAD’s Intergovernmental Group of Experts on May 2011. development, especially the least developed countries Competition Law and Policy, has led to great progress (LDCs), while remaining compatible with the multi­ in this relevant policy area. lateral trading system. Our work will continue to expand into new geo­ graphic areas, with emphasis on Africa and the LDCs. ◆ Export diversification We will explore and further analyze competition policy UNCTAD has carried out extensive work on concepts, and public procurement; knowledge and human- statistical support and policy analysis in the area of the resource management for the effective enforcement of “creative economy”. There is recognition that the competition law; and the challenges that cross-border combination of creativity, culture and technology can anticompetitive practices pose for developing countries be a driver that helps developing countries establish and countries with economies in transition. more diversified and resilient economies. UNCTAD XIII Ministers at UNCTAD XIII will have a unique oppor­ could well serve as a call to global action so that the tunity to review progress in this area. Perhaps they will creative economy is mainstreamed into trade and also draw some inspiration with respect to intergovern­ industrial policies. mental consensus-building and UNCTAD’s role in The use of trade as a genuine engine for sustainable relation to new and emerging issues that are not yet development and poverty reduction may be achieved ripe for hard rule-making negotiations. through the participation of developing countries in In this respect, it should be recalled that UNCTAD’s dynamic and new sectors of world trade. Many dev­ working methods have allowed many developing UNCTAD’s moment eloping countries, especially LDCs, continue to countries to make headway in competition policy even

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after the issue as such was dropped from the multi­ lateral negotiating table of the Doha Round in 2003. The potential for transposition, as appropriate, of this “soft” approach should be explored in order to progressively pave the way for eventual “hard” rule- making, consistent with the real needs and capacities of developing countries. It cannot be denied that ways need to be sought for reaching consensus other than directly seeking agreement on legally binding rules on the basis of a single-undertaking approach. Moreover, information exchanges on successful emerging- economy policies and experiences would assist other developing countries in designing sound trade policies tailored to their specific situations.

Trade and sustainable development: a huge and urgent agenda UNCTAD is no newcomer to trade and sustainable inter­national trade and could create new opportunities a b ov e development. We have been working for many years for many developing countries; and developing Global supply trains are promoting on trade, environmental, climate-change and countries are enjoying growing political relevance international trade. sustainable-development issues, providing analysis and and partici­pation in international decision-making technical assistance. Among other things, we have and rule-making. facilitated exchanges of experiences among developing None of this is to overlook continuing major dev­ countries on Clean Development Mechanism projects; elopmental problems, particularly for LDCs and other we have explored joint ventures among developing weaker developing countries. Moreover, in an inter­ countries for the production and use of biofuels: we dependent and globalizing world, the acute challenges have helped organic farmers gain access to developed- being faced by developed countries must necessarily country markets; and we have facilitated trade in adversely affect developing countries. And growing organic products through harmonization and equiva­ disparities in income and wealth at the dom­estic and lence of standards. As we prepare for the Rio+20 international level, including greater differen­tiation summit, UNCTAD has been focusing on the implica­ within and among developing countries, raise grounds tions, challenges, and trade opportunities that the for acute concern. transition to an inclusive green economy will mean for This is a time to exercise leadership and reinforce developing countries. Ministers at UNCTAD XIII will multilateralism, a time for the international community have a further opportunity to discuss these issues in to grasp this opportunity at a forum which has the preparation for the forthcoming Rio summit. legitimacy of being an organ of the United Nations General Assembly. It is the right moment to enhance Conclusion: Finding hope at a time of crisis and provide fresh impetus to the contribution UNCTAD XIII could not have happened at a more that trade makes to development. This is opportune time – a time of crisis, but of hope as well. UNCTAD’s moment. There are some bright spots: many developing coun­ tries are enjoying rapid growth through international Guillermo Valles is the Director, Division on trade, and they are accounting for a growing share International Trade in Goods and Services and of world GDP; global supply chains are promoting Commodities, UNCTAD. UNCTAD’s moment

3 7 Shaping a new investment and enterprise agenda for sustainable and inclusive UNCTAD XIII development

By James Zhan, Director, Division on Investment and Enterprise

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International investment and the strengthening of domestic entrepreneurial capabilities are essential ingredients for economic development.

Over the past 20 years, many countries, both dev­ eloped and developing, have seen huge increases in foreign investment. There has also been a major shift towards the internationalization of domestic enter­ prises. Transnational corporations (TNCs) have evolved in line with two major trends: the increased globali­ zation of production and the opening of industries to the private sector. The establishment of international networks of production and geographically dispersed, but integrated value chains of TNCs, including through non-equity arrangements, have also become defining features of globalization.

r i g h t TNCs themselves have evolved and increasingly James Zhan: include firms based in developing and transition The landscape for economies. They also include state-owned firms and FDI and TNCs has changed enormously sovereign wealth funds. These new players have been in recent decades. particularly active in investing in other developing and transition economies, which in 2010–2011 absorbed more than 50% of global flows of foreign direct poor, including through policies that encourage the investment (FDI) for the first time ever. This shift is formation and growth of domestic businesses. partly related to changes in TNC strategies, which are Investments must target more people at the bottom increasingly focused on efficiency-seeking and market- of the economic pyramid: TNCs are sources of capital, seeking investment in emerging economies with rising but government policies can steer that capital more incomes. Moreover, a record 29% of global FDI flows effectively so that it helps poor and marginalized were from developing and transition economies in groups. Better-designed policies and more effective 2010. A large proportion of these flows went directly economic links between TNCs and local businesses to other developing and transition economies. could spread the benefits of foreign investment to raise The FDI and TNC landscape has therefore changed the living standards of those who need it most. enormously. Aggregate global FDI flows increased The global economic crisis that struck in 2008–2009 from around $200 billion a year in 1990 to a historic caused a decline in FDI around the world. Investment high of $1.9 trillion in 2007. TNCs, in their operations flows have struggled to recover ever since and have at home and abroad, now account for a quarter of lagged behind recoveries in output and trade. Produc­ gross domestic product worldwide (2010) and employ tive investment is the foundation of development, but more than 80 million workers. They have therefore it needs to be sustained and protected from destabili­ become a prime factor in countries’ economic develop­ zing fluctuations that lead to disinvestment. It also has Shaping a new ment strategies. to be sustainable in terms of its environmental impact. investment and Policymakers need to understand and respond to And for effective development to result, it must be enterprise agenda these trends and complexities. They need to find ways inclusive – it must contribute to employment creation, for sustainable and inclusive to harness foreign investment so that it contributes to local entrepreneurship, knowledge acquisition and the development broad-based economic development and helps the spread of useful technology.

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Over the past 20 years, FDI has become a stronger is accompanied by the recognition that such growth component in the investment mix and can offer many and investment should be sustain­able, encom­pass development benefits. Government policy and private- environmental and social concerns, aim at long-term sector engagement play an important role in guiding stability and lead to inclusive economic progress. The foreign investment so that it can alleviate poverty – UNCTAD investment policy framework for Sustainable this is where the Division on Investment and Enterprise Development offers such an approach. has focused its efforts. It supports governments and One area of policy work concerns UNCTAD’s joint enterprises in making investment work better for the efforts with other international organizations (the Food poor in developing and transition economies. and Agriculture Organization of the United Nations, Another achievement of the past 20 years has been the International Fund for Agricultural Development the ongoing analysis and advocacy by UNCTAD for and the World Bank) to establish principles for various elements of an investment and enterprise responsible agricultural investment. policy framework that could better support develop­ As outlined in the World Investment Report 2009, ment. Many of these ideas have fed into governance foreign involvement in agriculture can offer many processes that UNCTAD has been encouraging since the 2008–2009 l e f t

UNCTAD The 2011 edition of global economic crisis. For example, U n i t e d n ations Conferen C e o n t r a d e a n d d e v e l o p m e n t the World Investment these proposals have helped to shape Report forecasts that, discussions of the Group of Twenty barring any economic (G20) on investment. UNCTAD has shocks, FDI flows will been building the case for comple­ recover to pre-crisis levels over the next mentary policy frameworks on two years. investment and enterprise at the national and international levels. WORLD INVESTMENT REPORT WORLD In the post-economic-crisis world, it will be impor­tant to consider how INVESTMENT these ideas can contribute to evolving REPORT debates about economic governance 2011 and sustainable investment that benefit the world’s poorest popu­ NoN-equity Modes of iNterNatioNal ProductioN aNd develoPMeNt lations. In this regard, I would like to draw attention to several initiatives that could make a real difference to poor countries. 2011

Creating investment policies for sustainable and inclusive development After global crises regarding finance, the economy, food, energy and Shaping a new UNITED NATIONS investment and climate change, there is a general enterprise agenda desire for responsible investment. for sustainable Today, the understanding that foreign and inclusive investment is crucial for global growth development

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r i g h t Investments in agriculture must be made sensitively so that they do not adversely affect local populations.

bene­fits to farming sectors in poor countries. Agricul­ these treaties still amount to a fragmented, complex, ture in these regions has suffered from considerable overlapping, inconsistent system of rules. They should under­invest­ment for years. However, inflows into such be replaced by something consistent and clear – and a strategically sensitive industry can also bring risks, such that helps countries achieve sustainable, broad-based as the much-discussed issues of “land-grabbing” and the economic growth. displacement of indigenous populations. The principles Paradoxically, while almost all nations are actively are intended to set voluntary international standards engaged in IIAs, there are hardly any mechanisms for for foreign investment in agriculture. It is hoped that coordination between the IIA regime and other areas these principles will increase the develop­ment impact of global economic governance, such as the multi­ of such investment. Similar efforts also include the lateral trading system (under the World Trade Organi­ formulation of a set of indicators for assess­ing the zation) and the multilateral monetary system (under impact of foreign investment on economic develop­ the International Monetary Fund). No equivalent ment in low-income countries, as requested by the G20. mechanism exists for international investment. Post-crisis efforts to manage globalization need to Multilateral consensus-building on IIA issues does include thinking about the international regulation of not necessarily mean the establishment of binding investment. The world currently lacks an overarching, investment rules. By offering a platform for consensus- effective policy for fostering responsible and sustain­ building, UNCTAD is working to carry forward dis­ Shaping a new able investment. Instead, more than 6,100 different cussion about the future orientation of the inter­ investment and international investment agreements (IIAs) at the national investment regime and its development enterprise agenda bilateral and regional levels govern the protection and dimension. The UNCTAD biennial World Investment for sustainable and inclusive promotion of international investment. While exhibit­ Forum has contributed to this end and has become the development ing a certain degree of coherence in their core elements, global centre of gravity for high-level discussion and

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action on how to harness international investment as concerns in investment and enterprise policymaking an engine for growth and development. and in the foreign investment decisions of TNCs. In the new era of development-led globalization, any invest­ Building enterprise policies for sustainable and ment and enterprise policy framework must take into inclusive development account such a perspective, not only for social and Improving the abilities of developing countries to environmental reasons, but also for the stability, produce broader varieties of goods – and goods of sustainability, and inclusiveness of long-term growth greater value and complexity – can lead to stable and and return. inclusive economic growth. Aiding this process and Since the twelfth session of the United Nations fostering the establishment of sustainable domestic Conference on Trade and Development – UNCTAD XII private sectors requires strong business-support – was held in Accra, Ghana, in 2008, the Division on measures and suitable government strategies. Investment and Enterprise has worked with individual UNCTAD’s entrepreneurship policy framework for countries and at the regional and international levels to sustainable development is intended to help dev­ promote and take effective steps towards responsible b e lo w eloping country policy-makers, particularly those from and sustainable investment. We hope that during our A semiconductor the least developed countries, in the design of initia­ next four-year mandate we can ensure that these plant in Taiwan; tives, measures and institutions to promote entre­ principles are firmly reflected in global investment and Asia’s dominance preneur­ship. It sets out a structured framework that enterprise policymaking. in the field of electronics manu­ helps guide policymakers so that they can create an facturing shows the environment that encourages entrepreneurs and James Zhan is UNCTAD’s Director, Division on developing world’s business start-ups. Further, the right policies can spur Investment and Enterprise. potential for growth. the expansion of existing enterprises. It is striking that while all developing and transition­ ing economies rank relatively high in business poten­ tial, there is a need in many countries to increase the quality of the human capital that can turn these oppor­ tunities into high-growth businesses. The creation of new firms can also contribute to specific sustainable and inclusive development objectives, such as the employment of women, of young people, or of dis­ advantaged groups, or the development of environ­ mentally friendly economic activities. The development of the private sectors of develop­ ing countries depends to a great extent on linking domestic businesses with global value chains that are often dominated by TNCs. Governments are increas­ ingly active in fostering these links and in improving local productive capacities by means of industrial and enterprise-development policies. It is therefore funda­ mental to look at investment policymaking and domestic enterprise development policymaking as related activities. These are just a few of the ways in which UNCTAD is contributing to efforts to include development

4 1 Making growth an engine of poverty reduction and inclusive development: UNCTAD XIII The post-crisis challenge for LDCs and other low-income economies

By Taffere Tesfachew, Director, Africa, the Least Developed Countries and Special Programmes Division a rt i c l e s f r o m u n c ta d

The world as a whole made reasonable progress in reducing absolute poverty in the two decades before the 2008 onset of the economic crisis. The great part of this reduction took place in Asia, and in particular, in China. However, many countries, especially the least developed coun­ tries (LDCs), of which 34 are in Africa – and other low-income and vulnerable develop­ing r i g h t Taffere Tesfachew: economies – did not do well. Large propor­tions The current dev­ of their citizens still live in extreme poverty. elopment model is not reducing poverty In 2010, UNCTAD presented an assessment of poverty or resolving the basic economic problems reduction trends and the state of progress towards of LDCs. achieving the Millennium Development Goals (MDGs) in LDCs. It argued that, despite noticeable progress in poverty reduction in some LDCs, the majority were – and are – off track. They are unlikely to meet most It is evident that the current development model is human development MDGs by the target year of not reducing poverty or resolving the basic economic 2015. Sadly, even though most LDC economies grew problems of LDCs – or, for that matter, of many African impressively during the first decade of the millennium, countries that are not LDCs. Despite record high growth especially before the crisis, LDCs as a group have not rates and an economic boom that lasted from 2002 to been able to close the income gap between themselves 2008, many of these countries neither reduced poverty and the major economies. They have not even been nor created more balanced econo­mies. Their trade, fin­ able to close the gap between themselves and other ancial and production systems did not raise investment developing countries. levels, trigger a diversification of goods produced, or In 2011, UNCTAD investigated poverty in dev­ reduce chronic vulnerabilities to global economic eloping countries from a different perspective – by events such as sharp rises and falls in the prices for comparing the share of people living in extreme basic agricultural goods and other commodities. poverty (that is, below $1.25 per day) among develop­ The theme of UNCTAD XIII – development-centred ing countries. The estimates showed that, while in globalization – squarely addresses this basic problem. 1990, China and India accounted for 61% of those If economic growth occurs but does not significantly living in extreme poverty in all developing countries, reduce poverty or broadly raise living standards among by 2007 their share had dropped to 42%. The bulk of the world’s most vulnerable people, then it is not the this reduction (about 90%) was achieved by China. In kind of economic growth that is needed. contrast, in 1990, only 18% of the extreme poor lived The trade and development challenges still facing in LDCs. By 2007, however, that share had doubled to these vulnerable groups of countries are enormous, 36%. Given current trends in poverty reduction and varied and complex. There is no simple or uniform population growth, it is likely that by 2015 the number blueprint for dealing with the essential tasks of of extreme poor living in LDCs will be some 440 accelerating economic growth and economic diversi­ million – making the LDCs the major centres of fication and ending the increasing marginalization of Making growth extreme poverty in the world.1 these countries from the global economy. an engine of Four decades have passed since the United Nations poverty reduction 1 See UNCTAD (2011). The Least Developed Countries Report 2011: The came up with the LDC category. Countries were and inclusive Potential Role of South-South Cooperation for Inclusive and Sustainable development Development. United Nations Publication. Geneva: 32 33. considered LDCs if they had low levels of income and

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“human assets” and high levels of economic vulner­ growth on the one hand, and domestic economic ability. It is disheartening to acknowledge that, since growth, job crea­tion, and poverty reduction on the then, the number of LDCs has gone up from 25 to 49 other. It is now irrefutably clear that the connection and only three countries – Botswana, Cape Verde, and between these important economic variables is not the Maldives – have graduated from LDC status. automatic. It is possible to record fast trade and UNCTAD, in collaboration with OHRLLS2 and other economic expansion, as many LDCs did, without international organizations, provides support to LDCs necessarily creating a concomitant level of employ- and to other countries included in the various United ment and without achiev­ing reductions in Nations country categories, such as SIDS (Small Island absolute poverty. Developing States) and LLDCs (Landlocked Developing Indeed, there is evidence to show that some Countries). The immediate needs, initial starting countries that recorded impressive levels of growth conditions and resource bases of each country are between 2002 and 2008 failed to reduce poverty, unique. It is necessary, therefore, for each country to while some slower-growing nations were more design and implement country-specific, home-grown, and endogenous policies l e f t

UNCTAD The latest Least and strategies. U n i t e d n ations Conferen C e o n t r a d e a n d d e v e l o p m e n t Developed Countries UNCTAD believes that the countries Report explores themselves should assume primary how the potential

The least developed countries (LDCs) are a groupresponsibility of countries that have and been ownershipclassified by the of their THE LEAST DEVELOPED COUNTRIES of South–South United Nations as least developed in terms of their low gross domestic product (GDP) per capita, weak human assets and high degree of economic vulnerability. This Report argues that the LDCs cooperation can be need to go beyond business as usual in order to developmentpromote inclusive and sustainablepolicies development and strategies. As REPORT 2011 and it suggests how South–South cooperation supports such a transformational agenda. turned into a reality elabor­ated through UNCTAD’s major The Report shows that despite strong GDP growth during the last decade, the benefits of growth THE LEAST DEVELOPED COUNTRIES The Potential Role of South-South Cooperation for Inclusive and Sustainable Development that promotes were neither inclusive nor sustainable, mainly because growth was not complemented by structural transformation and employment creation. Growthreports and trade has on not-recovered Africa andto pre-crisis the levels LDCs, this development in after the global recession of 2009. Most LDCs continue to deepen their specialization in exports of primary commodities and low-value, labour-intensiverequires, manufacturing, among rather than other diversifying things, into building the LDCs. more sophisticated products. Growth projections also indicate that the poorest countries of the world could face a more volatile and less expansive global economic environment in the coming decade. effective “developmental States” and Further, the Report examines how South–South cooperation could support development LDCs against this background. It shows that there are rebalancingintensifying economic the relationships roles betweenof States the and LDCs and other developing countries and that these helped to buffer LDCs from the downturn in advanced economies. A major new trend in the patternmarkets. of integration It also over therequires last decade expanding or so these has been the deepening and intensification of economic and political ties with more dynamic, large developing countries, acting as growth poles for the LDCs. While intensifying South–South relations presents major new opportunities for LDCs in termscountries’ of markets, foreign productive direct investment, remittancescapacities – that is, and official financing, they also bring many challenges, ranging from extreme competition to de-industrialization. Therefore, the long-term impacttheir of South–Southabilities economicto produce relations ongreater the varieties LDCs still remains a puzzle. The Report explores how the potential of South–Southof goods, cooperation and can goods be turned intoof agreater reality that promotes the development of productive capacities, structural transformation and decent employment in the LDCs. It argues that the benefits of South–South cooperation will be greatest in the LDCs when a dynamic two-way relationshipsophistication. is established in which Itpolicies is necessary carried out by to harness catalytic developmental States in the LDCs and South–South cooperation reinforce each other in a continual process of change and development.local In such or a bottom-updynamic relationship, approaches the catalytic to solving developmental State in the LDCs enhances and shapes the benefits of South–South cooperation, and South–South cooperation supports both the building of the catalytic developmental State in the

LDCs and the successful achievement of its objectives.economic problems. It also means that 2011 REPORT New modalities and structures are required to strengthen the interdependence between the two phenomena in the post-crisis environment. In thisbusinesses, regard, the Report citizens, claims that developmentaland governments regionalism is particularly important. Given that financing productive capacities still remains a major challenge for most LDCs, the Report revisitshave the roleto of work regional together. development banks and proposes new modalities through which a small part of the reserves that have accumulated in developing countries and that are managed by sovereign wealth funds could support the financing of development in the LDCs. South–South cooperationThe should setback be a complement of the to North–South recent global cooperation. economic crisis has forced the international community to rethink the Front cover the front cover indicates three major regionsneo-liberal of the South – i.e. development developing countries model in widely Latin America and the caribbean, Africa, and Asia and the Pacific – and identifies the number of least developed countries in eachfollowed region. in recent years. This model

presupposes a direct and automatic linkUNITED NATIONS Making growth Printed at United Nations, Geneva United Nations publicationbetween openness and export-led GE.11-00000–October 2011–5,143 Sales No E.11.II.D.19 ISBN 978-92-1-112839-0 an engine of UNCTAD/LDC/2011 ISSN 0257-7550 poverty reduction 2 The Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and inclusive and Small Island Developing States (OHRLLS). development

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conference in Doha, Qatar. UNCTAD XIII starts with the basic hypothesis that the growing income gap between countries and the failure of LDCs and other low-income economies to make significant progress in poverty reduction have put into question the viability of finance- and market-led development models and has exposed their inherent limitations. UNCTAD XIII will explore an alternative development model based on development-led globalization and with particular emphasis on productive capacity- building, structural transformation and inclusive, sustainable development. Through its flagship publications, and in particular its recent reports on the LDCs, UNCTAD has consist­ ently argued that, when it comes to establishing a more inclusive development path, strategic and tailored policies matter, especially those aimed at a b ov e successful. Moreover, in some countries where growth structural transformation, investment in productive Investments in has occurred, it remains fragile and unsustainable. capacity, job creation, and technological upgrading. technology and That is largely because the growth failed to stimulate Ultimately, the progress made by countries is measured eduction (particularly of women) will aid improvements in productive capacity. It failed to by the extent to which their economic growth results the process of job change the basic structures of these economies. Many, in structural change or transformation. creation and for example, continue to rely heavily on exports of Structural transformation is a process by which the economic growth basic com­modities – agricultural products and natural relative contribution of the agricultural sector, as well for LDCs. resources – and have not expanded their industrial and as other low value-added, labour-intensive and low services sectors. technology-based production activities on the overall It seems, therefore, that the form and nature of economy, declines and the share of non-agricultural economic growth registered in many LDCs and other sectors rises. This, of course, is not to imply that agri­ low-income economies in recent years is not the kind culture will become less important. To the contrary, in that creates jobs, reduces poverty, and brings about absolute terms, agricultural output and agricultural meaningful economic change. To the contrary, there productivity need to continue to grow and to contri­ are clear signs that the recent boom and growth may bute to overall economic growth, since food security have resulted in increasing inequality within and and improvements in rural incomes are prerequisites between countries. In rethinking the development for structural transformation. The point is that it is model as the economic crisis recedes, it is therefore difficult to achieve inclusive and sustainable develop­ vital for policymakers and the international commu­nity ment and to attain real reductions in poverty without to reassess and understand under what conditions systemic and structural economic changes. trade expansion and economic growth lead to poverty Moving to more inclusive development strategies reduction and to inclusive development. Inclusiveness and promoting structural transformation involve and economic structural transformation should be the adding policies to the development toolkit and finding Making growth key components of the new development model. more pragmatic ways of using them. In the more an engine of These two aspects of the development process are successful developing countries, progress in initiating poverty reduction and inclusive given greater emphasis in the theme and sub-themes structural change has been associated with “develop­ development selected by member states for the UNCTAD XIII mental states” capable of raising investment to fuel

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economic growth. Such states also are capable of At the same time, State revenue should increase as guiding that investment into activities that create jobs, a larger share of the population pays taxes. That expand productive capacity, improve infrastructure, provides increased funding for public investment. It is and stimulate structural changes. Most of these states through such virtuous circles that economic growth have also been successful in mobilizing domestic and trade expansion lead to poverty reduction and resources for public investment. And they have esta­ inclusive development. blished the institutions and macro-policy frameworks In addition, foreign direct investment and official needed to induce economic growth, promote dynamic development assistance can be mobilized to comple­ domestic firms, and determine how foreign capital is ment investment gaps in targeted areas, including the used domestically. As elaborated in a recent UNCTAD development of infrastructure, the creation of produc­ publication3 the full cycle of economic links must take tive employment, and the achievement of higher place for economic growth to result in income incomes through progressively increasing wages. These improve­ments and poverty reduction. are the policy tools that LDCs and other low-income In principle, when economic growth occurs, economies should adopt. UNCTAD stands ready to employment expands, which means income rises, assist them in formulating such integrated approaches and – linked to that – savings also rise. That in turn to inclusive and steady economic growth. means the amount of capital available for potential invest­ment in the domestic economy rises as well. Taffere Tesfachew is UNCTAD Director for Africa, the Least Developed Countries and Special 3 The Trade and Development Report 2010; UNCTAD, United Nations Publication. Programmes Division.

l e f t Coffee handlers at Cooperative Café Timor, Timor-Leste. With 21,500 mem­ bers, the cooperative is the nation’s largest employer during the coffee season, helping realize the govern­ment’s priority of promoting rural development.

Making growth an engine of poverty reduction and inclusive development

4 5 Data on Least Developed Countries

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The three country groups of Least Developed LDCs have adopted special support measures in Countries (LDCs), Land-locked Developing recognition of the particular problems. The develop­ Countries (LLDCs) and Small Island Developing ment challenges of LDCs are also on the agenda of States (SIDS) are recognized by the United major international United Nations conferences and Nations as special categories of countries that gatherings. The Fourth United Nations Conference face specific development challenges and, on the Least Developed Countries, held in 2011 in accord­ingly, need special attention and support Istanbul, Turkey, took stock of the current economic from the international community. and social situation in the LDCs and adopted a set of develop­ment measures and strategies for these coun­ tries for the decade 2011-2020. The 10-year Istanbul Least Developed Countries (LDCs) Programme of Action (IPoA) lists eight priority areas of The United Nations created the category of LDCs in action: productive capacity; agriculture, food security 1971. Currently 48 developing countries from Africa and rural development; trade; commodities; human (34 countries) Asia (13 countries) and Latin America and social development; multiple crises and other (1 country) are classified as least developed. These emerging challenges; mobilizing financial resources for countries have small and low-productive domestic develop­ment and capacity-building; and good economies that generate only very low per capita governance at all levels. incomes. In 2010, the average annual gross domestic The LDCs also benefit from special and differential product (GDP) per capita for LDCs amounted to $684. treatment in international economic and financial Hence, a large share of their populations lives in relations, such as non-reciprocal market access prefer­ absolute poverty. In addition, LDCs possess of weak ences. Bilateral, regional and multilateral donors and human assets, which are manifest in high levels of financial institutions accord LDCs concessionary terms undernourishment and child mortality, as well as low in their decisions on development financing. In the school enrolment and literacy rates. Moreover, the area of technical assistance, priority is given to LDCs in small and undiversified economies of LDCs make these cooperation programmes of the United Nations, and countries vulnerable to the vagaries of global markets bilateral and other multilateral development partners and to natural shocks and disasters. are encouraged to follow similar preferential policies. The United Nations classifies a country as an LDC These measures are designed to overcome the struc­ on the basis of three criteria: tural disadvantages that these countries face in an ever ◆ Low income threshold: Based on a three-year more complex and competitive world economy, to average estimate of the gross national income (GNI) support the development of their physical infrastructure, per capita, currently thresholds are set at $905 for to develop their human resources, and to strengthen possible cases of addition to the list, and at $1,086 their national institutional capacities. for graduation from LDC status; However, the overarching goal of the national ◆ Human development levels, as measured through a efforts by LDC governments and the international composite Human Assets Index, based on indicators support measures in favour of LDCs is to eradicate of nutrition, health, secondary school enrolment and poverty, achieve internationally agreed development adult literacy; goals and enable graduation from the least developed ◆ Economic vulnerability, as measured through a country category. So far, three countries have gradu­ated composite Economic Vulnerability Index, including from LDC status: Botswana in 1994, Cape Verde in 2007 indicators of natural and trade shocks and the and Maldives in 2011. The Istanbul Programme of country’s exposure to them, economic smallness and Action stipulates the aim of enabling half the number Data on Least Developed economic remoteness. of least developed countries to meet the criteria for Countries Bilateral and multilateral development partners of graduation by 2020.

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With a view to making graduation irreversible and Merchandise exports and imports of LLDCs, other sustainable, the graduating country is granted a three- than in the case of costly airfreight, are bound to pass year grace period before graduation effectively takes through at least one transit country. Although the place. The graduating country and its development Convention of the Law of Sea stipulates that land- and trade partners are given this grace period to agree locked countries “shall have the right of access to on a “smooth transition” strategy, so that the possible and from the sea” and “shall enjoy freedom of loss of LDC-specific concessions at the time of transit through the territory of transit States by all graduation will not disrupt the socio-economic means of transport”, transit traffic operations come development of the country. at a cost in terms of money and time. These additional charges are particularly burdensome for developing Land-locked developing countries (LLDCs) countries. In addition, LLDCs often have only a limited A land-locked country is a country which has no sea- choice of transit neighbours. For example, Lesotho is coast. Thirty-one developing countries and countries in completely surrounded by South Africa, Mongolia has b e lo w transition that share this geographical particularity only two transit neighbours. Uzbekistan is double land- A hillside slum in Port-au-Prince, Haiti, have joined the Group of Land-locked Developing locked, ie. the country is surrounded only by other where living con­ Countries (LLDCs). Fifteen of these countries are landlocked countries. ditions have not located in Africa, 12 in Asia, two in Latin America and The lack of territorial access to the sea bears heavily improved since the two in Central and Eastern Europe. Despite their on the development options of these countries. It is earthquake in 2010 and most of the location on four continents, all LLDCs share common therefore no surprise that LLDCs are among the country’s 10 million problems of high transaction costs in international poorest developing nations. Nearly all LLDCs have a people live on less trade operations and remoteness from major markets. low per capita GDP, reflecting low income levels, than $2 a day.

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land-linked rather than landlocked are measures to mitigate the adverse effects of land-lockedness. In addition, economic modernization and re-specialization, focusing on low bulk, but high value trade products and services, such as tourism, can help to reduce transport costs. Finally, the advent of modern communication technologies provides a new range of trade options to these countries by promoting the provision of IT-based export services, where transport costs and transport distance are of less significance.

Small Island Developing States (SIDS) The United Nations has been recognizing the particular problems of Small Island Developing States (SIDS) since 1994. The development challenges of these countries are enormous: SIDS are 33% more vulner­ able to external shocks with economic consequences than non-SIDS developing countries. They are more a b ov e limited domestic savings capacity and a low level of than 12 times more exposed to oil price-related shocks Advancing education economic development. In fact, 16 LLDCs are also than non-SIDS; and SIDS are structurally more vulner­ in LDCs such as classified as LDCs. The high transaction cost incurred in able, by at least 8%, to climate change effects than Timor-Leste will aid the development of international trade reduces the international competi­ non-SIDS developing countries. future generations. tive­ness of these countries, hampers their beneficial The small size of these countries – seven SIDS integration in global value chains and limits the range (Kiribati, Maldives, Samoa, São Tomé and Príncipe, of potential exports and markets in which goods could Solomon Islands, Tuvalu and Vanuatu) have a total by competitively traded. population of less than 500,000 people – also their In 2003, the United Nations adopted the Almaty often remote location and widely scattered geography Programme of Action which provides a framework pose formidable obstacles to national and international for cooperation among LLDCs, their transit neigh- development efforts. For example, the costs of pro­ bours and bilateral and multilateral donors to viding basic social and technical infra­structure, from address the specific development hurdles related schools to hospitals and domestic transport to tele­ to land-lockedness.” communication, are proportionally significantly higher Geography may pose severe constraints on econo­ than in most other developing countries and often mic growth and development; however it need not exceed the capacity of the small economic base of spell doom. The examples of developed land-locked these countries. countries, such as Austria and Switzerland, show that In addition, fragile eco-systems on and around SIDS the development constraints resulting from land- are highly vulnerable to domestic pollution and the lockedness can successfully be addressed. effects of climate change. In fact, globally induced Trade facilitation measures at border crossings and phenomena such as sea level rise pose a very concrete modern transport infrastructure in both land-locked threat to the long-term existence and survival of and transit countries, as well as policies aimed at several SIDS. Data on Least Developed turning LLDCs into hubs of regional integration and International support measures in favour of SIDS Countries cooperation arrangements making these countries are grounded in the Mauritius Strategy for the Further

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Implementation of the Programme of Action for the promote action at national, regional and international Sustainable Development of SIDS, which was adopted levels to support their development, enhance their in 2005. The Mauritius Strategy recognizes the serious­ participation in the world economy and achieve ness of the disadvantages most SIDS suffer from in the internationally agreed development goals. global economy and calls on the inter­national commu­ Through its Division for Africa, LDCs and Special nity to find a range of answers for these problems. Programmes, UNCTAD provides timely, targeted research and analysis of development challenges faced UNCTAD and its work on LDCs, LLDCs, and SIDS by these countries, designs innovative policy Since its inception in 1964, UNCTAD focuses on the recommendations, delivers tailor-made technical world’s poorest and most vulnerable developing assistance and supports intergovernmental processes countries. Specifically, it aims to increase understanding which seek to address their specific problems. The and awareness of the development problems of least division also draws on, applies and articulates the work developed countries, as well as countries with specific of other UNCTAD divisions in relation to trade, geographical handicaps. Most notably, land-locked finance, investment, enterprise, technology and developing countries and small island developing states logistics in order to maximize its relevance to the target are impacted by geography. UNCTAD also works to countries and their development partners.

List of LDCs Liberia List of Mongolia Kiribati Madagascar Landlocked Nepal Maldives Afghanistan Malawi Developing Niger Marshall Islands Angola Mali Countries Paraguay Micronesia Bangladesh Mauritania (LLDCs) Rwanda Mauritius Benin Mozambique Swaziland Nauru Bhutan Myanmar Afghanistan Tajikistan Palau Burkina Faso Nepal Armenia Turkmenistan Papua New Guinea Burundi Niger Azerbaijan Uganda São Tomé and Príncipe Cambodia Rwanda Bhutan Uzbekistan Seychelles Central African Republic Samoa Bolivia Zambia Solomon Islands Chad São Tomé and Príncipe Botswana Zimbabwe St Kitts and Nevis Comoros Senegal Burkina Faso St Lucia Congo (Democratic Sierra Leone Burundi List of Small St Vincent and the Republic of the) Solomon Islands Central African Republic Island Grenadines Djibouti Somalia Chad Developing Timor-Leste Equatorial Guinea South Sudan Ethiopia States (SIDS)* Tonga Eritrea Sudan Kazakhstan Trinidad and Tobago Ethiopia Timor-Leste Kyrgyzstan Antigua and Barbuda Tuvalu Gambia Togo Lao People’s Democratic Bahamas Vanuatu Guinea Tuvalu Republic Barbados Guinea-Bissau Uganda Lesotho Cape Verde Haiti United Republic of Macedonia Comoros Kiribati Tanzania Malawi Dominica Lao People’s Democratic Vanuatu Mali Fiji * The UN has never established criteria Republic Yemen Moldova Grenada to determine an official list of SIDS. This unofficial list is used by UNCTAD for Lesotho Zambia Jamaica analytical purposes only.

4 9 Technology and innovation, a cornerstone of development policies UNCTAD XIII By Anne Miroux, Director, Technology and Logistics Division

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Over the last 15 years, the share of global exports that can be classified as high technology has steadily remained as high as 40%. Technological change and innovation have become central drivers of economic growth and export competitiveness, as shown, for instance, by the successful performance of dynamic emerging economies. Technology and innovation policies are becoming an essential component of development strategies.

r i g h t Anne Miroux: Innovation is a central driver of economic develop­ Technology and ment, not only for industrialized countries, where innovation’s role extends beyond unprecedented growth rates have been made possible economic growth. by the application of science to productive activities, but also in developing and least developed countries, where routine learning-by-doing and incremental the importance of innovation capacity for sustained innovations can make economies more efficient and economic growth and development. productive. The accumulation, transfer and diffusion of Innovation that boosts productivity is driven by knowledge have gained a new impetus in recent years technological advances, investment in physical capital with the advent of information and communication and improved skills. But these factors are shaped in technologies and the flourishing of knowledge- profound ways by institutions and policies. Building up based economies. “systems of innovation”, as they are called, requires Ushering in a fresh wave of innovations where deliberate government actions to create the institutions technological advances have helped create new and the incentive mechanisms that can support the comparative advantages, these economies thrive on generation, transfer and diffusion of knowledge. innovation-based competition. Investments in Innovation systems in developing countries often intangible assets such as research and development, have weaknesses. For example, their markets for skilled intellectual property, marketing and management and unskilled labour may not be well developed. They expertise are important drivers of such comparative may have insufficient access to finance. Institutional advantages. This underscores the growing importance shortcomings may include the inability to provide of knowledge in economic activity: The share of high- standard setting, testing or metrology services, or technology exports within global trade has been as adequate protection of intellectual property rights. high as 40% over the past 15 years, and is expected to Other fundamental weaknesses may lie in shortages expand over the coming decades. of vocational, technical and skill training, as well as Unfortunately, many developing countries have scientific and technological research facilities. Finally, remained stagnant or have even regressed techno­ there may not be effective links between universities logically over the past few decades. That has created and research centres on the one hand, and enterprises an expanding divide not only globally, but within the on the other. This may be due to an absence of a ranks of developing countries. The “new South” of culture of cooperation between academia and industry. Technology and dynamic emerging economies on course to catch up But it may also reflect an inadequate incentive system innovation, with the more traditional technological leaders is that does not encourage researchers to align their a cornerstone of development leading to a gradual reconfiguration of global inno­ priorities – where appropriate – with the needs of policies vation activities. It has also refocused attention on productive sectors.

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For a long time, economists and policymakers have the same tech­nological change will have different struggled to find approaches that can fruitfully link inno­ impacts on productivity increases in each case. vation, technology, and development. More recently, Here lies the most serious challenge. Using existing there has been much talk of “convergence” and “catch­ technologies to catch up with the rapid progress of the ing up”: concepts that suggest the possi­bility of over­ global economy means a wide array of policies that fall coming and “leap-frogging” development obstacles under the umbrella of innovation policy frameworks and quickly achieving higher productivity. According to need to be coordinated. These include national science this argument, untapped opportunities exist for the and technology policies, investment policies, education successful emulation of new processes and products policies, intellectual property laws, and regulations based on existing technologies through globalization, relating to research and development. Such frame­ leading to enhanced domestic productive capabilities. works are fundamental for supporting the building of Technology and innovation’s ubiquitous role extends the technological absorption capacities that are critical beyond economic growth. They are important resources for surmounting the barriers imposed by the growing for eradicating poverty, creating jobs and promoting knowledge divide. the achievement of several of the Millennium Development Goals. The issue is: how can this be Building technology and innovation capacities made to happen? How can countries harness the With the increasing shift towards the predominance strong links between technology and innovation for of knowledge-based goods and services, developing broad-based, sustainable development and improved countries are hard-pressed to foster the emergence of welfare? The fact that countries have signi­ficant local innovation capacities. For many developing differences in technological capability implies that countries, however, enacting and coordinating policy

fa r l e f t a n d l e f t UNCTAD U n i t e d n ations Conferen C e o n t r a d e a n d d e v e l o p m e n t The Technology and Innovation Report 2011 (far left) focuses on the important role of Technology renew­able energy tech­ nologies in res­ponding T echnology and I nnova and InnovaTIon RepoRT 2011 to the dual challenges of energy poverty and climate change The Powering Development with Renewable 2011 edition of Energy Technologies UNCTAD’s Information Economy Report (left) finds that many 2011 TI on R epo RT national and donor strategies related to private sector dev­ The map shows a world in which national territories have been resized according to the global distribution of energy poverty. In elopment currently the map, the territory size is proportional to the percentage of world electricity production that occurs there. The map, fail to take adequate which is available at www.worldmapper.org, has been reproduced with the permission account of ICT’s of the copyright owners: ©SASI Group (University of Sheffield) and Mark Newman (University of Michigan). potential.

Technology and

UNITED NATIONS innovation, a cornerstone of development policies

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and focused on a steady improvement in domestic capabilities. Policies will also be critical to ensure that technological change and learning are well coordinated with demand and supply on the one hand, and public investment on the other.

The role of UNCTAD in science, technology and innovation for development As technology and innovation continue to gain increasing recognition for their fundamental role in economic growth and development, UNCTAD’s work – focusing predominantly on helping countries design, r i g h t enact and rethink their policy frameworks on tech­ Whether for work or education, access nology and innovation – remains central. As the lead to information agency on technology within the United Nations technology and in system, UNCTAD has been carrying out research and particular the analysis, technical cooperation and consensus-building internet can help bridge the activities aimed at strengthening our understanding of knowledge divide. how technology and innovation policies can be fostered to achieve broad-based and sustainable frameworks that foster the development of domestic economic development. technological and innovation capacities remains a UNCTAD’s policy analyses are disseminated through major hurdle. At the same time, difficulties in accessing a range of activities and publications, including two existing technologies should not be understated. While major annual reports, the Technology and Innovation a growing share of innovative activities is already Report and the Information Economy Report. The taking place in emerging developing countries – Technology and Innovation Report 2010 examines notably, Brazil, China, India and South Africa – a large such issues as the role of technology and innovation number of developing countries will need greater policies in improving food security in Africa and the international support to overcome the barriers that 2011 edition explains how developing countries can hinder the diffusion of knowledge. use renewable energy technologies to respond to the Different economic activities have varying learning dual challenges of reducing energy poverty while patterns and knowledge “spillovers”. However, in mitigating climate change. many developing countries, the shift to economic For its part, The Information Economy Report 2010 activities that are carriers of dynamic growth is looks at questions such as how the use of information restricted by low technology absorption capacity. This and communication technology (ICT) by enterprises shortcoming can stifle the efforts of firms and organi­ can contribute to poverty reduction and improved zations to obtain and apply new knowledge and new living standards; the 2011 edition explores the poten­ technologies. Greater national coordination and inter­ tial of ICT to maximize the impact of private-sector national support, therefore, are critical for helping development policies. developing countries close the gap and kickstart their This research work supports and complements a Technology and economic transformations. variety of technical assistance products. For example, innovation, In this process, the right mix of policies at the UNCTAD has been undertaking national policy reviews a cornerstone of development national level is important. Such policies should ensure to support more effective technology and innovation policies that technological change is demand-driven, inclusive policy design, implementation and monitoring. Science,

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technology and innovation policy reviews, also known as STIP Reviews, provide participating developing countries with overall diagnoses of their national innovation systems. Information and communication technology policy reviews take a specific look at how national policies are supporting the development of ICT and e-business. Other technical cooperation programmes concern networking and capacity-building among the scientific and technological institutions of developing countries, capacity-building for the statistical measurement of the diffusion and impact of ICT and e-business, and train­ ing on legal issues related to e-business. l e f t In the area of consensus-building, UNCTAD Wind turbines such supports international debate and policy discussions as these in India on global technological issues, including ICT, and provide an escape route from energy their implications for development. UNCTAD is poverty while responsible for the substantive servicing of the United producing no harmful Nations Commission on Science and Technology for greenhouse gases. Development, a subsidiary body of the Economic and Social Council. This involves supporting these discussions have covered such topics as water- intergovernmental discussions on the follow-up to the resource man­agement, agriculture, gender and World Summits on the Information Society of 2003 renewable energy. and 2005, as well as policy dialogues and the sharing of experiences on matters related to science, tech­ Anne Miroux is the Director of the Technology and nology and develop­ment challenges. In recent years, Logistics Division of UNCTAD.

l e f t An integrated combined cycle thermo-solar power plant in Morocco; renewable energy has been a focus of recent policy discussions.

Technology and innovation, a cornerstone of development policies

5 3 Turkey: An Attractive FDI Destination

The world is undergoing a profound political and economic Gross Public Debt Ratio to GDP (%) transformation. In the aftermath of one of the worst financial crises 74.0 80.0 67.7 in world history, the recovery is far from being over with the risk 70.0 59.6 52.7 60.0 46.5 46.1 of a second dip. While many economies, especially advanced ones, 42.2 50.0 39.9 40.0 39.8 try to leave behind the deep recession which hit all economies 40.0 around the world hard, global financial markets are now faced with 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* the risk of a second recession due to the sovereign debt crisis in the Source: Treasury Eurozone. Unsurprisingly, the crisis and the persistent threats have * Estimate (Medium-term Programme 2012-2014) negatively affected the flow of global foreign direct investment (FDI). For the majority of companies, accessing and securing finance for Budget Deficit Ratio to GDP (%) new investments, either expansions or greenfield investments, has 15.0 11.5 become more difficult. The gloomy economic outlook has worsened 10.0 8.8 the situation, thus a number of investors have had to either cancel 5.0 1.8 1.7 5.2 1.1 0.6 1.6 5.5 3.6 or postpone their investment projects. The figures also support this 0.0 dim outlook: global FDI inflows decreased 12% in 2008 and 32% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* Source: Treasury in 2009, while the year 2010 has seen a slight recovery. * Estimate (Medium-term Programme 2012-2014) During such a time of high risk and crisis, global investors are looking for safe havens where a second dip does not seem FDI Inflows to Turkey ($ Billions) imminent. Both the mediocre growth rates in advanced economies 120 105 and the looming sovereign debt problem and banking crisis in 100 Europe intensify investors’ quest for new destinations for 80 60 investment. At this juncture, with its stable and robust economic 40 15 growth, Turkey stands out as a refuge for global investors trying to 20 0 decrease the amount of risk in their future investments. Turkey’s 1923-2002 (80 years) 2003-2011 (9 years) performance in terms of economic growth, 9% in 2010 and 9.6% Source: Central Bank of the Republic of Turkey in the first nine months of 2011, encourages experts and inter­na­ tional institutions to make confident projections about the Turkish public debt ratio to around 40% of GDP in 2010, down from around economy. For example, according to the OECD, Turkey is expected 74% in 2002. The average of the 27 EU countries was more than to be the fastest growing economy among OECD members during 80% in 2010, while in countries like Greece and Italy, it is over 2011-2017, with an annual average growth rate of 6.7%. 100%. While increasing budget deficits are another problem for As for the sovereign debt problem, which emerged as a recent threat many countries, Turkey has enjoyed a budget surplus in the first nine to the stability of the global economy, Turkey has decreased its gross months of 2011.

Annual Average Real GDP Growth (%) Forecast in OECD Countries 2011-2017

7 6.7

6

5.0 4.9 5 4.7 4.5 4.1 3.9 4 3.8 3.6 3.5 3.2 3.1 3.1 3.0 3.0 2.9 3 2.8 2.8 2.6 2.6 2.5 2.3 2.2 2.1 2.0 1.9 2 1.8 1.8 1.6 1.4 1.2 1

0

UK US Italy Korea Spain OECD Japan Turkey Mexico Greece Finland Ireland Iceland Poland Austria Canada Belgium France Hungary Australia Norway Sweden Denmark Germany Portugal Slovak Rep. Czech Rep. Switzerland Netherlands Luxembourg New Zealand Source: OECD Economic Outlook No. 86 As the recent global financial crisis has hit many economies hard Access to Multiple Markets: 1.5 Billion People $23 Trillion GDP in several ways, many large banks in EUROPE RUSSIAN FEDERATION

Europe and the US are faced with GDP – $ 18.4 Trillion GDP – $ 1,5 Trillion bankruptcy, looking for bailouts Population – 666 million Population - 142 million from their governments. The collapse of Lehman Brothers has been a milestone in the financial history of world, putting an end to the idea “too big to fail.” US and the European governments had to bail out more than a hundred banks, whereas not even a single bank in Turkey had to be bailed out. This is mainly because Turkey has a very strong financial system reinforced by a vigorous regulatory and supervisory framework. The capital CENTRAL ASIA & CAUCASUS adequacy ratio of the Turkish bank MIDDLE EAST AND NORTH AFRICA system has been hovering around GDP – $ 2,8 Trillion GDP – $ 290 billion 20% while many European banks Population – 636 million Population – 80 million are unable to pass the stress test. Source: IMF World Economic Outlook April 2011 Source: IMF WEO for GDP figures as of 2010 Such a stable and promising investment environment has turned Turkey into an attractive investment destination which business world to train the necessary workforce. Turkey with garnered more than $100 billion FDI in the past nine years such unique advantages is alluring investors from all around the since 2003. When compared to the $15 billion FDI attracted world. The government is doing its best to accommodate global in the preceding eight decades before 2003, then it becomes investors in Turkey. clear how Turkey has shifted gears in recent years in terms of investment. Investment Support and Promotion Agency of While global FDI has started to experience a slow recovery Turkey (ISPAT) in 2011, FDI inflows to Turkey have increased exponentially, The Investment Support and Promotion Agency of Turkey (ISPAT) exceeding $1 billion in the first ten months of 2011. Such a sharp was established under the auspices of the Prime Ministry in 2006. increase in FDI inflows corresponds to a 84% rise when compared ISPAT is the official organization for promoting Turkey’s investment with the same period of 2010. This indeed serves as an acknow­ opportunities to the global business community and providing ledge­ment of Turkey’s recent economic performance which turned assistance to investors before, during and after their entry into it into a hot spot for investment though it growing and stable Turkey. ISPAT serves as a reference point for international investors domestic market, skilled labour force, and strategic location as a and as a point of contact for all institutions engaged in promoting regional center which enables global companies to access Turkey’s and attracting investments at national, regional and local levels. It neighbouring markets. works on a fully confidential basis and combines a private sector Turkey has a population of approximately 74 million as of approach with the backing of all governmental bodies. ISPAT’s free- 2010. Half of the population is under the age of 29, making of-charge services include, but are not limited to, market Turkey the country with the youngest population in Europe, both information and analysis, industry overviews and comprehensive in term of proportional and absolute values. Its labour force is sector reports, assessing conditions for investments, site selection, rapidly growing with participation of young and skilled finding companies for potential partnerships and joint ventures, newcomers. Every year, around 500,000 students graduate from negotiations with relevant governmental institutions, facilitating universities, similarly hundreds of thousands graduate from legal procedures and legislation issues such as establishing business vocational and training schools both at secondary and tertiary operations, incentive applications, and obtaining licenses and levels. Moreover, the government is working closely with the work/residence permits. C M Y CM MY CY CMY K UNCTAD XIII

Articles from the family of International Organizations

This section is a series of articles from leaders across relevant UN organizations. ◆ Sha Zukang, Under-Secretary-General, United Nations Department of Economic and Social Affairs (DESA), opens this section by outlining what needs to be achieved at Rio+20, the United Nations Conference on Sustainable Development. (page 58) ◆ Dr Kandeh Yumkella, Director-General of the United Nations Industrial Development Organization (UNIDO) emphasizes the importance of investing in Africa to secure the continent’s future and meet MDGs. (page 62) ◆ Juan Somavia, International Labour Organization (ILO) Director-General writes about the importance of decent work for all as an essential part of overcoming mass unemployment on a global scale. (page 68) ◆ Helen Clark, Administrator, United Nations Development Programme (UNDP), discusses inclusive growth, equitable globalization and the importance of supporting sectors where the world’s poorest can earn an income. (page 72) ◆ Achim Steiner, Executive Director, United Nations Environment Programme (UNEP) writes about how a sustainable green economy offers social, environmental and economic benefits to developing countries. (page 74) ◆ José Graziano da Silva, Director-General, Food & Agriculture Organization (FAO), outlines policy responses to higher food prices in the wake of an increase in food production and a decrease in agricultural investment. (page 78) ◆ Pascal Lamy, Director-General, World Trade Organization (WTO), describes a model for the multilateral trading system of the future based on policies already in place as well as ideas for the future. (page 82) ◆ Patricia Francis, Executive Director, International Trade Centre (ITC) writes about how the ITC plans to help vulnerable countries develop and grow in a challenging global economy. (page 86)

◆ Rima Khalaf, Under-Secretary-General and Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), reflects on the events of the Arab Spring and the resulting new realities and social, political and economic challenges. (page 88)

5 7 Rio+20: Preparing the future we want

UNCTAD XIII By Sha Zukang, United Nations Under-Secretary for Economic and Social Affairs (DESA)

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organizations

The United Nations Conference on Sustainable member states toward a focused, forward-looking and Development will take place in Brazil on action-oriented outcome document. 4-6 June 2012. It marks the 20th anniversary During the preparatory process, member States and of the 1992 United Nations Conference on other stakeholders identified a number of critical emer­ Environment and Development and the ging challenges for Rio+20 to address. They include: 10th anniversary of the 2002 World Summit ◆ Green jobs and social inclusion; on Sustainable Development. It is envisaged ◆ Energy access, efficiency and sustainability; as a conference at the highest possible level, ◆ Food security and sustainable agriculture; including Heads of State and Government. ◆ Sound water management; ◆ Sustainable cities; The objective of the conference is to secure renewed ◆ Management of oceans; and political commitment for sustainable develop­ment, ◆ Improved resilience and disaster preparedness. assess progress to date and remaining gaps in imple­ Climate change cuts across all of these areas; it is men­tation, and address new and emerging challenges. also a high priority in its own right. Another cross- The conference will focus on two themes: a green cutting priority, which is particularly relevant for dev­ economy in the context of sustainable dev­elop­ment eloping countries, is the means of implementation. This and poverty eradication; and the institutional includes technology, financing and capacity building. framework for sustainable development. Each of these priority areas is briefly discussed below. Major milestones during conference preparation include five regional preparatory meetings and Green jobs and social inclusion numerous other events hosted by governments, UN In rich and poor countries, social exclusion remains an system agencies and major groups. In the first two unmet challenge. Social safety nets and the ability of quarters of 2012, intense political negotiations will public and private actors to create jobs have been com­ help bridge gaps, identify common ground, and move promised. Recurrent economic and financial crises, and

r i g h t Twenty years ago the United Nations Conference on Environment and Development focused the world’s attention on the importance of a sustainable future.

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mounting public and private debts, remain problematic. Job creation is a big challenge facing all countries today. Rio+20 is not just about the environment. It is also about social development. It is a summit about action to create more jobs, better jobs and more green jobs. At Rio, governments need to share lessons on what kind of policies related to a green economy can help to create jobs.

Energy access and energy security Energy security and energy independence are pressing priorities for all countries. At the same time, energy poverty is still widespread in Africa and South Asia. Some 1.4 billion people lack access to electricity, and almost twice as many continue to rely on biomass for cooking. One proposal is to launch an exciting global initia­ tive at Rio+20: universal energy access by 2030. international cooperation will be needed to avert con­ a b ov e Ambitious goals for energy efficiency and renewable flict. Rio+20 offers an opportunity for forward-looking The growth in urbanization presents energy are part of the package action on integrated water resource management. both challenges and This package of energy goals is the first concrete opportunities to step in moving the world’s sustainable development The challenge of urbanization building a more planning horizon from 2015 to 2030. Other sectors Cities are concentrations of human energy and creati­ sustainable future. must follow suit in the coming months. vity. They are the source of sustainable development problems as well as the laboratories for solving them. Food security Urban planners and managers, transport planners, real Even with the great advances of the “green revolu­ estate developers, architects and engineers all have a tion”, nearly one billion people are still hungry or crucial role in shaping a sustainable planet. under­nourished. However, now farmers around the It is estimated that buildings alone account for world are experimenting with integrated soil, water roughly 15% of global greenhouse gas (GHG) and plant management methods. emissions. Add transport and the manufacturing of At Rio+20, we should aim to accelerate an “ever­ building materials, and the number rises to the green revolution”. This revolution will meet the grow­ 20-25% range. ing global food demand while protecting soils, water and biodiversity. Marine resources The world’s oceans are too heavily exploited and too Sound water management little managed. The dire state of many fisheries is hard Water is essential to life and is the lifeblood of farmers. evidence. Many people would like to see forceful actions It has long been taken for granted. This must change. agreed at Rio to accelerate implementation of chapter Rising demand is running up against greater scarcity. In 17 of Agenda 21 on protection of the oceans. This is many places, desertification and drought are becoming long overdue. Rio+20 must also be about the blue eco­ more severe. This is happening even as flooding takes nomy, which is an integral part of the green economy. a heavy toll on lives and livelihoods. Agenda 21, adopted at the 1992 Earth Summit in Rio+20: The risk of conflict over scarce water looms large, as Rio de Janeiro, reflects a global consensus and political Preparing the does the challenge of coping with water stress. Closer commitment at the highest level on development and future we want

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Means of implementation To effectively meet these new and emerging chal­ lenges, developing countries will need international support. Technology cooperation, capacity develop­ ment and finance will be crucial. The biggest challenges and opportunities are clearly in the fast-growing economies of the developing world. Scalable green technologies will need to be widely deployed in the developing economies To acquire technologies to build greener infra­ structure and industries, finance will be needed. Much r i g h t of the financing for building greener economies will be Solar power in Thies, mobilized by developing countries themselves. But, Senegal. Access to international financial support will be needed to move clean energy con­ tinues to impede towards greener development, especially in the Least development, Developed Countries (LDCs). particularly in Africa Perhaps Rio+20 will launch a new public and private and South Asia. An financing initiative, like a global green economy fund. initiative to address this barrier is pro­ Solutions are needed for development finance that go posed for Rio+20. beyond the classic methods of the past.

environment cooperation. The agenda deals with the Conference themes for Rio+20 pressing problems of today and the need to prepare As mentioned previously, the conference’s two themes for the challenges of the next century. Chapter 17 will be a green economy in the context of sustainable includes enclosed and semi-enclosed seas under the development and poverty eradication, and the insti­ “oceans” definition and states that oceans are “an tutional framework for sustainable development. The essential part of the global life-support system”. following sections address each theme separately. Oceans are under increasing threat from pollution, over-fishing and degradation of coastlines and A green economy in the context of sustainable coral reefs. development and poverty eradication There is no consensus definition of a green economy. Enhancing disaster preparedness However, it is important to recognize upfront what a Significant environmental changes are already upon us, green economy is not. It is not a top-down, one-size- often affecting vast areas at a time. Natural disasters fits-all model of development; or an excuse for green occur more frequently and their impacts are becoming protectionism or new green conditionalities on ODA more severe. Many economies and societies are and other finance, nor is it a way of putting nature’s under stress. wealth under corporate control. Building resilience is crucial. We need earth obser­ A green economy is or should be a means to accel­er­ vation and early warning systems. Also crucial are ate progress on sustainable development com­mit­ments; enhanced prevention and preparedness. At Rio+20, a vehicle for integrating the three pillars of sustainable governments and others could commit to work development; and a way of reinforcing coherence together more closely to strengthen international among economic, environmental and social policies. Rio+20: Preparing the management of natural disasters and support resilience For developing countries, a green economy trans­ future we want building efforts in vulnerable developing countries. ition needs to be supported by adequate means of

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implementation, including finance, technology and mentation. This could be done, for example, through capacity building. A green economy needs to be voluntary reporting and review along the lines of the inclusive. It must create sustainable livelihoods for the Human Rights Council. poor and decent jobs for those seeking employment. Different proposals have been put forward on how There is also emerging consensus on the need for a to strengthen the UN Environment Programme (UNEP), green economy roadmap. Such a roadmap can guide including a proposal on making it a specialized agency. countries in the transition, as well as offer a menu of Other proposals argue that strengthening UNEP could policy options, a toolkit with best practices and lessons be achieved without this particular transformation. learned to facilitate information exchange. Whatever the final option, one thing is clear – the world needs a stronger UNEP for there to be a more Strengthening the institutional framework for robust environmental pillar for sustainable development. sustainable development We must consider what institutional structures for Conclusion sustainable development will be most effective in There are many challenges for world leaders to address advancing the integration of economic, social and at Rio; however, humanity now stands at a crossroads. environmental concerns; implementation of concrete Sustainable development is the only path that allows actions; and coherence of policies and strategies at all all of humanity to share a decent life on this, one levels. In this regard, the proposal for a sustainable planet. Rio+20 must be the turning point that makes development council (SDC) has been gaining interest. that future possible. Its proponents suggest that such an SDC could raise the political profile of sustainable development, foster Sha Zukang is the United Nations Under-Secretary- greater coordination in international institutions and, General for Economic and Social Affairs given a strong mandate, an SDC could monitor imple­ (www.un.org/desa).

l e f t The UN Interim Force in Lebanon and Lebanese armed forces mounted a training exercise in disaster preparedness in February 2011 dubbed “United Beacon” which aimed to enhance inter- agency coordi­nation in the event of a natural disaster.

Rio+20: Preparing the future we want

6 1 The importance of investing in Africa

UNCTAD XIII By Dr Kandeh Yumkella, Director-General of the United Nations Industrial Development Organization (UNIDO)

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Every penny invested in Africa counts today of economies, the steady introduction of pro-business and to secure Africa’s future. A dollar won’t policy environments, the empowerment of women and get you far in a rich economy, but in a poor the expansion of education. But these gains are country like the one I come from, Sierra Leone, seriously threatened by the global financial crisis. even half a dollar can save a life or feed an This crisis has dealt a blow to remittances. Many entire family. migrants who sought work in stronger economies than their home countries have lost their jobs or are The combined effects of the financial, food and energy struggling to set aside cash to send to their families crises will hammer the “bottom billion” – the poorest back home. The World Bank’s latest global economic people in some 60 countries who have to survive on outlook suggests that remittances will fall by 5% to around a dollar a day – the hardest. Because of these 8% this year. This will affect countless families who crises, many African countries are likely to miss the rely on remittances for survival. 2015 deadline for the Millennium Development Goal But this is just the tip of the iceberg. Foreign of poverty reduction. companies are pulling back capital, drying import and export financing. Trade is declining. The Gains under threat unemployment rate, especially among young people Africa has made significant socio-economic progress and women is staggering. In Sierra Leone, more than over the past decade, with especially notable gains 60% of the country’s youth are jobless. being recorded in such countries as Benin, Ghana, A failure to help the “bottom billion” could fuel Ethiopia, Namibia, Nigeria, Senegal, and South Africa. mass migration and global insecurity. Ignoring the These gains include: free-market reforms, liberalization poorest nations means postponing a larger crisis which

r i g h t UNIDO has worked with other stakeholders to develop a youth employment programme in Côte d’Ivoire, Guinea, Liberia, and Sierra Leone to address high levels of joblessness.

The importance of investing in Africa

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will lead to famine, unrest, and massive migration. Poverty is also an incubator for diseases, the increased incidence of which will further weaken the productive capacity of these countries and their ability to emerge from poverty. Poverty is everyone’s problem. If developing countries collapse, millions will knock on the doors of developed countries, and the first port of call will be Europe. Such mass migration will hurt already strained social relations in some countries. Only a coordinated global response can guarantee that people from the poorest countries will visit Europe as tourists and business partners, not as asylum seekers.

Investment and the benefits of globalization Africa needs to do its share to address the crisis and the pattern of investment needs to be carefully reconsidered. The continent needs to shift from its dependence on aid and peasant-driven agriculture, and learn to compete on a global level. It can generate Investment in access to energy a b ov e sustainable growth through industrialization, and by Development won’t happen without access to energy. Malian women receiving training expanding its markets through increased regional The current energy crisis should give us an incentive to in business manage­ integration. It needs to promote production and trade, formulate a new approach to enable increased access ment to allow them expand agribusiness and agri-industries, and create to reliable, affordable and renewable energy services to access inter­ wealth and new jobs. Agribusiness development can for sustainable development. At the same time, this national markets. stimulate broader economic growth, boost regional new approach should promote energy efficiency to trade, enhance food security and reduce poverty. minimize the impact of economic growth on energy Globalization has been good to many in the demand and environmental degradation, including developing world. At this critical moment, we can’t climate change. allow this important driver of international economic Africa has great hydropower potential but only growth to fade away. We need a more inclusive 7% has been exploited. Africa’s natural gas reserves process, and to make sure that: amount to about 8% of global reserves. It has 10% of ◆ Financial resources keep flowing into Africa and the global oil reserves. But the continent requires major developing world so their continuing integration into investments to develop its sources of traditional and the global economy is sustained. renewable energy. ◆ Protectionism is avoided and markets stay open. ◆ The poorest nations can grow out of poverty Ghana: A case study through trade. Ghana, host nation of the last UNCTAD conference in ◆ There is good governance of natural resources to 2008, is an example of an African nation that has fuel broader and inclusive development made improvements but still has issues that need to be Relevant experiences from the newly industrialized dealt with. countries in Asia and elsewhere can show African When you fly into Takoradi, Ghana’s fourth largest countries how to galvanize their economies, acceler­ city, an industrial and commercial centre, the oil rigs The importance of ating wealth creation and poverty reduction. along the coast are easily spotted. It is a panorama investing in Africa

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diamonds, titanium, and gold. One of the iron-ore concessions in Sierra Leone is estimated to hold 10.5 billion tons of ore. Similar stories of mineral abundance have emerged in other African countries in recent years, including Chad, Guinea, Liberia, Mauritania, and Sudan. As the rest of the world grapples with austerity measures, such countries should be considering restoration strategies and ways to permanently wean themselves off foreign aid and encourage smart investment. In the same way that Ghana was the trailblazer for ending colonial rule, it could also become sub-Saharan Africa’s next success story in economic terms and set an example for the rest of the continent. But it must be ready to make some tough choices – and study the region’s existing success stories. On a continent where mineral wealth too often has a b ov e that is increasingly characteristic of modern-day Africa. become a curse, Botswana, under the leadership of Ghana – UNIDO has This contrasts with the nearby city of Elmina, where former President Festus Gontebanye Mogae, has assisted in the scars of the former West African slave trade can demonstrated how natural resources can promote establishing modern national standardi­ still be seen. sustainable development and good governance. Mogae zation institutes in In Ghana in 2010, I met ministers who shared managed to hold down inflation and attract foreign each country of the impressive figures on how much progress the country investment in order to diversify Botswana’s economy West African has made in achieving the Millennium Development and make it less dependent on the extraction of Economic and Monetary Union. Goals (MDGs). Some traditional leaders, academics, diamonds, while simultaneously ensuring that more of representatives of civil-society groups, and students, the country’s mineral wealth was processed at home. on the other hand, were more worried about Thanks in part to the efforts of celebrities like Bono whether the country’s new oil wealth would benefit and Bob Geldof, some African countries were absolved ordinary people. of their long-standing debt a few years ago. The Is oil a blessing or a curse? Will oil and other natural choices that we as Africans make today will determine resources force Ghana, ranked among the leading whether we remain poor or follow the successful producers of cocoa, coffee and oil palm, to turn its agriculture-led industrialization model implemented in back on agriculture? Will oil wealth create a klepto­ Malaysia (despite that country’s gas discoveries) and cracy on the bones of 30 years of progress in meeting evolve into diversified economies. standard criteria of good governance? African countries could also choose the Norwegian model, which established the principles that natural Natural resource issues across Africa wealth belongs to all citizens, including the unborn, Ghanaians are not alone in voicing such concerns. and that all mining deals should be completely Their compatriots in Sierra Leone also want to know transparent. Adherence to these principles ensures what will happen now that they, too, have won the that private rent-seeking and appropriation of oil commodities lottery: in 2009, the country struck oil profits, a major dimension of the resource curse, and discovered one of the largest iron-ore deposits in is avoided.

The importance of the world. It also signed new mining concessions for At the same time, it is important to prevent mineral investing in Africa bauxite, in addition to existing concessions for wealth from causing unwarranted currency appre­

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ciation – the dreaded “Dutch disease.” This would next 50 years. No one is forcing us to sign the mining undermine the competitiveness of other economic and drilling deals today. African leaders should use sectors and stifle export-oriented manu­facturing the Natural Resource Charter, launched in Oslo in growth, thereby stalling these economies’ structural 2009, and the Extractive Industries Transparency transformation. Initiative as guidelines when undertaking any mining negotiations. We can and must avoid the Garden of Conclusions Eden Syndrome. In The Africans: Triple Heritage, the Kenyan-born It is still unclear exactly how much of the $1 trillion scholar Ali Mazrui expressed concern about what he pledged at the London G20 summit will find its way to perceived to be a Garden of Eden in decay. Speaking of Africa. That’s why we need to keep an eye on the the lost decade of the 1980s in Africa, Mazrui observed figures and keep reminding world leaders of the needs that, despite being endowed with superb climatic of those in the developing world that live in their conditions, few African countries could feed them­ shadow. This will set policy priorities straight, put selves; likewise, despite being engaged in trade in strategies in place to avert a human catastrophe, and minerals and cash crops, most countries still wallowed help Africa secure its rightful place at the global in a state of aid-dependency. Mazrui, forever the economic table. optimist, expressed hope that the “human will has the power of restoration.” Kandeh K. Yumkella is Director-General of the United We Africans can blame colonialism for most of the Nations Industrial Development Organization. This problems of the past 350 years, but we will have no article is an edited version of two articles published by one to blame for the decisions that we make in the Project Syndicate (www.project-syndicate.org).

l e f t Africa’s natural resources, such as the vast iron ore deposit in Sierra Leone, could improve the lives of continent’s citizens if managed prudently.

The importance of investing in Africa

6 5 The Republic of Trinidad and Tobago An Ideal Investment Location within today’s challenging Global Business Environment.

Development path analysis of the performance of the economy with particular Index 2011, ranks this developing nation on “Strength of It has been coined the Rainbow Isle, this southernmost emphasis on macroeconomic, political and social develop- investor protection” within the top 14% at position number Caribbean island, strategically located off the northern tip ments, government finances and the country’s domestic 20 among a total of 142 countries reviewed. In September of Venezuela. Situated south of the hurricane belt, between and external debt position. Results highlighted: 2011 fDi Magazine placed Trinidad and Tobago, out of 31 the North Atlantic Ocean and the Caribbean Sea, Trinidad 1 Solid external fiscal positions supporting policy flexibility countries in the Caribbean and Central America, as the 3rd and Tobago has a unique history, from its early days of de- and enhancing the government’s liquidity position; most attractive nation for foreign direct investment and velopment to its present-day business environment. A na- 2 Public debt burden below the 36% median for ‘A’ rated 2nd for cost effectiveness. tion built upon the strength of its industrial sector, through sovereign entities; Alongside various trade agreements that exist between structure, a tier 3 data centre, high-quality, flexible office its crude oil reserves and natural gas reservoirs, stemming 3 An ‘A’ rating long-term foreign currency , reflecting a posit- Trinidad and Tobago and nations such as Costa Rica, space and a work-ready labour pool of graduates from its from its first oil boom in the 1970s, this twin island re- ive signal to investors. Venezuela, Columbia, Canada and the USA some key factors resident university; public is distinguishable from the rest of the Caribbean. “These findings reflect favourable economic growth pro- contribute to the country’s investor-friendly environment, Light Manufacturing – a thriving manufacturing sector Trinidad and Tobago (T&T) has not followed the tradi- spects in 2011. Trinidad and Tobago can be viewed as a these include: offers an advantage to produce value added products that tional path that may be expected of a Caribbean nation, sound destination market for foreign direct investment and a 1 Competitive Advantages: are competitive in targeting niche markets, using natural with a focus on tourism, but has positioned itself as a re- viable source of the necessary resources needed to sustain • Strategic location at the crossroads of the Americas and resource outputs from energy production; gional leader in the industrial and manufacturing sectors. any new business entity or venture” says Kelvin Mahabir, below the hurricane belt; Transport and Logistics (Merchant Marine) – the advance The country has one of the highest per capita incomes in President of invesTT, the country’s investment promotion • Globally competitive and lowest energy costs in of technology and enhanced trade routes provides the po- Latin America and the Caribbean and is a primary member agency aligned to the Ministry of Trade and Industry. the region; tential for T&T to be positioned as a transport hub; of CARICOM (Caribbean Community). A strong supporter of • Access to regional and international markets through Creative Industries – fashion, art, film, music, entertain- the Caribbean Single Market Economy (CSME) and, with a Future direction and opportunities bilateral investment and taxation treaties; ment, animation. Known for its music (Calypso and Soca), population of 1.3 million, Trinidad and Tobago has dis- • Advanced infrastructure with fully developed industrial and its Carnival, T&T has targeted niche markets regionally played a positive, healthy economic position for the past 15 ICT, evolving industry trends and the impact of globalisa- ports and industrial parks; and globally for the advancement of creative streams; years. Through its existing trade agreements this nation tion as well as increased free and deregulated trade, have • International standard telecom services, fibreoptic Clean Technology – the development of renewable en- has access to a market size of over 90 million individuals. created a valuable opportunity for T&T to accelerate its network, cellular systems and global connectivity in ergy industries including solar and wind technologies, re- economic development. Its government has embarked on place; and cycling and waste management. Economic and Financial strengths an aggressive drive to diversify the economy and support • A well-educated workforce and access to the country’s new non-oil & gas industries and sectors through foreign existing labour pool. A November 2010 Financial Stability Module review of direct investment attraction, increased market size through 2 Incentives: T&T by the International Monetary Fund (IMF) highlighted trade agreements, and fiscal and monetary incentives. • Exemption from customs duties, value added tax and the resilience of the country’s banking and insurance sec- At the 3rd China-Caribbean Economic and Trade Co- income tax on dividends; tors in the face of the global financial crisis. This was noted operation Forum recently held in the country’s busy capital, • Duty-free treatment on raw materials, machinery as being largely due to effective management by the the Honorable Stephen Cadiz, Minister of Trade and In- and equipment; country’s Government and Central Bank in relation to the dustry, stated “Trinidad and Tobago is indeed open for busi- • Free trade zones for export manufacturing; issuance of guidelines for corporate governance and strong ness, trade and investment. Development of human • No restrictions on repatriation of capital, profits; financial controls. resource capabilities, transfer of technology, improvements • 100% ownership of a private company established in Additionally, a Standards and Poor’s rating review per- in healthcare and improvements in education are areas of T&T; and For more information on investing in Trinidad & Tobago, formed in 2010 by the IMF, gave favourable results for co-operation being sought with international partners.” • Ownership of up to 5 acres of land for business without please visit our website www.investt.co.tt, contact invesTT T&T. The review was prepared based on a comprehensive The World Economic Forum’s Global Competitiveness a license. at +1 (868) 675-1989 or email us at [email protected] Top among the list of priority areas of business focus and investment initiatives are: Information, Communications & Technology – The Au- gust 2011 issue of Business Facilities magazine ranked Trinidad and Tobago in fourth place as a global emerging ICT hub. Tamana InTech Park – an 1,100 acre industrial and technology park will offer modern communication infra-

The National Academy for the Performing Arts, Port of Spain (FAR LEFT), Englishman’s Bay, Tobago (LEFT) and Port of Spain, the capital of Trinidad & Tobago (ABOVE). The Republic of Trinidad and Tobago An Ideal Investment Location within today’s challenging Global Business Environment.

Development path analysis of the performance of the economy with particular Index 2011, ranks this developing nation on “Strength of It has been coined the Rainbow Isle, this southernmost emphasis on macroeconomic, political and social develop- investor protection” within the top 14% at position number Caribbean island, strategically located off the northern tip ments, government finances and the country’s domestic 20 among a total of 142 countries reviewed. In September of Venezuela. Situated south of the hurricane belt, between and external debt position. Results highlighted: 2011 fDi Magazine placed Trinidad and Tobago, out of 31 the North Atlantic Ocean and the Caribbean Sea, Trinidad 1 Solid external fiscal positions supporting policy flexibility countries in the Caribbean and Central America, as the 3rd and Tobago has a unique history, from its early days of de- and enhancing the government’s liquidity position; most attractive nation for foreign direct investment and velopment to its present-day business environment. A na- 2 Public debt burden below the 36% median for ‘A’ rated 2nd for cost effectiveness. tion built upon the strength of its industrial sector, through sovereign entities; Alongside various trade agreements that exist between structure, a tier 3 data centre, high-quality, flexible office its crude oil reserves and natural gas reservoirs, stemming 3 An ‘A’ rating long-term foreign currency , reflecting a posit- Trinidad and Tobago and nations such as Costa Rica, space and a work-ready labour pool of graduates from its from its first oil boom in the 1970s, this twin island re- ive signal to investors. Venezuela, Columbia, Canada and the USA some key factors resident university; public is distinguishable from the rest of the Caribbean. “These findings reflect favourable economic growth pro- contribute to the country’s investor-friendly environment, Light Manufacturing – a thriving manufacturing sector Trinidad and Tobago (T&T) has not followed the tradi- spects in 2011. Trinidad and Tobago can be viewed as a these include: offers an advantage to produce value added products that tional path that may be expected of a Caribbean nation, sound destination market for foreign direct investment and a 1 Competitive Advantages: are competitive in targeting niche markets, using natural with a focus on tourism, but has positioned itself as a re- viable source of the necessary resources needed to sustain • Strategic location at the crossroads of the Americas and resource outputs from energy production; gional leader in the industrial and manufacturing sectors. any new business entity or venture” says Kelvin Mahabir, below the hurricane belt; Transport and Logistics (Merchant Marine) – the advance The country has one of the highest per capita incomes in President of invesTT, the country’s investment promotion • Globally competitive and lowest energy costs in of technology and enhanced trade routes provides the po- Latin America and the Caribbean and is a primary member agency aligned to the Ministry of Trade and Industry. the region; tential for T&T to be positioned as a transport hub; of CARICOM (Caribbean Community). A strong supporter of • Access to regional and international markets through Creative Industries – fashion, art, film, music, entertain- the Caribbean Single Market Economy (CSME) and, with a Future direction and opportunities bilateral investment and taxation treaties; ment, animation. Known for its music (Calypso and Soca), population of 1.3 million, Trinidad and Tobago has dis- • Advanced infrastructure with fully developed industrial and its Carnival, T&T has targeted niche markets regionally played a positive, healthy economic position for the past 15 ICT, evolving industry trends and the impact of globalisa- ports and industrial parks; and globally for the advancement of creative streams; years. Through its existing trade agreements this nation tion as well as increased free and deregulated trade, have • International standard telecom services, fibreoptic Clean Technology – the development of renewable en- has access to a market size of over 90 million individuals. created a valuable opportunity for T&T to accelerate its network, cellular systems and global connectivity in ergy industries including solar and wind technologies, re- economic development. Its government has embarked on place; and cycling and waste management. Economic and Financial strengths an aggressive drive to diversify the economy and support • A well-educated workforce and access to the country’s new non-oil & gas industries and sectors through foreign existing labour pool. A November 2010 Financial Stability Module review of direct investment attraction, increased market size through 2 Incentives: T&T by the International Monetary Fund (IMF) highlighted trade agreements, and fiscal and monetary incentives. • Exemption from customs duties, value added tax and the resilience of the country’s banking and insurance sec- At the 3rd China-Caribbean Economic and Trade Co- income tax on dividends; tors in the face of the global financial crisis. This was noted operation Forum recently held in the country’s busy capital, • Duty-free treatment on raw materials, machinery as being largely due to effective management by the the Honorable Stephen Cadiz, Minister of Trade and In- and equipment; country’s Government and Central Bank in relation to the dustry, stated “Trinidad and Tobago is indeed open for busi- • Free trade zones for export manufacturing; issuance of guidelines for corporate governance and strong ness, trade and investment. Development of human • No restrictions on repatriation of capital, profits; financial controls. resource capabilities, transfer of technology, improvements • 100% ownership of a private company established in Additionally, a Standards and Poor’s rating review per- in healthcare and improvements in education are areas of T&T; and For more information on investing in Trinidad & Tobago, formed in 2010 by the IMF, gave favourable results for co-operation being sought with international partners.” • Ownership of up to 5 acres of land for business without please visit our website www.investt.co.tt, contact invesTT T&T. The review was prepared based on a comprehensive The World Economic Forum’s Global Competitiveness a license. at +1 (868) 675-1989 or email us at [email protected] Top among the list of priority areas of business focus and investment initiatives are: Information, Communications & Technology – The Au- gust 2011 issue of Business Facilities magazine ranked Trinidad and Tobago in fourth place as a global emerging ICT hub. Tamana InTech Park – an 1,100 acre industrial and technology park will offer modern communication infra-

The National Academy for the Performing Arts, Port of Spain (FAR LEFT), Englishman’s Bay, Tobago (LEFT) and Port of Spain, the capital of Trinidad & Tobago (ABOVE). Global action for productive investments and decent jobs UNCTAD XIII By Juan Somavia, Director-General, International Labour Organization

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Economic and financial volatility and widening policies and greater coherence across the existing income inequalities are major drawbacks of the frameworks for multilateral governance. current pattern of globalization. They stand as main threats to the effort to set the world The economic and social impact of a prolonged economy on a sustainable and inclusive path to global jobs deficit development and growth. In 2004, the World In its Trade and Development Report 2010, UNCTAD Commission on the Social Dimension of recognized that “Unemployment is the most pressing Globalization had called for urgent action to social and economic problem of our time, not least build a fair and inclusive process of globali­ because, especially in developing countries, it is zation – away from a narrow focus on market closely related to poverty, therefore employment liberalization and deregulation. creation needs to be made a priority in economic policy”. At the Washington Summit in 2009, G20 Better governance of globalization and a better Leaders had agreed to put quality jobs at the heart balance between economic and social concerns were of the recovery, as a critical element not only for a deemed essential in order to realize the full potential of meaning­ful global economic upturn but also to econo­mic integration for improving the living underpin social cohesion and balanced and inclusive standards of women and men in all countries. That call growth. However, the emphasis subsequently shifted is even more urgent now in the long and distressing to fiscal austerity. aftermath of the worst global economic and financial Despite this era of austerity, the facts show that crisis since the 1930s. Action is urgently needed to tackling the global jobs deficit must be given high boost decent employment and productive investment, priority. It is also part of the solution to establishing sustain incomes of working families and reform the more efficient patterns of growth. finance sector. It requires the coordination of national The fallout of the global crisis and the uncertainty in the pace of economic recovery are exacerbating an r i g h t already precarious jobs situation. Today, some 200 Juan Somavia: million are unemployed in the world, the highest level A global effort is ever recorded. Many of them are young. The youth required to reduce unemployment and unemployment rate is close to 20% and many young ensure investments people are so discouraged that they do not even are sustainable. bother to search for a job. Long term unemployment is rising in many advanced economies.1 At the current pace, the world economy is sustaining a growth of total employment of only about 0.8%, less than the increase in the labour force. Stronger job creation is necessary to restore employment to its pre-crisis levels and to absorb the new entrants to the labour market. Over the next 10 years, 400 million new jobs will be needed just to keep up with the increase in the working age population. Furthermore, unemployment levels are only the Global action tip of the jobs crisis. In all regions, working families for productive investments and 1 see ILO, Global Employment Trends 2011: The challenge of a jobs decent jobs recovery, Geneva, January 2011.

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are confronted with increasing hardship. Data from several countries points to large numbers of women and men involuntarily working part-time. Vulnerable employ­ment has expanded. Wages for the bulk of working people in many countries have been stagnant for several years despite increases in the productivity of labour. Worldwide, two employed persons in five are estimated to have an income of less than two dollars per day, that is, up to $720 per year. Poverty reduction has been arrested or set back in many developing countries and in many developed countries, measures of poverty are rising. Long spells of unemployment, widespread underemployment and working poverty are structural constraints on future growth. They leave permanent scars on economies and societies, undermining social cohesion, weakening aggregate demand and wasting the skills and talents of the younger generations. The high number of unemployed and inactive a b ov e The need to make employment and decent work a people (especially youth and women) is not the only Felicienne Soton, a member of a priority of economic policy is especially evident in the concern. Many of the existing jobs are of low quality, women’s group that Middle East and North Africa. The total unemployment underpaid, insecure and without respect for basic produces cassava rate in the region is estimated to be around 10%, the rights at work. This is reflected in the extent of the flour in Adjegounle, highest regional rate in the world. This high level is informal economy in many countries. There is scant Benin. The group has benefited greatly primarily the result of extremely high unemployment data on wages. Still, provisional estimates suggest that from a national for young people, with an estimated one out of four real wages in the region registered a very modest community driven youth in the labour market being unemployed. The increase of about 2% over the 1999-2007 period – by development project. situation for women is worse than for men: young far the lowest among all regions.3 The effects of wage female unemployment rates reached well over 30% moderation on the lives of working families were further in 2008.2 compounded by fragmentation and large gaps in the This is particularly worrisome for two reasons. The existing social assistance and social security schemes. region has very high rates of growth of the working- Prompted by social unrest, governments in the age population, second only to Sub-Saharan Africa. In region and international partners are launching addition, despite great gains in female education in ambitious plans to fight unemployment and poverty recent years, female participation rates are extremely especially among the youth. What should be clear low amongst adults and young people. High unemploy­ from the outset is that simply intensifying old policies ment rates, low labour force participation, and striking will not lead to the desired outcomes. The economic gender gaps result in very low employment-to- reforms of the past decade and the apparently population ratios, almost twice the global average. In impressive high economic growth rates failed to North Africa, for instance, less than a quarter of the produce the jobs that could meet the aspirations of an total female active population has a job, while the increasingly educated young generation. In some potential of the remaining 75% to contribute to cases, they even exacerbated inequalities and feelings Global action economic growth is not tapped. of exclusion and discrimination. for productive

2 see ILO, Global Employment Trends for Youth, Geneva, August 2010 3 see ILO, Global Wage Report 2010/2011: Wage Policies in Times of investments and . Crisis, Geneva, 2011 (Table 1, p.15). decent jobs

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The real challenge is to pursue a more inclusive be made easier by means of guarantees with some back­ development model that promotes jobs together with ing from government, credit mediation or ear­marking of rights, adequate social protection and equity. The ILO is part of the liquidity that is provided to banks. working in collaboration with many sister UN agencies Well-designed active labour market policies and to promote decent work opportunities in the region. vocational training can help alleviate tension on the labour market by facilitating the upgrading of quali­ Global recovery and development through fications, job search and the transition of young productive investments and decent jobs women and men from education into work. Tax policy In response to the global economic crisis, the ILO adop­ can play an important role in employment generation – ted a Global Jobs Pact which set out policy measures through reductions in payroll taxes paid by employers that could support a rapid recovery of the real economy and workers, for example. Tax reforms should be sustained by investment, enterprise dev­elopment, guided by the goal of ensuring that the burdens of social protection, rights at work and social dialogue. reallocation of expenditures and medium-term fiscal The pact was endorsed by the UN and welcomed by consolidation are fairly shared. the G20. Many countries have applied some of the measures suggested by the pact in their stimulus plans. Sustaining incomes of working families and Those actions – taken simultaneously – made a differ­ reducing inequalities ence, boosting growth and jobs in the midst of a dram­ Another lesson from the response to the global crisis atic recession. Yet the effort has not been sustained. concerned the need to have in place mechanisms for Within the framework of credible medium- to long- income support and social protection to buffer fluctu­ term fiscal consolidation plans, it is urgent to regain ations in the earnings of working families and stabilize momentum for coordinated policies aimed at boosting aggregate demand. This is not just an issue for a single the real economy, jobs and incomes directly. Policies to country coping with the business cycle; it is a structural stimulate productive investment in the real economy, to concern for the world economy. Increase in income help start and grow businesses and to develop and inequalities across and within countries is a widely maintain the supportive infrastructure are fundamental acknowledged feature of globalization as a result, in developed economies as well as emerging and dev­ among others, of productivity outstripping wages in eloping economies. The developing economies were many countries. able to weather the crisis relatively well, but remain One consequence has been a constant relative exposed to long-standing social vulnerabilities, gaps in decline in the purchasing power of households and the domestic consumption and widespread poverty. expansion of debt for consumption purposes which, in The specific circumstances, priorities and needs of the absence of checks on leveraging, fuelled financial each country and region differ. A review of experience instability. Policies to reinforce minimum wage systems suggests that public and private investments in job and strengthen labour standards and institutions of generating activities should focus on housing, collective bargaining could help better align wages infrastructure for urban and rural development, edu­ with productivity gains, share the benefits of economic cation and health services. Special attention should be growth more widely and sustain a steady expansion of paid to supporting small and medium-sized enterprises household demand and investor confidence. which are the most dynamic source of employment. The scope for similar policies clearly varies across There is abundant liquidity in the international mar­ countries. Surplus countries may adopt them to avoid kets which is not invested productively, while small large domestic wage-productivity gaps, thereby Global action entre­preneurs in all countries struggle to get access to contributing to national welfare and a balanced global for productive investments and the bank credit they need to remain viable or expand macroeconomic expansion. This would also ease the decent jobs and create jobs. Credit conditions for small firms should burden of adjustment for deficit countries, which might

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be trapped in a self-defeating vicious circle of wage compression, shrinking of domestic demand and growing fiscal deficits. The aim should be to secure a mix of policies that yield socially responsible fiscal consolidation. The role of international support to sustain a country’s finances while the nec­essary adjustments take place is critical. Developing countries face distinctive challenges in strengthening their social protection systems and labour market institutions as an important step towards enhancing and consolidating economic and social development. Large social programmes are being introduced in several countries in Asia, Latin America and Africa. The ILO, in collaboration with the UN system, is promoting a gradual establishment of social protection floors that protect and empower the most vulnerable and contribute to sustaining demand, according to the circumstances of each country. sump­tion – in short, to support enterprises and jobs in a b ov e A report prepared under the leadership of Michelle the real economy. The creation of sustainable jobs for Bachelet, former President of Chile and current UN female employees Women Executive Director, has been delivered to the Conclusion: Focusing on investments and jobs can will help to United Nations and the G20 showing the feasibility of to build a better framework for globalization address gender this approach. The International Labour Conference in The call of UNCTAD XIII for a re-engineering of global­ inequality. June 2012 will discuss an international standard on ization is extremely timely. Policies to promote high social pro­tection applicable to diverse national situ­ quality jobs and decent work through investment and ations in 2012. Multilateral institutions should step up enterprises are a central element of the shift to a more their collaboration to assist countries wanting to intro­ sustainable and inclusive global economy. Decent jobs duce a social protection floor as part of their develop­ connect the dignity, empowerment and voice of indi­ ment strategy. Mobilizing domestic and international viduals with the cohesion and productivity of societies. dev­elopment finance is especially important for Under the urgency of responding to the global crisis, increasing investment in the economic and social governments and international organizations are slowly capital to the Least Developed Countries (LDCs) and to converging on a stronger job agenda that integrates kick-start the introduction of social protection floors. macroeconomic coordination, socially responsible fiscal policies, structural reforms and proper regulation of the Reforming the financial sector to make it work financial markets. There has been some encouraging for the real economy progress in cooperation between governments and new Finally, a number of important measures to repair and dialogue and joint initiative across international agen­cies reform the finance sector have been proposed, dis­ in some areas; delays and disappointments in others. cussed and in some cases introduced. It is urgent that In the process, we are learning about the constraints measures adopted should include the re-establishment but also about the potential of a new governance of of normal credit flows, in particular to small enter­ globalization. We must build on such momentum. Global action prises, as part of an overall coherent policy approach for productive to guide banks back to their function of lending for Juan Somavia is Director-General of the International investments and innovation, productive investment, trade and con­ Labour Organization (www.ilo.org). decent jobs

7 1 Inclusive growth – an enduring challenge for equitable globalization UNCTAD XIII By Helen Clark, Administrator, United Nations Development Programme

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To date, a number of developing countries – Economic growth needs to be inclusive and equitable and Least Developed Countries (LDCs) in par­ to enhance resilience to crises and reduce poverty and ticular – have been unable to take advantage of inequality. Growth needs to occur in the sectors where globalization in a way which accelerates the the world’s poor are trying to make their living, like convergence of their human development agriculture, and employment creation needs to fit the indicators with those of the industrialized definition of decent work. world. The obstacles in the way may include A vehicle for achieving inclusive growth is increased insufficient physical infrastructure, poor econo­ capacity to trade. On the whole, countries which have mic governance institutions, inadequate rule of made trade a major part of their development law, and lack of a healthy and skilled labor strategies have grown at a faster rate than those which force. A combination of lack of capacity, have not. Yet many LDCs and their regions are still not domestic constraints, and an adverse inter­ able to exploit their full potential for trade. Sub- national policy environment acts to lessen the Saharan Africa’s share of world exports, for example, prospects for inclusive growth which could fell from almost 4% in 1980 to 3.4% in 2010. benefit the poorest people and nations. Recent Small developing countries and LDCs are particularly and ongoing crises, volatile commodity prices, vulnerable to rapid declines in export earnings and the increasing impact of climate change, and capital flows, and to interrelated global crises and lack of progress in the World Trade Organization challenges such as increased food insecurity. Going (WTO) Doha Round further compound the forward, it is important to diversify exports and mar­ exclusion of LDCs. kets, reap the gains of regional economic inte­gration,

r i g h t Construction workers in Afghanistan; developing transport infrastructure such as roads is a prerequisite for economic growth.

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and pursue an international trading environ­ment Improved market access for developing countries’ which provides increased market access oppor­tunities products has been highlighted throughout the Doha for LDCs. negotiations. It has also been recognized, however, The potential of regional economic integration to that market access alone is of little use without the deliver higher economic growth is widely acknow­ supply capacity to take advantage of it, and without ledged. Around the world, regional economic commu­ complementary behind-the-border policies and nities have created more trade and increased incomes investment. Fortunately, there has been broad support and as a result, more jobs have been created. Within for developing countries’ efforts to build trade capacity these regional communities, businesses have learned through the Aid for Trade and Enhanced Integrated how to compete – enabling them to tap bigger Framework initiatives. Assistance through them markets. increased to a record $40.1 billion in 2009. Important enablers for regional integration include By focusing on the connections between regional investments in regional infrastructure, institutional integration, economic growth, and human capacities, harmonization of regulations and standards, development, the international development common approaches to macroeconomic policy, man­ community can help accelerate achievement of the age­ment of shared natural resources, greater labour MDGs and sustainable development for all. mobility, and social protection policies to prevent people from slipping out of employment and into Helen Clark is the Administrator of the United Nations poverty. These actions can help to ensure that trade Development Programme and the former Prime reinforces, rather than undermines, inclusive growth. Minister of New Zealand.

l e f t The port at Tema, Ghana; sub-Saharan Africa’s share of world exports has fallen in recent years.

Inclusive growth – an enduring challenge for equitable globalization

7 3 The green economy: Delivering social, environmental and economic benefits UNCTAD XIII By Achim Steiner, Executive Director, United Nations Environment Programme

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Twenty years on from the 1992 Earth Summit – population of nine billion or more by around 2050, when governments committed to the pursuit of these challenges are only going to increase. “sustainable development” – it’s clear that an Achieving sustainable development rests on getting array of challenges including the means and the economy right. Sustainable development is our the methods for implementing that develop­ objective, and greening the economy can help us ment remain and need to be fast-forwarded at achieve it. the United Nations Conference on Sustainable For UNEP, a green economy is one that is low- Development (Rio+20) this June. carbon, resource-efficient and socially inclusive; that results in improved human wellbeing and social equity, Poverty and inequalities which afflict a significant but significantly reduced environmental risks and number of people are among those challenges, as is ecological scarcity. A green economy is delivered

b e lo w mitigating, responding and adapting to the damaging through public and private investment into areas that Processed timber effects of climate change, such as rising sea levels, have the greatest potential to utilize emerging oppor­ from the National desertification and biodiversity loss. tu­nities and address multiple challenges: investment in Tapajos Forest – the The world equally needs to address the related crises sectors such as renewable energy, sustainable and only forest in Brazil with a management in water and food shortages while simultaneously organic agriculture, forest conservation and reforest­ programme for increasing energy security. This is an issue of heighten­ ation, sustainable timber production, manufacturing, sustain­able ing importance as our approach towards peak oil is transport, buildings, water, waste management and production of raising the cost of fossil fuels – and, in turn, the cost of ecotourism. The employment and trade opportunities industrialized timber – ready for export at food production – to critical levels. As the global embodied in these green economic sectors make them the Santarém port. population ticks past seven billion, towards a global major catalysts for growth and poverty reduction in developing countries.

The benefits of a green economy Investment in green economic sectors creates green jobs, which are not only environmentally sound, but as the joint UNEP-International Labour Organization Green Jobs Report highlighted, they also provide “decent” work, including safe working conditions, job security, reasonable career prospects and rights for workers. Moreover, the greening of economic sectors may generate higher wages and increase employment. Organic agriculture, for instance, is typically more labour-intensive than conventional agriculture. As such, it can create up to 30% more employment than conventional farming. This sector is predicted to increase global employment by as much as 4% over the next decade. Uganda is a case in point. Organic agriculture has drastically boosted employment in Uganda, increasing the number of farmers by more than 350% between 2002 and 2007. The market price for organic products is significantly higher than the price of conventionally

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farmed products. In Uganda, organic pineapple is worth 300% more than conventionally farmed pineapple; organic ginger is worth 185% more; and organic vanilla is worth 150% more. These price premiums generate much-needed employment and better incomes for farmers in rural communities. A joint UNCTAD and UNEP report that surveyed small-scale farmers in Africa found that yields had l e f t improved on average by 100% after switching to Organic agriculture organic or near organic methods. has been a boon to Furthermore, sustainable forms of agriculture can Uganda where organic pineapple is reduce externalities such as water pollution and soil worth 300% more erosion, and increase trade between developed and than conventionally developing countries. Certified organic exports from farmed pineapple. Uganda increased from less than $4 million in 2003- 2004 to nearly $23 million in 2007-2008. Global trade developing countries with significant export in organic food, drinks, fibre and cosmetics is valued at opportunities. over $60 billion per year, and rising. Whilst most As this example demonstrates, a shift towards green organic agriculture production takes place in develop­ economic sectors, such as organic agriculture, can lead ing countries, most of the consumption is in developed to increased and improved employment, reduced countries. The increase in these trade flows presents environmental impact, increased trade, and economic

l e f t Costa Rica was quick to realize the value of its fauna and flora and has capitalized on the popularity of ecotourism.

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development. In other words, organic agriculture is soaring food and energy prices, and issues linked to delivering sustainable development to Uganda. access to oil reserves. Modelling carried out for UNEP’s report, Towards Renewable energy can enable economies to grow in a Green Economy: Pathways to Sustainable Develop­ a sustainable manner, so that the energy needs of all ment and Poverty Eradication, has revealed several seven billion of us may be satisfied, without other examples where green economic sectors are compromising the longevity of the planet, or the ability delivering sustainable development. For example, of future generations to meet their needs. Increased opportunities are arising for developing countries in access to electricity would bring us closer to achieving ecotourism. Tourism is a key export for 83% of the Millennium Development Goals; in particular, the developing coun­tries and for the 40 poorest countries. endeavour to reduce the proportion of people living in Ecotourism is projected to capture 25% of global poverty. Energy access can lift communities out of tourism revenues in 2012, with international tourists poverty through its provision of water pumps and spending $240 billion at ecotourism destinations. boiling facilities for clean water; better lighting for In the last decade, 23 biodiversity hotspots saw security and extended work and study time; media more than 100% tourism growth. Costa Rica was one access for education and information transfer; indoor of the first countries to recognize the value of its bio­ heating and cooling; vaccine refrigeration; and medical diversity. Some 26% of the nation’s land area consists equipment operation. of legally protected forest, resulting in a boom in Our planet is rich in renewable sources of energy. ecotourism that attracts one million visitors each year. Solar energy alone is ample to power a world of The green economy transition is opening and potentially nine billion people. In fact, year round, expanding markets for environmental goods as well, enough solar energy falls on the Sahara to satisfy the an area in which many developing countries have a energy needs of the entire world. This valuable source comparative advantage. For instance, developing of energy has not gone unnoticed. countries are increasing their presence in sustainably Morocco, for example, has launched a project to harvested timber markets. Globally, forest land area establish photovoltaic and solar thermal energy plants certified by the Forest Stewardship Council has across 10,000 hectares of solar-rich land, which is only increased sevenfold over the past decade, to reach a fraction of the size of the $566 billion solar power nearly 350 million hectares in 2010. Developing project that is envisaged for the region. This larger countries’ share of this certified forest area has risen to project, launched in 2009, aims to establish solar about 20%. thermal power plants across more than 34,500 square Investments in renewable energy may also be miles of the Sahara in Morocco, Tunisia and Algeria. rewarded with employment, environmental and other The project would not only generate much of the benefits. Renewable energy projects can generate electricity required in North Africa and the Middle East long-term employment for local communities, in the by 2050, but it would also satisfy at least 15% of construction and operation of the power plants, for Europe’s power requirements via high-voltage trans­ example. Increased renewable energy capacity will mission lines across the Mediterranean Sea. enable the necessary shift away from fossil fuel use. In turn, there will be reduced pollution, meaning fewer Delivering a green economy: pollution-related health issues; and reduced carbon Supporting investment through regulation and emissions, which should slow global warming, and international frameworks hopefully decelerate the damaging effects of climate Recognizing the development trajectory that may be The green economy: change, including food and water shortages. Expanded sparked by investment in green economic sectors – Delivering social, environmental and renewable energy capacity could also increase our such as renewable energy, ecotourism and sustainably economic benefits energy security, resulting in fewer conflicts driven by produced agriculture and timber – policymakers are

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turning their minds to the types of regulatory conditions that may motivate such investment. Certain trade measures have been shown to be effective in promoting green economic markets such as sustainably produced agriculture and timber. In particular, standards that specify a minimum level of environmental performance of a product or a production process, and labels to inform consumers about those products or production processes, can be effective tools for achieving environmental objectives and enabling markets for sustainable goods and services: markets which represent an engine for economic growth and job creation in developing countries. In recent years, national eco-labelling schemes have been initiated in several developed and developing countries, including Brazil, China, India, South Africa, Indonesia, Thailand and Tunisia. But concerns have frequently been raised about green economy trade measures such as standards. A proliferation of standards can inflict high costs on businesses, particularly small and medium-sized enterprises in developing countries, and thereby hinder agriculture industries, and reinforce the associated a b ov e access by developing country exporters to lucrative development benefits. A farmer maintains his field of sea- markets in developed countries. As we approach the Rio+20 Conference, govern­ buckthorns in the This highlights the need for the international com­ ments must prepare to commit greater efforts towards Altai-Sayan Eco- mu­nity to work towards harmonizing environmental agreeing on the measures required for a green eco­ Region of Uvs standards across countries. In this regard, the design of nomy transition – not only standards and labels, but Province, Mongolia. The shrub is used for international standards and labels should involve both other measures, such as carbon pricing and intellectual the prevention of soil producers and consumers, and in particular producers property protection, about which countries have also erosion and the from developing countries interested in accessing the expressed concern. production of food markets where the standards or labels apply. Addressing these concerns is but one of the tasks to and medicine products. UNEP is engaging in a range of activities directed at be confronted as the world prepares for Rio+20. Above the harmonization of standards. For example, UNEP is all else, governments need to strengthen the policy involved in the UN Forum on Sustainability Standards – switches and smart market mechanisms can unleash a platform for facilitating developing country private capital into green economy sectors. participation in the international dialogue on voluntary The development path of the coming years and sustainability standards. UNEP has also worked with decades will happen by default or by design – Rio+20 UNCTAD under the Capacity Building Task Force on is an opportunity for world leaders to be the architects Trade, Environment and Development to assist the of a sustainable 21st century, with the green economy governments of the East African Community with the representing not an alternative universe, but the development of a regional organic products standard. means and methods of implementing a fairer, forward- The green economy: Such initiatives can build a stronger, collective nego­ looking future. Delivering social, tiating position for developing countries to seek market environmental and access and mutual recognition or equivalence of Achim Steiner is the Executive Director of the United economic benefits standards in export markets, strengthen their organic Nations Environment Programme. 7 7 Policy responses to higher food prices

UNCTAD XIII By José Graziano da Silva, Director-General Food & Agriculture Organization

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As we have learned from experience, the choices have not always been as successful in pro­ benefits of globalization are not automatically moting develop­ment in dozens of poor and develop- and equitably shared. The fact that about one ing countries. out of every seven human beings is In agriculture, the aggregate increase of productivity undernourished in a world of sufficient food and production was accompanied by a fall in invest­ production is one example. ment in agriculture in poor and developing countries. Official development assistance to agriculture fell from Whilst agricultural production and productivity have 17% of the total in the early 1970s to around 3% in increased significantly over the past decades, a logical 2005. National investments also fell. fall in hunger – if the problem the world faced were The first edition of The State of the World’s Land primarily of food production and not access – did not and Water Resources, published in 2011 by the Food result from this growth. In fact, the total number of and Agriculture Organization of the United Nations undernourished persons in the world has risen since (FAO), shows that low-income countries cultivate the mid-1990s and, in the same period, we saw an about 0.17 ha/per capita, less than the cultivated land interruption of a downward trend in the reduction needed to feed one person (about 0.22 ha/per capita of the proportion of hunger that had started in the in 2006) while the proportion in high-income countries early 1970s. is of 0.37 ha/per capita. This is partly due to the national and international The production growth in the developed world, agriculture, trade and social protection policies combined with massive agricultural subsidies of about adopted over the course of the past decades. Despite $1billion per day in developed countries, allowed for the fact that they were able to increase wealth, cheap food to be available in international markets. connect markets and support innovation, our policy This seemed to work fine until prices peaked in 2008,

r i g h t Food security in times of high prices can be bolstered by focussing on domestic markets.

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making food inaccessible for poor consumers and countries worldwide. FAO and other institutions such as the Organization for Economic Cooperation and Development (OECD) and the International Food Policy Research Institute (IFPRI) expect international food prices to settle at new and substantially higher, albeit volatile, levels. In this scenario, we are compelled to find a new balance to guarantee access to food by low-income families and support small-scale farmers to assure that they benefit from the opportunity provided by high prices. In recent years, FAO and other international institu­ tions have been calling for a reversal in the downward trend of new investment in the agricultural sectors of developing countries. Many governments are making an effort in this direction, including a growing number of African countries that are complying with the 2003 that we have been confronted with since 2005-2007. a b ov e Maputo Declaration on Agriculture and Food Security, However, there is still the need to advance, for Boosting agricultural research like this in which they pledged to allocate at least 10% of their instance, in fulfilling the commitments of the L’Aquila project in Afghanistan budgets to the agricultural sector. Food Security Initiative. will increase food The international community is also heeding this A major challenge is to link significant numbers of security and enhance call, in the face of the food crisis and rise in hunger producers to markets by enhancing their capacity to productivity.

l e f t As part of an FAO supported project in Kenya, in exchange for each day of work, farmers are given vouchers – half of which can be redeemed for food at select local traders. The other half is used to buy materials to construct the community- owned dams.

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r i g h t Knowledge transfer and education will aid present and future agri­ cultural yields.

deliver a consistent supply of quality product. An As in many other areas, knowledge transfer is important component in meeting this challenge is the essential here. An enormous store of agricultural provision of an enabling and gender sensitive insti­ knowledge exists at international level but making it tutional and policy environment which facilitates possible to disseminate that rich heritage requires an remunerative and secure access to these markets. appropriate level of investment. Closing the gender gap is also a crucial factor in The renewed emphasis on domestic markets as a obtaining the production increases needed to feed a viable option, particularly for smallholder producers, growing world population. Today, yields on plots should not play down the importance of continuing to managed by women in developing countries are lower strive for a fairer global trading environment and the than those managed by men, according to the flagship development of mechanisms to assist producers to FAO report, The State of Food and Agriculture 2010- meet the often stringent demands of international 2011. If women in rural areas had the same access to markets. land, technology, financial services, education and While significant challenges exist, not just in markets as men, their production would grow. ensuring more equitable rules relating to the use of Climate change adds a dynamic dimension, whereby tariff barriers globally and to the provision of producer the availability and suitability of water and land subsidies particularly in richer countries, but also in resources is likely to change over time, requiring tackling issues related to the increased use of technical changes in trade and production patterns. In some barriers to trade and to the actions of agricultural Policy cases, traditional production systems, often being more trading firms and the implications for their suppliers, responses inclusive of smallholder producers and more resilient to the potential gains remain significant. to higher climatic change, will provide a viable alternative to For trade to promote development it needs to be food prices export oriented, commercially driven production. more than free, it needs to be fair. That is the goal

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l e f t FAO has assisted governments in programming invest­ ment support to development banks to increase produc­ tion by small holders.

we should join efforts to achieve: a fair trade agree­ international markets can better contribute to the ment. This is also an opportunity for countries to assurance of global food security. The creation of the gradually shift to sustainable models of production Agricultural Market Information System (AMIS) is an and consump­tion, adjusting their domestic policies important first step in this direction. Like any infor­ to encourage this change. mation system, however, its value rests in the extent to As a first step, developed countries should use the which it is linked to decision-making systems – in this opportunity provided by high food prices to open their case to institutions that have the power to intervene to agricultural markets and reduce export subsidies that prevent incipient crises from getting out of control and distort international markets and, in many cases, posing serious threats to global food security. prevent small-scale farmers from competing in local By working together, governments, FAO, UNCTAD, and international markets. other international agencies and development partners Developing countries should put in place or can spark the necessary changes to achieve the goal of strengthen national-scale social protection promoting development-centred globalization. programmes. These programmes must ensure that all poor and very poor families have the resources to meet José Graziano da Silva has worked on issues of food their essential food needs, take steps to broaden security, rural development and agriculture for over farmers’ access to investment credit and to land 30 years. He led the team that designed Brazil’s “Zero resources, and substantially increase public sector Hunger” (Fome Zero) programme and was responsible investment. for its implementation in 2003. He headed FAO’s Policy This focus on adjusting domestic policies in Regional Office for Latin America and the Caribbean responses to higher developed and developing countries is not intended to between 2006 and 2011, before being elected food prices imply that there is not also a need to explore how Director-General of FAO in June 2011.

8 1 The multilateral trading system of the future

UNCTAD XIII By Pascal Lamy, Director-General, World Trade Organization

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The world is going through a stormy period. The global economy was showing signs of recovery at the beginning of 2011 but it is again being confronted by serious challenges. These range from rising sovereign debt problems to a loss of confidence in financial markets and the lack of a coordinated reaction of governments to address the structural

r i g h t problems that underpin weak growth, high Pascal Lamy: unemployment and unsustainable fiscal deficits LDCs face continued in many advanced countries. challenges that must be factored into the future multilateral We have moved from a financial crisis to a growth trading system. crisis. Many economies are not growing at a pace sufficient to reduce socially destructive high unemployment and to achieve the fiscal consolidation Subsequent trade monitoring reports during 2009 needed after the extraordinary measures taken during confirmed this picture. The situation was kept under the 2008-2009 financial crisis. control and it remained that way throughout 2010. The growth of international trade in 2010 led the But over the course of 2011, with a weakening of recovery, particularly in developing economies that growth and with stubbornly high unemployment, were largely innocent casualties of the crisis. World we have spotted some worrying developments. trade volume grew by a record 14.5% in 2010. To turn to protectionist trade measures in the Exports and imports of developing countries rose current circumstances would be a huge mistake – one above their pre-crisis highs by July 2010, although that could send the global economy back into deep developed countries reached that level only in the recession. This is a time when governments need to act first quarter of 2011. The faster export growth of with determination, political courage and in a coordi­ developing econo­mies was supported by a parti- nated manner. It is understandable that at a time of cularly strong growth in South/South trade during suffering we all run for shelter. We want protection. the first half of 2010. But the irony is that trade protectionism does not But with demand weakening, 2011 ended with protect. One country’s exports are another country’s prospects for world trade being revised downwards. imports, and vice versa. One country’s protectionism The financial and economic crisis of 2008 created a will lead to another country’s protectionism. And fertile ground for isolationist tendencies. Some pre­ everyone will lose. As Gandhi said “an eye for an eye dicted that this would lead to trade protectionism on a and we will all be blind”. scale of the 1930s Great Depression. Fortunately, they The multilateral trading system of the future is were proved wrong. likely to continue to feel the pressure of protectionism. At the end of 2008, the WTO set up a monitoring Trade protectionism would be a recipe for disaster. system of trade measures taken during the crisis. To But continued support for more open trade will the surprise of many, the picture was not too bad. require other forms of protection, in the form of There was some evidence of new tariffs, non-tariff better social safety nets and investment in technology, barriers and new trade remedy measures, particularly education and infrastructure. These are issues outside anti-dumping duties. But overall, most governments the purview of the WTO, but they have to be part of The multilateral trading system seemed to have successfully kept protectionist the domestic policy mix to make trade opening viable of the future pressures under control. at home.

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The multilateral trading system of the future will This is not just an academic exercise. Having the also have to take better account of the growing right tools to measure trade flows is essential in order importance of global value chains. The geographical to have a proper domestic debate about trade. fragmentation of the value chain is leading to a Reading press headlines and listening to many public structural change in international trade, moving from pronouncements on trade these days brings to mind the old theory of “trade in goods” to a new “trade in Mark Twain’s words: “Never let the facts get in the tasks” paradigm. This has been dubbed “Made in the way of a good story!” World”. Old concepts such as “country of origin” or Global value chains also require taking a closer “resident versus non-resident” are losing part of their look at behind-the-border rules and regulations. analytical relevance in international economics. As tariffs are gradually reduced, divergences in Defining and conducting trade policy in this domestic regulatory frameworks may require context calls for a new measurement of trade flows greater attention. based on value added, which will indicate the The 2011 WTO World Trade Report shows that, domestic content of exports, after subtracting direct while there is slow convergence on tariffs, the risk of and indirect imported inputs. The WTO is actively divergences in regulatory frameworks in preferential cooperating with other partners in order to build the trade agreements is growing. If preferential trade required data sets and to define the most appropriate agreements are less about tariffs, this changes the methodologies. The impact of this methodology is nature of the relationship between the multilateral particularly signifi­cant when measuring bilateral trade trading system and preferential trade agreements. The balances, and calls for a revaluation of the effective­ challenge is one of market segmentation. We will need ness of traditional policy instruments such as to fashion a new framework more applicable to these exchange rates. preferential trade agreements.

l e f t A quiet moment at the Tokyo Stock Exchange. There is a lack of confidence in global financial markets.

The multilateral trading system of the future

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r i g h t The WTO’s Third Global Review of Aid for Trade took place in July 2011. Initiatives such as Aid for Trade should enjoy continued support in future.

Different ideas have been floated: Fix deficiencies into consideration the continued challenges faced by in the WTO legal framework; develop a set of non- developing countries and the least-developed ones in binding good practices that members could follow; particular. The full integration of these countries into extend existing preferential arrangements in a non- the multilateral trading system will be as relevant then discriminatory manner to additional parties; or as it is today. The challenge of assisting developing and accelerate multilateral trade opening through a Least Developed Countries (LDCs) build their trade and more ambitious regulatory agenda. productive capacities should continue to be a priority The multilateral trading system of the future will as it is today. also have to address a number of global challenges Global initiatives and partnerships such as Aid for which are either not or insufficiently addressed under Trade, within which the Enhanced Integrated Frame­ the existing WTO rules. The blurring of the edges work for LDCs, in which the WTO and UNCTAD are between trade policy and others such as exchange rate partners, will still be relevant and central to the trade policies, climate change policies, food security policies policy strategies of developing countries and should or energy policies will require the attention of WTO therefore enjoy continued support. members. The same can be said of the expansion of And while we focus upon these future challenges, the WTO Government Procurement Agreement. Or we have a more pressing challenge: to advance the unfinished task of fully integrating the world’s negotiations on the issues we agreed to act upon when poorest countries into the global economy in a more we launched the Doha Round in 2001. convincing way than is the case at present. We need to Since 2001 the world has seen major transform­ better understand the issues at stake before discussing ations, in terms of WTO players, issues on the agenda any role for the WTO on these issues. and in geopolitics. And yet the goals we set in Doha The multilateral trading system It is also a fact that the multilateral trading system are still relevant. Curbing fishery subsidies which of the future of the future will only remain relevant if it also takes contribute to overfishing, disciplining trade-distorting

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l e f t Ambassador Stefán Jóhannesson (Iceland) Chair of the Accession Working Party with Pascal Lamy and Maksim Medvedkov, Head of the Depart­ ment for Trade Negotiations of the Russian Ministry of Economic Develop­ ment as Russia joins the WTO after 18 years of negotiations. agriculture subsidies, eliminating export subsidies, confidence and trust to weave all topics into a reducing industrial tariff peaks, cutting red tape at final package customs, expanding opportunities for vibrant services And, three, there has to be a spirit of realism. Asking sectors or better integrating LDCs in the trading for the moon and using empty rhetoric is normal in any system can hardly be seen as irrelevant to today’s negotiation but we are now past that point. We must world. Nor do I think that these issues would disappear now seek realistic and creative solutions. To stand if we were to stop the talks and reboot. behind red lines waiting for others to move only breeds If we are to tackle global challenges, we can only mistrust and stalls the negotiations, postponing do it multilaterally. To revive it I believe three elements benefits to the world economy. require urgent attention. The first one is political Four new members are joining the WTO family: leadership. Trade agreements need political leadership Russia, Montenegro and two LDCs – Samoa and at home and in Geneva. Trade agreements are struck Vanuatu. This is a signal of the importance of global by governments, not by wise men, think tanks or trade co-operation in today’s world. Multilateralism is Directors-General. Leaders must act to convince not going through a rosy period, but the lessons of and spend political capital to make them happen. history tell us that we stand stronger when we stand The time for technical work is long past. It is the united. And we all stand to lose when we pursue hour of politics. isolationist policies. Two, pragmatism and a spirit of compromise are I hope that the UNCTAD XIII conference which essential. There has to be give and take. There has takes place in Doha in 2012 will provide a timely to be flexibility, and perhaps the way we have been opportunity to strengthen multilateralism. pursuing the Doha deal has been too rigid and with The multilateral limitations that do not help the politics. Smaller steps Pascal Lamy is the Director-General of the World trading system that show demonstrable progress might inspire the Trade Organization. of the future

8 5 Helping vulnerable countries develop in a challenging world economy UNCTAD XIII By Patricia Francis, Executive Director, International Trade Centre

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We are all aware that in the present situation – and for the foreseeable future – the forecast for the world economy is gloomy.

Indeed, over the last year we have also seen stark evidence of a lack of trust and loss of confidence in leadership to deliver on the aspirations of people, manifested in the Arab Spring, the Occupy Wall Street demonstrations, riots and protests in many other countries, and in the market response to the debt crisis. There is growing consensus of the lack of political will to move the multilateral trading system forward. Yet as the world is changing at an ever-increasing

r i g h t speed, the dynamics necessitate a new way of Patricia Francis. responding to alleviate mistrust and to build consensus

b e lo w on trade policy initiatives which deliver results for The Occupy inclusive and sustainable development objectives. movement has The International Trade Centre (ITC) stands ready highlighted people’s lack of faith in global to contribute to this endeavour as we attempt to able to catch up with the changing environment leadership. permanently reinvent our services. We need to be in order to provide state-of-the-art value to the poorest countries. The private sector is moving ahead as they find innovative ways to globalize, adopting strategies that take advantage of the shifting economic climate, changing trade patterns and challenges such as climate change and food security. The majority of the most vulnerable countries, however, are trying to understand the implications of these changes which are rapid and profound. It is a major endeavour of the ITC to help these countries in three ways. First, the private sector is building global value chains but our method of gathering trade data is not telling this story. In fact, the opacity stemming from national-based statistics has contributed to the confusion about how the benefits of trade are distributed. Transparency here is essential to building confidence and it is critical that we all understand what is happen­ ing in markets. Access to data is critical and to this end, ITC works with partners such as WTO, UNCTAD and the World Bank, to make trade and market data information available – free to developing and least developed countries – so that users can better under­

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stand supply and demand trends, seek out new mar­ kets and opportunities to diversify. Second, the private sector, including businesses and NGOs, is developing a complex set of private voluntary standards through labels intending to disseminate the values of sustainable development, through the expression of consumer preferences and expectations toward global distribution channels. What can we do to help the poorest countries find their way through these new market trends? Here again, we must start with transparency. To this end, ITC has developed a unique platform for volun­ tary standards, to disseminate information, allow comparison, and make informed decision about the requirements of private labels. Then we must build capacities. Enterprises want to know how to comply, how to benefit, and how to move up the value chain. We have been developing programmes to build the skills of the poorest producers so they can take advantage of the new market oppor­ Sustainable development must also be inclusive by a b ov e tunities provided by niche markets, such as organic bringing all parties to the table: international organi­ Women in Peru’s textile and clothing products and bio-diversity products. zations, policy-makers and, critically, the private sector sectors are benefiting Then we also want to harness these new market all have important and necessary contributions to the from an ITC trends to channel their force in favour of development development agenda. To this end, ITC believes that programme aimed of the poorest. ITC has been recognized for pioneering development requires mutually beneficial partnerships at enhanving export competitiveness. the exploration of the fast-developing ethical fashion and collaboration, between private and public sectors demand, through which we deliver skill-building and and within supply chains, with the support of strong employment opportunities to people living in the worst Trading Standards Institutes and financing for enter­ slums of Africa. prises to optimize effici­encies within the supply chain. Our third focus in this area is gender development. Short-term focus is not sustainable in a world facing ITC is working with the private sector to connect the current challenges. women business owners to national and multinational ITC is learning from the private sector and working corporations through the Global Platform for Action on with governments to ensure that they too invest in this Sourcing from Women Vendors to bring a larger and learning process and adopt policies and build institu­ more equal share of procurement to women. This, tions which support their countries trade and develop­ however, is not simply a business-matching scheme, ment agenda in a sustainable way. but a programme which fills the gap of these particular Increasing trade is not an end per se. Trade generation buyer-seller transactions: trade support institutions needs to be more inclusive through grow­ing the formal provide capacity-building to the women business economy and providing jobs and opportunities for the owners so they are better able to meet the demands most vulnerable segment of the world’s populations. of the buyers. The Global Platform now has a network Helping vulnerable of more than 50,000 members including Fortune 500 Patricia Francis is the Executive Director of the countries develop companies, women business owners and trade International Trade Centre, a joint agency of the in a challenging support institutions. World Trade Organization and the United Nations. world economy

8 7 Arab uprisings: New realities and challenges

UNCTAD XIII By Rima Khalaf, Under-Secretary-General and Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA)

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The Arab uprisings which started in the streets knowledge and women’s empowerment continue to of Tunisia in December 2010, have ushered in impede development in Arab countries and frustrate an era of great change for Arabs. They have so the masses. far led to the overthrow of four dictators, and The third report published in 2004, saw the change have, at the very least, shaken the thrones of coming. It warned that Arabs had become disillusioned almost all others. with promises of reform by their rulers, and with what they perceived as insincere Western initiatives. They b e lo w Although some observers had predicted that change were suffering multiple injustices: domestic oppression, It has been more than a year since was coming to the region, very few thought it would economic injustice and increasing marginalization, protests in Tunisia happen so quickly and on such a massive scale. But compounded by foreign encroachment. According to started the Arab almost a decade ago, UNDP’s first Arab Human the Report, Arabs were rapidly moving from a mindset uprisings whose Development Report, authored by a team of dist­ of intimidation and apathy to a combustible mix of repercussions are still being felt across inguished Arab intellectuals, cautioned that the status righteous indignation and anger. A threshold would the region. quo was untenable. It argued that deficits in freedom, inevitably be crossed.

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A new Arab order? formulas, seeking to maintain the status quo. When Today, the old Arab order is crumbling. And although this failed to save friendly despots, a cautious the features of the new order are still unclear, they are resignation ensued and western states called for bound to be shaped by new realities. peaceful transitions and for presidents to step down. Firstly, there will be no going back to a pre- As rulers were deposed, the strategy shifted towards December 2010 world. The transformations that have containing the change and controlling the direction of taken place are non-linear and irreversible. In such the transition. To safeguard their interests, regional transformations, a very small and incremental change powers tried to buy their way in, while global powers in one variable, such as an uncalculated insult to a tried to clip the wings of revolutions. Both discovered street vendor, can lead to a breakdown of the whole that there were new limits on their powers. system. The Arab masses have discovered that they Finally, the moribund peace process will yield peace. have a voice, and that they can make a difference. To Arab despotism, as much as superpower support, has terrorize them back into submission, regimes will have helped sustain Israel’s occupation of Arab land, despite to resort to something bordering on genocide. its violation of international law and moral values. Secondly, the theory of Arab exceptionalism has While paying lip service to the cause of Palestinian been shattered. To the comfort of Arab autocrats, the liberation, authoritarian rulers tended to acquiesce in theory of Arab exceptionalism postulated that ethnic Israel’s oppression of the Palestinians and the ongoing traditions, religious practices and linguistic character­ colonization of their lands. istics rendered Arabs unsuitable for democracy. It was Arab democracy will not tolerate indefinite Israeli a convenient theory that allowed some foreign policy­ occupation. The Arab revolts have revitalized calls for makers to ignore or suspend their espoused values. Palestinian rights. The new wave of support for the Whether its proponents truly believed in it or not, the Palestinians now emanates from the same principles theory helped them justify their support of despotic that brought millions onto the streets, namely dignity, regimes against the aspirations of the people. and justice for all. Its non-ideological and non-violent Thirdly, democracy will ultimately prevail but the nature, and its solid grounding in universal human road will be rocky. The struggle for rights and social rights makes this new support for the Palestinian cause justice will continue. In countries that have crossed the more effective and durable. first threshold, new mini uprisings may occur to correct Marginalized for decades, Arab public opinion will a path or to protect the new order against the old now have a decisive influence over foreign policy. guard. The nascent forces of positive change will Together with the prospect of a further expansion of organize politically and gain a solid footing. democracy in the Arab world, this will have a major Social and economic benefits of the transition will effect on the behaviour of all stakeholders in the region. start to accrue. Regional and global powers will find it more costly to challenge emerging democracies. It is The challenges ahead not inconceivable that, five years from now, a vibrant The prospect of freedom, justice and good governance democratic culture, and fully functioning democratic for Arabs, and of peace for the region and the world, institutions, will be firmly established in some Arab has the power to keep all parties on track. But the countries. This will trigger another wave of demo­ short-to-medium term outlook may not be so rosy. cratization in the region. In this next round, no regime The first challenge is how to build inclusive institu­ will be caught off guard. Those unwilling to reform to tions and economies and foster a democratic culture. pre-empt change, will viciously fight back to smother As constitutions are redrafted, there will be very little the first signs of it. disagreement on issues related to basic rights and Arab uprisings: Fourthly, the West will not be able to call all the freedoms. However, two issues will give rise to vibrant New realities shots. Initially, the West resorted to tried-and-tested debate and a degree of polarization in transitioning and challenges

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countries: the place of religion in reformed Arab coun­ liberalization as implemented by former regimes has tries, and the role of the military in new democracies. led to corruption and a more skewed distribution of The process of achieving consensus on these issues income, resulting in a public backlash against such will be challenging, particularly since those leading the policies. Decision makers may have an understandable fight for more progressive societies are still struggling tendency to shun them in the short term. But once to move from the street to the political arena. External political life matures and true representative processes powers cannot be of much help. The process will have take hold, a healthier, more constructive economic to be managed domestically and has to ensure the debate can ensue. It is to be hoped that Arab countries participation of all stakeholders, including traditionally will then be able to design economic policies that are marginalized groups. Much of the future prosperity neither subject to the dictates of international financial and stability of the region will depend on how this institutions, nor knee-jerk reactions against them. process is carried out. The fourth challenge is how to manage expectations The second challenge is how to avert setbacks or in the short term. The revolutions are about freedom, relapses into violence. Forces loyal to former regimes dignity and social justice. People believe that their lives will not willingly give up their hold on power. Super­ will witness substantial improvements as they start powers and regional powers whose interests are enjoying their freedoms and participating in decisions jeopardized by the new order could throw their weight that affect their lives. But few socio-economic benefits behind regressive forces. But setbacks will come at a are likely to be achieved in the short term. high price and societies won’t quietly resubmit to In the medium term, transparent governance, autocracy. Violence, perhaps leading to civil war in effective public institutions, a strong and independent some countries, cannot be ruled out. judiciary, and lower levels of corruption will boost One way to mitigate such risks is to put in place investment and growth. effective transitional justice mechanisms. A balance However, economic reforms often take a long time between justice and inclusiveness on the one hand and to bear fruit. Moreover, serious economic reform averting future conflict on the other must be struck. cannot start before the political process generates Swiftly rehabilitating the armed and security forces, stable and representative government. In the mean­ strengthening the judiciary in upholding the rule of law time, a free and open political dialogue can raise and the safeguarding of human rights, can help awareness of the trade-off between short-term gains minimize the risk of setbacks. and long-term prosperity. The third big challenge is getting economic policies right. The short-term outlook for transitioning econo­ A possible role for the international community mies does not look good. Growth rates will be low or In the short term, humanitarian assistance, mitigating negative due to the decline in tourism, FDI and dom­ transition risks, and helping new Arab democracies estic economic activity. Unemployment and poverty learn from the experience of other countries that have are rising. There is also the risk that populist policies undergone radical transition will be top priorities. The will drive up fiscal deficits and increase borrowing international community can help countries restart costs. Inflation will rise and the current account their economies. They can promote administrative and balance will deteriorate. institutional capacity-building, particularly in countries However, people will pay such a price in exchange such as Libya, which have suffered from a weak or for the long-term sustainable benefits of a democracy. non-existent institutional framework. And they can The major challenge is to forge consensus on economic help countries to strengthen economic governance and strategies. Though not many will dispute the objective regulatory mechanisms. Arab uprisings: New realities of inclusive growth and social justice, there is a diver­ Providing technical support and financial assistance and challenges gence of opinion on how to achieve it. Economic will be vital. However, beneficiaries will not always see

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eye-to-eye with donors. Though none of the trans­ ition­ing countries are expected to revert to centrally planned economies or to advocate state control of the means of production, most are expected to opt for a variation of free market economics that offers more space for social justice and equity. The issue of trust may stand in the way of greater cooperation in the short term. Bilateral financial assistance has often been associated with a political price that the generation of the revolution might not be willing to pay. As for international financial institutions, the issue of trust is twofold. Firstly, they were often perceived as representing creditors, particularly in the days of financial stabilization and structural adjustment packages. Secondly, those institutions are perceived to embrace an economic ideology that makes them ill- equipped to provide the innovative solutions required by nations in transition. Finally, there is the question of will. A primary con­ cern for Western powers has been the safeguarding of their interests including security, oil, and the protection of Israel. Loyal dictators, whose thrones are dependent of a Western-style liberal democracy. For young Arabs, a b ov e on outsiders’ support, were seen as better instruments democracy does not come at the expense of social Future generations of Palestinians must for achieving these objectives. The new realities, justice; and freedom is not only personal but also be free to live with however, call for revisiting this conventional wisdom. includes national liberation. Opening up to the world dignity. If by security, the West means protecting its people does not mean you can’t be proud of your cultural from threats of violent extremism, then a democratic identity. The youth of today are looking to the inter­ Arab world that is committed to ending injustice and national community to see how they will respond. marginalization is the better alternative. Abuse by des­ How they will support their aspirations for a promising potic regimes exacerbated the problem of extremism, future, uphold human rights and moral values, defend by providing it with ideal breeding grounds. political freedoms and empower women. If by oil, what is meant is its free flow at reasonable As Arabs reinvent themselves, their partners must prices, and not the ability to influence how its proceeds re-evaluate their past practices and rethink their are spent, then a democratic Arab world is the one approach to the region and its people. Then, great without burning oil wells, blown up pipelines and price partnerships can be forged. hikes caused by instability and war. If protecting the interests of Israel means ensuring Rima Khalaf is the Under-Secretary-General and that it can enjoy peace like any other state, as opposed Executive Secretary of the Economic and Social to providing unquestioning support for its expansionist Commission for Western Asia. The content of this agenda, then Arab democracies are more capable of article is based on a keynote statement delivered in upholding that peace. the opening of the conference entitled “The Arab uprisings: Arabs have made their choice. They are determined Economics of the Arab Spring”, which was held on New realities to build a better world. It probably won’t be a replica 12 September 2011, at Chatham House, London. and challenges

9 1 INDIA’s $1 TRILLION OPPORTUNITY IN INFRASTRUCTURE A preview of the $90 billion Delhi-Mumbai Industrial Corridor

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India has remained the third most attractive But given its unique political milieu – longest list of destination for foreign direct investment in recent registered voters, fiercely independent judiciary, free years, behind only China and the United States. press, and one of the world’s largest media networks The world’s ninth largest economy has stayed in this – the government is equally committed to ensuring august company given its strong macroeconomic political stability. This drives the public discourse on fundamentals, but also because of a government more equitable distribution of prosperity, including strategy wherein growth is powered mainly by bringing the marginalized populace into the domestic consumption while exports have risen only economic mainstream. at about 12% annually. This strategy has enabled India is also increasingly recognized for its India to weather the global financial crisis and slack “frugal engineering.” Nano, Tata’s $2,600 car – is a external demand, clocking a GDP growth of about recent example, which inspired GE’s low-cost, high 8% a year for the past decade. mileage MAC 400 ECG, also developed in India. Over The global community has responded with 200,000 engineers and scientists work at 750 MNC- growing confidence, investing almost $160 billion owned R&D centres across India, producing world- in India since 2005. More heartening are the class products. findings of a Boston Consultancy Group study that These impressive outcomes have only strength- over 90% of foreign companies operating in India ened the resolve of the Indian political leadership were earning profits, 60% of whom also report that to achieve more. One pragmatic step was to their India operations are the most profitable of all create a dedicated agency for investment pro- their global activities. motion and facilitation – Invest India. Established The corporate sector is already harnessing the in December 2009 as a joint venture of FICCI world’s third largest pool of scientists and skilled (Federation of Indian Chambers of Commerce manpower, low-cost environment for manufacturing and Industry), DIPP (Department of Industrial and service sectors, respect for the rule of law and Policy and Promotion, Ministry of Commerce increasingly business-friendly government policies. and Industry) and State governments, Invest New investors are looking at a country of over India works to expedite regulatory approvals, 1.2 billion people, with an average age of 25 years, assist companies set up operations in India, where 300 million more will join the burgeoning and provide other hand-holding services. Invest middle class and further stimulate demand. This India collaborates with “empanelled partner growth is anchored by a strong financial system and companies” – E&Y, KPMG, PwC, Grant Thornton a vibrant stock market. Unsurprisingly, India will & Vaish Associates Advocates – in responding to contribute about 12% to the world’s economic specialized taxation and legal queries. It has growth by 2020. handled over 580 queries from investors globally, In 2011, India completed 20 years of economic and is dedicated to becoming an effective bridge restructuring and liberalisation, with a strong between foreign investors and India’s value-added consensus that reforms are on an irreversible path. manufacturing and services sectors. Creating Shared Value Nestlé’s way of doing business

our company lies in helping people to eat source our raw ingredients. Through our ”It is our firm belief that, for a company to a healthier diet, whether the problem is investments in factories and their surrounding be successful over time and create value deficiency in vitamins and minerals at one infrastructure,we not only provide technical for its shareholders, it must also create end of the spectrum, or obesity at the other. assistance and knowledge transfer but also value for society.“ We invest in continuous development and support economic development and improve improvement in the nutritional profile of social conditions of the local communities, Peter Brabeck-Letmathe, products through reformulation and in particularly in developing countries. Chairman, Nestlé S.A. meeting the nutritional needs of those at the base of the income pyramid.

Our focus on water. We have adopted rigorous standards to reduce water consumption at our plants and facilities. We work alongside our suppliers to promote more sustainable practices in our supply chain, engage in dialogue on a global level working with policymakers and experts, and increasingly contribute to sustainable water management schemes in the communities where we operate.

”Based on strong foundations of compliance and sustainable business In Colombia, Nespresso agronomist Liliana practices, Creating Shared Value is Rodriguez (right) helps coffee farmer Luis Alfonso our basic way of doing business.“ Angel Jaramillo to meet the standards of the Nespresso AAA Sustainable Quality Program.

Paul Bulcke, Chefs at Nestlé’s Product Technology Centre in CEO, Nestlé S.A. It is no coincidence that the UNCTAD XIII is Singen, Germany, create a broccoli soup which will being hosted in Qatar. With its tremendous be the “Gold standard” benchmark when developing potential for economic development, Qatar a commercial Maggi equivalent. (and the Middle East as a whole) is one of the fastest growing economies of the world. But what does Creating Shared Value Nestlé has invested more than USD 400 mean? According to Michael Porter and million in the region since its formal inception Mark Kramer, the pioneers of the concept, as Nestlé Middle East in 1997. These capital creating shared value is defined as “policies investments, which have continued despite and operating practices that enhance the current adverse economic environment, the competitiveness of a company while have contributed heavily to creating local jobs, simultaneously advancing the economic enhancing technological and manufacturing and social conditions in the communities capabilities, and fostering national economies in which it operates”. around the region.

At Nestlé, this means by leveraging core We owe a large part of our success to the activities and partnerships to simultaneously Children in Kaleke, India, are drinking from a well built communities in this region and aim to have a create value for shareholders as well as for in their school as part as Nestlé partnership to bring positive long-term impact on their economic society. It goes above and beyond sustainability clean water to villages in the milk collection disctrict and environment development and standards around its Moga factory. and compliance, to create new and greater of living: thereby creating shared value for value within our chosen areas of focus – both the Company and society. nutrition, water, and rural development. Our focus on rural development. Nestlé has a long history in the developing world To learn about CSV and our many global development projects please visit: Our focus on nutrition. As the world’s with half our factories and employees located leading Nutrition, Health and Wellness primarily in rural areas, as well as of course www.nestle.com /csv Company, we believe that the future of the farmers and suppliers from whom we UNCTAD XIII

International contributions

This section is a series of articles from a diverse group of contributors from Africa, the Middle East, South America, Asia and Europe. ◆ Professor Mona Makram-Ebeid, a lecturer at the American University of Cairo’s Political Science Department, reflects on the economic and political future of women in the Arab world in the wake of a period of great upheaval. (page 96) ◆ Avanildo Duque, Policy and Programme Coordinator and Right To Education Programme Coordinator for ActionAid Brazil, shares the Brazilian experience of eradicating poverty including current achievements and future plans. (page 101) ◆ Alfred G. Nhema, Chief Executive Officer of the Pan African Development Center, discusses the progress in Africa towards meeting the MDG deadline, emphasizing the importance of looking beyond 2015. (page 103) ◆ Mo Ibrahim, Chair of the Mo Ibrahim Foundation, writes about Africa’s governance issues and how improved governance and democratization is essential for the continent to continue to make economic gains. (page 107) ◆ Jeremy Hobbs, Executive Director, Oxfam International calls for a multilateral approach to trade and global political commitment to ensure food security and reduce vulnerability for developing countries. (page 110) ◆ Mary Robinson, President, Mary Robinson Foundation – Climate Justice, highlights the role of women at UNCTAD XIII and explains the connections between gender equality, economic development and climate change. (page 114) ◆ Kathryn Pardo, Managing Editor at Izilwane, an online environmental issues forum, writes about the role ethical ecotourism can play in sustainable development, using the Egyptian experience as a case study. (page 118) ◆ Chandran Nair, founder of Global Institute for Tomorrow, a Hong Kong-based think tank, offers an Asian perspective on the world food crisis, neglect of agriculture, supply chain inefficiencies and their impact on development. (page 124)

9 5 The right of political and economic participation for Arab women UNCTAD XIII By Professor Mona Makram-Ebeid, American University of Cairo

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Women, individually and collectively, need to cannot ignore the fact that women are the mothers fight for their right to take a place in the and educators of the nation, the companions of political system. men, workers and the fighters for prosperity and development. Political participation offers opportunity to various In this respect, the quota system is one useful groups in society to promote, articulate, advocate and strategy to guarantee that the voices, knowledge, defend their interests and views. Women are as vital a experience and skills of women impact the develop­ human resource as men. If women are excluded from ment of a nation. Resistance to women entering political and economic life, there is a risk that their politics via mechanisms, such as quotas, that make knowledge, skills, experience and distinct vision on it possible to correct democratic dysfunctions is world and society will not be fully utilized. Political and largely explained by the attitude of the political class. economic participation empowers people to under­ It does not look favourably upon female represen­ stand and influence decisions that affect their lives. tatives, who are not yet considered major players The time has come to move on from recognizing in the effort to bring about democracy and sustain- women’s contributions to challenging the factors in the able development. family, in communities, in countries and in the Arab Yet evidence from around the world shows that world as a whole, that make it difficult for women to voluntary quotas adopted by political parties and play their full part in democracy and economic administrations to increase the number of women development. candidates in elections have been effective, especially b e lo w Voting at a polling Is it a male or a female issue? The answer: it is an when applied in proportional representation-based station in Erbil, Iraq. issue for society as society ascribes different roles to systems. In the Arab world, however, there are The importance of men and women. We should not forget that women relatively few successful examples of political parties the inclusion of constitute 50% of the total population of the Arab adopting and enforcing internal party quotas and the women in political life cannot be world. Women are the foundation of the transform­ participation of women remains limited. overstated. ation underway in Arab societies. Our societies Although no quota is perfect, it is better to have an imperfect system than none at all. While quotas alone will not solve the problems of patriarchal systems, attitudes and stereotypes, the mere presence of women changes the face of decision making and provides opportunities for substantive input. As the nations affected by the events of the Arab Spring attempt to regroup politically as well as economically, this should be looked on as a great opportunity for women to have greater participation at every level.

The Egyptian experience since the Arab Spring As a former member of the Egyptian parliament, I participated in three different elections with different electoral systems. In the 1980s, a new law was introduced which reserved 30 seats for women. Three women won elections on their own steam and two more were appointed by President Anwar Sadat, so there were 35 women in Parliament representing 9% of the body.

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l e f t Women attend a class in midwifery at the Health Service Institute in the Republic of Yemen.

In 1987, the reserved seats were abolished but the watch from the sidelines for so long that it is hard to government retained the proportional representation get them moving and involved in politics. system and 18 women gained seats in Parliament. The Women need to mobilize on a larger scale within proportional representation system was also eventually and outside of political parties. The good news is that abolished and in 1990, women only constituted 2% of the environment today is more conducive for women Parliament, most of them appointed. to assert their rights, not just in political participation There has been a lot of talk lately of empowering but also economically, to strive for greater partici- women and encouraging their political, social and pation in professional and technical employment. economic participation and many activists have There are economic issues at play here which demanded a return to the proportional representation require the cooperation of men and women as system or the quota system to help achieve this. Egypt attempts to move forward after the dramatic Until the events of the Arab Spring in Egypt, the events of 2011. For example, an economic reason nation’s parliament had a majority of chauvinistic and behind the unrest was the rising price of wheat short-sighted members, many of whom registered their imports. Unfortunately, Egypt does not produce strong resistance to such systems. In the wake of the enough wheat, its staple crop, to be self-sufficient events in Tahrir Square and the overthrow of President anymore. Getting the basics right, such as this, is Hosni Mubarak, the future of democracy in Egypt and essential if Egypt is to progress economically after its economy is uncertain – but now is the time for the Arab Spring. Afford­able, healthy food that is The right of political and women’s associations, politicians, party members and locally grown will not only benefit people from a economic writers to stand up and demand what is their legiti­ health perspective but provides employment and participation for mate right. Egyptian women have been forced to contributes positively to the economy at a time Arab women

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r i g h t Women and girls marching to assert their rights in the recent demon­ strations in Cairo.

when other sources of revenue, such as tourism, to damage the productive economy and to assist with have suffered. its recovery. To move forward economically, Egypt needs the assistance and moral support of other countries. Conflict, political uncertainty and its A good starting point would be for the US to renego­ economic impact tiate Egypt’s debt and retrieval of stolen assets, which At this juncture, I am reminded of an address I gave to could tally up to an amount larger than the official a No Peace Without Justice conference in Yemen back aid package. Aid money needs to be used to promote in 2004. At the time, the war on terror was making a demo­cratic civil society as well as more traditional headlines and the Arab Spring was seven years away, economic purposes. The resuscitation of the Egyptian but the economics of the situation were as shocking tourism industry, especially ecotourism, is another then as they are now – total military spending equalled important part of the nation’s recovery – and it would 14 times more than the amount governments of indus­ be a great boon to the country if Egyptian expatriates trialized countries spent on foreign aid for develop­ment can help and return home to play a part in the and it was, as it still is, a world of unthinking consump­ The right of new economy. tion and destruction. political and It is also vital that a new government for Egypt Then, as now, there is a development crisis that is economic participation for and its associated agencies is not corrupt. Cairo will equally as urgent as any military, terrorism or political Arab women have to be careful in rooting out corruption so as not crisis. Then, as now, too many people lived in sub­standard

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housing, have no access to clean water and wealth is still Syria and Yemen, all countries simmering or embroiled in allowed to be concentrated in fewer and fewer hands. uprisings have all ranked in the bottom 10 of the World Then, as now, a handful of wealthy individuals have assets Economic Forum’s most recent gender gap index. that exceed the combined gross domestic product of at At this crossroads in Egyptian history – as well as the least 40 poor countries. Then, as now, more than one wider Arab world – let us remember the work of Doria billion people are living on an income of less than $1 a Shafik, the courageous political activist. Along with her day and as such are effect­ively excluded from the public supporters, she was instrumental in helping women decision-making process because of this wrenching obtain the vote in Egypt in 1956. Can we expect that poverty. Then, as now, poverty and slow progress in her daughters and granddaughters be as courageous sustainable development affects men and women in as her in forging a new political and economic future different ways. Then, as now, not enough NGOs have for Arab countries? The arc of history is long but it taken up such issues as re-channelling and forgiveness bends towards justice. of foreign debt incurred by developing countries – this is an issue that will hold back the economic turnaround Professor Mona Makram-Ebeid is a lecturer at the of nations affected by the events of the Arab Spring as American University of Cairo’s Political Science well as those where the political system has remained Department. She has been newly appointed as a unchanged but is not necessarily ideal. member of Egypt’s Advisory Council to the Supreme b e lo w If we can fight poverty, overcome the development Council of the Armed Forces. She was formerly a A displaced family in Gaza, the need for crisis that still affects countless people in the Arab member of the People’s Assembly of Egypt and an basic rights underpins world and beyond, and better distribute wealth, advisor to the World Bank for the Middle East and all others to ensure broader political participation is a logical positive North Africa region. full participation. outcome. Both men and women are disenfranchised by poverty and the regression of development and this is exacerbated by conflict and political uncertainty. While the situation in Egypt and the wider Arab world is still uncertain and many conflicts are far from resolved, the role of women thus far and in the future cannot be underestimated. Women and girls of all types have been part of the Tahrir Square demon­ strations in Cairo, for example, and it is clear that they want a voice, politically, socially and economically. It is said there are three deficits in the Arab world: education, freedom and women’s empowerment – women’s issues are no less important than democracy or development, especially in the regions that are still recovering and regrouping after the often violent events of the Arab Spring. As many global studies have shown, a country’s economic health and security are deeply linked to the status of its women. Even the poorest societies are more stable when children are educated, resources shared and women are free. Nations that sideline women not only forfeit the capital of half their population but also create conditions for unrest. It is no surprise, for example, that Egypt,

9 9 For global investors who want to do business with Brazil. Or for Brazilian investors who want to do business globally.

Banco do Brasil. From Brazil to the world. From the world to Brazil. Making progress with the eradication of poverty in Brazil UNCTAD XIII By Avanildo Duque, Policy and Programme Coordinator, Right To Education Programme Coordinator

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Brazil has taken great strides forward to international negotiations such as the World Trade eradicate poverty and forge a path towards an Organization, ALCA and Mercosul. Protecting Brazil’s economy based on sustainable development food sovereignty, removing agricultural export sub­ and fair trade. But there is still much work to sidies, substantially reducing domestic support in dev­ be done to ensure some of the country’s more eloped countries, expanding access to the agricultural alarming statistics are changed for the better. markets of these developed countries, and, above all, ensuring that farming is not used as a bartering tool in For example, in the Heliópolis community in the city of the various negotiation forums are all major priorities. São Paulo, 6 out of 10 adolescents are unemployed In partnership with REBRIP (Brazilian Network for and 4 out of 10 do not attend school. The family the Integration of Peoples), we have achieved some income of 51% of the residents of the Cabo de Santo positive results, including the government’s recognition Agostinho municipality is less than minimum wage, the of the importance of the family farming sector and the classification for living in poverty. In the communities creation of specific public policies such as PRONAF of Ibura and Jordão, 40% of people live in poverty, (Programa Nacional de Fortalecimento da Agricultura 27.9% of children and teenagers up to the age of 15 Familiar) and the Food Purchase Programme. live in absolute poverty and around 12% of women An example of our work in rural areas is the project and 9% of men are illiterate. In Cidade de Deus, a in Orobó, a partnership between ActionAid and community of 65,000 people, 10.1% of children aged from zero to five years are malnourished. l e f t It is clear from such figures that a multi-faceted Increasing education and literacy levels approach is required to raise the standard of living for will provide a strong millions of Brazilians in a way that offers meaningful foundation in the employment and achieves economic justice for all. drive to alleviate Issues such as trade justice, education and infra­ poverty. structure all need to be addressed if poverty is to be eradicated and Brazil’s economy is to continue to grow.

Trade justice for farmers Family farms in developing countries are increasingly threatened by the unequal trade conditions imposed by developed countries. At ActionAid, we support the reform of international trade agreements in farming and food markets in order to combat world poverty and hunger. In Brazil, most of the food that reaches the table is produced by family farmers. Farming has been trans­ formed with the rapid growth of the agri-business export sector and the substitution of crops previously grown for the domestic market. Industrial groups are regularly consulted on the issue of international trade, yet the same does not apply to family farming, a sector Making progress that has totally different objectives and needs. with the ActionAid advocates strengthening the initiatives for eradication of monitoring and influencing multilateral forums for poverty in Brazil

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COMSEF (Sowing The Future Community), a sustain­ (2.88% in 2003 and 2.67% in 2005). Infant education able development project based on agro-ecology and received the least funds, only 51% of the amount helping local farmer associations participate more allocated in the federal budget. effectively at a political level. For Brazil to be able to eradicate illiteracy and Through the project, family farmers were taught develop a quality public school system, we argue for about agri-ecological techniques that enable better use more investments in education, placing a greater value of soil and water, thereby avoiding environmental on the sector’s workers and democratic management degradation and recuperating exhausted areas. The at municipal, state and national levels. project began by identifying the conditions of agricul­ tural production in the municipality and the needs of Empowering communities through providing family farmers. This was followed by capacity building infrastructure in agri-ecological production. Proper infrastructure is not limited to roads, public In parallel, local campaigning for rights was strength­ transport and the like. It is also about empowering ened as a means of involving grassroots organizations people to liaise with local authorities so their commu­ and wider society in the determination of public nities can be improved in many ways. Our project in policies and building a production model based on Heliópolis is one example of an ongoing success story agri-ecology. A network of civil society organizations but one that still needs work for the future. was formed enabling families to participate in the Since 1999, ActionAid has been working with the process of local development. These organizations Union of Centres, Associations and Societies of the cover areas such as producing craftwork, growing Residents of Heliópolis and São João Clímaco to plant-based remedies and citric fruits, and defending improve the infrastructure of the Heliópolis favela the rights of women, young people and the families of through facilities such as crèches, sports and cultural farmers in agrarian reform settlements, as well as the activities, places for additional tuition for children and local rural workers union. adolescents, literacy courses for young people and adults, improved housing and service provision for Meeting Brazil’s education needs: An ongoing the area. challenge In the communities of Ibura and Jordão, ActionAid An educated population is essential for continued has supported grassroots urban action movements so growth and prosperity for Brazil and while there is still that the residents could have basic sanitation, road much to do, great strides have been made thanks to paving, slop retention and legalization of land deeds strong campaigning. The National Campaign for the for dwelling areas. We have found that when people Right to Education mobilized diverse sectors of civil have these basics, they are better able to focus on society for the defence of quality public education and important priorities such as education and ways to for greater and more transparent investments. Launched earn an income. The residents are developing active in 1999, the campaign resulted in the approval of a forms of citizenship so they can have full political, larger share of the budget for basic education (from 0 social and economic participation. to 17 years), with a special focus on the access to public crèches for millions of Brazilian infants. Avanildo Duque is the Policy and Programme However, running counter to the country’s urgent Coordinator and the Right To Education Programme needs, decreasing resources are being assigned to coordinator for the Brazilian office of ActionAid, a education. According to the study Public Education: non-profit NGO that works to overcome poverty in Making progress Many Discourses, Few Resources, there has been a more than 40 countries. In Brazil, ActionAid oversees with the eradication of percentage fall in the resources for education within 303 community-based organizations in 16 local poverty in Brazil the Federal Government’s total public expenditure development areas.

1 0 2 Millennium Development Goals and the development agenda in Africa UNCTAD XIII By Alfred G. Nhema, Chief Executive Officer, Pan African Development Center

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The Millennium Development Goals (MDGs) African Development Bank, the African Union have given weight and positive responses to Commission, the European Union Commission, the poverty reduction strategies internationally. International Monetary Fund, the Islamic Develop­ment They have made governments more focused Bank, the UN development group and the World Bank. and targeted. All-in-all, they have given It has, however, become apparent that the majority impetus to a more acceptable universal of the African countries will not be able to meet the set definition of development. MDGs by the 2015 deadline. While a few countries, including Cape Verde, Ethiopia, Ghana, and Malawi are likely to achieve most of the Millennium Develop­ Challenges leading up to 2015 ment Goals by 2015 or closely thereafter, the majority MDG targets have galvanized African countries into are facing serious development challenges that need action and, in general, most countries have scaled up thorough review and analysis. monitoring processes aimed at meeting the set MDGs. As we approach the deadline that is just few years The Fifth Ordinary Session of the Assembly of the away, a critical examination is essential to help eluci­ African Union, which took place in Sirte, Libya, in July date how African countries can focus their efforts 2005, adopted a Common Position on the Review of towards enhancing initiatives and policies that are the MDGs and the Millennium Declaration. Then, in conducive to attaining the set MDGs. A sober reflec­tion 2007 at the G8 Summit, the UN Secretary General esta­ on why the majority of the countries will not attain the blished the MDG Africa Steering Group and working MDGS and what factors the countries can address if groups to support the implementation of commitments they have to attain MDGs beyond 2015 is in order. towards achieving the MDGs. The steering group, It is commonly accepted that Africa is the one conti­ chaired by the UN Secretary General comprises the nent that has the most challenges in terms of poli­tical

l e f t Children conducting a science experiment in Harar, Ethiopia. Education underpins all future growth.

Millennium Development Goals and the development agenda in Africa

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GDP commitments to foreign aid. This is due to various factors including lack of political will and the current economic meltdown. The lack of massive aid inflows has adversely affected some countries in Africa that are highly dependent on aid. The indications are that Africa will increasingly have to rely on its own resources. This may not augur well for the majority of the countries that are not well endowed with natural resources and have no products that they can competitively trade regionally and internationally. Indeed, the enormity of the challenges that still lie ahead may pose even more questions for Africa’s leaders to consider. For example, how will the aid architecture deal with new threats, opportunities and challenges? How will new evidence in relation to a b ov e instability combined with high levels of poverty. climate change and environmental concerns impact on Africa’s reliance A combination of complex and intertwined factors good governance and democracy promotion as well as on agricultural explain why African countries are lagging behind in the economic development? How do other challenges such production is increasingly implementation of MDGs. The overriding fact is the as greenhouse gas emissions, declining agricultural unsustainable. prevailing economic environment facing the majority productivity, desertification, and energy and food of the continent has not shown overall improvement security relate to the whole development agenda? upon careful analysis of growth figures. Furthermore, Africa’s over-reliance on commodities and agri­ the tension between state-building, development and cultural produce is proving to be non-sustainable given democracy has slowed down the implementation of the entry of competitors from Asia and Latin America. MDGs and this needs a serious review. Moreover, climate change complications have resulted To be sure, the continent, though still considered the in erratic rainfall patterns, floods, increased desertifi­ poorest in the world has delivered growth rates of up cation and poor agricultural outputs. This has led to to 5% and above annually over the past decade. The the lack of food self-sufficiency among the majority of continent currently hosts a few of the world’s fastest the people who eke out a living from peasant agri­cul­ growing economies over the past 10 years. Countries ture and are dependent on rain-fed systems of farming, that have consistently performed well over the last which are generally more successful in countries with a decade are Angola, Chad, Ethiopia, Mozambique, more temperate climate and reliable annual rainfall. Nigeria and Rwanda. Africa’s total GDP has also The end result is that more and more people have to increased exponentially over the years and so has rely on food handouts and various government initia­ consumer spending. However, when compared to tives aimed at providing basic sustenance. other regions of the world, these developments are While the HIV/AIDS rates have come down in modest. Concerted efforts have to be made to ensure real terms, the epidemic still poses a serious challenge that Africa pursues policies that accelerate its economic to the development of Africa and the attainment development with a view to ensuring that economic of MDGs. Africa still hosts the largest number of Millennium benefits can filter down to its populace. people afflicted with the AIDS virus and a large Development number of orphaned children. This puts a huge stress Goals and the Factors hindering the attainment of MDGs on national budgets. development agenda in Aid inflows have been modest as some industrial Peace and long-term security has eluded Africa for Africa countries have been unable to reach the agreed 0.7% the greater part of its post-colonial period. After years

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of political and economic liberalization initiatives in The association between governance and clear Africa in the 1990s and beyond, the continent is still deliverables and the wellbeing of all citizens is a novel grappling with issues of good governance, democratic concept that seeks to hold the state accountable to its consolidation, economic growth and poverty allevi­ people by ensuring that its citizens are accorded basic ation as well as durable peace and stability. Develop­ needs based on the minimum basic purchasing power ment and prosperity requires stable policies that proffer parity index relevant to that particular country. predictable investment and long-term economic dev­ Development can only be meaningful if the citizens elopment policies. can relate to concrete and clear deliverables. One of African economies are small and have not invested the major root causes of the uprisings in Egypt, Libya heavily in integrating their markets or in developing and Tunisia can be linked directly to the failure of state their transport and infrastructural networks with the systems to deliver on the economic front. objective of enhancing regional trade among the various economies. Whereas regional trade accounts 2015 and beyond for over half of total trade in Asia, in Africa regional There is a need to re-energize implementation efforts trade is slightly above 10% of the total trade volume. to ensure that working towards the attainment of Econo­mic cooperation and integration has the MDGs will continue well after the deadline for all potential to become the engine of growth that can nations where 2015 proves to be too unrealistic. Any propel the economic development of the continent. new initiatives beyond 2015 must complement and The above issues highlight the serious impediments buttress the universally agreed upon goals rather than facing Africa’s development trajectory. Not only do adopting new and unrelated different imperatives. these factors deny Africa the opportunity to create A combination of the current MDGs and more robust and efficient economic bases that can effectively locally defined specific measures and indicators would deliver decent standards of living for its people, they be ideal. Timelines are important and should be overtly undermine Africa’s ability to achieve the stated maintained and should be supported by concrete b e lo w MDGs. All-in-all, the lack of a vibrant economic base, monitoring and evaluation measures. At state levels, a While HIV/AIDS levels are falling, the dwindling aid inflows, lack of good governance, the global political agreement must be reached that allows epidemic is still a HIV/AIDs pandemic and the current adverse inter­ countries to monitor each other’s commitment to good developmental threat national economic environment all combine and this governance and sound economic management, which to the continent. produces a detrimental domino effect that impacts negatively on Africa’s quest to attain MDGs by 2015.

Creation of appropriate frameworks to fight poverty Africa as a continent is still grappling with issues of poverty and has not been able to address the basic needs of its people in a sustainable manner. The future scenario calls for the adoption of policy frameworks and sustainable development paradigms that can holistically address the development challenges faced by African countries at the economic and social levels. One such powerful approach would be the adoption of a basic needs approach to governance that focuses on clear deliverables and seeks to improve the wellbeing of all citizens.

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are strong foundations for development. Universal References indicators will continue to be important but only if they Nhema, Alfred. G. (2010) An MDG-Plus Agenda for are buttressed by inputs from locally defined measures. Africa, IDS Bulletin 41 (1): 127-128. The lessons that have been learnt since the MDG Nhema, Alfred. G and Paul Tiyambe Zeleza plan was first put forward and attempts to meet the (eds.). 2008. The Resolution of African Conflicts: goals made can be utilized as fertile grounds for the Management of Conflict Resolution and Post- finding solutions. Also, now is the time for countries in Conflict Reconstruction. James Currey, Oxford and Africa to look at how they can learn from the experiences Ohio University, Athens. (224 pages). of other regions in the South and indeed the North. Nhema, Alfred. G and Paul Tiyambe Zeleza This scenario calls for the adoption of development (eds.). 2008. The Roots of African Conflicts: policies that encourage the creation of a positive the Causes and Costs. James Currey, Oxford and economic, political and social environment conducive Ohio University, Anthens (288 pages).& African to the attainment of MDGs. An interesting nuanced Research Centre approach would be one that encourages and binds World Bank, 2011. World Development African governments to adopt a basic needs approach Report 2011: Conflict, Security, and to governance that focuses on clear deliverables and Development. Washington D.C.: World Bank the concept of well-being of its citizens. The approach Publications calls for the need to adopt well-conceived systematic political systems and state citizen pacts that provide Alfred G. Nhema is the Chief Executive Officer basic needs and safety nets that are universally of the Pan African Development Center, Addis acknowledged and acceptable. Ababa, Ethiopia.

r i g h t The issues of poverty and malnutrition still hamper the attainment of the MDGs.

Millennium Development Goals and the development agenda in Africa

1 0 6 Overcoming governance issues in Africa

By Mo Ibrahim, Founder, Mo Ibrahim Foundation UNCTAD XIII

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For seven years I ran Celtel, a pan-African Malaysia, Thailand and South Korea. It is only by mobile phone company. We built infra­ confronting these truths that we can move forward. structure, employed thousands of people and In any failing business, responsibility falls upon the tried to bring the highest corporate gover­ chief executive. During my time at Celtel, I had been nance standards to bear on everything we did. held accountable by my board and my shareholders. During that time, as I travelled from Gabon, to When I looked at the political chief executives of the Burkina Faso; from Sierra Leone to Tanzania, continent, this did not seem to be the case despite the I was often taken aback by the vastness and fact that the lives of millions of people depended on richness of the continent and the poverty their performance. In business we ensure that employ­ of its citizens. ees are incentivised to perform well. There seemed no comparable systems in place for presidents. Indeed, The experience of running Celtel convinced me that some of the worst-performing heads of state had bad governance was at the heart of all the reaped the greatest financial rewards and seemed to continent’s problems. That such an abundantly rich have complete job security. continent has become synonymous with poverty, The Prize was my response. The issue of perfor­ disease, corruption and conflict must be laid at the mance at the highest level in Africa needed to be feet of our political leadership. The argument that dragged to the forefront. The people with the greatest colonialism and imperial­ism are to blame for our degree of influence over the future of the continent problems is under­mined by the fact that many had to be held accountable. Those that had delivered African countries have declined relatively in living needed to be honoured. Those that had not should not standards since indepen­dence when compared with be. By creating a panel of such eminence that their

l e f t Mo Ibrahim applauds as Cape Verde’s President Pedro Verona Pires is awarded the 2011 Ibrahim Prize for Achievement in African Leadership.

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experience and credibility could not be questioned – In designing the Prize, we realized that those and crucially by creating a firewall between that panel evaluating candidates would need robust data on how and me – a bar of excellence in leadership could be set. each country had fared over the preceding decade. The accompanying monetary award was set at $5m Again, as a businessmen I had to produce results on an after serious consideration. We were rewarding a annual basis. There seemed to be nothing comparable public servant who had improved the lives of millions in the public sector. We examined the World Bank’s of people. It is a hard achievement to put a price on. indicators, the UN Human Development Index and I don’t believe that anyone associated with the realized that what was needed was a composite of Foundation anticipated the sheer volume of debate the these: a robust index that would allow anyone who Prize would generate. Some considered it a form of was interested to assess the performance of each corruption – bribing presidents to leave office. Others country against every key deliverable that govern­ found the monetary award too high or too low. It was ments have a responsibility for. described as insulting to Africans. We turned to a professor at the Kennedy School Throughout all the debate, I have been convinced of Government at Harvard, Robert Rotberg, who that it is the best investment I have ever made. At least had been working on score-carding performance for b e lo w two incumbent heads of state have spoken of their some time. Through the team he assembled, within President Pedro Verona Pires ambition to win the prize. If the prestige of the award, one year we produced the first Ibrahim Index of accepts the 2011 and the future financial security it provides, changes or African Governance. Ibrahim Prize for reinforces their behaviour in any way that is wonderful. Over the past five years we have developed the Achievement in In the end it is private money, earned legitimately in index in line with the Foundation’s commitment to African Leadership for his work Africa, being used to help create better outcomes for building capacity in Africa. It is now produced in Cape Verde. Africans. I can think of worse insults. in-house supported by a Technical Committee of eminent academics, in partnership with African institutions and reinforced by an Advisory Council of experts. From the original indicators it has now grown to over 120. The lack of good statistical information on Africa limited what we were able to include but we are working to commission data to fill these gaps – again in partnership with African institutions. What the Index has shown us over the past five years is that the democratisation of the continent is still a work in progress. Consistent economic gains have been achieved in a context of democratic stagnation and even recession. Africa’s great wealth is still not being managed equitably and inclusively and the signs are that this continent of young people is not willing to stand for this. It is with this next generation of leaders in mind that we have created a programme of scholarships ranging from a fully-funded MBA at London Business School to supporting hundreds of Sudanese women at Ahfad University and instituting a governance-for-develop­ ment programme at London’s School of Oriental and

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l e f t Joaquim Chissano, former President of Mozambique (left), seen here with Martti Ahtisaari, former President of Finland, was awarded the inaugural Ibrahim Prize in 2007.

African Studies (SOAS) encompassing PhD scholarships We have held meetings with civil society in Accra, and residential schools in Africa. The newest of these is Maputo, Abuja, Addis Ababa, Dakar, Lagos, Cairo, a leadership fellowship pro­gramme in partnership with Cape Town and Nairobi. They have included represen­ the African Development Bank, the UN Economic tatives from all sectors of those societies and have Commission for Africa (UNECA) and the World Trade highlighted the growing voice and influence of civil Organization (WTO). society. We hope we have created more space for dis­ The heads of these institutions have agreed to take cussions of governance and look to our brothers and an exceptional young African into their office and sisters across the continent to fill that space locally. mentor them for one year, in a 10-year programme. Above all it is our young people that give me most Having not awarded the prize for the last two years, hope. From the brilliant students we have been fortu­ the board of the Foundation wanted to invest in creat­ nate to meet through our scholarship programmes to ing future winners and I am confident that the gradu­ the thousands who filled the streets of Tunis, Cairo and ates of this programme will go on to great things. Benghazi I am convinced that if we begin to put in The past five years make me optimistic about place good governance systems – build institutions Africa’s future. that enshrine the rule of law and deliver results – the In Chissano, Mogae and Pires the Prize Committee future of our continent will surpass the dreams and identified three outstanding leaders who many within aspirations of our youth. the continent, let alone without, had never even heard of. It showed that the bar of excellence we had set Mo Ibrahim is the founder of the Mo Ibrahim was not too high. It was and is attainable and we look Foundation which was established to support Overcoming forward to seeing other retiring heads of state join good governance and great leadership in Africa. governance their number. www.moibrahimfoundation.org issues in Africa

1 0 9 Food security and global governance: Waiting for coherence UNCTAD XIII By Jeremy Hobbs, Executive Director, Oxfam International

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In the 11 years since world leaders signed up negotiators are still dug into the same trenches that led to the Millennium Development Goals (MDGs), to their last failure in 2008 and are losing sight of the some remarkable progress has been made. broader context. By 2015, 920 million people will be living in This current context highlights more than ever the extreme poverty – half the number in 1990. need for a strong multilateral system, including on At present, 10,000 fewer children under the trade. This is not about charity. It is about justice. Ten age of five die each day than in 1990. years after the launch of the Doha Round, the justi­ fication for a meaningful reform of trade rules is Still, much remains to be done and the stark facts of stronger than ever, and the rigged rules and double poverty today should shame us all. In a world that standards that govern international trade have only produces enough food to feed everyone, close to one worsened. In a context where the weak development billion people go to sleep hungry each night. In sub- provisions of the multilateral trading system have been Saharan Africa, one in seven children dies before his or systematically undermined by an array of regional and her fifth birthday. bilateral agreements, the current trade rules are more While the needs are rising, political commitment than ever part of the problem, rather than the solution. seems to wane. The leaders of many developed The food system in particular is still failing the most countries have neglected the needs and rights of the vulnerable countries and communities. Global gover­ poorest countries. More than half of Organization for nance has to focus on reducing hunger and vulner­ Economic Cooperation and Development (OECD) ability. Trade negotiations, whether bilateral or multi­ donor countries cut their aid to poor countries in 2009. lateral, have been consistently falling far short of what Copenhagen and Cancun have not delivered the is needed on that front. The trade agenda must be breakthroughs needed to avoid catastrophic climate transformed to reduce the risks of future shocks and change and help poor communities to cope with this prioritize the needs of small-scale food producers in additional burden. World Trade Organization (WTO) developing countries. Trade rules must allow develop­

r i g h t Vulnerable families receiving their WFP monthly rations at the Oxfam distri­ bution centre at Kanakurdio, Kenya. With the need for aid never higher, many of the developed world’s governments have cut their aid budgets.

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ing countries to design and implement adequate had added an estimated 109 million people to the development policies, foster sustainable economic ranks of the hungry, who already include about one in growth and protect poor people in times of both high six of the world’s population. and low food prices. National governments remain the primary duty Developing countries, which do not enjoy the sub­ bearers for ensuring the right to food for their citizens. sidies of rich countries, but whose markets are increas­ Some developing country governments have been able ingly integrated into the global economy, have found to make progress in promoting food security and themselves increasingly affected by international price increasing resilience through comprehensive, pro-poor instability. Existing trade rules have not helped, and in policies including investment in small-scale food some cases have made countries more vulner­able. production, social protection and trade measures which Years of rich country dumping, rapid liberali­zation, promote local production and trade. However, many and restricted market access for some of the most developing country governments require support from competitive exports from poor countries have fed into the international community, which should provide an a vicious circle of weak productive capacity and food enabling international environment for the promotion insecurity, import surges, and dependence on imports. and protection of the right to adequate food. If existing trade rules proved inadequate in an era of However, in the last few years, it has become cheap food, they are all the more irrelevant to address increasingly apparent that global institutions and the current problem of high and volatile food prices. forums are failing to perform these roles of global The food crisis, with its skyrocketing prices, failed to governance. In short, there are two major problems. bring any benefits to poor country producers; instead, Firstly, many rich country governments are unwilling to it provoked severe shortages in many areas. In 2007 agree on international policies and regulations, which and 2008, the world saw price increases in staple foods do not favour their own domestic consumers and ranging from 30% to 150% and an equally sharp rise businesses. Secondly, there is a lack of coherence and in the price of fuel. By the end of 2008, rising prices coordination between the global institutions with a role

l e f t After last year’s poor harvest in Chad, Fatna Bakhit, relies on market gardening to feed her family. Early indicators point to similar problems this year.

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r i g h t Muslims gathering together for Iftar (Breaking of the Fast) at sunset during Ramadan in Bangladesh where food inflation was recorded as 13.4% in July, 2011. The international rise in food prices is being felt across the world.

to play in providing policy, technical and financial disciplines, such as smart subsidies or buffer stocks. assistance. Simply calling for a rapid conclusion of the Doha Given growing integrated and interconnected Round without a clear analysis on the implications of markets, reducing food price volatility and addressing the package currently on the table is not an adequate hunger require adapted and coordinated action at the answer to the current context faced by most global level, which takes into account the diversity of developing countries. national contexts. It requires specific and appropriate Beyond this, an international coordinated effort should responses depending on commodity, country and also address the root causes of food price volatility and in global market conditions, with specific attention to the particular the specific responsibilities of developed countries most vulnerable and in particular women. and major food exporting countries towards low income The trade framework of the WTO and regional trade food importing countries, poor producers and consumers. agreements need to be revisited in the light of the new In this context, action on three major issues is challenges that volatile markets pose. Trade policies needed. First, the US, EU and G20 must make should be consistent with the overarching objective to agricultural derivatives markets work effectively for achieve the right to food. The need for the appropriate their most important stakeholders: food producers and policy space, in particular for the vulnerable countries, consumers. New rules on transparency and regulation necessary to develop effective public policies to tackle must be adopted to restore the useful functions of hunger and address food price volatility and market these markets and to prevent excessive speculation failures at local, domestic and regional levels should from fuelling food price volatility1. be recognized. Second, governments should urgently agree to Most importantly, vulnerable countries need to be phase out biofuels mandates and subsidies that provide Food security able to support smallholders and improve national and damaging incentives to divert agricultural feedstocks to and global regional food system resilience. Depending on the fuel. At the same time, they should urgently explore governance: specific situation, this may include policies which could Waiting for 1 Not a Game: Speculation vs Food Security, Oxfam issue brief, October coherence be perceived as trade distorting in the context of WTO 2011, http://oxf.am/4jr.

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l e f t A Hindu community in a makeshift camp in Mirpur Khas, Pakistan. This largely overlooked humani­ tarian crisis, caused by flooding, in 2011 affects 5 million people in southern Pakistan leaving them without adequate winter shelter or clean drinking water. options for “safety valve” measures that place limits on countries in the current crisis context. The organization such diversion when global stocks are acutely scarce. has to continue to develop and influence pro-poor Finally, the main exporters of basic food commo­ policy-making through its research and consensus- dities should commit to refrain from using export building activities. In that context, it is crucial that the restrictions that may undermine the right to food and organization continues to look both at the root causes the long-term development prospects of the poor, at of the current food price volatility context and how it least until clear rules are agreed at the Committee on affects vulnerable countries and communities. World Food Security (CFS) and WTO. Clearer rules on UNCTAD XIII, by looking at inclusive and sustainable when and how export restrictions can be used and growth and development, also has a vital contribution clearer mechanisms for coordination with countries that to make to current policy debates. Evidence shows that may be negatively affected are needed. In the mean­ poor communities, who are most heavily depend­ent on time, export restrictions on all purchases of humani­ natural resources for their livelihoods, are the first tarian food should be eliminated, including – but not victims of environmental degradation, highlighting the limited to – purchases by the World Food Programme2. need for a sustainable growth. At the same time, the While some of these issues are firmly on the political power of growth to reduce poverty depends on how agenda of the G20, UNCTAD or the CFS, the WTO, as equitably that growth is distributed. It is high time that the major multilateral trade institution, continues to policymakers start to focus not only on growth as the have an important role to play. The only way to rebuild ultimate achievement of economic policy but more on public and political interest in a reform of trade rules is the way that growth is distributed within society and to demonstrate how trade negotiations can bring how it affects our environment, while acting far more solutions to multilateral issues on the table. decisively to bring the use of natural resources back Food security A strong UNCTAD is also needed to better under­ within the limits of what this planet can provide. and global stand the new realities and needs faced by developing governance: Jeremy Hobbs is Executive Director of Oxfam 2 The Impact of Russia’s 2010 Grain Export Ban, Oxfam research report, Waiting for June 2011, http://oxf.am/4ce. International. coherence

1 1 3 Gender equality, economic development and climate change UNCTAD XIII By Mary Robinson, President, Mary Robinson Foundation – Climate Justice

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The focus on women in development at this conference is timely: momentum is growing to highlight the vital role that women play in eco­ nomic activity. For many years this dimension has been understated, even ignored. But today the issue has risen to the top of the agenda.

In all countries – developed and developing alike – barriers exist which prevent women from playing a proper role in their countries’ economies. Numerous

r i g h t studies have been carried out which demonstrate the Mary Robinson: strength and persistence of these barriers. Ironically, Women’s economic there have also been plenty of studies which prove contribution is central to that full participation by women in the workplace development. would increase a country’s GDP significantly. So, apart from the issue of fairness, enabling women to play a full role in economic activity makes sound “Close the resource gap holding women back in dev­ business sense. eloping economies, and we could feed 150 million more people worldwide every year, and that’s according to the Women, economic equality and Food and Agriculture Organization, and that’s in addition participation to the higher incomes for families and the more efficient The World Development Report 2012 focuses on markets and more agricultural trade that would result.” the theme of Gender Equality and Development. Yet the barriers remain. In the workplace, lower pay It concludes: and lack of access to higher level jobs are still the order “Gender equality is a core development objective in of the day for many women. Lack of access to credit, its own right. It is also smart economics. Greater to agricultural inputs such as seeds and fertilizer gender equality can enhance productivity, improve impede their capacity to be strong economic actors. development outcomes for the next generation, and And the discrimination starts earlier. Although make institutions more representative.” improve­ments have been recorded, girls still lag behind “Women now represent 40% of the global labour boys in access to education and healthcare. force, and more than half the world’s university Together we must keep the momentum going. It is students. Productivity will be raised if their skills and not a case of adding a gender perspective to be talents are used more fully.” politically correct, or gender needing to be main­ “Gender equality matters for society more broadly. streamed. The evidence shows that women’s economic Empowering women as economic, political and social contribution is central to the development of countries. actors can change policy choices and make institutions Making this a reality is the challenge we face. Events more representative of a range of voices.” such as this one in Doha are helpful towards that end Hillary Clinton, US Secretary of State, put it well in a and I look forward to new insights and initiatives speech at the Asia Pacific Economic Cooperation emerging from this conference. (APEC) on Women and the Economy: “The case for unlocking the potential of women and The effects of climate change Gender equality, including them more fully in the economic life of our Climate change has a direct impact on the prospects economic development and nations begins with the accounting of how women for world economic growth and for women’s role in climate change already are driving growth.” realizing growth.

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The impact of climate change cannot be overstated. particular, the semi-arid dryland belt countries from the Climate change will raise temperatures, change preci­ Sahara to the Middle East and Central Asia, sub- pitation patterns and distribution of water, threaten Saharan Africa, South and South East Asia, and small biodiversity, raise the sea level, increase flooding and island developing states. Nevertheless, no one is safe storm surges, threaten unique systems such as coral from climate change impacts, with so many millions of reefs, and cause large-scale melting of ice shelves. people living in zones vulnerable to significant negative These changes in the natural environment are impacts of climate change. increasingly causing human impacts: an increase in The Mary Robinson Foundation – Climate Justice water insecurity and the time required to collect water; (MRFCJ) aims to put justice and equity at the heart of changes in agricultural productivity and food insecurity, national and international responses to climate change. with a loss of livelihoods and effects on the wider The Foundation is a centre for thought leadership, economy. There are health risks, such as malnutrition, education and advocacy on the struggle for those water-borne and vector-borne diseases and deaths many victims of climate change who are usually from natural disasters. There will be effects on human forgotten – the poor, the disempowered and the settlements, on land use patterns, and displacement marginalized across the world. and involuntary migration. A climate justice approach amplifies the voices of The impact of climate change varies greatly from those people who have done least to cause climate country to country, with 99% of casualties occurring in change, but who are affected most severely by it. developing countries. This fact raises strong global They include the citizens of island states and vulner­ justice issues, since the 50 least developed nations of able countries fighting for their very survival; indigenous the world account for less than 1% of the greenhouse communities whose lands and resources are under gas emissions that cause climate change. The popu­ threat; women farmers feeding their families and lations most gravely at risk live in some of the poorest grow­ing much of the world’s food. And it includes the areas that are also highly prone to climate change – in poorest and most marginalized people worldwide who

l e f t Girls are as enthusi­ astic as boys to learn, but still lag behind in access to education.

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r i g h t Women collect water from the only well in Kuma Garadayat, North Darfur. Water insecurity disproportionately affects women.

already suffer most from poverty, hunger, ill-health address the entire range of climate issues as well as and injustice. bringing a gender perspective to each of them. The climate justice approach has a clear gender Women in many countries are adversely affected by dimension. Women make up the majority of the the impacts of climate change, but they are also world’s poorest people, and given existing gender powerful agents of change taking action at global, inequalities and development gaps, climate change national and community levels. ultimately places a greater burden on them. Men and If, as a global community, we hope to respond to women are affected by climate change in different the immense challenge of climate change, women ways, because the roles expected of them and the leaders must play a greater role in innovating, deciding demands made of them by their families and commu­ and implementing the solutions that are so urgently nities are very different. This is very relevant for Africa, required. The leadership, participation, knowledge and for example, where women are the primary food experience of women, especially from the global South producers and providers of water and cooking fuel for and communities most affected by climate change, is their families, while having greater responsibility for vital to successful mitigation, as well as adaptation. family and community welfare. Given the transformative change which will be The climate justice approach highlights the gender needed, MRFCJ has begun to harness the power of dimensions of climate change impacts, and requires the women’s leadership on gender and climate change. energy and resourcefulness of women’s leadership to The goal is to ensure that the UN Framework tackle it. When communities living in poverty are Convention on Climate Change and other relevant impacted by weather shocks – such as drought or flood­ treaties and documents incorporate a strong gender ing – it is women who try to hold them together and perspective. I believe that the leadership, participation, cope. When subsistence farmers are affected, we must knowledge and experience of women, especially from Gender equality, remember that the vast majority of them are women. the global South and communities most affected by economic development and Gender inequities alone can motivate more women climate change, is vital to successful low carbon climate change to lead in taking action, but women’s leadership must development and adaptation.

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l e f t The gender gap and a lack of access still impedes women’s capacity to be strong economic actors.

To this end, MRFCJ is supporting an alliance of place two days after the grassroots meeting, and women leaders on climate change. It is led by women before a large audience. We borrowed the European ministers from the three countries that have held or model and developed a Troika of women leaders on will hold the chair of the Conference of the Parties of gender, led by the Ministers from Denmark, Mexico the UNFCCC: Denmark, Mexico and South Africa, and and South Africa, leading to COP17 in Durban. We we hope it will have an impact on institutions such as will continue our efforts to ensure that women’s voices the Green Climate Fund and future thinking on are heard in the intergovernmental discussions about mitigation, adaptation, climate financing and transfer climate change. of technologies. In short, a start has been made to bringing out the MRFCJ worked to develop women’s leadership and gender dimension in climate change negotiations. to strengthen the gender perspective in the climate There is further work to be done and MRFCJ will do all negotiations at Cancun. We convened a meeting last in its power to build on the start that has been made. autumn “Women’s Leadership on Climate Justice: Change is happening in the economic empowerment Planning for Cancun and Beyond”. This resulted in a of women across the world. But, just as with climate network of about 65 women from different perspec­ justice, so with the goal of achieving women’s full tives – government, civil society, business, grassroots involvement in the workplace, there is a long way to go. and indigenous, who shared common goals. We then If there is one message which should go out from planned two side events in Cancun. this conference it is that inequality is unacceptable and The first was on women’s leadership from the that all obstacles which prevent women from playing a grassroots perspective, which MRFCJ co-hosted with full role in global economic activity to build a the late and much missed Wangari Maathai’s Green sustainable future should be removed. Belt Movement, the Nobel Women’s Initiative, Climate Gender equality, Wise Women and Realizing Rights. Together with the Mary Robinson is the President of the Mary Robinson economic Mexican Government, MRFCJ co-hosted a side event Foundation – Climate Justice and former President development and “Women Leaders on Climate Change”, which took of Ireland. climate change

1 1 7 Ethical ecotourism and sustainable development UNCTAD XIII By Kathryn Pardo, Managing Editor, Izilwane

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Tourism is big business. The upside of this The World Tourism Organization, a specialized increasingly connected world is that some agency of the United Nations, has adopted a Global tourists are becoming more aware of the Code of Ethics for Tourism outlining standards that impact of their travels and are eager to address should be met when pursuing ecotourism develop­ these pressures. But more needs to be done to ment. Article 3 asserts the need to create tourism ensure that all governments and international infrastructure so the integrity of the natural and organizations support sustainable tourism. cultural heritage of an area is maintained and an area’s natural resources can be conserved as much as possible. Article 4 emphasizes the need for tourism What is ecotourism? ventures to operate with respect for local customs and The concept of ecotourism has attempted to answer in such a way that allows local traditions, artwork and the call of social and environmental responsibility in folklore to flourish and important cultural sites to be travel. The term is relatively new and often ambi- protected. The code also covers such issues as govern­ guous. According to the United Nations, this type of ments being responsible for safety and the Universal recreation should promote environmental protection, Declaration of Human Rights being adhered to, sustainable travel and economic development for especially when it comes to freedom of movement indigenous people at a grassroots level. As part of the within and between countries. fight against international poverty, ecotourism builds Despite wide-ranging support from many govern­ on ideas of cultural understanding, natural resource ments and organizations, efforts to promote eco­ protection and human rights. It should improve eco­ tourism do not always succeed in creating sustainable nomic growth and relations with mar­ginalized minori­ tourist cultures, and many countries do not recognize ties and indigenous groups to produce tourist practices the Global Code of Ethics for Tourism as having any that are profitable and sustainable over time. real influence in international development.

r i g h t Luxor has been a focus for dev­ elopment funds.

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Egypt: Case study today cover approximately 10% of the country’s land In Egypt, the former government committed to sup­ and marine territory. porting services consistent with ecotourism concepts In 1994, the government established the Red Sea but never followed through with any of the ecotourism Sustainable Tourism Initiative in an effort to protect the policies it developed. Instead, economic disparities delicate coral reefs in the Red Sea coastal areas that have widened, feelings of cultural exploitation have have suffered from over-use as tourist sites. According worsened and a security vacuum was created in many to USAID, this was the first initiative that attempted top destinations. to involve local Bedouin groups in planning and The World Bank and International Monetary Fund implemen­tation. Meanwhile, the Egyptian National have given millions of dollars in loans to government Biodiver­sity Strategy and Action Plan utilized the and private organizations in Egypt along the Red Sea input of sev­eral Bedouin inhabitants of the Red Sea and in Luxor. The United States Agency for Inter­ coastal areas to identify 170 plant species traditionally national Development (USAID) also gave more than used by the Bedouin in various cultural, traditional, $170 million between 1999 and 2003 to the Egyptian culinary or medi­cinal practices and emphasized Environmental Policy Programme to aid the develop­ sustainable collection. ment of sustainable use practices of the Red Sea area’s However, there is no infrastructure or institutional land and marine resources and to fund inspection and support in place to support any of these ideas. compliance regulations, including awareness cam­ According to records from the Egyptian Ministry of paigns for both locals and tourism investors. State for Environmental Affairs, low operating budgets Law 4 of 1992 created the Nature Conservation are inadequate, regula­tions are rarely enforced, and Sector (NCS), and Law 102 of 1993 attempted to revenues from the park are often circulated into non- protect natural areas popular with tourists. These laws related government agencies; parks rarely see the enabled the creation of Egyptian national parks, which revenues they produce.

l e f t USAID worked with the Egyptian govern­ ment to preserve coral reefs leading to the esta­blish­ment of the Red Sea Sustainable Tourism Initiative.

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Security issues in underfunded ecotourism areas have become an issue, especially since the 2004 attacks on hotels in Sinai and the 2006 attacks in Sharm-el-Sheikh. Maintaining security, preventing negative tourist-local interactions, ensuring the safety of tourists and locals and protecting the integrity of natural and cultural landscapes – all while creating jobs and a buoyant economy – is proving to be a difficult task. A difficult political climate ensued with suspicion cast on Bedouin for the attacks and borders tightened, again all factors which have made it hard to maintain a sustainable ecotourism economy.

Is there a solution? A singularly positive attempt made by both the Egyptian government and the European Union to implement ecotourism standards, as outlined by the r i g h t Tourism and its World Tourism Organization, came in the form of the inherent environ­ Bedouin Support Programme in 1995. Reports from mental and social programme organizer Joseph Hobbs indicate that the pressures has international bodies allocated $10 million to the become a divisive issue for the Bedouin umbrella St. Katherine Development Project, with more population. than $1.3 million going toward the Bedouin Support Programme. Researchers and planners conducted In 1982 and 2006, the Egyptian government opened several interviews with Bedouin about nature con­ up properties owned and managed by the state to servation, park policies and what types of support they international investors. According to Dr Waleed would like to receive in exchange for adhering to and Hazbun of the American University in Beirut, the actively supporting park regulations. government relocated indigenous peoples and sold Most Bedouin responded positively to ideas of land at low prices and with low taxes to foreign com­ conservation and expressed interest in participating in panies who promised to develop environmentally these efforts should they see some economic and social friendly vacation sites. Promises of infrastructure benefit from doing so. Generally, they asked for improvements and job opportunities for locals fared enforcement of laws, especially of the no-hunting just as poorly with many jobs going to imported labour clauses. Also important was the enforcement of laws instead. New commercial licences, even for locals wish­ forbidding tourists from destroying cultural heritage ing to sell handicrafts, are extremely difficult to get. sites. They asked for such things as the regulation of The Bedouin in Sinai also suffer from the commer­ tourist hotels and trash dumps in the area, which were ciali­zation of their culture in the name of ecotourism. polluting ground water and driving away wildlife. One This leaves many Bedouin little option but to lead of the greatest complaints, however, was that by and traditional lifestyles to appeal to tourists rather than large, the Bedouin were entirely excluded from any embracing modernity. In addition, looting, environ­ tourism development; in the interviews, they over­ mental destruction, dumping of waste in protected whelmingly asked for job and educational opportu­ni­ areas, destruction of artefacts, disputes between ties so they could actively participate in park operations. Ethical ecotourism and sustainable Bedouins who embrace tourism and those who do not, This five-year project seemed successful at first. development and hunting by non-residents are commonplace. More than 100 Bedouin were trained and hired as park

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wardens in St. Katherine National Park, and additional ultimate outcomes for eco­tourism specifically, it is staff hired as animal-control officers, construction worth noting that much tourism activity has come to a workers, and border-patrol agents. Marketing eco­ standstill. Foreign inves­tors have halted the flow of tourism in Sinai, especially to Israelis who could visit funding for development projects. the area without visas, became a top priority for the Tourism and its related activities make up approxi­ Egyptian Ministry of Tourism in the late 1990s. How­ mately 7% of the Egyptian economy, and without the ever, when EU funding stopped in 2005, employment influx of visitors, the future of the country is tenuous. of Bedouin dropped to only 46 in St. Katherine, and According to the investment bank Crédit Agricole, hotels that had previously cleaned up their act while Egypt is losing as much as $310 million per day from under international scrutiny returned to mass rubbish the halt in tourism. There are store owners who have dumping near St. Katherine and socially responsible not sold a single item since the protests began on practices fell by the wayside. Many attempts to form January 25, 2011, guides who have had to let their sustainable tourist practices have been abandoned, pack animals go because they could not afford to ignored, or turned over to private players with no feed them, and abandoned restaurants and intention of circulating revenues within the local tourist attractions. economies. Ecotourism may hold the answer for the The halt of the tourism industry could spell disaster cultural and economic disparities in Egypt, and around for ecotourism as investments wane and the fragile the world, but governments must implement and infrastructure deteriorates. However, the restructuring enforce such strategies at a grassroots, rather than a of tourism after stability returns to Egypt could also multi-national corporate level. mean that ecotourism could receive a boost once investors realize the opportunities socially responsible The current situation travel presents to the economy. The current situation in Egypt has become unstable after the events of the Arab Spring, providing Kathryn Pardo is managing editor of Izilwane, additional challenges to the tourism industry in that an online environmental information service country. While it is currently impossible to predict the (www.izilwane.org).

l e f t The unrest in Egypt has damaged the country’s tourism industry.

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An Asian perspective on the world food crisis and its impact on development UNCTAD XIII By Chandran Nair, Founder, Global Institute For Tomorrow

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Soaring food prices are impacting on the pros­ has exacerbated rural poverty, increased rural-urban perity and development of countries across migration and hastened the degradation of arable land. Asia, including China, India, Indonesia and Viet On the supply side, increasing amounts of arable Nam. After peaking at a record high of 238 land have been usurped for factories, housing, resorts points in February 2011, the Food Price Index and golf courses. In China, 8.2 million hectares of averaged 234 points in June 2011, 39% higher arable land were lost from 1997 to 2009. Today, only than the same period last year. In Asia, it has 121.7 million hectares of arable land remain. translated into an average 10% increase in food A nationwide land regulatory system was imple­ prices and could push 64 million Asians into mented in 2006 to control land use and reduce this extreme poverty. In the Asia Pacific region, 578 shrinkage. However, China’s arable land may drop million people were undernourished in 2010. below 120 million hectares (the figure essential to maintain food security until 2020) because of illegal use and degradation. The Ministry of Agriculture has The neglect of agriculture considered the seemingly implausible prospect of The crisis was triggered by trends such as rising leasing agricultural land in Australia, Latin America, consumption, environmental degradation, climate Africa and elsewhere. change and demand for biofuels, but has its origins in flawed government policies. Lured by Western insti­ Problems and issues with the “green revolution” tutions and economists concerning a fast track to In many countries, including the Philippines, Thailand prosperity through “Washington consensus” models of and Viet Nam, watersheds have been destroyed and economic growth, Asian policymakers have shifted soil degraded from poor natural-resource management. their focus from a development path dominated by Indiscriminate use of fertilizers and pesticides to agricultural self-sufficiency to one mandated by the increase productivity in the “green revolution”, which industrial and manufacturing sector. The belief that started in Mexico in the 1940s, spread to India in the Asian countries could “manufacture their way out of 1960s and China in the 1980s, has had a detrimental poverty” led to policies that sowed the seeds of impact on agricultural land. exigency by not recognizing that manufacturing-led The heavy use of agrichemicals has severely economic growth would push agriculture to the degraded soil’s organic matter and contaminated background, worsening rural-urban disparities and aquifiers, which are crucial in determining crop output. unwittingly encouraging overconsumption. China has been the world’s largest consumer of The critical role of the rural economy as the national chemical fertilizers since 2007, using more than 50 breadbasket when people aspire to consume more, million tons a year. China also uses 1.3 million tons of together with the consequences of giving priority to pesticides annually, with usage per unit area 2.5 times the industrial and manufacturing sectors and disin­ the global average. In India, fertilizer application has centi­vizing the agricultural sector, have been ignored risen from less than one kilogram per hectare in 1951 by many political leaders owing to the conviction that to 133kg per hectare in 2011. Agricultural centres like the rural sector comprised a backward population and the state of Punjab, the largest producer of wheat in that agriculture was a “poor cousin” of industry. India, struggle with this problem. The waning of Asian agriculture was caused by Within Asia, cultivated land will risk yield decreases An Asian institutional neglect and policy shortcomings. A lack of in the next few years as degraded soil becomes less perspective on public investment in rural infrastructure (irrigation, resilient to natural disasters such as drought, heat the world food water conservation, roads, electrification, housing, waves and windstorms, which are likely to become crisis and its impact on communication), social infrastructure (education, more severe with climate change. Another natural development health care) and agricultural services (rural banking) precursor of the food crisis is flooding. According to

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the UN World Food Programme, 57 countries, includ­ ing 19 in Asia were hit by catastrophic floods in 2007. Conglomerates have been allowed a much bigger influence on agriculture in Asia in recent years and are beginning to play a more dominant role than govern­ ments, often shifting production to cash crops or grain for livestock. According to the Food and Agriculture Organization of the United Nations, an estimated 30% of the Earth’s ice-free land is directly or indirectly used for livestock production. In 2010, China imported more than 50 million tons of soya beans, mostly from the United States and Brazil. This accounted for 73% of soya bean consumption in China and was used exclu­ sively in the production of livestock feed, with cooking oil a by-product. Transnational agribusinesses own about 70% of China’s soya bean-crushing industry. On the demand side, urban-biased policies are consumption and waste. For example, in India 28.9% a b ov e rampant. Cities benefit from better social services and of urban women were overweight in 2006, while 47% Irrigation and water management are vital infrastructure, higher wages and artificially low prices. of children below five were malnourished. The percen­ to Asia’s staple crops. This reduces inflation and sustains urban political tage of overweight Chinese has more than doubled, harmony but creates stress in rural economies. With from 7% in 1982 to 15% in 2006. Adopting Western the exception of Japan, South Korea and Taiwan, consumption habits means richer Asians are eating which have strong policies supporting farmers’ away at their own resource base. cooperatives, farmers who help to feed nations remain Consumption-led economic growth has created a among their poorest people, not having benefited from departure from traditional Asian values of moderation, the “Asian economic boom” of the last three decades. pressurizing the food-supply chain. Long-established Improving the lot of the Asian farmer should not be diets are changing, with many packaged foods includ­ treated by policymakers as a romantic attempt to help ing ingredients derived from agribusiness conglomer­ the poor, but as a critical manoeuvre for national ates. Meat consumption in India, a country with a security and economic development. strong culture of vegetarianism, has increased by This predicament can also be attributed to trends almost 50% since 1980, from 3.7kg per capita per year affecting development at a global level. The first is to 5.5kg today. Average meat consumption in the US is continuing population growth. In Asia, the population now 93.4kg and in China 58.8kg per capita per year. expanded from 1.4 billion people in 1950 to 2.4 billion The growing affordability of meat is of concern in 1975; then to 4.2 billion, or 60% of the world total, because of its inefficiencies as a food source and by 2011. Increasing prosperity has also resulted in a underpricing. To produce a kilogram of meat takes 6kg consumption binge among the growing Asian middle- of grain and more than 15,000 litres of water. Live­ class. About 30 years ago, the United Nations esti­ stock reared for meat now eat the grain that would mated that up to 40% of Asians were chronically have fed the poor. An estimated 50% of all grain undernourished. Huge progress has been made in food grown globally is used to feed livestock. An Asian production and accessibility since then and by 2007 Prices have increased in the rush to cash in on perspective on the that number had been reduced to 15.6%. However, biofuel production. The rising demand for subsidized world food crisis with increasing prosperity, hundreds of millions of biofuels in the US and Europe, stimulated by soaring and its impact on other Asians enjoy abundance steeped in over- oil prices, encourages calls for grains and edible oils for development

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structure. Produce from scattered farm plots in relatively undeveloped areas requires additional handling outside existing food logistics. Compared to the US, where more than 90% of meat, fruit and vegetables are transported in cold-storage vehicles, it is estimated that in China, only 15% of meat and 5% of fruit and vegetables is thus conveyed. Farmers’ cooperatives, reforms of land ownership rights, loans for farmers, availability of insurance and price controls must be part of a rural economic trans­ formation in Asia. Such reforms overhauled the rural sector and increased agricultural productivity in Taiwan, South Korea and Japan after World War II. Improvements should be tied to policies that make resource conservation and environmental management in rural areas central tenets of economic planning. a b ov e biofuels to be produced instead of food. The US Land management practices should emphasize While research into ethanol industry consumes more than 40% of the 335 ecological food production and water conservation. biodiesel crops such million tons of corn produced annually in the US, with Investment to protect soil, water resources and bio­ as jatropha (seen here being evaluated government subsidies reaching $7.7 billion in 2010. diversity is essential. Linking public sector spending to in Pune, India) Asian regulators are intervening: the Chinese govern­ their protection is essential to vibrant agricultural progresses, the ment banned the use of grains for biofuel in 2007. sectors. Conservation initiatives have been seen as sector can harm food Inequitable international trade rules that shield impediments to development in countries in a rush to security in the developing world. farmers in rich countries leave developing countries’ industrialize their way to progress. But conservation farmers unable to compete on the world market. India, policies are essential for long-term employment in rural opposed to World Trade Organization (WTO) rules, areas – although they require a departure from the has taken issue with the US in particular, because the strategies employed by Asian governments pursuing regulations favoured by the US benefit fewer than six urbanization. million American farmers versus more than three billion Fiscal measures, such as tax and other financial people who depend on agriculture for their livelihoods. incentives, should be put in place with the aim of reducing resource usage and emissions. What can be done? The industrialization of agriculture should be reversed. Asian governments should re-channel resources to Agriculture must move towards low-chemical fertilizer, solve agricultural and policy problems and help rid the herbicide and pesticide use. All should be replaced sector of the “poor cousin” stigma it has endured for where possible by labour-intensive, integrated culti­ the last 40 or so years. To make agriculture central to vation techniques and local vertical integration, includ­ economic development, parallel reforms in the rural ing processing at or near the source. Many of the sector with improvements in the industrial, manufac­ practices of large-scale agro-industry are founded on tur­ing and services sectors are needed. Agriculture an underpricing of inputs. An Asian should be regarded as central to economic vitality. Resource taxes for raw materials used in agriculture perspective on Supply chain inefficiencies result in significant food – especially water, but also chemicals – plus an the world food waste. It is estimated that more than 30% of fresh emissions tax on the energy required, and a proper crisis and its impact on produce is squandered in markets such as India, owing pricing of the impact of run-offs and other pollutants, development to inadequate transport, storage and industrial infra­ would inevitably raise costs significantly. But it would

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also encourage use of natural fertilizers such as organic More Asian governments should explore genetically compost and cover crops grown primarily to add modified (GM) foods. Japan and China already import nutrients to the soil and curb environmental damage GM grain for the production of animal feed and cook­ from overuse of fertilizers and pesticides. This would ing oil. In 2009, China’s Ministry of Agriculture issued benefit the widespread small-scale local farming and biosafety certificates to strains of pest-resistant GM should be at the core of economic policymaking. Rural rice and corn, and further trials are in progress before and urban environments that are sustainable and allow commercial production commences. As food prices communities to flourish need to be developed. soar and grain shortages persist, governments, food Governments must ensure that all farmers have companies and consumers may be forced to overcome access to the tools, including irrigation and agriculture their entrenched resistance to genetically engineered inputs, to improve productivity. Farmers need fair crops. GM should not be seen, however, as a panacea, access to capital and governments should ensure they but a component of a food-security strategy. receive practical help with production planning and sustainable, integrated cultivation techniques. Making Feed or be fed weather and market information easily accessible can For most people in Asia the food crisis is one of afford­ help farmers make business projections; and by ability. For a smaller percentage it is a range of issues, diversifying the crops they grow, farmers can cushion from lack of access to being unable to grow the themselves against market fluctuations and climate- minimum for subsistence. Climatic conditions, trade related crop failure. Governments can help link farmers subsidies in rich countries, diversions for biofuels and and markets. In Shandong, China, the provincial gov­ speculative purchases in commodity markets are diffi­ ernment is urging supermarkets and school canteens to cult to control so Asian political leaders must reassess buy vegetables directly from local farmers. their manufacturing-led development models and Indigenous crops need to be improved and made support policies to address the complex food predica­ available to farmers. Taiwan-based international non- ments. There can be no continued excuse for Asian profit research and development institution The World countries’ expectation of food aid from the West. Vegetable Center breeds enhanced varieties of vege­ Countries receiving food aid today include North Korea, tables to extend shelf lives. Diversifying diets based on Bangladesh, India and the Philippines. Reliance on aid local foods to build secure agricultural systems resilient has created a dangerous dependency: Asia is capable to food-price fluctuations would benefit consumers of feeding itself instead of being fed. Poverty and farmers. alleviation; managing the excesses of free markets; Investment in education and health, with the aim of technology (in fertilizers, genetic modification of food providing opportunities for the rural poor, is essential. etc); industrial agriculture and investment (public and Opening the rural sector to private investment by private) must be in equilibrium. encouraging investors to capitalize on profitable, com­ None of this will be possible unless Asian govern­ paratively small-scale rural projects would unlock a ments reject the consumption-led growth model and new area of economic activity. adopt instead an approach that makes resource con­ Profiteering and overemphasis on biofuels is harm­ servation the heart of all policymaking. ing food security. Governments must introduce policies to ensure that production and prices are not influenced Chandran Nair is the founder of the Global Institute by the growing demand for biofuels. Asia, in coopera­ for Tomorrow, a Hong Kong-based indepen­dent think An Asian tion with the European Union, could lead the world in tank with a special interest in business, public policy perspective on the introducing a certification scheme for biofuels that and civil society issues (www.global-inst.com). world food crisis meet stringent criteria concerning the protection of This is an abridged version of an article that first and its impact on food supplies and ecosystems. appeared in Asia Literary Review in October 2011. development

1 2 7 Acknowledgements

UNCTAD XIII

For UNCTAD The Development Agenda of UNCTAD Policy Responses to Higher Food Christiane Stepanek-Allen The Issues from Accra to Doha: Prices: Giulio Napolitano/FAO (78, 79 Chief, Communications, Information Eskinder Debebe/United Nations (26), upper & 80), Thomas Hug/FAO (79 and Outreach Greenshoots UK/Tullow Oil plc (27). lower), Olivier Asselin (81). Office of the Secretary-General A fresh start for economic growth The Multilateral Trading System of the UNCTAD with social equity: UNCTAD (30 & Future: Jay Louvion/WTO (82), Dick Muriel Scibilia 31), Dana Smillie/World Bank (33). Thomas Johnson [CC BY 2.0] (83), Chief, Communications and UNCTAD’s moment: UNCTAD (34), Edmundo Murray/WTO (84), Studio Information Unit Casagrande/WTO (85). Office of the Secretary-General Kibae Park/UN Photo (35), Evan UNCTAD Schneider/UN Photo (36), UPS (37). Helping vulnerable countries develop Thamara Romero Montoya Shaping a new investment and in a challenging world economy: ITC Public Information Assistant enterprise agenda for sustainable and (86 upper), David Shankbone [CC BY Office of the Secretary-General inclusive development: UNCTAD (38), 2.0] (86 lower), ITC (87). UNCTAD UNCTAD (39), Kibae Park/UN Photo Arab uprisings: New realities and chal­ For ISC (40), Taiwan Semiconductor lenges: Flickr User cjb22 [CC BY 2.0] Editor-in-Chief: Mark Blacklock Manufacturing Co., Ltd (41). (88), David Masters [CC BY 2.0] (91). Deputy Editor: Georgia Lewis Making growth an engine of poverty The right of political and economic Copy & Picture Editor: Adrian Giddings reduction and inclusive development: participation for Arab women: Rick Publisher: Nigel Ruddin The post-crisis challenge for LDCs and Bajornas/UN Photo (96), Dana Smillie/ Publications Director: Robert Miskin other low-income economies: World Bank (97), Gigi Ibrahim Finance Director: Yvonne O’Donnell UNCTAD (42), UNCTAD (43), Dana [CC BY 2.0] (98), Natalia Cieslik/ Finance Assistants: Maria Picardo, Smillie/World Bank (44), Martine World Bank (99). Anita d’Souza Perret/UN Photo (45). Making progress with the eradication Senior Consultants: Derek Armandias, Data on Least Developed Countries: of poverty in Brazil: Julio Pantoja/ Jeffrey Fearnside, Michael Gaskell, Sophia Paris/UN Photo(47), Joao dos World Bank (101). Karin Hawksley, William Innes, Santos/World Bank (48). Jonathan Unsworth Millennium Development Goals and Technology and innovation, a the development agenda in Africa: Art and Design Director: Michael Morey cornerstone of development policies: Eskinder Debebe/UN Photo (103), Printed by: Buxton Press Ltd UNCTAD (50), UNCTAD (51), Fred Noy/UN Photo (104), Eskinder IGU and UNCTAD would like to Jonathan Ernst/World Bank (52), Debebe/UN Photo (105), Stuart Price/ express their thanks to all those who Vestas Wind Systems A/S (53 upper), UN Photo (106). helped in the preparation of this Dana Smillie/World Bank (53 lower). Overcoming governance issues in publication. Thanks are also due to the Rio+20: Preparing the future we want: Africa: Ons Abid/Mo Ibrahim following companies, people and Michos Tzovaras/UN Photo (58), Jerry Foundation (107, 108 & 109). organizations for providing pictures. Kurniawan/World Bank (59), Sean Food security and global governance: The credits are listed by article. Where Sprague/UN Photo (60), Pasqual Waiting for coherence: Andy Hall/ the pictures for an article came from a Gorriz/UN Photo (61). Oxfam (110), Irina Fuhrmann/Oxfam variety of sources, the appropriate The importance of investing in Africa: (111), Andrew Biraj/Oxfam (112), page numbers are given in brackets UNIDO (62, 63 & 64), African Sam Phelps/Oxfam (113). after each source. Minerals (65). Gender equality, economic Message from the UN Secretary- Global action for productive invest­ development and climate change: General on the Occasion of UNCTAD ments and decent jobs: J. Isaac/ILO J gen Frank/Mary Robinson XIII: Eskinder Debebe/UN Photo (8), (68), Arne Hoel/World Bank (69), Foundation Climate Justice (114), Nugroho Nurdikiawan Sunjoyo/World T. Falise/ILO (71). Barbara Ratusznik/World Bank (115), Bank (9). Inclusive growth an enduring Albert Gonzalez Farran/UN Photo Message from the Secretary-General challenge for equitable globalization: (116), Giulio Napolitano/FAO (117). of UNCTAD: UNCTAD (10), A.P. UN Photo/WFP (72), Jonathan Ernst/ Ethical ecotourism and sustainable Moller - Maersk Group (12), World World Bank (73). development: Vyacheslav Argenberg/ Bank (13). The green economy: Delivering social, VascoPlanet/www.vascoplanet.com Qatar and the Gulf states: Harald environmental and economic benefits: (118), Mahmoud Habeeb/USAID Pettersen/Statoil (18), Qatargas (19 Eskinder Debebe/UN Photo (74), (119), Tomas Sennett/WTO (120), upper), Royal Dutch Shell (19 lower), Rachel Hinman [CC BY 2.0] (75 www.redseaexplorer.com (121). MIA (20 upper), Qatar Tourism upper), Daniel Borman [CC BY 2.0] An Asian perspective on the world Authority (20 lower), Flickr [CC BY (75 lower), Eskinder Debebe/UN food crisis and its impact on 2.0] (21 upper), Qatar Tourism Photo (77). development: Nonie Reyes/World Authority (21 lower), Carnegie Mellon Bank (125), Daimler AG (126). University in Qatar (22).

Acknowledgements

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Contribution of the Arab Bank for Economic Development in Africa to the Development of sub-Saharan Africa

The Arab Bank for Economic Since the commencement of its feasibility studies funded is as follows: Development in Africa (BADEA) was relatively young trade finance • Infrastructure: 37% established in 1973 and began its programme BADEA has financed 28 • Agriculture: 40% activities in 1975. It has 36 years external trade operations at a total • Energy: 4% experiences in the field of development amount of $212 million. • Industry: 2% finance. The sector distribution of the • Others: 15% To serve the needs of its beneficiary Project Loans is as follows: Within the Technical Assistance countries, African countries non- • Infrastructure: about $1,678 million Programme, BADEA has availed the members of the League of Arab States, (56%) services of about 103 Arab experts to it offers project loans, technical • Agriculture and rural development: Africa and trained about 5,000 African assistance grants and trade finance. about $769 million (26%) cadres in various fields relevant for the Most of the loan’s conditions are • Energy: about $185 million (6%) needs of their countries. offered at highly concessional terms • Social: about $206 million (7%) (1% annual interest rate, 30 years as • Industry: about $52 million (2%) Arab Bank for Economic reimbursement period), which • Others: about $94 million (3%) Development in Africa translate into more than 50% as grant Around 49% of the $127 million, element. alluded to above, offered as part of the P. O. Box 2640 Since its establishment, BADEA technical assistance programme has Khartoum has financed more than 523 projects been allocated to finance project Sudan amounting to $3.7 billion and 526 feasibility studies while the balance technical assistance operations for a was allocated for funding institutional Tel: 249-1-83773646 / 83773709 total amount of about $127 million support operations (Training courses, Fax: 249-1-83770600 / 83770498 offered as grants to various Arab expertise, equipment and Telex: 23098/22739/22248 SD beneficiaries (States, national and organization of forums and meetings). regional institutions). The sector distribution of the 200 Email: [email protected]

BADEA contributed $13 million of financing to fund an extension of Kayes Dag – Dag Airport in Mali (left) while $5 million was advanced for the rehabilitation and development of irrigated lands in the Holla region of Kenya (right).