General
statement of UNIDO
by Mr. Carlos Magarinos,
Director-General, United Nations Industrial Development Organization
Third United Nations Conference on the
Least Developed Countries (LDC III), Brussels, 15 May 2001
Mr. Chairman, Excellencies, Distinguished Guests,
It
gives me great pleasure to convey on behalf of Mr. Carlos Magarinos, the
Director-General of UNIDO, our message at this important meeting. UNIDO pays
tribute to the critical role played by UNCTAD in its capacity as the designated
focal point for the preparations of the 3`d UN Conference on LDCs. I also take this
opportunity to express our thanks and appreciation to the EU for hosting and
sponsoring this conference.
Global
advances in economic development and the progress achieved by developing
countries as a whole have largely bypassed the least developed countries
(LDCs). These countries continue to face appalling conditions of poverty and
lack the capacity to break out of the vicious circle of low income, low
investment and low growth. By and large, LDCs have not been able to gain
economic and industrial momentum and trigger a sustainable development process.
With a share of world population of around 10.4 per cent the 49 LDCs account
for just 0.4 per cent of world manufacturing value added (MVA), only 1.6 per
cent of developing country MVA and 2.2 per cent of foreign direct investment
(FDI) flows to developing countries.
The
economic stagnation in most LDCs, and their marginalized position is linked to the
insufficient attention or even neglect paid to the development of productive
capacity in industry, and in particular manufacturing. It is industry, more
than any other productive sector that drives the process of economic growth and
global integration.
Manufacturing
industry is at the heart of the modern knowledge-driven economy. With a
stagnant manufacturing sector LDCs cannot achieve sustainable development in a
globalizing economy. Manufacturing industry is a major conduit for the
transmission of technological knowledge to the rest of the economy. Industrial
development contributes to alleviating poverty by raising productivity, in
creating employment, reducing risk exposure and enhancing the physical income
generating assets of the poor. Thus, industrial growth is essential for poverty
alleviation. Linking agriculture with manufacturing, is a most powerful engine
of progress.
Despite
their marginalisation, LDCs are seeking to participate in the globalisation
process at a rapid pace by instituting liberal macroeconomic, trade and
exchange rate regimes. However, industrial skills have to be developed if LDCs
should gain access to the global economy. Industrial training is an imperative
in creating comparative advantage of LDCs. The manufacturing sector has a key
role to play with respect to enhancing these capabilities and, therefore, in
reducing the vulnerabilities and risks to which LDCs are exposed. Development
policy must focus on the question towards which key industries should
investment efforts be directed in order to ensure a rapid build up of economic
and technological capabilities in the LDCs.
Current
research being undertaken at UNIDO explains all too clearly, why the LDCs did
not succeed in their efforts to break the vicious economic circle:
- The LDCs as a group were marginalized because they failed to
industrialise;
- The LDCs remain marginalized because they are losing a
technological race affecting productivity;
- Technological change over the past three decades appears to have
brought technological regress rather than progress to LDCs;
- The LDCs require more capital and more labour to produce one unit of
output than other countries;
- Exogenous causes, like HIV/AIDS and civil wars are taking their
toll causing productivity to decline;
- With productivity - and thereby also competitiveness -
degrading, any drive for exports is in vain.
UNIDO, since 1998, has
developed an `integrated programme approach' in order to achieve maximum impact
and synergy in our cooperation activities. In 43 countries, of which 13 are LDCs these programmes
address issues concerning industrial policies and strategies focussing on
poverty alleviation through industrial development. The programmes have placed
emphasis on building capabilities necessary for successful LDC integration with
the global economy in order to reverse marginalisation of LDCs. The programmes
emphasise a coherent, system-wide industrial strategy; improvement of
industrial governance and supporting institutional infrastructure; strengthening
of micro, small- and medium-sized enterprises; upgrading technological
capacities, skills and access to modern technology; effective integration of LDCs into global
production networks, export and trade facilitation; adopting energy efficiency
measures and a clear focus on cleaner production facilities.
Therefore,
UNIDO
welcomes
that `Productive Capacity' is reinstated in its crucial role at this conference
and in its Programme of Action. We enthusiastically support the strong emphasis
placed on the need to build up and strengthen productive capacities and to
overcome supply side constraints. We have been actively involved in the
preparatory process to achieve this, and will, this week in Brussels further
contribute by
- leading, in cooperation with the Government of Austria and Mali,
the thematic session on energy, later on this week
- presenting a study on the role of industry in LDCs, emphasising
the need for building productive capacity in fighting poverty.
- organizing together with the ITC the Business Sector Round
Table, contributing our experiences through concrete case studies in successful
upgrading of productive capacity and trade facilitation, i.e. the key
determinants for export success.
- launching a portfolio of special initiatives (deliverables), which reflects a
critical focus for development within UNIDO's mandate, drawing on UNIDO's
expertise in building productive capacity through sector support, trade
facilitation, and an integrated energy/environment approach. Emphasis is on cooperation
with other partner agencies within the United Nations, and on multi-stakeholder
implementation.
What we
are proposing constitutes four categories of deliverables underlining the need
for concrete follow-up to the Conference:
- The Promotion of Modern Energy Solutions, As Driver for
Development
- Enabling LDCs to Participate in International Trade (Trade Support Services)
- Small and Medium-size Enterprise Networking and Cluster Development
- Strengthening Productive Capacities in Sub-sectors of Priority Interest of
LDCs, i.e. Textile, Leather and Food.
These
initiatives have been specifically developed in cooperation with interested
LDCs in the context of LDCIII preparations and are closely related to the
Programme
6 of Action.
UNIDO will work with partners to make these deliverables a reality for LDCs as
soon as possible.
Mr. Chairman,
The
time has come for `getting the fundamentals' right - we need to go beyond the
issues of public finance and monetary policy, beyond prices and markets to
address the fundamental questions: the questions of productive capacity and
employment creation, of cleaner production and of saving natural resources; of
market access and trade facilitation. The least developed countries deserve special
and specific attention by the international community.
The
first principle, however, is the joint ownership of visions and goals, i.e.
unless competitive production is built up, unless supply-side capacities are
created, the LDCs will be unable to benefit from liberalized trade flows and
will fail to integrate into the global economy.
Mr. Chairman,
UNIDO
considers the Third UN Conference for LDCs of vital importance. It constitutes
a collective undertaking by the world community and the UN System as "Joint
Partners" to bring into fruition the objectives and goals of the
UN-Millennium Declaration. We strongly believe that the Programme of Action has
to be the vehicle to implement those recommendations, which will enable the
LDCs to participate in the process of globalization -sharing its gains - as
equal partners.
Thank you.