Trade liberalization not enough, says UN official
21 April 2008
New York, 21 April 2008 -- The trade liberalization witnessed in the Least Developed Countries (LDCs ) between 2000 and 2005 has, instead of leading to the expansion of exports and stimulate growth, led to further marginalization and loss of their market share because the liberalization was undertaken without structural transformation and technological progress, a senior United Nations official says.
Mr. Cheick Sidi Diarra, UN Under-Secretary-General, Special Adviser on Africa and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States stated this in addressing the Ministerial Meeting of the Least Developed Countries held during the twelfth United Nations Conference on Trade and Development (UNCTAD XII) in Accra, Ghana on 19 April.
He told the meeting on “Addressing the Opportunities and Challenges of Globalization for Development” that the new wave of globalization driven by technological progress and innovation has only offered opportunities to few, while it has posed challenges to many. Instead of integration, it has sharpened the inherent conflict underpinning global trade and development, contradicting the conventional economic belief that trade and economic growth can reduce poverty. He added that the competitiveness of LDCs has been further weakened by preference erosion under the Most Favored Nation (MFN) trade liberalization.
South-South cooperation, he observed, is gaining ever greater importance, with half of trade and FDI, as well as 65 % of remittances to LDCs being “South-South”. Still, however, the single largest source of external financial flows to LDCs remains Official Development Assistance (ODA).
Mr. Diarra asserted that increased integration of LDCs in the world economy requires active domestic industrial policies which support capital accumulation, structural transformation, technological progress, building productive capacities, employment creation, development of entrepreneurial capabilities and upgrade of physical infrastructure. All this should be in addition to the creation of an enabling global environment as well as coherence of policies at all levels.
At the conclusion of their meeting, the LDC ministers adopted a ministerial declaration in which they welcomed the Aid-for-Trade (AFT) initiative as a complement, yet not as a substitute to the Doha Development Agenda. In their declaration, the ministers also expressed concern about policies of developed countries, especially on agriculture, which are adversely affecting the role and contribution of their countries’ agricultural sector to their socio-economic progress. The meeting also recognized the critical role of UNCTAD in supporting the LDCs' development process, including through the implementation of the Brussels Programme of Action in areas of its expertise and competence.
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