Statement by Anwarul K. Chowdhury, Under Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States
At the Third International Chamber of Commerce (ICC) Africa Regional Meeting
Yaounde, 30 October 2002
Ladies and Gentlemen,
At the outset, on behalf of the United Nations Secretary-General, and on my own behalf, I wish to express my gratitude for the kind invitation to address the third International Chamber of Commerce (ICC) Africa Regional Meeting. I also would like to commend the African Business Round Table, the ICC Cameroon, the NEPAD Secretariat, and the NEPAD Business Group, for their excellent preparatory work for this important event. My thanks also go to the Government of Cameroon for the warm welcome.
The Secretary-General of the United Nations has undertaken a major initiative to forge to partnership with the business community to bring sustainable business to the world’s least developed countries to assist them in escaping their desperate poverty trap. In this context, the Global Compact launched by the Secretary-General in July 2000 facilitates in bringing companies together with the UN agencies, labour and civil society, to foster action and partnership.
The share of LDCs in the global investment inflow continues to decline substantially compared to other recipients. Africa receives the least FDI flows relative to the region’s economic size. Therefore, in his statement made during the Monterrey Conference, the Secretary-General emphasized that, “the public-private partnership at the international level is precisely what Africa needs.” In their efforts to attract foreign direct investment, the LDCs face multiple challenges, such as limited scale of economy, inadequate development of macroeconomic environment, unsatisfactory physical and economic infrastructure development, low level of technology development, a disadvantaged geographical situation (more than half of the 49 LDCs are landlocked and small island developing countries), and lack of entrepreneurial and managerial capacity. Investment decision is further complicated by the growing importance of technological progress and evolving corporate culture of host countries, along with more traditional factors such as the possession of natural resources and access to low-cost unskilled or semiskilled labour. In this regards, I wish to emphasize the importance of corporate social responsibility. The corporate social responsibility represent more than just a change in the commercial environment, it should generate broader benefits by increasing opportunities for greater market access, savings and productivity. The corporate responsibility must be part of the core business strategy.
The High-Level Round Table on Growing Sustainable Business in the LDCs, which was convened during the WSSD in Johannesburg, resulted in commitments undertaken by donor countries and other developing countries to assist LDCs in attracting greater FDI. In particular, donor countries have undertaken a commitment to coordinate development assistance and capacity building activities with the business and civil society, to support an international multi-stakeholder process to further develop the concepts, programmes and activities in the area of FDI, and to foster a conducive multilateral environment for sustainable investment in LDCs. Other developing countries also committed to take active participation in creating a conducive environment for growth of sustainable business in LDCs and implementing means to overcome bottlenecks and hurdles in the area of FDI.
The Brussels Programme of Action for the Least Developed Countries for the Decade 2001-2010 provides a framework for a strong global partnership to accelerate economic growth and sustainable development in poorest countries of the international community. This partnership was founded on mutual commitments by LDCs and their development partners, including the private sector, to undertake concrete actions in seven priority areas with a number of time-bound development targets. The Brussels Programme of Action emphasized the complementary and catalytic role of FDI in building domestic supply capacity which would bring benefits such as export growth, technology and skill transfer, employment generation and poverty eradication for LDCs. In Brussels, the governments of LDCs have undertaken important commitments aimed at establishing a stable economic, legal, and institutional framework, to promote a conducive macroeconomic environment, good governance, and democracy, as well as to strengthen structural aspects of the economy and to improve institutional and human capacities to create better investment climate. They have already been undertaking bold measures to meet their obligations. In this context, I wish to call home countries of FDI to provide commensurable incentives for their investors to go to LDCs.
The Brussels Programme also complements in a number of ways the NEPAD. In this context, both the NEPAD Programme of Action and the Brussels POA underscored the importance of good governance, human, institutional, and productive capacity building. Mobilizing financial resources and market access are considered to be the priority issues in these two programmes. Therefore, it is important to promote synergies in the implementation of both NEPAD and the Brussels Programmes, as 34 out of 49 LDCs are in Africa.
The importance of establishing adequate scale of economy at the national and sub-regional levels should be emphasized. The FDI will come if adequate scale of economy is in place. The scale of economy will only be established if adequate infrastructure, especially viable transport and communication network, is developed to link national and sub-regional economic centres. The existence of well functioning transport system is not only prerequisite for trade to take place but equally for foreign direct investment to be channelled to a specific country. In this regard, the landlocked developing countries and small island developing states are at significant disadvantage. Many transit countries of Africa which provide transit services are themselves poor developing countries and face financial and economic difficulties in their efforts to establish necessary infrastructure facilities. Due to the lack of efficient transport systems, many of the landlocked countries in Africa spend significant share of their export earnings for transport and insurance services, which in turn limits their capability to make capital investment. High transport costs erode their competitive edge for not only external trade but also for attracting foreign direct investment. Therefore, I would like to emphasize the paramount importance of the FDI for physical infrastructure development in Africa, in particular in LDCs.
It is relevant to mention that the General Assembly of the United Nations decided last year to convene the International Ministerial Conference on Transit Transport Cooperation in 2003 in Almaty, Kazakhstan. The Conference is expected to adopt an action oriented global programme. During the Conference, we are planning to organize a high-level investment forum to bring together public and private sectors to address the issue of investment for infrastructure development. Priority attention will duly be given to the infrastructure development in this continent.
The Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (OHRLLS) has recently been established to provide an effective and highly visible follow-up mechanism for the implementation, coordination, review and monitoring of such a crucial Programme of Action which will bring development attainable for the poorest of the poor.
My Office is prepared to make its contributions to the joint efforts undertaken by the relevant UN system organizations and the International Chamber of Commerce in bringing greater foreign investment to the poorest segment of the international community.
I would also like to stress the important role of the private sector, both at the national and international levels, in effort to achieve poverty alleviation and human development in the LDCs, in particular in Africa.
Let me conclude by quoting Secretary-General of the United Nations Kofi Annan. I quote “Let us choose to unite the power of the markets with the authority of universal ideals. Let us choose to reconcile the creative forces of private entrepreneurship with the needs of the disadvantaged and the requirements of future generations”. End of quote.
Thank you very much