Message by
Mr. Rubens Ricupero
Secretary-General of UNCTAD
to the Special Ministerial Meeting to commemorate the 40th anniversary of the Group of 77

São Paulo, Brazil
11 June 2004

Distinguished delegates,
Ladies and Gentlemen,

The commemoration of the 40 th Anniversary of the Group of 77 is more than a special event. This is a unique opportunity to reflect not only on the achievements of developing countries and of the institutions created to support their development but also on the challenges ahead and the responses to be provided by the Group of 77. The Group of 77 was born at the first session of UNCTAD conference in 1964, which was established as an institution precisely to assist the Group in its efforts to integrate into the world economy and in the international trading system. Thus, the Group of 77 and UNCTAD were not only born together but they were part of the same endeavor, namely to give developing countries a voice to participate in and influence the debate on development and in the effort to build a better, development-oriented economic, financial and trade architecture. It was only afterwards that the Group started to make its presence felt in other economic and technical fora of the United Nations system.

That was 40 years ago. But, no one would claim that the task has been fulfilled. To the contrary. The old challenges, to which new ones have been added, are very much present among us. We need therefore to assess and redirect the central vocation of the group in the years to come and this Meeting is an excellent opportunity to do so, in a forward-looking context. In this respect, three main components of the economic external environment should be stressed. The first relates to the recent developments in the international trading system and in the functioning of multilateralism in this area. The second deals with developments in the international economy, in particular in other development related issues. Finally, the reform of the United Nations and the role of the developing countries in this process.

The preparatory work for this meeting have shown bold new approaches on how to reinvent or redefine the Group of 77 on the eve of a possible new round of the United Nations reform next year. By the United Nations reform, I understand the future role of the institution and that of member States and not exclusively that of the secretariat. This process has been launched to try to deal with, among other things, the so-called new threats and challenges for the system. The report of the Blue Ribbon Panel is expected by the end of this year. We need to follow the work in progress and be attentive to the conclusions and recommendations arising from that body. It is the duty of the Group of 77 to contribute to avoiding that, in dealing with the United Nations reform, the international economic agenda is not narrowed down. So far, most of the ideas floated about the United Nations reform highlight basically three issues: international terrorism; the dissemination of arms of mass destruction; and how to avoid genocide. All are issues that fully deserve attention and need to be considered as important challenges and threats. Any future United Nations agenda would necessarily have to deal with these problems. They are legitimate, important and central to the concerns of the international community. But, they are not the whole picture. If we only concentrate on those matters, we run the risk of having what in the 1960s or 70s was called the one-dimensional approach to human problems.

There is indeed another dimension, in addition to peace and security and the treatment of new threats, which is equally important: the very much-unfinished business of development. This is an agenda that is more than 40 years old now and has to be addressed together with the new ones. They relate to globalization, its promises, its pitfalls, and its crises, starting with the frequency and intensity of financial and monetary crises since the mid 1990s. All those problems are here and have to be dealt with. Some may say that their treatment is already integrated in a specific process. We have, of course, the post-Monterrey and the MDGs processes. However, they can only cover some of those aspects. Even in these cases, the progress has been limited in terms of actual, effective implementation measures. No one would pretend for example, that the financial and monetary architecture is much more advanced now than it was a couple of years ago. The same applies to trade, where the negotiation agenda is proceeding slowly with still many obstacles to overcome. In sum, the unfinished business of development from the past is still very much alive.

It is in this context that lays the irreplaceable duty of the Group of 77. If the Group of 77 does not keep alive the development agenda in the United Nations, who will do it? It is the central endeavor and responsibility of the Group of 77 to prepare for this immediate challenge. The UN reform and its implications for the development agenda should constitute the central concern of the Group, not in a reactive way, not waiting for the report of the Panel, or for the other proposals that are certainly going to be presented, but trying to undertake an early and timely reflection on the possible elements of a pro-active contribution the Group can make. In this connection, it is indispensable to link with UNCTAD XI and with its central concern with development.

I would like to briefly call to mind what are the more important events in the international economic scene that in my opinion make this Ministerial Meeting of the Group of 77 and UNCTAD XI particularly timely and relevant. The first one is trade. UNCTAD has been created to deal, among other things, with trade as an instrument of development. The initial inspiration was to use the United Nation process to try to redress the imbalances that existed in the international trading system that had not been originally created to deal with development, but with pure trade matters. One of the consequences was that agricultural trade, trade in textiles or in other sensitive products, on footwear, tariff peaks, tariff escalation were left entirely outside of the international rules and disciplines. 40 years later, we are still struggling with the same problem. There are now efforts under way in Geneva and also here in São Paulo to resume negotiations in the Doha Round but it is not clear when and how those efforts will succeed. I believe they will, but in what terms? If the meeting of minds around a possible framework for negotiations by the end of July is to be confirmed, then, our meetings in São Paulo, taking place just about one month and a little before the deadline, will be the right time to take stock of the situation to looking at the negotiations from the perspective of development.

It is worth mentioning that these developments are taking place in an international economic context where economic growth is picking up, thanks largely to some developing countries, among them China growing at 8.5%, India at 6%, the Asia and Pacific countries growing between 5 and 6% a year. This brings new hope for injecting dynamism in the world economy and in the international trade. Last year, international trade grew by 4.7% and this year it is estimated that it is going to grow by 8.6%. In this real world of trade, the better conditions are, to a large extent, coming from the expansion of developing economies, most of them in Asia, at a time when some industrial locomotives such as Japan and EU have added little to the growth in global demand. It is the first time that we are seeing this extremely encouraging phenomenon of the rapid development of intra developing countries' trade, something that should always be on the Group of77 mind. We used to discuss South-South trade thirty years ago. At that time, it was seen more as a hope for the future a dream. Now, it is becoming a reality. That was one of the reasons why Asian countries were able to continue to grow even after the 1997 crisis and after the slowdown in the US economy in 2001. The determinant factor then was a strong intra Asian trade. China has become the major market for most of the Asian countries, including Japan. One of the reasons for the recent growth in Japan has been the exports to China. For both Japan and the US, trade with developing countries is now approaching the 50% mark, and perhaps Japan has already reached that mark. This shows that it is by no means an illusion to think that the contribution of the developing economies is becoming more and more significant.

The Group of 77 has a newly found sentiment of self-confidence and self-assertiveness. Those feelings are not illusory. They are the logical consequences of many recent developments. The Group of 20, alongside the G-90 and other efforts to give voice to a significant number of developing economies (the African Unity, the ACP countries, the LDCs), have become organized and effective forces, at least in the multilateral approach to trade. Trade is, by the way, one of the rare areas where the multilateral approach is still alive and where this newly found sentiment of self-confidence and self-respect should be first exerted. Thus, the role of the Group of 77 in keeping alive the development agenda refers, in concrete terms, mainly to the only economic negotiations presently underway which are in trade not in finance, technology. There is nothing similar for instance on the international financial architecture.

The Group of 77 in Geneva highlighted during UNCTAD XI preparatory process the key role that UNCTAD should play in support of the efforts towards development undertaken by developing countries. In preserving and strengthening UNCTAD one should preserve its unique system of governance. It is because of this role and its governance that UNCTAD has been able to draw attention to the imbalances in the financial, monetary, trade and technological fields. In this respect, the Conference in São Paulo is fundamental for the future as it was not by accident that the Group of 77 and UNCTAD were born together. They were born together, they thrive together and any limitations on the freedom of action for one will affect the other. Their fates are inextricably linked. This is why we should make the best possible use of this opportunity and of its full potential for the years to come, for the benefit of advancing the development agenda, for bringing real growth and development in developing countries and for reinstating and strengthening the multilateralism.

Thank you.