Statement by His Excellency
Sheikh Mohamed bin Ahmad
bin Jassim Al-Thani,
Minister of Economy and Commerce of the State of Qatar
(Doha, 5 December 2004)
Ladies and gentlemen,
Nothing can convey an economic message with greater clarity than the figures:
- Last year, trade among developing countries accounted for 43 per cent of all their trade;
- According to the Asian Development Bank, the 41 economies of Asia and the Pacific have achieved a growth rate of 5.5 per cent and they will continue to expand at an annual rate of 6 per cent between now and 2010. The two major developing countries, China and India, enjoyed an annual growth rate of 8 per cent and 6 per cent, respectively.
- Exports from Argentina and Brazil to China have doubled, and the Chinese market has for the first time become the largest market for the Republic of Korea and other neighboring countries.
- Last year almost half of all imports by the US and Japan, and more than a third of all imports by the European Union, came from the South, and the same is true of their exports to markets in the South.
The new geography of trade
Are these figures indicating a temporary situation or are they the proof of a more solid and long term trend? The answer to this question has come at UNCTAD XI in Sao Paulo. Both in the Ministerial Declaration commemorating the 40 th anniversary of the Group of 77 and in the Sao Paulo Consensus the concept of “the new geography of trade” emerged. It confirms that the South-South trade is becoming a dominant factor in the international economic relations. It shows that developing countries not only continue to be major markets for developed countries but that the trade among themselves is growing much faster then the growth in international trade. South-South trade is increasing at an annual rate of 10 per cent, more than twice the rate of expansion of world trade in 2003. If developing countries agree to reduce the average tariffs applied to each other by 50 per cent, this would generate an additional $15.5 billion in trade. This is not an alternative, but a complement to the multilateral liberalization process. It could be a decisive move in the development of a “new global trade geography" referred to by President Lula of Brazil, one that gives trade among developing countries its rightful place in international economic relations. It also provides dynamism to the South so as to beneficially and effectively integrate into the international trading system and take full advantage of the potential development gains.
I would simply recall that at UNCTAD XI, several Heads of State and Government examined this phenomenon during the High-level Segment on the New Geography of Trade. They concluded that: (a) the new trade geography not only brings commercial gains, but also enhances solidarity and equity among countries; (b) there is increased potential for beneficial cooperation among developing countries, based on fair rules and solidarity, including special treatment for the weaker among them; and (c) increased South-South trade is a complement to rather than a substitute for North-South trade.
Why the Forum
In April 2000, the Heads of States and Governments meeting in Havana adopted the Declaration and the Plan of Action of the South Summit. The documents stressed that South-South cooperation was a crucially important tool for developing and strengthening the economic independence of developing countries and achieving development and as one of the means of ensuring the equitable and effective participation of developing countries in the emerging global economic order. Economic and Technical Cooperation among Developing Countries have become an integral part of the mutual relations between the States of the South and an important means of promoting the exchange of ideas, experience, knowledge, technical advances, skills and expertise across a broad range of sectors. It also remains a key vehicle for forging common positions in international forums on issues of concern to developing countries.
The political and the policy framework adopted at Havana was translated in a more elaborated operational activities on the occasion of the High-level Conference on South-South Cooperation of the Group of 77, held in Marrakech, Kingdom of Morocco, in December 2003. In both the Marrakech Declaration on South-South Cooperation and the Marrakech Framework for the Implementation of South-South Cooperation specific South-South areas for cooperation were identified. They ranged from private-public sector joint ventures, support for the exchange of expertise and experiences among research institutions and universities in developing countries, enhancing coordination and joint negotiating positions on major issues of the multilateral trading negotiations, in particular the Doha Work Programme, promoting investment among developing countries, exchanging experiences and expertise in the area of agricultural production, promoting cooperative actions among developing countries aimed at dealing with the commodity issues to sharing experiences and expertise on programmes especially related to women and children.
The Forum intends to detach from this overall “package” two key areas, namely trade and investment, and attempt to examine in greater details the possible concrete actions that can be taken to give life to a real South-South cooperation. GSTP is one of them. But what else? The very good background papers that UNCATD has prepared already provides a set of ideas that will be explored both in the inter-active debate of this plenary and, beginning this afternoon, in greater details in the specially organized workshops. I am sure Mr. Fortin, the Officer-in-Charge of UNCTAD, will give us in a moment the flavor of the content of these papers together with his views on the entire concept of the new geography of international economic relations. Mr. Rubens Ricupero, our keynote speaker, will give us the salient feature of a subject that he knows remarkably well both from his research and diplomatic career.
The outcome of the Forum will serve a substantive contribution to the preparations of the South-South Summit that will take place in 2005 in Doha. The preparation of the Summit and its outcome will find its proper place in the complex process of next year leading to the High-level Event on the Millennium Declaration. The concept of the new geography of international economic relations, which gives prominence to the role of the South, may be integrated among the new directions dominating the world economy in the coming years.
The focus of the Forum
The focus of the Forum on both trade and investment is a logical one taking into account their importance in development. Trade is not an end in itself but in many cases the single most important external source of development financing. Further, trends in investment flows indicate the possible emergence of a new geography of international investment relations. According to UNCTAD paper, the annual foreign direct investment (FDI) outflows from developing countries have grown faster over the past 15 years than those from developed countries. Even more, in the 1990s, many developing countries emerged as significant sources of FDI in other developing countries.
The relationship among these key economic sectors is essential if development gains should be ensured from international trade. Concessions arising from trade negotiations, being they from the Doha Round or from the GSTP, remain opportunities only if developing countries do not have the necessary productive capacities. Thus, supply capabilities responsive to market demands,promoting technology development andtransfer, encouraging enterprise networking, increasing productivity and fostering the competitiveness of developing countries´ enterprises are key issues to be addressed.Investment, including foreign direct investment, provides a crucial link between productive capacity building and international competitiveness, while information and communication technologies are becoming increasingly important for the competitiveness of enterprises, as they reduce transaction costs, open up wider markets, increase management efficiency and enhance flexibility in the production process.
The task ahead of us is complex. However, the format of the Forum will allow for an open and frank discussion on concepts and major related issues that may allow the definition of a South-South cooperation strategy. It would focus on a number of key areas that could consolidate and expand the transformation that is taking place in South-South trade, investment and economic cooperation and allow the South to play a key role in sustained economic growth in the South itself and in the rest of the world. However, such a strategy, based on the concept of the new geography of international relations, will not be enough. As we are asking our partners to implement and deliver on their promises, we need to address the same question to ourselves. Are we ready to move from concepts, strategies and positive agendas to real, concrete action?