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Contributions from
the Column
Studies and reports
Consumer participation matters
for public and private provision
Industrialisation requires
a solid foundation
Human rights for informal workers
Social standards as guiding principles
A neglected potential
5/2004 |
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[ UNCTAD ]
Industrialisation requires
a solid foundation
“What we discuss has great influence on trade negotiations.” Those who have followed the history of the UN Conference on Trade and Development, UNCTAD, know that much wishful thinking is expressed in this remark by the current General Secretary, Rubens Ricupero. The times in which UNCTAD had political clout on the international trade system are long gone. In the late 1960s they formulated the General Preference System, which is still valid today. Since the mid 1990s, however, UNCTAD has not been in a postion to do more than to comment on what is decided upon by the World Trade Organisation (WTO) and to explore how the developing countries’ prospects could be improved in the global economy. UNCTAD does both with great expertise.
However, many developing countries would happily vest the organisation with greater authority. Up to now, the industrial countries have always been able to prevent this – and will probably do so again at the next UNCTAD four-yearly conference in São Paulo in June. The European Commission’s strategy paper for UNCTAD XI stresses that the organisation plays an important role as a think tank and as a forum for dialogue between North and South. According to the EU officials, however, the organisation should not expand its activities to areas “which lie beyond its remit”. “UNCTAD’s activities should be strictly based on its comparative advantages as well as the specificity of its mandate”, states the EU document.
Aside from the matter of UNCTAD’s role, the ability of developing countries to compete will also be an important topic at the conference in São Paulo in June. At a preparatory conference of the German Federal Government and InWEnt near Bonn this spring, it became clear that the reasons for Africa not being able to increase its exports are sometimes downright mundane. South Africa produces leather upholstery for BMW cars worldwide. However, the companies have to obtain their leather from distant Australia, because herdsmen in Mali or Ethiopia do not treat their animals with enough care, as South African entrepreneur Moeletsi Mbeki explains. He goes on to say: “Africa has dozens of regional and bilateral economic agreements, however, the continent has not gained anything.” Ricupero agrees that trade liberalisation alone does not result in a better options in non-competitive countries. Rather it enhances exports from countries that already have productive capacities.
But this can also go awry. To pursue industrialisation based exclusively on exports, is a risky strategy, particularly if trade preferences are speculated on. This is illustrated by the examples of Bangladesh and Mauritius. Both countries have, in the past decades, concentrated on the textile sector and conjured up enormous productive capacities. It was above all the Multi-Fibre Agreement, which grants certain countries preferential treatment, that enabled this boom. However, the agreement will run out at the end of the year, and from 2005 on, both countries will have to assert themselves, unprotected, on the world market. Because of this, entrepreneurs from the East African island have already moved production to Madagascar and Mozambique. Bangladesh, on the other hand, is trying to rid itself of the image as a producer of low-cost goods and to cater to more lucrative markets in the wealthy countries by complying with social and environmental standards.
Stable, long-term industrialisation requires a solid foundation, i.e. a developed domestic market. Nii Narku Quaynor of the Ghanaian company, Network Computer Systems, then also stifled the expectation that his country could develop into the African Silicon Valley. Ghana is a long way away from this, Quaynor admits without sign of worry. “We will first take care of the local markets and only then consider exporting.” (ell)
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