Ladies and gentlemen,

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1 Globalization and Development Poverty is the Achilles heel of globalization Intervention by Bert Koenders Netherlands Minister for Development Co-operation UNCTAD XII, General debate Accra Ghana, 23 April 2008 [check against delivery] Ladies and gentlemen, This meeting of UNCTAD has in our view two essential functions: The first is to further define the role of UNCTAD in the system of global governance. An architecture which needs fundamental change in view of the enormous development challenges and quickly shifting power relations in the world. If we do not change our ways of doing things we will be changed or marginalised. It is our firm opinion that the architecture of global institutions should be strengthened according to comparative advantages. For UNCTAD this is clearly in the areas of Trade and Investment. Therefore I call upon UNCTAD to remain as close as possible to its mandate and the recommendations of the Panel of Eminent Personalities. UNCTAD has a rich tradition since 1964 in analysis, and has warned at a very early stage for the risks of uneven development, 1

2 and recently it was one of the first to warn for the rising food prices and its disastrous effects on the poor. In the new architecture this role can and should be further modernised and streamlined. The second function of this conference is to give a clear and well communicated signal to decision-makers and powerbrokers around the world that much more has to be done about the credit-crunch, the risks of neo-mercantilism, the rising commodity prices and the insufficient financing for the Millennium Development Goals. These immediate and urgent issues were clearly laid out by the Secretary General on Sunday. If we don t take action, further economic, political, cultural and religious divisions in the world, and divergences among and across countries in the North and the South will increase. This requires a new debate. A debate that others should join, including parliaments and civil society. It is not simply a debate between the North and the South. We see increased inequality within and across countries that go far beyond the somewhat atavistic categorizations of years ago. Development experts have rightly pointed out that poverty is the Achilles heal of globalization. Clear signals should be given from this meeting. We have to: 1. reach a development friendly Doha-agreement, 2. ensure equitable regional integration and in my view the EU could do more to foster this- to create a conducive environment for this regional integration through aid for trade. My country is willing to do so. 2

3 3. form public private partnerships in order to combat poverty and promote sustainable development; it is not the private sector alone which can solve the urgent problems of all those vulnerable people trying to survive climate change and rising food prices. We should therefore be as practical and as action oriented as possible in bridging the divide between rich and poor. Long term economic growth requires integrating poor people in the economy. Full, productive employment and effective services are at the core of sustainable poverty reduction, and also helps to reach the MDGs. We should signal to the MDG Summit in September at the level of the Government leaders of the world that there is no time to loose. Many MDGs are not reached in time, for instance those on maternal health. Sometimes I think employment is one of the forgotten MDGs. Ladies and gentlemen, Let me say a few more words on trade. Let s turn to our corebusiness: integration of developing countries into the global economy. I would like to stress that further trade liberalization is important but it does not automatically lead to poverty reduction or to a more equitable income distribution. Fair globalization in its essence is an issue of distribution of wealth, security and freedom. Most trade reforms create winners and losers and may even exacerbate poverty in the short run. We have to analyse what the impact of trade liberalization and the reduction of subsidies is on development and poverty reduction and what the potential role is of 3

4 multilateral rules to strengthen good economic governance. Developing countries are of course primarily responsible for their own development. Nevertheless, a balanced approach requires that poor countries receive enough and effective aid for trade and that the rules incorporate their need for policy space and well phased globalization. There should not be a one size fits all approach. Well-designed WTO rules should take into account the circumstances in individual countries. And WTO-rules should help to strengthen both the enabling environment for the business sector and the hand of reforming governments against self-serving interests. They need to be able to phase and sequence liberalization properly, employ newly gained resources to alleviate hardships and reactivate the people in society who lost out. Ladies and gentlemen, We should stimulate and support developing countries to participate much stronger in the world trading system. There is no alternative. Aid for Trade assists developing countries to build their supply side capacity and economic infrastructure. It should also help them in the WTO to be better positioned in WTO-negotiations. Aid for Trade allocations are not aligned well enough with the priorities of recipients, especially in LDCs. Why don t we focus more on enhancing domestic policy making processes? This involves better coordination among relevant government departments and proper consultation and involvement of stakeholders including the business sector, labour unions, parliaments, NGOs and academia. We have to form coalitions. 4

5 Donors and international organizations will have to mobilize capacity to better harmonise their Aid for Trade programmes, improve coordination, further untie aid flows and align their efforts with national poverty reduction strategies. The last issue I would like to raise revolves around non trade concerns. I wonder who could be against compliance with basic labour standards, the prevention of child labour, promotion of sustainable development etcetera? No one of course. The real question is how to promote these objectives effectively. It is sometimes argued that most countries have already committed themselves in these areas through international agreements like the ILO-standards, and the conventions on human rights and environmental issues. Should we allow unilateral trade measures to pursue these objectives if such measures have not been explicitly authorized in these agreements? The answer is obviously no, certainly not in a legal sense. There is a great danger of neoprotectionism. In my view Non Trade Concerns, however, do deserve the WTO s attention, though not necessarily always in the form of negotiating rule change. Reasons for devoting attention to NTCs are their intrinsic importance, as we have discussed yesterday on the urgent need for a North-South certification of biofuels. The discussion is more complex than fuel in our tanks versus food for the poor. Further discussion and analysis is necessary. Ignoring NTCs could undermine public support for the WTO and trigger uncontrollable use of unilateral trade measures. And most of all, ignoring them could hinder development, and affect the rights of the poor. 5

6 Ladies and gentlemen, Let s check our work against reality - do we really make a difference? -, tackle the challenges and maximize the opportunities raised by globalization. This requires all of us who are gathered here this week to quickly agree, go back to our capitals and get to work. We owe it to the poor. Thank you. (woorden 962 = ca. 8 minuten) 6