UNCTAD - Trade and Development Board, 56th Session,

UNCLAS GENEVA 001048

SIPDIS
SENSITIVE

DEPT FOR DEPT for IO/GS, IO/HS, IO/MPR, EEB/OIA, EEB/ODF, EEB/MTA,
OES/EGC, OES/ENV, AF/EPS

E.O. 12958: N/A
TAGS: UNCTAD ECON ETRD XA EAID
SUBJECT: UNCTAD - Trade and Development Board, 56th Session,
September 14-25, 2009, Geneva: Financial Crisis, Climate Change, and
African Integration

SENSITIVE BUT UNCLASSIFIED


1. (U) Summary. The United Nations Conference on Trade and
Development (UNCTAD) held the 56th Session of its Trade and
Development Board (TDB),UNCTAD's governing body, in Geneva from
September 14-25, 2009. The meeting focused on LDC's, African
economic integration, and the impact of the financial crisis and
climate change on development. There was consensus that donor
countries must maintain aid levels in spite of the financial crisis
and that all countries must avoid protectionist trade measures.
Delegates discussed the expanded role of governments in economies in
response to the financial crisis. Developing countries repeatedly
stated that they are not responsible for climate change, yet must
suffer the consequences and need more aid to mitigate its effects.


2. (U) A heated debate concerning UNCTAD's work in the Palestinian
territory was the most unproductive session. Other contentious
issues included the role of UNCTAD's Working Party and approval of
UNCTAD's new publications policy and communications strategy.
Nevertheless, the U.S. achieved all its objectives in the meeting.
Results of the Trade and Development Board's High-Level segment is
reported septel. Please see www.unctad.org for a complete listing
of agreed conclusions.
END SUMMARY.


--------------
Review of Progress in the Implementation of the Program for Action
for the Least Developed Countries (LDCs) for the Decade 2001-2010.
--------------


3. (U) There was consensus that the Doha Development Round should
conclude as soon as possible, that LDC's have been hit especially
hard from the economic crisis, that regional cooperation and
integration can aid the recovery, and that there is a new paradigm
in development that involves more state intervention in the
economy.


4. (U) The G77 and China called for debt cancellation, increased
"policy space," technology transfer, especially for climate change
mitigation and agriculture, and greater South-South cooperation.
Delegates focused on paragraph 41 of the Accra Accord, which calls
for UNCTAD to increase its work within Africa and the LDCs. Several
developing countries called for an independent evaluation of
UNCTAD's implementation of paragraph 41. Group B (developed
countries) opposed this proposal on the grounds that it would be too
costly to undertake such a broad evaluation.


5. (U) Kandeh Yumkella, Director-General of UNIDO (UN Industrial
Development Organization) made an impassioned and well-received
speech on development prospects for LDC's. His four points were: 1)
Diversification challenges: countries cannot succeed by only
exporting primary commodities; 2) New Green Growth: Green
enterprises offer potential for diversification and growth; 3)
Policy Space is necessary for rapid growth as shown by India and
China whose pragmatic strategies, including the understanding that
you cannot fight poverty without creating wealth, are successful
models for the developing world 4) Carbon-tax/Green protectionism:
developed countries must not use clean energy goals to create new
trade barriers.


6. (U) Terry McKinley, Professor at School of Oriental and African
Studies at Oxford, discussed his "Development-oriented Macroeconomic
Agenda," which makes the following recommendation: LDCs need to:
hold the line on reducing tariffs, tax more, reduce capital
outflows; improve market incentives [guarantee loans], and link
formal institutions to the informal sector. He proclaimed the
Washington consensus wrong and called for government-driven economic


growth.


7. (U) There was a long debate over resources in coming to the
agreed conclusions on LDC's. The agreed conclusions request UNCTAD
to review the human resources of the LDC division and report back to
the TDB, thus delaying a decision as to whether to increase the
division's budget. The agreed conclusions also require that a
section of each UNCTAD flagship publication be devoted to LDCs. The
U.S. added to the agreed conclusions, the words "within existing
resources" to ensure that any increase in resources for the LDC
division is done by reallocating resources from another UNCTAD
division to the LDC division, and not by an overall budget increase.


--------------
Economic Development in Africa: Strengthening regional economic
integration for Africa's development
--------------


8. (U) UNCTAD Secretary General Supachai expressed concern about
increasing poverty in Africa. According to Supachai, 2009 saw the
first decline in African GDP per capita since 1994. Three quarters
of the countries in Sub-Saharan Africa will experience a rise in
poverty. Supachai tasked UNCTAD with strengthening African
integration through work on diversification, structural change, and
economies of scale. Transportation, both the physical barrier of no
infrastructure and the very difficult border crossings because of
tariffs, are major concerns in Africa that were highlighted by many
of the speakers.


9. (U) The focus of UNCTAD's report (Economic Development in Africa:
Strengthening regional economic integration for Africa's
development) and that of most speakers, was the importance of
regional integration and how best to achieve it. The EU and ASEAN's
experience were presented as models. There was major concern
expressed over the state of infrastructure within Africa. The roads
are abysmal, the infrastructure deficit is at USD 80 billion/yr and
there are 54,000km of missing road links. There are also major
concerns about the airline industry and barriers to easily flying
within Africa. There were repeated calls for "Open Skies."


10. (U) Habib Ouanne, Director, UNCTAD Division for Africa, LDC and
Special Programmes, discussed the challenges facing African
integration: integration has been poorly implemented [ex. travel in
Central Africa], weak infrastructure, increased trading costs, lack
of diversification. He pointed out that Asia, Latin America, and the
Middle East are all investing in Africa, which is compensating for
reduced investment from the U.S. and Europe. Intra-African
investment is also on the rise.


11. (U) Many delegates spoke on inefficiencies in regional
cooperation and the overlapping mandates and memberships of the
regional organizations. Speakers called for merging of groups and
trying to come up with a more unified, less convoluted system of
regional membership. Many delegates opined that the MDG's could not
be achieved by 2015.


12. (U) The changing development paradigm, where developing
countries support each other's development, was frequently
mentioned. In 2007, China invested more in Africa than the World
Bank. South-South cooperation was trumpeted, while International
Financial Institutions were targeting as untrustworthy and working
against Africa. Panelists and developing country delegates
pronounced the "Washington Consensus" dead and doubted if
liberalization has brought about improved living standards.


13. (U) Economic Partnership Agreements (EPA's),which are
reciprocal trade partnerships that will take the place of European


Union trade preferences to Africa, were hotly debated. Ademola
Oyejide, Professor at the University of Ibadan, Nigeria, said that
EPAs will strengthen African unity because African nations will
negotiate as a group with the Europeans. He supported those
negotiations, but cautioned that they are imposing strains on
regional integration since they divert attention from regional trade
to Africa/Europe trade. The EPA negotiations are heightening
antagonisms between LDCs and non-LDCs within Africa, and the EPA's
themselves will create a hub-and-spoke system with most trade still
going outside the continent.


14. (U) Peter Thompson, Director of EPAs for the European
Commission, argued that they will strengthen regional institutions,
develop regionally integrated markets, create business
opportunities, connect infrastructure, and lead to sustainable
development. Thompson claimed that the former unilateral trade
preference system has not worked [net export decrease, no
diversification] and that a new, reciprocal trade partnership, as
envisioned by the EPA's was needed.

--------------
Evolution of the international trading system and of international
trade from a development perspective: Impact of the crisis
--------------


15. (U) The panel of experts agreed that the current global
financial crisis was caused by factors within developed countries,
yet it affected all countries and caused severe social and economic
concerns in developing countries. The financial crisis has caused an
increase in extreme poverty and rendered the achievement of the
Millennium Development Goals by 2015 practically impossible.


16. (U) Developing countries want global solutions, including a
stronger partnership among the different international
organizations. A common wish from developing countries was to
replace the G20 with a so-called "G192," which would come up with
truly global solutions.

--------------
Development strategies in a globalized world: Meeting the
development challenge of climate change
--------------


17. (U) Panelists and developing countries had three major concerns
concerning climate change: 1) the countries that are not responsible
are being forced to shoulder disproportional effects; 2) the need
for intellectual property leeway in terms of mitigation technology;
and 3) the possible creation of new, unwanted, trade barriers.


18. (U) Developing countries also expressed hope about: 1) green
jobs and the ability to play a role in the global energy
infrastructure through new renewable sources; 2) UNCTAD's
contribution in pushing this issue and working towards structural
change to facilitate new green industry; and 3) climate change
negotiations to be held in Copenhagen and the possibility of more
ambitious targets.


--------------
Report on UNCTAD assistance to the Palestinian people
--------------


19. (U) The discussion was more about the political situation in the
Palestinian territory than a technical discussion of UNCTAD's work.
Several delegations made statements calling for a Palestinian state,
with East Jerusalem as its capital, and the freezing of settlements.
At the same time, delegations took the opportunity to attack
Israel. H.E. Bassim Khoury, Minister of National Economy,


Palestinian Authority, outlined how Israel is stifling the
Palestinian economy by not allowing trade with other states and
imposing many barriers to free movement of people and goods. He
claimed that recent economic growth in the West Bank had nothing to
do with Israeli softening of restrictions. Several Middle Eastern
and North African countries called for Palestinian accession to the
WTO.


20. (U) The Israeli delegation responded by asking delegations not
to politicize UNCTAD's work, which Israel finds very productive.
Israel expressed concern that the UNCTAD report conveyed only the
Palestinian perspective. Israel issued its own report describing
Israel's efforts to support the Palestinian economy.


21. (U) In its statement, the United States statement attempted to
refocus discussion on technical assistance. Both Minister Khoury
and the Israeli delegation thanked the U.S. constructive approach.
Following the session, Minister Khoury appealed for U.S. support for
Palestinian WTO accession.


--------------
Hearing with Civil Society
--------------


22. (U) UNCTAD's annual half day meeting with civil society focused
on the international financial crisis. Pedro Paez, Minister for
Economic Policy Coordination of Ecuador and Coordinator of the Bank
of the South, stressed that financial decisions should be made by a
universal body, the G-192, and not smaller groupings. He theorized
that the economic crisis is not over, but rather has entered a new
destructive phase. Paez attacked "the North's use of printing
machines to fix the crisis," and said such inflationary actions by
the North would force the global south to follow suit. He called on
the USG to give up its Special Drawing Rights allotment and allow
the UN to redistribute them. Robert Bissio, executive director of
the Third World Institute and coordinator of Social Watch, echoed
many of the same ideas, and called for establishment of a "Global
Financial Coordinating Council," which would coordinate a new global
financial system, and reform of the Bretton Woods system. Many other
members of Civil Society spoke and joined the chorus favoring global
monetary reform and less reliance on the US Dollar.


23. (U) Panelists representing civil society agreed that LDC's have
no responsibility for climate change, yet are hurt most by it.
Panelists called for: a debt moratorium, grants over loans, and
SDR's being distributed based on need, not quota. They expressed
general concern and animosity towards International Financial
Institutions.

--------------
Publications policy and communications strategy
--------------


24. (SBU) For the first time ever UNCTAD has a communications
strategy and operational publications policy. The U.S. succeeded in
creating a mandate for UNCTAD's communication strategy and
publication policy in the Accra Accord (para 187) and succeed at
this TDB in realizing the full and effective operationalization of
that paragraph. This was difficult since developing countries were
content with the status quo and suspicious that any changes to
UNCTAD's publications processes or efforts to codify a
communications strategy might be a backhanded way to reduce UNCTAD's
resources, divert resources from G-77 priorities or censure UNCTAD's
free expression. Staff in the UNCTAD Secretariat were also
concerned about greater intrusion by member states in their work,
where previously there was no member state guidance and hence no
accountability.




25. (SBU) The communications strategy aims to make UNCTAD's work
more accessible, demand-driven and cost-effective by targeting
defined audiences, requiring publications proposals to include a
distribution and promotion strategy, and requiring member states to
agree on priorities for the annual communications strategy. The
strategy will allow cost savings through greater use of digital
technologies. It marks an enormous step forward for the UNCTAD
Secretariat in terms of prioritizing its work, institutionalizing a
more responsive relationship with member states and creating a
process that will lead to greater accountability.

--------------
Reports of the Working Party on the Strategic Framework and the
Programme Budget
--------------


26. (SBU) This was the most contentious agenda item at the Board.
The Board typically just rubber stamps Working Party conclusions,
but this time Canada with full U.S. support, blocked their approval.
Canada and the US were concerned that in one of its conclusions the
UNCTAD Working Party had addressed itself to the UN General
Assembly, seeking additional resources for a division within UNCTAD.
While the US and Canada agreed that the division in question, the
LDC and African division, needed more resources, we could not accept
that the Working Party would request those from the overall UN
budget rather than through recommending a reallocation of existing
UNCTAD resources. When developing country delegates tried to repeat
the contentious language in another context, we realized that if
agreed the language could become a terrible precedent. Around
midnight, on the final day of the TDB, the session was suspended due
to our unwillingness to approve the Working Party's agreed
conclusions in their entirety.


27. (SBU) The US agreed to informal consultations and a resumed
session on the condition that the Communications and Publications
strategy would be addressed prior to the Working Party budget issue,
which was a G-77 priority. While the G77 and China were unwilling
to amend the Working Party's agreed conclusions, the US and Canada
succeeded in neutralizing them through a clarification in the TDB's
decision that approved the conclusions.

--------------
COMMENT
--------------


28. (SBU) Opening up the Working Party's agreed conclusions at the
TDB created a furor within the G77 and China, but demonstrated that
the Working Party's conclusions are not valid until approved by the
TDB. The United States will no longer be a member of the UNCTAD
Working Party in 2010, so it was extremely beneficial to assert the
TDB's role since that will be the only forum we have to block
unhelpful language agreed in the Working Party.


29. (SBU) Along with asserting the authority of the TDB over the
Working Party, the US succeeded in starting a process to more
clearly define the role of the Working Party and its oversight
responsibilities with regards to UNCTAD's budget and strategic
framework. The TDB's decision clarifies that the Working Party
reports to the TDB, that the Working Party has no direct
relationship with bodies in NY, and that Working Party conclusions
have no status unless they are approved by the TDB. The decision
also revamps the calendar of meetings for the Working Party so that
the schedule of meetings will allow the Working Party to submit its
conclusions for consideration to the TDB and that decisions approved
by the TDB will be submitted to the UNCTAD Secretary General who
will reflect them in his budget proposals to the UN Secretary
General prior to his submitting any proposals to the UN SG. This


should mean that for the 2012-2013 biennial budget, for first time
the UNCTAD Secretary General's submission to the UN SG will be
informed by and reflect member states priorities, not just
Secretariat staff preferences.


30. (SBU) Another success for the US was that the TDB's decision
approving UNCTAD's communication strategy and publication policy
also calls on the UNCTAD secretariat to implement recommendations
contained in members' statements. The US statement, annexed below,
has many recommendations that we should press UNCTAD to pursue and
implement, including a proposal that "UNCTAD should establish a
member state portal on the UNCTAD website where member states can
access information about UNCTAD staff travel plans, so that Geneva
delegates can facilitate meetings between UNCTAD staff and
interested government officials." Mission notes that along this
could also go a long way towards improving transparency and
accountability for UN travel expenditures.

--------------
Annex 1: Statement by the United States on
UNCTAD Communication and Publication Policy
September 23, 2009
--------------


31. (U) It is my pleasure to welcome UNCTAD's communication strategy
and publications policy. We asked in Accra that UNCTAD produce such
documents and are delighted to see that UNCTAD has delivered. These
are exciting and important first steps towards improving UNCTAD's
outreach and its impact helping developing countries successfully
integrate into the world economy.


32. (U) We believe that effective communication is essential to
UNCTAD's work and relevance. UNCTAD's communications strategy
targets the right audiences and proposes effective tools to reach
those audiences. We congratulate UNCTAD staff on their work and
encourage the Secretariat to maintain the momentum.


33. (U) UNCTAD should now devise a concrete plan for implementation
of the communications strategy and publication policy, including
deadlines for recommended actions, budgets for necessary
technological upgrades, equipment, training and outreach events, and
benchmarks to measure effectiveness of all work and expenditures.
And I was delighted to hear in Deputy Secretary General Draganov's
presentation that is UNCTAD's plan. We recognize that important
improvements in UNCTAD's communications have already been made and
ask that those, and more improvements, continue. We ask that UNCTAD
provide its detailed plan for implementation of the communications
strategy and publications policy, including any budget implications,
to the next Working Party. We believe that UNCTAD should implement
its communications strategy within existing resources, and that
dedicated resources should be allocated to communications for this
purpose.


34. (U) While we endorse the communications strategy, we also will
take this opportunity to recommend additional concrete improvements.
First, we believe UNCTAD could do more to mobilize Geneva delegates
as partners in UNCTAD's communications efforts. To that end, UNCTAD
should establish a member state portal on the UNCTAD website where
member states can access information about UNCTAD staff travel
plans, so that Geneva delegates can facilitate meetings between
UNCTAD staff and interested government officials. The member state
portal should also include lists of who has registered for which
meetings, so Geneva delegates stay informed as to which experts from
their countries are attending UNCTAD meetings.


35. (U) Second, to fully implement the communications strategy and
keep it alive and updated, we ask whether UNCTAD has sufficient
staff and resources. Does UNCTAD have enough staff with specialized


skills, such as web design and e-tools expertise? Does UNCTAD have a
sufficient number of excellent writers to produce web content
quickly in multiple languages? If not, what are UNCTAD's plans and
budget for implementing the strategy and hiring such necessary staff
or retraining existing staff to meet those needs?


36. (U) Third, the UNCTAD website is currently very difficult to
navigate and contains multiple subsidiary websites that are not
linked or accessible via the current weak search engine. What are
UNCTAD's plans to upgrade its search engine and website? As part of
the upgrade to UNCTAD's website, we encourage UNCTAD to add an
interactive map that links country specific technical assistance and
research to the map, to make registrations for all its meetings
available on-line, and to install counters so UNCTAD knows how many
people are downloading its material and from which locations. This
information can help UNCTAD to better understand its users and
tailor its products to meet their needs.


37. (U) Finally, we encourage UNCTAD to continue work to define its
corporate image and message. In the Accra Accord UNCTAD has a
wonderful, clear mandate. Per paragraph 171 UNCTAD's purpose is to
help developing countries integrate successfully into the global
economy. Per paragraph 173 UNCTAD should mainstream 3 issues into
all its work: gender equality and the empowerment of women, the
promotion of sustainable development, and full and productive
employment. Per paragraph 171 and paragraph 8 of the Accra Accord,
UNCTAD does 3 types of work: research and analysis, convening of
meetings and technical assistance, and UNCTAD serves as the focal
point for the UN system for the integrated treatment of trade and
development. The mission is clear. The issues to mainstream are
clear and the modes of work are defined.


38. (U) Unfortunately, this clarity gets lost in UNCTAD's 17
thematic funds for technical assistance, 100 plus publications and
myriad of Powerpoint presentations that never seem to have a common
look. We encourage UNCTAD to continue to cull its publications, and
to continue to improve its clearance process and peer review, so
more energy gets focused on fewer high quality publications. We
encourage UNCTAD to consider consolidating its 10 thematic trust
funds that each accounted for less than 3 percent of 2008 technical
assistance expenditures into one fund for pilot projects. Finally
we encourage the Secretariat to develop a set of templates for
UNCTAD products and presentations and to enforce their use, so that
the Secretariat presents a consistent corporate image. In
communications, less is often more.

--------------
Annex 2: Statement of the United States on UNCTAD Technical
Assistance to the Palestinian People September 22, 2009
--------------


39. (U) The United States appreciates the work of UNCTAD's
Secretariat for the program of assistance to the Palestinian people
and its support of the Palestinian people. The United States
continues to support the Palestinian Authority and its efforts to
improve the livelihoods of all Palestinians in the West Bank and
Gaza. The Palestinian Authority deserves great credit for its
efforts over the past two plus years. A program of reform and a
strategy for development first laid out by Prime Minister Fayyad in
2007 is producing results. The IMF is now forecasting significant
growth in the West Bank economy in 2009. The Palestinian Authority's
program of reform, support from donors, and Israel's easing of
internal movement and access restrictions in the West Bank have
contributed to these positive indicators. We agree that more
progress is needed to maintain this momentum and create the
conditions for sustainable economic growth.


40. (U) We thank UNCTAD for its efforts to support Palestinian


reform and development efforts by providing technical assistance and
trade facilitation in the region, and we encourage UNCTAD to
continue its efforts. We are particularly impressed by the
implementation of the Automated System for Customs Data (ASYCUDA)
which will modernize the Palestinian customs process and aid in
enhancing needed customs revenue collection. While we note UNCTAD's
investment of resources over the past few years, we understand that
this figure will diminish and express concern. We hope to see
UNCTAD able to invest additional resources in the West Bank and Gaza
in the near future to support the vital work being done in the
region.


41. (U) Now I would like to take this opportunity to ask UNCTAD
which of its technical assistance programs it considers most
effective in assisting the Palestinian people. We would like to use
this meeting to learn about specific UNCTAD technical assistance
efforts and how they can be enhanced. We look forward to hearing
from UNCTAD in this regard.

GRIFFITHS#