GROUP OF 77
GENEVA

Statement by Mr. Mohamed Tawfik, Chargé d'affaires of the Arab Republic of Egypt
on behalf of the Group of 77 and China, at the Commission on Enterprise, Business Facilitation and Development, Sixth Session

Geneva 18 February 2002

Mr. Chairman,

Please allow me first of all, to congratulate you on your well deserved election as Chairman of the 6th session of the Commission on Enterprise, Business Facilitation and development. My congratulations also go to the other members of the Bureau. Mr. Chairman, I am confident that under your wise and effective leadership this Commission will accomplish its task in a most satisfactory manner.

The G-77 and China welcome the attention the secretariat continues to accord to integrating developing countries in the global economy by building productive capacities. The three Expert meetings on whose recommendations this Commission is to make policy recommendations, have all dealt with issues included in our development agendas. The importance of issues such as transportation and trade facilitation activities, building productive capacities by developing the private sector and making optimum use of the existing human resources, including women the less favoured half, cannot be underestimated. Without prejudging the outcome of this session, the G-77 and China would like to emphasize the need for strengthening communication infrastructures in general, and transport and trade facilitation in particular, and for reinforcing its small and medium enterprise sector through national, regional and international support measures. The role of gender in the development debate, should be considered wherever relevant and UNCTAD should make it a point to mainstream gender issues in its various areas of work, as it has already successfully done, in enterprise development.

As you know, new technologies – and in particular electronic commerce - are shaping the global economic landscape in which firms from developing and developed countries operate. A firm's competitiveness is measured by its capacity to link in real time to the global markets, and deliver quality goods. In this respect, firms from developing countries face a number of obstacles like the insufficient development of telecommunications, the limited availability and high costs of transport facilities, and the difficulty of accessing finance at a reasonable cost. These difficulties are compounded for women entrepreneurs also due to their more limited access to new technologies and finance.

Transport and telecommunications infrastructure are considered a key element of this climate and are often inadequate in many developing countries, particularly the least developed ones. Targeted infrastructure investment, regional cooperation on transportation and trade facilitation activities will improve the competitiveness of exporters and attract investment flows.

The G-77 and China welcome UNCTAD’s focus on small and medium-sized enterprises (SMEs) in respect to financing. Small and medium-sized enterprises are the backbone of our economies. They contribute to economic growth in general, to employment generation in particular, but also to social development. A balanced economy requires a healthy mixture of big and small economic activities.

As Secretary-General, Mr. Ricupero mentioned in opening the Trade Commission, the real challenge after Doha is to make the developing countries ready to seize the opportunities that might arise from new international trading developments.

Mr. Chairman

Information technologies and especially Internet-based systems are increasingly being employed in all forms of transportation. Transport and logistics services are a critical element for the growth of international trade in general in and electronic commerce in particular, as businesses and consumers demand the rapid delivery of goods traded electronically. There is a mutual interdependence between electronic commerce and transport services. Each one represents a vehicle for improving the other and both of them promote the participation of developing countries in global trade.

For developing countries to effectively participate as equal partners in global electronic commerce, it is important that transport services be available, and that they are adapted to the new requirements. Furthermore, the maximum benefit from the opportunities offered by electronic commerce will not be obtained unless international trade transactions, including transport contracts, can be conducted in a secure electronic environment. This is particularly important for operators and traders of developing countries who are relative newcomers to these types of services and transactions. To facilitate the conduct of international trade by electronic means it is essential that all aspects of transport that might be affected by information technologies and electronic commerce are examined in an integrated manner, including logistics requirements as well as legal and documentary aspects, including the replacement of paper transport documents with electronic substitutes. This is an area in which much work remains to be done and which requires urgent attention. Additional assistance to developing countries in these areas are highly required.

The development and use of electronic means of communication has provided the availability of real time information for all players in the transport chain. While advances in information technologies have created a large scope for reducing transport costs, the use of these technologies is still primarily confined to developed countries. Lack of communication infrastructure and the necessary skills, as well as inadequate legal framework for electronic commerce, often present serious obstacles.

Mr. Chairman

The Expert Meeting on Electronic Commerce and International Transport Services has provided an important forum for participants from developing countries to expose the situation in their countries and regions and to report on the steps being taken to benefit from the new technologies. The agreed recommendations of the Expert Meeting are focused on the needs and concerns of developing countries and have our strong support. They identify and address the crucial concerns of developing countries namely: the requirement for investments in transport, telecommunications and information technology infrastructure; the need for reviewing and adapting the legal infrastructure to foster the use of electronic commerce; the need to simplify administrative procedures and the need for education and training for traders and transport operators.

The Group of 77 and China considers the recommendations addressed to the international community as highly relevant and calls upon it to reinforce legislative, technical and financial assistance that will allow the strengthening of trade and transport service providers and also the strengthening of information technology infrastructure.

The Group of 77 and China supports the recommendations addressed to UNCTAD for future work in this field. In particular; to monitor the latest developments and to analyse their implications for developing countries; to prepare analytical studies, particularly on the use of traditional transport documents and their possible replacements; to prepare guidelines on the development of port community systems and to develop training materials.

The Group of 77 and China considers that electronic commerce is placing great demands on developing countries to adapt their various trade-related services to the new trading methods. This is particularly important in relation to the development of our international transport services. The Commission is requested to give attention to the subject in the future work of UNCTAD.

Mr. Chairman,

The topic of improving the access of SMEs to finance, including e-finance is highly relevant. SMEs hold the key to economic development. In terms of job creation and their contribution to economic growth they are by far the most important sector. Building productive capacity or relieving supply constraints requires the creation of a strong and vibrant SME sector. This particularly true for developing countries where the overwhelming majority of enterprises are SMEs. However, in many poor and highly indebted countries and particularly in LDCs this sector remains weak and needs to be strengthened.

To have a strong and vibrant SME sector there is a need not only to create right conditions to generate self-financing but also to ensure that SMEs have access to both local and international finance on reasonable terms in order to undertake productive investment to expand their business, upgrade their technology or to run their day-to-day business more efficiently. Increasing or improving productive capacity requires investment and that requires finance. In the majority of developing countries, unfortunately, it is still not easy for SMEs to obtain finance. Financial institutions prefer to lend to larger corporate borrowers or to governments. Donor driven schemes, on the other hand, focus more on micro enterprises operating in the informal sector – thus leaving a void that is often referred to as the "missing middle".

Efforts are therefore urgently needed to find ways to increase the amount of financing available to SMEs. Examination of the successful financial innovations used by some banks shows that servicing SMEs can be a profitable business. However, very often SMEs need to be made "credit-worthy". Therefore, it is a good idea for banks to work in partnership with business service providers. The key here is capacity building. Providing finance alone without technical support and business development services – rarely leads to sustainable results.

E-finance and the emerging opportunities that it will bring for our enterprises, are also of equal importance to us. However, to launch e-finance, the majority of developing countries should first address the issues of digital divide and particularly Internet connectivity of local financial institutions and enterprises. They equally need to make sure that their financial regulations are technology neutral and do not stifle innovation while seeking to achieve financial stability. Unfortunately, Internet is still unaffordable for many of our enterprises. The paucity of data on e-commerce and particularly on e-finance doesn’t permit us to measure the gravity of the situation. But even based on anecdotal evidence we would like to emphasise the importance of capacity building particularly promoting the SMEs capacity to pay and get paid online as well as participating in emerging e-credit information databases and related e-trade finance and e-credit insurance schemes.

With respect to the Doha declaration – It has become clear that in order for developing countries to participate more fully in trade and investment in the global economy, both local and international efforts need to be taken in order to improve the productive capacity of local enterprises. Access to finance at reasonable terms is an important factor in this respect and the outcome of the Expert Meeting offers many valuable insights on how to achieve this goal.

We encourage UNCTAD is work to continue on related aspects such as Improving the competitiveness of SMEs through enhancing productive capacity by facilitating access to finance, technology and other means to enhance competitiveness.

The Group of 77 and China thank the secretariat for the work done on mainstreaming gender in the various areas of its work. UNCTAD has established a record in this area with its various activities, over the past few years. We would like to recall the pre-UNCTAD X Workshop on Trade, Sustainable Development and Gender, the Women Entrepreneur's Forum, held at LDC-III, and last years Expert meeting on Mainstreaming gender in order to promote opportunities. These activities underscore the importance our governments attach to economic empowerment of women but more generally to the efficient integration of gender issues into our social and economic policies.

We would like to reiterate that entrepreneurship is an important vehicle for achieving women's economic empowerment. However, women entrepreneurs face socio-cultural barriers when compared to their male counterparts. These are defined as women-specific obstacles to enterprise development. Greater difficulty in accessing credit and technology, limited bargaining power and limited mobility, dependency on male kin and male-dominated markets have been cited as components of such obstacles. Poor education compounds this cycle as education and training constitute the very basis of the quantitative and qualitative growth of entrepreneurial capacity.

Access to capital for start-ups and expansion of an enterprise continues to be perhaps the most significant obstacle for women entrepreneurs in developed, as well as in developing countries, including LDCs. Special Government and donor programmes for credit and business development services tend to concentrate on income maintenance programmes involving microenterprises and community initiatives. Commercial banks prefer to lend to large enterprises and to the Government due to the high risks and transaction costs of dealing with small- and medium-sized enterprises (SMEs). Women entrepreneurs are considered high risk due to their insufficient collateral, low capitalization and lack of financial information.

We would like to draw attention to the fact that to date, women's entrepreneurship has not received the concerted and coordinated attention it warrants. We therefore call on UNCTAD to continue to mainstream - where appropriate - issues related to women's entrepreneurship in its relevant activities. We have taken note of the recommendations made by the experts participating in the Expert Group meeting of 2001 and call upon the international community to take appropriate action. Our Governments have taken good note of the policy options and recommendations proposed. Many issues raised and policy options presented are already on the national agenda of many of our member states, and other recommendations will be carefully considered for inclusion in our strategies, wherever appropriate.

Mr. Chairman,

Allow me to make some observations on mainstreaming Gender in ICT Policy.

We appreciate that the Expert Meeting has addressed the topic of information and communication technologies. We consider ICT and electronic commerce to play an increasingly important role in enhancing economic growth and development. Through the use of the Internet, businesses can access information and markets 24 hours a day, participate in new income earning activities and overcome physical distances and geographical boundaries. This will make them more competitive and result in increased profit margins and higher incomes.

On the other hand, not participating in global e-commerce also involves the risk of becoming further marginalized. E-commerce has become a key element of globalization of the world economy and the global market. Many enterprises in developing countries have become integral parts of global supply chains.

Not participating in e-commerce could result in a loss of competitiveness and trading opportunities. Around the world, the Internet is increasingly becoming a source of product information for buyers and sellers, and enterprises that are not on the Web may loose their customer base. Especially, for SMEs, which play a strategic role in developing countries, e-commerce creates new opportunities because it involves relatively cheap and easily transferable technology, as well as low market entry barriers. On the other hand, SMEs often lack the resources and capacity needed to compete internationally and expand their market opportunities.

So despite the great potential of ICT and the Internet, only those who have access to them at affordable rates and know how to use them in an effective and efficient way will benefit, while many of the poor risk being marginalized.

In many developing countries, a large proportion of the poor are women, especially those living in rural areas. They cannot afford buying computers and often live in houses with no connection to the national telecommunication infrastructure. Those who work from home and those who do not have access to secondary or higher education, have no possibility to use the Internet in schools, Universities, work offices or other public places (such as Internet cafes). Additional barriers that women face are lack of time, to go online outside their homes, and lack of foreign language skills, which are usually required to use computers and the Internet.

On the other hand, the discussions and many examples brought forward in the Expert Meeting showed that new technologies could, if accessible and used, bring new business opportunities to women, especially in the developing countries. For example, women entrepreneurs have benefited from using the Internet in a large number of areas, such as getting access to valuable business information, finding new (export) markets, marketing their products and services over the Internet, securing large orders through networking with community members, and generally cutting costs through more efficient business practices. Hence, if provided with access and know-how, women can use the new technologies to improve their competitiveness and economic well-being. This could contribute towards enhancing the competitiveness of individual countries and regions and, more generally, towards integrating the developing countries into the global economy.

Therefore, we endorse the outcome of the Expert Meeting and agree that knowledge and the Internet are public goods and that therefore all the appropriate measure should be taken to ensure rapid, equitable and affordable access to the Internet and ICT, especially for women. It would therefore be useful for UNCTAD to mainstream gender in its overall work on ICT and e-commerce. We seek further advice from UNCTAD on how we can improve access to ICT and the Internet for women, with a view to increase our countries’ participation in global electronic commerce. In particular, it would be useful to carry out more analytical and case-study based work on the potential of ICT and e-commerce for creating new opportunities for developing countries, with special consideration to identifying the gender-specific opportunities.

Thank you very much.

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