Third Session of the Investment, Enterprise and Development Commission

GROUP OF 77
GENEVA

STATEMENT ON BEHALF OF THE GROUP OF 77 AND CHINA BY H.E. DR. MOTHAE ANTHONY MARUPING, AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY AND PERMANENT REPRESENTATIVE OF LESOTHO TO THE UNITED NATIONS OFFICE AND OTHER INTERNATIONAL ORGANIZATIONS IN GENEVA, AT THE THIRD SESSION OF THE INVESTMENT, ENTERPRISE AND DEVELOPMENT COMMISSION
(Geneva, 2 May 2011)

Mr. Chairman, H.E. Mr. Kenichi Suganuma,
Permanent Representative of Japan
Dr. Supachai Panitchpakdi, Secretary-General of UNCTAD,
Excellencies,
Distinguished Participants,

1. I have the distinct honour and special privilege to make this statement on behalf of the Group of 77 and China.

2. At the outset allow me to congratulate Ambassador Kenichi Suganuma, for assuming the chairmanship, and the members of your Bureau, at this third session of the Investment, Enterprise and Development Commission, and express the confidence that, under his able leadership, this meeting will achieve a successful and meaningful outcome. Allow me also to thank Dr. Supachai Panitchpakdi for this enlightening and stimulating remarks made to kick start the work of this Commission.

Mr. Chairman

3. This session of the Commission is particularly important, taking place immediately before the UN LDC IV Conference, the advent of the annual session of the Commission on Science and Technology for Development (CSTD) and on the eve of the substantive preparatory process for UNCTAD XIII. The Group, therefore, eagerly looks forward to a lively exchange of ideas and sharing of experiences with a view to enriching the broader development discourse, including in related processes which may seem to lie outside the scope of UNCTAD mandate.

4. Allow me, Mr. Chairman, to convey on behalf of the G77 and China the key issues that require special attention and due consideration. The Group will of course, actively participate in the discussions in the days ahead, and will take opportunity to amplify, and add to, these key points:

5. At the outset, the Group wishes to stress the importance of the developmental and responsive state and the need for the state to be an active player in the economy. This includes ensuring that the need for adequate investment in the basic infrastructure needed for development is adequately addressed, as well as ensuring that the broad spectrum of activities in the area of investment works for development.

6. In this regard, the Group wishes to emphasize that developing countries are making substantial efforts to invest in the development of their infrastructures to provide the basic facilities such as water, electricity, roads, ports, airports, and telecommunications. Yet the financing needs far exceed available public resources, thereby creating a significant financing gap. This requires special attention especially for developing countries, and most importantly the LDCs.

7. One way to address this gap is through the mobilization of Private-Public Partnerships (PPP). The involvement of the private sector in national development is welcomed. It should be pointed out, however, that PPPs as they currently stand are insufficient. In this regard caution is advised lest there is the risk that the involvement of the private sector is being advocated by some as a substitute for traditional partnerships between the developed and developing countries. It is, therefore, important to take into account the other three Ps of development which the Group of 77 and China in Geneva has previously articulated: namely the mobilization of political will to give new impetus for development; policy space to enable developing countries to use the most suitable set of policy instruments to address their needs and priorities - including in the area of investment; and the building of productive capacities.

8. Clearly, this mix of public and private sector initiative - and resources - must be guided by the wise and able hand of the developmental state, rather than the now discredited pure invisible hand of laissez faire economics, which has allowed a drift into the most serious economic crisis in the past century. The G77 and China takes note of UNCTAD's analysis and advice on how investment can be more fully harnessed for development. This includes the important area of international investment agreements. These must work for development, and must better balance the needs and concerns of investors with the needs and priorities of developing countries. Similarly, the Group views as important UNCTAD's work on investment policy reviews as important tools for the sharing of experiences and lessons learned, and G - 77 and China looks forward to their being further strengthened.

9. The Group, therefore, would view with keen interest these inter-linkages being further explored in the World Investment Report, and being addressed in the forthcoming World Investment Forum.

Mr. Chairman,

10. This Commission must also continue to address how the private sector can be strengthened in order for it to play its important role in development. This is not just a question of building small and medium enterprises - such as through the application of UNCTAD's EMPRETEC program which is being implemented in Africa, Latin America, the Middle East, economies in transition, and according to the latest information, soon in Asia. Rather, it must be a broader and more holistic approach, addressing the fundamentals of the economic system itself, as well as the capacity of firms to be active and viable players in the economy, including the global economy.

11. In this regard, the interplay of the international enabling environment for development, and its impact of enterprise development is of critical importance. The economic and financial crisis has shown us that gains can - and are - wiped out overnight no matter how strong, and how efficient, a country's enterprise base might be. The Group stresses that it is a tragedy when hard earned development gains are wiped out by natural disasters; it is a travesty when similar damage is caused by man-made disasters such as a global financial and economic crisis. The Group underscores that the global economy is a man-made construct and should be treated as such.

12. The Developmental State must therefore play an active role in promoting a conducive environment for business. This means pursuing policies at the national level to empower business, as well as working at the global level to ensure that the international trading, financial, and monetary systems work coherently to support business, including small and medium enterprises. It also means that related regimes must be similarly supportive, and strike a balance between the needs of the private sector and the imperatives of development. One key area is science, technology, and innovation for development (STI).

13. STI is key in not only ensuring the competitiveness of business, but also in playing an important role in addressing pressing current national, regional and global issues. These range from raising agricultural productivity and preventing food crises, to building productive capacity and diversifying productive structures, to achieving energy security and mitigating and adapting to the effects of climate change.

14. G - 77 and China, therefore, appreciates the support provided by UNCTAD on STI and would like to see this work sustained and further strengthened. The Group recognizes with appreciation both the analytical and technical cooperation activities of UNCTAD on STI, including in particular the Technology and Innovation Report and the Science, Technology and Innovation Policy (STIP) Reviews, respectively. The Group sees the preparation of STIP Reviews as a useful activity that supports the efforts of developing countries to build their national capacities to harness STI as a tool for development. Additional work on STIP Reviews is fully supported in more developing countries based on the demand from the countries, and the Group encourages development partners to provide sustainable financial support for these reviews.

15. The Group also welcomes UNCTAD's work on information and communication technologies (ICTs) for development. In particular, the Group stresses the need to exploit opportunities in ICT for development. For example, the Information Economy Report 2010 documented how the new technology developments are opening up many new opportunities for ICTs - not least mobile phones - to help reduce poverty.

16. G -77 and China also looks forward to gaining more insights from the investment promotion agencies and the private sector as they exchange experiences and views during the presentations of the investment policy reviews of Guatemala and the review of the implementation reports of the investment policy reviews of Ethiopia and the United Republic of Tanzania.

17. In conclusion, Mr. Chairman, permit me to thank the Secretariat for its arrangements for this session of the Commission. It would have enabled more profound engagement if all important documents had been made available to delegations in a more timely manner. G - 77 and China, therefore, wishes to encourage the Secretariat to ensure that documentation is provided to the delegations in good time in order to allow delegations to study and digest the contents so as to participate even more engagingly and to ensure the smooth functioning of the intergovernmental machinery, which is the core of UNCTAD. I have no doubt that this will be so henceforth. Again congratulations and grow from strength to strength.

Thank you Mr. Chairman.