GROUP OF 77
GENEVA

STATEMENT BY HIS EXCELLENCY MR. DIEGO AULESTIA VALENCIA, AMBASSADOR AND PERMANENT REPRESENTATIVE OF ECUADOR ON BEHALF OF THE GROUP OF 77 AND CHINA, AT THE ELEVENTH SESSION OF THE INVESTMENT, ENTERPRISE AND DEVELOPMENT COMMISSION
(Geneva, 11 November 2019)

Mr. President, Ambassador Alfredo Suescum (Panama),
Ms. Isabelle Durant, Deputy Secretary-General of UNCTAD,
Mr. James Zhan, Director of the Division of Investment and Enterprise
Ms. Shamika Sirimanne, Director of the Division of Technology and Logistics,
Excellencies,
Ladies and Gentlemen,

1.    I have the honor of delivering this statement in representation of the Group of 77 and China.

2.    The Group of 77 and China would like to congratulate you Ambassador Suescum and the members of the Bureau for their election.

3.    At the outset, the Group would like to express its gratitude to the Divisions on Investment and Enterprise (DIAE) and of Technology and Logistics (DTL) for their work in organizing this 11th session of the Commission on Investment and Enterprise.

4.    The Group of 77 and China recognizes the significant contribution of UNCTAD’s programme on investment and enterprise and on science, technology and innovation to the achievement of the sustainable development goals and the Agenda 2030.

5.    In the area of investment and enterprise, the Group of 77 and China would like to highlight the importance of the efforts placed in providing practical policy experience intended to attract and harness investment for development. According to the data from the 2019 edition of the World Investment Report, despite the global decline in FDI, it is positive that FDI in developing countries remained stable, rising by 2 per cent to USD706 billion. As a result, developing economies now account for 54 per cent of global FDI, up from 46 per cent in 2017.

6.    There were significant disparities among regions, with Asia and Africa recording higher inflows, while Latin America and the Caribbean experienced a contraction. The value of announced projects in manufacturing – of critical importance for industrial development – rose by 68 per cent to USD271 billion, halting the downward trend of recent years. However, these projects remained concentrated in Asia. Clearly this is a result of an active industrial policy. It is encouraging to see, once again, that policy space does play a role in fostering development.

7.    The topic of the World Investment Report 2019 (Special Economic Zones or SEZs) is very important given that developing economies are the primary employers of this strategy, with over 4,700 SEZs in place, representing almost 90 per cent of SEZs in existence. There are also 450 SEZs under development and more than 500 SEZs planned in developing countries.

8.    This report shows that although SEZs are widely used, their distribution is uneven. China alone hosts over half of all SEZs in the world. In some countries, for example, Small Island Developing States (SIDS), the capacity and availability of resources to build zones is limited.

9.    The Group of 77 and China would like to recognize the rapid development happening in the way international investment agreements are drafted and recognize the role played by UNCTAD and the Investment Division. The right of host states to regulate investment to favour sustainable development is a fundamental element.  

10.  The Group of 77 and China expresses concern due to the fact that most treaties in force today are yet to include such provisions, and thus remain a source of insecurity for many developing countries.  There is still a need to reform the existing outdated treaties. Currently, the number of old-generation treaties is ten times greater than the number of modern, reform-oriented treaties and, as noted by UNCTAD, the majority of known investor–State dispute settlement cases have to date been based on old-generation treaties. It is not enough to sign new, modern treaties – what is needed now is to fix the old treaties.

11.  The Group of 77 and China notes with interest that sustainable development‑oriented provisions can be found in the latest international investment agreements, as the inclusion by the EU of provisions aimed at maintaining the right of the parties to regulate, clarify vague provisions such as fair and equitable treatment, and include important exceptions for the protection of public policy interests.

12.  The Group of 77 and China urges UNCTAD to continue its stocktaking of developments related to international investment agreements reform with a view to developing lessons learned, and to develop concrete guidelines on how to operationalize the policy options to reform existing agreements. This could be done through the development of concrete tools for implementation, such as a step‑by‑step guide to engage effectively in international investment agreement amendments, renegotiation or termination.

13.  The Group of 77 and China welcomes a series of recent publications on best practice and tools in investment promotion, including a guide on Promoting Investment in the Sustainable Development Goals, training  brochures on Partners for Investment in the SDGs and Mobilizing Investment for the SDGs and an Investment Promotion and Facilitation Monitor on Promoting Investment for Sustainable Development in Cities.

14.  The Group of 77 and China would like to highlight the work of the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). This Group of Experts has culminated in the core indicators on sustainability reporting which have been published as the Guidance on core indicators for entity reporting on contribution towards implementation of the Sustainable Development Goals.

15.  There are many other areas related to investment in which UNCTAD has done positive work across its three pillars: research and analysis, consensus building and technical cooperation.

16.  The Group of 77 and China recognizes that structural transformation is a central process in economic development and highly relevant to the course of the progress that we aspire to see in the countries of our group. This requires the establishment of a development-friendly economic international environment and the continued support of the international system, notably UNCTAD.

Mr. Chairman,

17.  Turning to the issue of science, technology and innovation, The Group of 77 and China welcomes the note for this meeting and its contribution to a better understanding of the multiple opportunities, but also challenges, raised by Industry 4.0, especially relative its impact on equality. We consider that UNCTAD has a clear role to play in the development of international public policy responses to those economic and social challenges.

18.  The Group of 77 and China recognizes the central role of technological development in structural transformation. A manifestation of this is the radical transformation that Industry 4.0 is causing in the competitive position of countries as they engage in industrialization. While Industry 4.0 opens new possibilities for improvement in productivity leading to faster growth, it can also make traditional pathways towards further sophisticated productive structures more challenging to follow for developing countries, some of them even facing challenges on electricity access.

19.  Benefiting from Industry 4.0 requires human and technological skills that many countries in our group have yet to develop sufficiently. UNCTAD has an important role to play in providing developing countries with relevant policy analysis to better understand the implications of frontier technologies for their industrialization and for inclusive and sustainable development in general.

20.  In this regard, the Group of 77 and China welcomes UNCTAD’s analytical work in the field of technology and innovation policy, including the recently released Digital Economy Report. We also look forward to the upcoming Technology and Innovation Report 2020 under the theme “Frontier Technologies and Inequalities: Leave no one behind”. We believe this report will further elaborate on the analysis of the frontier technologies and their potential effect on inequalities with concrete policy recommendations.

21.  We should keep in mind that UNCTAD is the Forum created by developing countries to discuss the key -big picture- issues derived from the complex relationships between trade and development.

22.  The Group of 77 and China also welcomes the active role of UNCTAD in the delivery of capacity-building activities. For instance, capacity development workshops held in Panama and Uganda this year contributed to strengthening the capabilities of policy makers to approach STI policies and we look forward to the upcoming workshop in Nigeria later this month. The Group would like to highlight the organization of the Commission on Science and Technology for Development (CSTD) last May.

23.  We appreciate the UNCTAD-China science, technology and innovation capacity building workshops held in China both in 2018 and 2019. We think this is a good example of an STI south-south cooperation platform and the lessons learned from the workshops were especially relevant to the issues that participants were facing in their home countries.

Mr. Chairman,

24.  The Group of 77 and China is currently submerged in debates and discussions regarding the more relevant elements to be positioned during the forthcoming UNCTAD XV. Member states have preliminarily signalled their interest in addressing the economic impacts of climate change and the impact of new technologies and the digital divide on the structural transformation of their economies. All of these subjects are strongly related to investment and to science, technology and innovation, areas in which UNCTAD has done a remarkable job.

25.  The Group of 77 and China counts on the persistent and committed support of UNCTAD, and particularly the Divisions on Investment and Enterprise (DIAE) and on Technology and Logistics (DTL), to accompany the preparatory process of UNCTAD XV.

I thank you.