Cablegate: Unctad 47th Executive Session of the Trade and Development

DE RUEHGV #0997/01 3130722
R 090722Z NOV 09




SUBJECT: UNCTAD 47th Executive Session of the Trade and Development

GENEVA 00000997 001.2 OF 005

1. SUMMARY. The United Nations Conference on Trade and Development
(UNCTAD) Trade and Development Board (TDB) held its 47th Executive
Session on June 30, 2009. The focus of the conference was food
insecurity in Africa as an obstacle to development. The TDB approved
several reports - the Report of the Trade and Development Commission
on its First Session, the Report of the Investment, Enterprise and
Development Commission on its first session, and the Topics for
single-year expert meetings for 2010. The TDB noted that UNCTAD
continues to provide technical assistance to African nations seeking
to alleviate issues of food insecurity, and in particular has
mobilized the Integrated Framework for Trade Related Technical
Assistance in favor of African nations. The United States gave a
statement highlighting the USG role in sponsoring African
agricultural development and extension services (between 2008 and
2009, the U.S. provided 5.5 billion dollars toward food security
measures globally), and suggesting reforms to improve UNCTAD's
efficiency. END SUMMARY


2. UNCTAD Secretary-General Supachai Panitchpakdi opened the 47th
TDB meeting with a reminder that the food crisis of 2008 was only
the most recent articulation of chronic food insecurity in African
nations: the World Food Programme estimates that high food prices in
2009 pushed an additional 105 million people into hunger, globally.
In Africa, 21 countries and 300 million Africans suffer from chronic
hunger - stemming largely from underdevelopment of the continent's
agricultural sector.

3. Average per-capita food production has been in decline for thirty
years, which indicates that fighting food insecurity will require
increasing production yields, as opposed to expanding acreage.
Supachai noted that biotech solutions such as genetically modified
organisms will provide only part of the solution, and productivity
could instead expand with access to modern farm equipment and
fertilizers, as well as the use of crop rotation in certain

4. Supachai stressed that Foreign Direct Investment (FDI) and
Official Development Assistance (ODA) Structural Adjustment Programs
and other market reforms have destabilized the role of States in
agriculture, and private investment has favored export cash crops
over production for local consumption. FDI has halved between 1996
and 2006, and currently the agricultural sector accounts for less
than two percent of world FDI inward stock. UNCTAD predicts that FDI
will decline by 25 percent in developing countries in 2009. Supachai
recommended that developing nations prioritize attracting FDI as
part of their investment strategies.

5. In Africa, the greater attention paid to humanitarian and social
aid has overshadowed ODA for agriculture. ODA for agriculture has
declined from 18 percent of total ODA in 1979 to three percent in
2006. Aid needs to be rebalanced toward production and

6. UNCTAD has been proactive in providing African nations with
technical assistance on a number of fronts, including providing
support to nations on commodities issues, organizing a series of
high-level forums on development issues surrounding cocoa, cotton,
and coffee, working with developing nations on negotiations under
the WTO Doha Development Agenda (DDA), collaborating with
international organizations regarding issues of subsidies and export
restrictions, and intensifying attention to issues of gender and


7. UNCTAD released the above titled report, which details the
persistence of food insecurity in African nations, particularly in
light of the financial crisis.

8. According to the report, 28 African nations reacted to the
crisis by enacting protectionist measures to limit or ban food
exports, claiming underlying risks of relying upon the principle of
comparative advantage. Protectionist policies and high subsidies in
developed countries have also deprived Africa of export markets, the
report claimed, while simultaneously demanding that Africa accept
cheap imports on their domestic markets.

9. UNCTAD recommends that managing food security in Africa will
require action on three fronts: improving agricultural productivity
through, inter alia, credit provision, research and development,
improving rural livelihoods through supporting infrastructure,
reducing farmer vulnerability to market fluctuation, and correcting
market imbalances through reducing protection and subsidies.

GENEVA 00000997 002.2 OF 005

--------------------------------------------- ------

10. UNCTAD's annual report, presented to the Trade and Development
Board, includes examples of technical assistance, policy analysis,
research, and information dissemination with reference to
development in Africa. UNCTAD has released two significant reports
in the past year. The first, Economic Development in Africa, argues
that African nations need to adopt sector-specific policies in
agricultural pursuits to manage structural, institutional, and
socio-economic constraints. The second, entitled the Least Developed
Countries Report 2008: Growth, Poverty and the Terms of Development
Partnership, questions the sustainability of recent growth in Least
Developed Countries (LDCs). The report encourages enhanced country
ownership of national development strategies. UNCTAD has also
produced and delivered two studies promoting trade policy that is
sensitive to key gender issues in Africa.

11. UNCTAD has also engaged African nations using the Enhanced
Integrated Framework (EIF) for Least Development Countries, a
multi-agency, multi-donor coordination effort to deliver
trade-related technical assistance and institutional capacity
building. The EIF currently provides assistance to 28 African

12. UNCTAD support for African nations in 2008 has included
monitoring the DDA negotiations, offering tailor-made comprehensive
assistance to nations acceding to the WTO, as well as to those in
the post-accession phase, assisting nations to capitalize upon
North-South preferential trade agreements, including the Generalized
System of Preferences (GSP), African Growth and Opportunity Act
(AGOA), and the ACP-EU Cotonou Agreement. Additionally, UNCTAD
provided advice and analysis on South-South trading arrangements.

13. UNCTAD supported the African Biofuels and Renewable Energy Fund
(ABREF), to which it provided technical assistance. UNCTAD also
worked with the WTO to deliver technical and training assistance in

Report on the Right to Food

14. Mr. Olivier De Schutter, UN Special Rapporteur on the Right to
Food, promoted the use of a human-rights approach to considering
issues of food security. Mr. De Schutter reminded the TDB that
national frameworks for food security need to target the most
vulnerable first. He noted that trade and investment policies need
to be subordinated to the larger objective of realizing the right to
food. According to De Schutter, the right to food should guide
governments in choosing between different modes of agricultural

15. In an Open Letter to Heads of State and Governments, Mr. De
Schutter recommended that states allocate public spending to public
goods in addition to, if not instead of, direct inputs such as seeds
and fertilizers. He cited storage facilities, access to
communication technologies, access to credit and insurance against
weather-related risks, extension services, agricultural research,
and the organization of farming cooperatives as examples of public
goods. He also promoted the development of farms that are
labor-intensive rather than heavily mechanized, as the former model
promotes job creation in addition to increases in agricultural

16. Mr. De Schutter commented on the use of transnational
large-scale land investments, noting that while they provide
potential for development through infrastructure and employment, as
well as improving access to technologies and credit, they also can
destroy indigenous and unprotected access to land. He recommended a
set of basic principles to ensure that transnational large-scale
land investments are utilized in a manner that prioritizes the right
to food in food-insecure nations.


17. The TDB approved the following topics for expert meetings in

- Successful trade and development strategies for mitigating the
impact of the global economic and financial crisis.
- The contribution of tourism to trade and development
- The role of States, efficiency in public investment for
development - sharing best practices.
- Investment in the agricultural sector with a view to building
productive capacities.
- Green and renewable technologies as energy solutions for rural

GENEVA 00000997 003.2 OF 005

- The contribution and effective use of external resources for
development, in particular for productive capacity-building.

18. COMMENT: The annual executive session of the TDB provided a
useful opportunity for delegations to focus on Africa and for
African delegates to demand greater efficiency and attention from
UNCTAD. Several African delegates complained that despite the Accra
Accord's emphasis on assisting less developed countries and Africa,
this mandate is not carried into many real programs and research
products benefiting LDCs and Africa. END COMMENT.


19. Ann Low, US Representative to UNCTAD, delivered the following
statement for the United States, which covers both the US role in
Africa promoting food security and development, and recommendations
to improve UNCTAD's effectiveness. The statement was very well
received. The President of the TDB, Ambassador Djani of Indonesia,
supported further discussion of US proposals for improved synergies
among UNCTAD's three pillars of work.


20. The United States welcomes this opportunity to focus on UNCTAD's
work in Africa and Food Security in Africa. The African continent
has made enormous strides forward in the past few years in terms of
economic growth and stability. However, much remains to be done. We
appreciate UNCTAD's commitment to making Africa a priority in all of
its work.

Since 2001, the United States has dramatically increased its
commitment to development in Africa - and has transformed the way
this development is carried out. Together, Africa's leaders and the
United States are working to pioneer a new era in development on the
African continent. The U.S. African Growth and Opportunity Act
(AGOA) has allowed 40 African nations to benefit from preferential
access to American markets. In 2008, net U.S. official development
assistance worldwide amounted to $26 billion, a real increase of
16.8 percent from 2007. This included a 38 percent real increase
in ODA to sub-Saharan Africa, which received $6.5 billion. The
Millennium Challenge Corporation has Compacts with 18 countries; of
those, eleven are in Africa and total approximately $4.5 billion in
multi-year financing. These innovative grants are being provided in
direct response to project proposals designed by Africans, and
capture the US commitment to poverty reduction through economic
growth and empowerment.

While U.S. work with Africa covers a broad range of cooperative
activities, here I will comment on UNCTAD's work in Africa and focus
on U.S. actions to improve food security, including in Africa.

UNCTAD's Work in Africa

The United States welcomes the report "Activities undertaken by
UNCTAD in favor of Africa (TD/B/EX (470/2)." We are impressed with
the breadth and content of UNCTAD's myriad projects in Africa.
However, we believe the impact of these projects, including their
usefulness in terms of lessons learned or expansion of effective
projects, can be improved through a more strategic approach to
technical assistance and better presentation of the results.

We believe UNCTAD has a unique role in the development community
through its mandate to be the focal point for the UN system on trade
and development and through the possibility of synergies among its
three pillars of work: research and analysis; consensus building;
and technical assistance. In order to more effectively perform its
mandate and help partners better understand the scope of UNCTAD's
projects, we encourage UNCTAD in its next annual report on
activities in Africa to list the dollar value of the projects it has
undertaken and, if appropriate, to explain how each project, based
on its utility, might be scaled up or spun off to another

UNCTAD should consider organizing its projects into those that are
well established and well known UNCTAD products, such as ASYCUDA,
DMFAS, EMPRETEC and Investment Policy Reviews, and those that are
new projects growing out of UNCTAD's research and consensus
building. The latter group could then be monitored by UNCTAD and
member states to determine whether they merit either being scaled up
and added to UNCTAD's menu of proven technical assistance products,
spun off to a partner development organization or NGO, or

In this way the synergies between UNCTAD's research and analysis,
consensus building and technical assistance could be strengthened.
Research should be the trigger that initiates a project. Then

GENEVA 00000997 004.2 OF 005

analysis of the project should lead to finite findings and either
discontinuation of the project, or validation of its impact and a
strategy for expansion either through UNCTAD or a partner. The
consensus building function could be used not only to publicize
research findings and share experiences, but also to attract
additional funding for successful projects, to refine and improve
ongoing projects, and as a source for new research ideas.

The report shows that UNCTAD is doing a great deal in many
countries. We encourage UNCTAD's different divisions to work
collaboratively on the elaboration of UNCTAD's Communications
strategy, so that this information becomes more accessible and
user-friendly through creation of country profiles on the UNCTAD
website. Given the availability of consolidated information on
UNCTAD's work in Africa, we encourage UNCTAD to start designing
countries profiles using African countries and to present a
prototype country profile to the next TDB meeting as part of
UNCTAD's new communications strategy.

We welcome the report's reference to the Enhanced Integrated
Framework (EIF) for trade-related assistance to LDCs. When UNCTAD
receives requests for assistance from member states, we encourage
UNCTAD to continue working with its development partners to have its
proven trade and development products incorporated into such
comprehensive development and trade initiatives as the Enhanced
Integrated Framework, UN Development Assistance Frameworks, and the
One UN effort.

Regarding specific work described in this report, we encourage
UNCTAD's continued excellent work on proven products such as
ASYCUDA, DMFAS, Empretec and Investment Policy Reviews. We
especially welcome UNCTAD's focus on Empretec Africa as we believe
entrepreneurship can be a driver of economic recovery and a major
contributor to helping developing countries leap frog forward in
their development goals. Regarding newer projects, we applaud
UNCTAD's work on organic farming, which embodies synergies among
UNCTAD's three pillars of work, is done in cooperation with multiple
organizations, including regional groups, and can help to address a
critical issue -- food security.

Improving Food Security

The United States is working to help countries most affected by
hunger and the impact of the global economic crisis. The U.S.
Government is providing over $5.5 billion to fight global hunger in
2008 and 2009. Separately, the U.S. Millennium Challenge
Corporation has committed over $1.3 billion since 2005 for long-term
investment in agriculture. Speaking in London in April at the G-20
Summit, President Obama announced his intention to work with
Congress to double agricultural development assistance to over $1
billion, to give "people the tools they need to lift themselves out
of poverty." These funds are designed to work with partner
countries to increase productivity and rural incomes by modernizing
developing country agriculture.

We agree with UNCTAD's finding that "improving food security of
African countries requires that they and their development partners
put agriculture firmly back on the agenda," and are working hard to
see that happens. The United States strongly supports the
objectives of the Comprehensive African Agricultural Development
Plan (CAADP), which is a continental framework endorsed by all heads
of state and government across Africa as their common vision and
agenda to reform and revitalize African agriculture.

In June, Secretary Clinton identified seven principles that support
sustainable systems of agriculture in rural areas at the 2009 World
Food Prize ceremony: increasing agricultural productivity by
expanding access to quality seeds, fertilizers, irrigation tools and
rural credit; stimulating the private sector by improving the
storage and processing of foods and improving rural roads and
transportation; maintaining natural resources so that land can be
farmed by future generations; expanding knowledge and training to
cultivate the next generation of plant scientists; linking small
producers to markets; supporting policy reform and good governance;
and supporting women, who make up 70 percent of the world's farmers.
These seven principles will guide upcoming work and will help set

The U.S. Government has a long tradition of providing longer term
agricultural development assistance. Increasingly, such assistance
focuses not only on sustainable agricultural production, but on
post-production storage, land management, marketing, and food. We
believe that, in order to make progress toward meeting the
Millennium Development Goal of halving the proportion of people who
suffer from extreme hunger by 2015, a major increase in investment
in agricultural development is essential.

GENEVA 00000997 005.2 OF 005

We strongly support the UN Secretary General's High Level Task Force
on Food Security (HLTF), which was established in the spring of 2008
in response to the global food price crisis. The HLTF, under the
leadership of Assistant Secretary General David Nabarro, produced a
Comprehensive Framework of Action (CFA) last year, and has made
considerable progress in working with food-insecure countries to
develop country-led strategies to improve food security. We are
encouraged by the HLTF's contribution to improving coordination
among the UN and other multilateral institutions involved in food

We appreciate UNCTAD Secretary General Supachai's participation in
the High Level Task Force and UNCTAD's continued research on the
food crisis, and look forward to a productive discussion today.
Thank you.



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