Good Morning,

On behalf of the Group of 77 and China, I would like to congratulate you Mr Chairman for your election.

Mr. Chairman

The G77 and China would like to pronunciate itself on the following items

On item 3 Improving competitiveness of SMEs through enhancing productive capacity

Overcoming supply-side constraints is of significant importance for development and helping developing countries better integrate into the global economy. Building productive capacities through increasing the capabilities, abilities and opportunities for developing-country firms to supply goods and services demanded by the world deserve close attention by this Commission and in UNCTAD’s analytical work. The role of enterprise and that of entrepreneurs in building national productive capacities cannot be emphasised enough. They are important cogs in the wheels in building productive capacities. Efforts to develop a competitive SMEs sector and measures to unleash entrepreneurship talents in developing countries are crucial aspects of policy issues and development initiative that should be given due consideration in international debate.

In this regard, it is important that the Aid for Trade initiative include efforts at building productive capacities by embracing investment and technology transfer, in particular enterprise development dimension. The Group of G-77 and China agreed with the views of the Expert Meeting on Building Productive Capacities held in 2006 that strengthening supply capacities should be placed at the heart of national and international policies to promote sustained economic growth, wealth creation and poverty reduction in developing countries.

In addressing enterprise development, the UNCTAD EMPRETEC’s programme has contributed to helping developing countries expand the pool of their entrepreneurs and SMEs. The Group of G-77 and China welcomed the recent efforts of the EMPRETEC’s directors to strengthen regional networks of EMPRETEC centres such as through the EMPRETEC African Forum. The Group of G-77 and China also concur with the views that the benefits and usefulness of the UNCTAD EMPRETEC’s programme be extended to include more developing countries and economies in transition. Development partner should see the program as an important vehicle to support developing countries SMEs effort and development to participate and integrate to global arena. They could also play an important role in this context through providing appropriate support.

Mr. Chairman,

Enterprise internationalisation such as through global value chains and business linkages is another crucial contributor to building productive capacities. It offers an essential channel for developing countries to improve competitiveness, linkage to the global economy and productive chains, including as global suppliers driven by the abilities of their enterprises to participate actively in international production system. The growth of outward FDI from developing countries, another key aspect of enterprise internationalisation, has been receiving increasing international discussion partly because of the South-South cooperation dimension as a significant proportion of such FDI goes to other developing countries. But less is known of the development impact potentials and in overcoming constraints that limit the capabilities of developing-country firms to engage effectively in the different aspects of enterprise internationalisation in building competitive enterprises, particularly SMEs. Equally less is known of how more SMEs from developing countries could be supported to be active linkage partners to TNCs, to invest abroad, to participate in global value chains and to help strengthen South-South cooperation. UNCTAD is well placed to carry out further policy and analytical work on these aspects of enterprise internationalisation in the context of building productive capacities.

On item 4: Efficient transport and trade facilitation to improve participation by developing countries in international trade

• On the subject of international transport services and trade facilitation, we would like to focus on two very relevant topics addressed in the Issues note TD/B/COM.3/80 namely 1) the need for developing to clearly define trade and transport facilitation priorities and 2) the relevance trade transaction costs and international transport connectivity.
• On the first topic, we see that many of members of the G77 and China will need the international community’s support, and in particular that of relevant international organisations working together with UNCTAD to identify their trade facilitation needs and priorities. In this process of prioritization, we think central actors of the reform include national trade facilitation bodies whose role is vital in the implementation of trade and transport facilitation measures as well as in assessing related proposals submitted and discussed in bilateral, regional and multilateral negotiations.
• As suggested in the way forward of the referred issues note, we believe that support from UNCTAD will be needed for many developing countries to carry out the analysis of countries’ trade flows and structure, geographical position, commonly used modes of transport for the carriage of international trade.  UNCTAD contribution is proven valuable, therefore, it should continue. The contribution of other relevant partners’ international organizations is also pertinent to further develop this sector.
• On the second issue, we would also agree that trade capacities of developing countries is dependent on access to international maritime transport networks. This access in turn relies, inter alia, on the availability and performance of sea ports, as well as the quality of available shipping services to enhance transport connectivity.
• We would like to see UNCTAD continue to analyse trends in trade logistics and trade facilitation in the framework of its close cooperation with international organizations gathered under Global Facilitation Partnership, GFP.

On item 5: ICT and E-Business for Development

• Given the scope of the mandate of this Commission on the subject of ICT and development, we look forward to an interesting discussion that should help us formulate our recommendations for the period before us. Of particular importance is the notion that we are entering the preparatory phase for UNCTAD XII.
• The work of this Commission can present an important contribution in shaping the future Conference, in particular with regards to issues related to science and technology. Such work is strongly underscored by the notable outcomes of the deliberations during the two World Summits on the Information Society as well as by independent policy advice from the UNCTAD Eminent Persons Group in their report (1). Finally, the UNCTAD secretariat, through the series publication of its Information Economy Report, and in particular its most recent edition launched last November, has raised a number of issues that require our consideration and follow-up by recommendations and further work of this Commission. Without prejudice to the outcome, the Group of 77 and China wishes to see UNCTAD continue, in its work on information and communication technologies, to maintain a productive balanced between its three pillars – research and policy analysis, consensus building, and technical assistance.
• While the development of information technologies continues to fascinate us daily, what we need more than ever is a policy framework for integrating these into our overall development endeavours. As our policy work, at both the national and international levels, goes beyond establishing principles and strategies, and into practical implementation, our need to evaluate and adjust our policies increases. To this end we would wish to underscore the indispensability of information society indicators and in particular those that relate to the use of ICTs in commerce and trade, where economic and monetary value is created.
• Of particular relevance is gauging ICT use by SMEs, as these are the mainstay of many a developing country economy. It has been said that the Internet can provide SMEs with market and trade information and reduce the cost of communication with customers and suppliers. But what happens in practice, and how can national and international policy positively influence technology transfer and adoption? Even within a single developing country, we can often find that there is a gap between SMEs and larger enterprises in the use of e-business applications, and the gap tends to widen as the complexity of the application increases. For policy to be devised and to be effective, these notions need to be substantiated by hard data and therefore this Commission should underscore the work of UNCTAD in providing e‑commerce and e‑business indicators as a core policy element for information economy and society development.
• The fundamental need of e-indicators is based on the fact that, every now and then, policy makers will critically examine their policies in order to adjust them and improve their effectiveness. This need is only heightened by the unceasing advances in ICTs and how these will interact with existing e-strategies and overall development policies. It is good common sense to accept the notion that a certain level of cross-comparability of policy review mechanisms would serve to enable an immense sharing of e-strategy implementation experience among developing countries and allow for revisions of priorities and recommendations formulated based on an internationally amassed body of policy experience. This can in particular be useful when identifying critical success factors, best practices and conditions, as well as risk and points of failure. To this end the Commission may wish to consider mandating the development of a set of voluntary guidelines that developing countries could use to define and implement such ICT policy reviews, comparable to processes established in, for example, the OECD.(2)
• Finally, the Group of 77 and China believe that because the fuel behind ICTs is unceasing advance and innovation, e-strategies and related policy measures necessarily need to relate to innovation practices and policies.  Developing countries may consider their innovation policies as an inseparable part of their ICT policy review mechanism in order to assess how these interact with each. Such an approach will inevitably enlarge the number of stakeholders thus increasing the need for consultation with expert bodies, such as those called by this Commission as well as other UN organizations and agencies. What is beyond doubt is that greater the interaction among stakeholders, the higher the quality of the policy outcomes. Developing countries, and in particular the G77 and China regularly appreciate the work of UNCTAD in catalysing such interaction at national, regional and international levels and have positive expectations of continuity for this activity.
• ICTs can have an important positive impact on development by enabling enterprises and industries to improve operational efficiencies and acquire new markets. Supportive e-strategies and polices can be vital for achieving these goals but only if they are underpinned with reliable and internationally comparable information about ICT and e-business adoption and use enabling the regular or periodic conduct of ICT policy reviews. Within this complexity, the capacity to innovate and apply technologies productively and creatively is closely related enabling ICT access and increasing its use. Increasingly, application means innovation. From a policy perspective, the Commission may be advised to explore this relationship, in particular as the multi‑stakeholder nature of the subject matter is particularly suitable to the mandate and mission of UNCTAD and would reflect the needs of its core constituency.

On item 8: Other Business

Discussion on Ad-Hoc Expert Meeting on “Building Skills in Developing Countries: Training, Networking, and ICTs”

• The G77 would like to commend UNCTAD for its capacity building programs which tackle some of the obstacles facing member countries in the field of international trade and trade negotiations. The technical assistance provided by UNCTAD to developing country academia and decision makers through capacity-building programs such as the Virtual Institute and TRAINFORTRADE has been instrumental in fostering long-term and locally owned training, teaching and research programs. In particular, the G77 recognize the efforts of the Secretariat to generate increasing South-South cooperation and institutionalize this as a feature of its capacity building programs, for example through the pioneering work of the Virtual Institute which has successfully built a network of mutually supporting academic institutions. Also, TRAINFORTRADE train-the-trainers activities have facilitated local ownership and created a local pool of expertise which can be used in other developing countries.
• The G77 commends the efforts of the Secretariat to underpin their technical assistance with research and consensus building through the ad-hoc Expert Group Meeting they held on the topic in November 2006. We encourage UNCTAD to continue its analytical work on capacity building and the use of evidence-based research in policy formulation, for the benefit of developing countries, and indeed donor countries. As part of UNCTAD’s consensus building efforts we also recommend that the relevant programs dealing with capacity building share their expertise and experience with any discussion forum that may be established under the Aid for Trade initiative.
• However, we recognize that in order to build successful models of South-South cooperation, such as joint research networks or the development of locally relevant training material, funds need to be made available so that these programs can continue and achieve their full long-term potential. The same case holds true for maintaining the continuity of capacity building programs, such as developing ICT tools which utilize the latest changes in technology and meet the needs of target audiences, and organizing regional workshops and training. Given the growing consensus about the inclusion of trade-related technical assistance and capacity building in the Aid for Trade Initiative, it may be that these activities can receive further financial support from the initiative when it is set up.

Thank you Mr. Chairman