U.S. STATEMENT AT UNCTAD’S 54TH TRADE AND DEVELOPMENT BOARD

Delivered by Ann Low, First Secretary
U.S. Mission Geneva
October 1, 2007

Globalization and Inclusive Development

We commend UNCTAD on highlighting the significant economic progress that has been made in the developing world as a result of various progressive policy reforms and a favorable global economic environment. Support for open trade and other sensible economic development policies is key to maintaining that growth. The paper presented suggests that the wealth created from globalization has caused greater inequality within countries as well as between countries and that some countries have not been “included” in the process of globalization that has brought about gains for most of the developing world. We agree that exploring the cause for that perceived inequity is a worthwhile endeavor. Globalization has the potential of bringing a positive economic impact to the developing world both across and within countries. We believe that developing nations must pursue a policy mix that will enable them to integrate with the global economic system in order to derive maximum benefit.

The US appreciates UNCTAD's diagnosis of the problem and its call for consideration on how best to promote “inclusive policies” for economic development. However, the paper's policy recommendations on how to get from the problem to the solution are too numerous. They lack prioritization and give no indication of their relative impact or importance. The report presents the challenge clearly, but does not propose a distinct way forward.

We would like to take this opportunity to highlight two of the recommendations that are buried within the note, but which we believe are fundamental for developing countries to focus on. First, we underscore tax policy, which the Secretariat's note addresses in the context of commodity-dependent developing economies, but which applies to all economies. Second, we note the irrefutable importance of creating and nurturing an economic environment that encourages entrepreneurship.

Specifically, we agree that more can be done to achieve development goals and reduce poverty through greater transparency and accountability in internal revenue payments. Recipient governments must also use their revenues wisely and in ways that target resources to provide a safety net and create opportunities for the poor and most disadvantaged in their countries.

Second, we strongly agree that promoting an environment conducive to entrepreneurship is crucial to harnessing globalization. Governments that implement a business-friendly regulatory environment facilitate business creation, expand employment in the formal sector, and attract investment, both local and foreign, to their economies.

We acknowledge the importance of reports such as this, which outline steps that can be taken to enhance economic development for the poorest countries. However, we believe that it is important for such reports to provide substantive, clear, and practical solutions that can be implemented and to prioritize those steps wherever possible.