Allow me from the outset to thank UNCTAD and US Mission in Geneva for organizing this roundtable in such an important issue.
The primary and overarching objective of the EU development policy is the eradication of poverty in the context of sustainable development, including the pursuit of the MDGs.
In spite of clear signs of hope in what concerns the decline in global poverty, the challenges involved in reaching the MDGs through combating and eradicating poverty, hunger, illiteracy, disease and, in general, all inequalities in so far as they hamper or impede the equal enjoyment of human rights and equal opportunities for all, persist and, in some cases, have even become greater.
We see the private sector as a source of growth, job creation (employment generation) and poverty eradication. It also plays a vital role in generating new investments and financing for development.
In our view, to promote growth, poverty eradication and sustainable development, there is a need to ensure the necessary internal conditions for mobilizing domestic savings, both public and private, sustaining adequate levels of productive investment, increasing human capacity, reducing capital flight, curbing the illicit transfer of funds and enhancing international cooperation for creating an enabling domestic environment.
Good governance is vital for the enhancement of an enabling environment to strengthen productive capacity, trade and investment. Good governance is a key component of policies and reforms for poverty reduction as well as for the promotion of democracy, human rights and rule of law. There is a critical relationship between providing a stable, transparent, and corruption-free business climate, and the ability to attract investment.
Developing countries need to create domestic enabling environment for mobilizing domestic resources by implementing good governance, sound macroeconomic policies and investments to drive sustained economic growth, promote small and medium-sized enterprises, promote employment generation and stimulate the private sector; (encourage business formation).
The fight against corruption is also a priority in this context. Countries need to implement and adopt policies that emphasize accountability, transparent public sector management and corporate responsibility.
Governments should consult representatives of the private sector when elaborating and implementing policies that have an impact in the economy. Taking into account of the growing relevance of trade as a major driving force in economic development and poverty eradication, governments should mainstream trade in their national developments plans. They should also create real partnerships with representatives of the domestic private sector to implement reforms and ensure that the voice of the private sector includes Small and Medium Enterprises (SMEs) and microenterprises.
Multinational Corporations, or large companies, have the potential to contribute to accelerating economic development and to poverty eradication through their knowledge, expertise and resources. But also local companies, SMEs and micro enterprises are an important part of the private sector. They too can make important contributions to their communities. Companies from emerging economies can also boost regional economies markets
Small and Medium Enterprises (SMEs) can be engines of job creation seedbeds for innovation and entrepreneurship. However, SMEs in some developing countries, in particular LDCs, are marginal in the domestic economy, by operating outside the formal legal system, therefore contributing to widespread informality and low productivity. They lack access to financing and long-term capital, the base that companies are built on. Linkages between different types of firms in developing countries provide an effective channel for local companies to gain access to markets, financing, skills and know-how.
Public-Private-Partnerships can play a crucial role in helping LDCs achieving their objectives in economic growth and poverty reduction, particularly in areas like infrastructures where the investment dimension is frequently too important to be financed solely by fragile Public sectors funds.
Poverty often has a female face. Attention should be given to the promotion of gender equality in the context of poverty reduction. The empowerment of women, including their political and economic empowerment, are closely interlinked. Women in many countries have fewer economic and political opportunities to improve their well-being and that of their families. Eliminating discrimination and gender inequality contributes directly to poverty reduction and growth through womens participation in the labour force and through their earnings. Women´s entrepreneurship is an unexploited source of economic growth We encourage the promotion of entrepreneurship for women in starting and growing their enterprises, by facilitating their access to microfinance.
Poor people are sometimes entrepreneurs themselves, out of necessity, operating under the informal sector.
Governments need to make efforts to reduce the share of the informal sector in an economy, through reform of the overall enabling environment for the formal economy.
We welcome the private sector focus on corporate social responsibility and hope that all enterprises, especially the TNCs including the ones from developing and emerging countries will continue to enhance its work in this field.
We encourage greater direct investment, including foreign investment, in developing countries and countries with economies in transition to support their development activities and to enhance the benefits they can derive from such investments.
We underscore the need to sustain sufficient and stable private financial flows to developing countries and countries with economies in transition. It is important to promote measures in source and destination countries to improve transparency and the information about financial flows to developing countries, particularly countries in Africa and the least developed countries. Measures that mitigate the impact of excessive volatility of short-term capital flows are important and must be considered.
Since UNCTAD assist developing countries in promoting the development of their enterprises, especially small and medium-sized enterprises (SMEs), so that they are able to grow and compete in the global economy UNCTAD could explore ways to enhance the private sector´s role while keeping a clear focus on sustainable development, as well as on promoting good governance and a supportive climate as part of the national development strategies. UNCTAD could collect best practices examples.
UNCTAD is well placed to promote a pro-development approach to investment. A good balance is needed between the investors and the employees. This focus includes, inter alia, long-term investment that generate stable employment and growth, and social and ecological standards as well as core labour rights (ILO).
The EU appreciates also the work done by UNCTAD regarding the World Investment Report and sees the UNCTAD ´s Investment Policy Reviews (that are carried out on a voluntary basis) as valuable contributions in defining a shared understanding of healthy investment climates in emerging economies and developing countries.
We acknowledge, as valuable, the work being done under ISAR related to accounting by SMEs, corporate responsibility reporting and environmental accounting reporting, and the EMPRETEC Programme regarding entrepreneurship training in this context. We think that launching of the EMPRETEC Africa can contribute to private sector development in the region.
We look forward to UNCTAD XII (to be held in Acrra, April 2008) as a time to reflect on the contribution of UNCTAD in helping developing countries to benefit from globalization. It will also be a time to reflect on the role of UNCTAD as the focal point in the UN for the integrated treatment of trade and development and interrelated issues in the areas of finance, technology, investment and sustainable development (core mandate).