Global Policy Forum

By Kofi Annan

Thank you, Mr. President.

I am honored to take the chair at this Special Event. It is an original way for us to start our conference, and a very promising one. During this session, Heads of State from the Least Developed Countries themselves will discuss their problems, not only with donor governments and international institutions, but also, in the same forum, with leading figures from business and civil society. That prefigures the kind of strategic partnership we must have, if poverty is indeed to be eradicated and truly sustainable development is to be achieved.

Let me start the ball rolling with some very simple observations. The poor are seldom poor by choice. Very few people in this world enjoy living on hand-outs. Most poor people know that they are quite capable of earning their living by their own efforts, and are eager to do so. But they must be given a fair chance to compete. That applies to individuals. It applies to companies. And it applies to countries.

All countries today need to mobilize their own resources, and to attract investment from abroad. Their ability to do that depends, in the first instance, on the quality of their governance. Countries can only compete in the global market if their people - women and men alike - enjoy the benefits of education and the rule of law, with effective state institutions, transparency and accountability in public affairs, respect for human rights, and a say in the decisions that affect their lives.

So there is much that even the least developed countries can do, and are doing, to help themselves. Many have made remarkable strides towards democracy and sound economic governance, even in the midst of poverty. But they are caught in a vicious circle. Even more than others, they need to attract foreign investment, since they have so little capital of their own. Yet they attract very little investment, because their people are poor, their politics are often unstable, and their domestic market is small. And their people remain poor because there is no investment.

So the poorer the country, and the smaller its domestic market, the greater its need to break out of this vicious circle through exports. And therefore, more than any other group of countries, the Least Developed need open markets, in which their goods can compete.

More fortunate countries have every reason to open their markets to products from the LDCs. Their consumers would benefit from wider choice and lower prices. Their industries would benefit from the competition. And, by allowing poor people in poor countries to make an honest living, they would contribute to a fairer and more stable world order.

Our hosts, the European Union, seem to have understood this. By adopting the "Everything But Arms" Initiative, without waiting for reciprocal concessions from the LDCs, they have taken a step in the right direction, even if on certain products it is going to be implemented rather slowly.

I very much hope that other economic powers will take similar decisions, and act on them faster. Only last September, after all, they adopted the Millennium Declaration - which calls on them, preferably by the time of this Conference, to adopt a policy of duty- and quota-free access for essentially all exports from the LDCs.

As things stand, those exports still face formidable barriers. Agricultural tariffs still average over 40 per cent, and on some products they rise above three hundred per cent. And then there are many non-tariff barriers: not only quotas, but also technical barriers, which regulate the size and quality of imports or require them to be labeled in a certain way. And of course there are health and safety standards.

All of these are ostensibly designed to protect consumers, and ensure that they know what they are buying. I am not saying that is unnecessary. But the requirements are often absurdly complex. Let me give one example: the European regulation on aflatoxins. A World Bank study has calculated that this regulation costs Africa 670 million dollars each year in exports of cereals, dried fruit and nuts. And what does it achieve? It may possibly save the life of one citizen of the European Union every two years.

Please do not misunderstand me. I am the last person to undervalue even one human life. But here many African lives are at stake - the lives of those whom the chance to export those products might save from an early death, caused by malnutrition or endemic disease. Surely these regulations need to be reviewed with a sense of proportion! Surely a more reasonable balance can be found.

I believe the best hope for LDCs, and indeed for the developing world in general, lies in a new round of global, multilateral trade negotiations. And this time it must be a true "Development Round". The new Round must aim to eliminate all tariff and non-tariff barriers in the developed countries to trade in agricultural products, textiles and other products of special interest to the LDCs. And it should review the progress made in implementing agreements reached in the last Round - the Uruguay Round.

After the Uruguay Round, developing countries found they had benefited less than developed ones. Many of them, as well as some non-governmental organizations, feel that there should not be a new Round, only a reassessment of the old. But, even if their grievance is well taken, surely it is not correct to argue against a new Round. For a new Round is precisely the forum where the necessary reassessment and adjustments can be undertaken. I urge therefore that all governments put their weight behind the launch of a new multilateral Round of trade negotiations, with all due dispatch.

Ladies and Gentlemen: So far I have focused on trade and market access, because I am convinced that without trade LDCs will not attract investment, and will not be able to grow. But while market access is necessary, it is certainly not sufficient. If they are going to export their way to prosperity, LDCs need many things they now lack. They need technology - especially information technology. They need to develop their physical, social and institutional infrastructure. And they need help in overcoming some appalling handicaps.

Many of them face acute environmental constraints, as a rapidly rising population struggles to survive on a shrinking area of cultivable land. Many suffer from a chronic health crisis, which debilitates and decimates their population - and which has now acquired a new, even more frightening face: that of HIV/AIDS.

Indeed, in much of Africa, AIDS is now far more than a health crisis. It has become not only the primary cause of death, but the biggest development challenge - and the same may soon be true in several Asian countries, too. At present, I am making this challenge my personal priority. I hope by the end of next month, when the General Assembly holds its Special Session on HIV-AIDS, we shall have an agreed global strategy, and a substantial global war chest, to confront this global scourge.

Many LDCs are also handicapped by destructive conflict. They need help in resolving their differences and rebuilding a peaceful economy. And many are still crippled by debt. Everyone now agrees that they must be relieved of this burden. But rich countries have not yet come forward with sufficient resources to do it. Even the poorest countries which qualify for debt cancellation under the Heavily Indebted Poor Countries scheme still spend more on repaying debts than they do on healthcare.

Additional debt relief will almost certainly be needed - deeper, broader and faster than what has been given so far. And it must be truly additional, not subtracted from funds already earmarked for development aid.

Because - and this is my final point - those funds are much too small as it is. The developed countries have long committed themselves, on paper, to giving 0.7 per cent of their gross national product in development aid. Very few have lived up to that pledge, and the developed world as a whole has reached only 0.2 per cent.

During the 1990s - a decade of unprecedented prosperity for most industrialized countries – official development aid declined, and LDCs suffered disproportionately. Unless governments take their commitment to the 0.7 per cent target more seriously, they will have little chance of meeting the new commitments they made at last year's Millennium Summit. Let me remind you that those commitments included pledges to halve the proportion of people living in extreme poverty by 2015; to halt and begin to reverse the spread of HIV/AIDS by the same date; and to address the special needs of the LDCs.

I urge all developed countries to meet the 0.7 per cent target – and within that, to allocate at least 0.15 percent of their gross national product to helping the LDCs, as they promised to do at the last LDC conference in Paris, ten years ago.

Why do we have these conferences, after all, if States do not follow up their fine words with action? As you know, this conference will adopt a Programme of Action, with a built-in monitoring system. Let us use it to ensure that this Conference, unlike its predecessors, marks a real turning-point in the everyday life of poor people in the poorest countries.

Thank you, ladies and gentlemen. Now it is my pleasure to give the floor to the President of the Conference, His Excellency Prime Minister Persson

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