World Trade WT/MIN(96)/ST/12
9 December 1996
MINISTERIAL CONFERENCE Original: English
Singapore, 9-13 December 1996
I am pleased to be able to participate in the first conference of the Ministers from WTO Member countries in this beautiful and modern city of Singapore, a pride of our region. On behalf of my delegation I wish to thank the Chairman of the Conference, His Excellency Mr. Teo Chow Tong, Minister of Trade and Industry of the Republic of Singapore and his Government for the excellent arrangements as well as for the hospitality and courtesies extended to us. This Conference will be a landmark in our effort to achieve an integrated, and fully globalized economy through our shared platform in the World Trade Organization.
It goes without saying that there is a direct relationship between trade and development. Trade and growth related issues need to be dealt with in totality. This Conference, therefore, reflects this realization on our part.
The success of the new trading arrangement, which has been identified as a springboard for growth is, contingent upon support from both developed and developing countries. In spite of the lurking fear that liberalization may overwhelm them through a surge in imports, the LDCs adopted liberalization, prompted mainly by hopes of a better future.
The Uruguay Round was finalized after assurances and pledges that developing countries would be compensated for any initial adverse economic fallout. The LDCs have not received the promised benefits assumed inherent in the Uruguay Round.
The Uruguay Round poses challenges and provides opportunities for the LDCs. The preference regime will gradually be eliminated but supply-side constraints will continue to limit their export base. Their obligations under the Uruguay Round Agreement including those relating to tariff reduction would increase their burden, unless they can reap compensatory benefits of international trade.
Until recently, a large part of foreign investment in LDCs, came through ODA and soft-term loans from multilateral financial institutions. Recently however, ODA grants have become smaller and aid conditionalities have become stiffer. Consequently, there is a looming crisis of confidence in many of our Member countries.
We are concerned that in the early 1990s, the LDCs share in global exports and imports shrunk by a further 50 per cent and 30 per cent respectively on the already meagre levels of 0.6 and 1 per cent. Also, the ratio of LDCs exports to their GDP, dropped from 17 to 14 per cent. This is an indication that the LDCs continue to be marginalized in international trade.
In the recent past, less than 1 per cent of the FDI went to the 48 LDCs including my own country. Therefore, the claim that FDI can be a substitute for ODA is not supportable. This needs to be looked into. The attempt to direct FDI by prodding changes in taxation, labour standards, company laws and other legislations of host countries would, I am afraid, backfire and further marginalize the LDCs.
The total outstanding debt of LDCs has been estimated at US$127 billion in 1994, which is not at all sustainable. A meaningful relief of LDCs' debt burden, therefore demands quick and courageous measures, including complete debt cancellation for all LDCs.
For the developing countries supply capacity and market access impediments continue to be limiting factors. Complementary and supportive actions, both financial and technical, from developed and trading partners are needed to alleviate their supply-side constraints and ensure diversification and competitiveness.
A comprehensive plan of action is called for which will involve:
(a) Adequate reflection of the interest of LDCs in WTO;
(b) ensuring market access by providing duty and quota-free entry, and removal of all non-tariff barriers;
(c) providing technical assistance to enable LDCs to meet their obligations;
(d) specific programme to ensure implementation of special and differential measures accorded to LDCs including the pledges at the Marrakesh Declaration for aid flow and compensatory measures, Ministerial decision in favour of LDCs on measures concerning possible negative effects of a reform programme on least-developed and net-food-importing countries;
(e) considering the proposal of the LDCs placed during the Mid-term review to set up a safety net; and
(f) a review of complex rules of origin, which reduce our capability to enter into developed markets.
Bangladesh is a huge and as yet largely underactive country of a 120 million people. The speed and volume of exchange in such a teeming market, once started, is bound to be very intense. The present Government of Bangladesh, under the energetic leadership of our Prime Minister Sheikh Hasina, which came into office in June 1996, has been working hard to bring back to balance the institutions of good governance through establishment of rule of law and civil stability.
Poverty alleviation and human resource development remain our highest priority objective. Commerce and trade-related laws and rules are being relaxed, in many cases even removed and rewritten to enable the market forces to operate freely. The large public sector is being rolled back through privatization and further stoppage of investment in uneconomic state-owned enterprises. Even investment by foreign entrepreneurs in sectors like energy and roads has been opened.
We, the seven countries of our region have formed the South Asian Association for Regional Cooperation (SAARC).See footnote 1 We have agreed recently to steer our efforts towards establishing the South Asian Free Trade Area (SAFTA). A strong wind of change blows in our region in favour of a more open and mutually beneficial partnership among our peoples. This is in line with the current global integration process that, we believe, has been set in motion by an unstoppable historical process.
This is the time, to pause and ponder over the achievements of globalization. The introduction of new issues at this stage makes many of us feel somewhat uncertain and hesitant.
I am confident that a meeting of the representatives of humanity as is gathered here, cannot fail to agree on measures aimed at ensuring a better future for all. Time and again at Uruguay, Paris, Lyons, Marrakesh etc. where prospects for settlement appeared bleak, the nobler side of mankind reasserted itself, given the fund of goodwill that exists between nations. This inspires me, to hope that our joint efforts will ensure a bigger pie of development so that each of us can have a larger and equitable share.