Speech delivered at the "East Asia Investment Forum 2005" by Renaud Meyer
East Asia Investment Forum 2005
Renaud Meyer, Deputy Resident Representative of UNDP
Madame Gu, Vice Chairperson of the Standing committee of the National's People's Congress,
Vice Minister Zhang of Ministry of Foreign Affairs,
Vice Minister Liao of Ministry of Commerce,
Governor Han of Shandong Province,
Ambassador Wu, President of the China Foreign Affairs University,
Ladies and Gentlemen,
It gives me great pleasure to be here today in the beautiful city of Weihai and to participate on behalf of the United Nations Development Programme in the 2005 East Asia Investment Forum.
I would like to start by thanking and commending the China Foreign Affairs University, the China Development Bank, the People's Government of Shandong Province and the Municipality of Weihai for sponsoring and organizing this important event. I am confident our discussion and the outcome of the Forum will greatly contribute in further fostering investment and trade in Eat Asia.
East Asian economies have achieved remarkable growth in the past several years. Trade and investment have been two of the most powerful engines of this growth. In 2004, East Asia recorded an export growth of 27 percent and imports have increased by about 30 percent, as a result of fast-growing processing trade and higher domestic demand for consumer goods.
Foreign direct investment flows to East Asia in 2004 increased by about 6 percent after three consecutive years of decline. This FDI is mainly in the form of more sophisticated activities such as research and development, design and advanced manufacturing for global markets.
What is even more telling in terms of trade and investment growth in East Asia is that more and more developing countries of the region now emerge as important sources of outward FDI flows. This demonstrates their increased capacity to compete on world markets. If countries such as the Republic of Korea, Malaysia and Singapore have been outward investors for some time, China is now clearly following the pattern.
This allows these countries to secure new markets abroad. For instance, Malaysian firms have invested in telecommunication in several African countries. Garment manufacturing companies from China have invested in Less Developed Countries in order to benefit from low labor costs and special arrangements facilitating access to the US and European markets. Outward FDI also fosters access to technologies and knowledge by investing in more developed countries.
Ladies and Gentlemen,
What can my Organization, the United Nations Development Programme, do to support countries in East Asia promote trade and investment both among themselves and with the rest of the world?
UNDP has offices in 136 developing countries, providing a large and rich network, and has established long term cooperation with national and local governments, but also with the economic and business sectors such as Chambers of Commerce and Industry in all these countries. Though this network, UNDP has accumulated an important source of knowledge about business environments, legal frameworks, institutional support available to promote trade and investment.
Through our technical assistance programmes in support to the development of the private sector, we provide best practices and policy advice to foster the business environments of developing countries. One modality that UNDP uses and promotes is South-South cooperation. This approach is highly relevant in the area of trade and investment where UNDP plays the role of a broker between business sectors of developing countries and provides assistance to their collaborations. A recent example is the launching of the China-Africa Business Council in December 2004. This initiative between China and a first group of five African countries aims at promoting trade and investment between them through exchange of information, business meetings and capacity development. In Malaysia, UNDP and its partners are also very active in making the Malaysian expertise and training available to African countries in several areas including trade and investment.
Another example of our activities is the UNDP regional programmes in East Asia which have trade and investment as their core activities. For example, the Tumen programme is a joint inter-governmental effort of China, Mongolia, Republic of Korea, Russia and DPRK to promote the regional development of the Greater Tumen Area. This region along the Tumen River is facing many challenges resulting in low economic and social development and high levels of poverty. UNDP and its partners have been working on improving the business environments and attracting investments to foster the economic development of the region. In September this year, an important investment forum is organized in Changchun, China, to showcase the potentialities of this region and attract new investors to the Tumen area.
And why is UNDP so interested in promoting trade and investment?
UNDP remains faithful to its mandate of capacity development of national governments and poverty reduction. However, it is increasingly relying on the private sector as an engine for economic growth to fuel the poverty reduction efforts. We believe that if we are to achieve the Millennium Development Goals and its main objective of halving extreme poverty by 2015, the private sector needs to be supported and to play its key role as the economic engine, not only in the developed countries, but more and more in developing countries.
We see trade and investment as instruments to accelerate growth and therefore fight poverty. Trade and investment are means to an end, not an end in themselves. Trade and investment need to be mainstreamed into development strategies of countries who can expect to gain a lot from increased and improved participation in international trade.
East Asia has achieved tremendous economic growth. In many countries, such as China, this has resulted in tangible progress in the fight against poverty. In China and the East Asia region, GDP per capita has more than tripled between 1981 and 2001 and the proportion of people living in extreme poverty has fallen from 56 percent to 16 percent.
However, challenges remain and disparities are increasing among countries in East Asia and within countries themselves. It is therefore very important for trade and investment to be inclusive and allow all parts of societies to benefit from them.
Regional forums such as today's event are excellent platforms to build a better understanding on how best to promote trade and investment in East Asia. And organizing it here in China is also very timely. We are all aware that China with its formidable economy is consolidating its role as the engine for regional economic development. It is reshaping regional as well as global trade and investment patterns. It has become an important participant in global production networks. It has now significant shares of world export markets and is increasingly absorbing exports from other East Asian countries.
China is also a great example in terms of poverty reduction. Its rapid economic growth has resulted in lifting more than 300 million people out of poverty in the past couple of years. China has already achieved several of the eight Millennium Development Goals.
Ladies and Gentlemen,
UNDP strongly believes in the power of trade and investment to reduce poverty. Tremendous success has been achieved in East Asia which is now considered as a fantastic model in many parts of the developing world. Challenges remain but we are confident that they will be addressed through the joint efforts of both governments and business actors.
It is important for countries in the region to establish the right institutions and legal frameworks, exploit synergies and complementarities, and create “win-win" solutions for all partners. UNDP is committed to continue its efforts in providing assistance to countries in East Asia in the area of trade and investment. We believe it can positively contribute to the achievement of the Millennium Development Goals in these countries and successfully fighting poverty.
Before finishing my statement, I wish to once again thank the organizers of this Forum for inviting me to share the views of my Organization on trade and investment in East Asia and I thank you for your attention.