MCom I Semester Business Environment United nation Conference Trade Development ( UNCTAD ) Study Material notes

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MCom I Semester Business Environment United nation Conference Trade Development ( UNCTAD ) Study Material notes

Table of Contents

MCom I Semester Business Environment United nation Conference Trade Development ( UNCTAD ) Study Material notes: Organization of UNCTAD Main Function of UNCATAD Conference of Unctad Twelfth Conference of Unctad Failure of Unctad Thirteenth Conference of Unctad Achievement and Success of Uncatad Suggestions for Future success of Uncatad Long Answer Questions Short Answer Questions Objectives Questions : ( Most Important Notes for MCom students )

United nation Conference Trade
United nation Conference Trade

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 United Nations Conference on Trade and Development (UNCTAD)

The problems of developing countries had been in the forefront for a considerable period of time. Main developments in the international trade policy had little relevance for solving the problems of developing countries. It was quite natural for the representatives of developing countries to feel frustrated by the work done within the framework of GATT and to feel that more consideration ought to be given to their specific problems. It was the effort aroused by such feelings that led to the establishment of UNCTAD as a permanent organ of the UN General Assembly in 1964.

ORGANISATION OF UNCTAD

The UNCTAD is a permanent member organisation of the General Assembly of the UNO. All the members of the UNO are the members of UNCTAD. The UNCTAD is run by a secretariat under the Secretary-General who is elected by the members. It’s secretariat is situated in Geneva. UNCTAD is organised by Trade and Development Board, Executive Committee, Standing Committees and Special Committee. Trade and Development Board is an executive body which is composed of 55 members elected from amongst the members on the basis of equitable geographical distribution.

United nation Conference Trade

MAIN FUNCTIONS OF UNCTAD

The main functions of the UNCTAD are to maximise the trade, investment and development opportunities of developing countries and assist them in their efforts to integrate into the world economy on an equitable basis. The principle functions of UNCTAD are as follows:

1 Stimulation of international trade : To promote international trade all over the world between developed and developing countries with different socio-economic systems and thus to accelerate economic development.

2. Implementation of principles and policies : UNCTAD formulates principles and policies on international trade and related problems of economic development. UNCTAD ensures that member countries should follow the principle and policies formulated by it.

3. Policy formation : UNCTAD formulates policies related to international trade and economic development.

4. Monitoring : UNCTAD, generally, reviews and facilitate the coordination of activities of the other institutions within the UN system in the field of international trade.

5. Increase of international assistance: In order to promote economic development in developing countries, UNCTAD makes efforts to increase cooperation amongst various countries.

6. Formation of development-related policy: Generally UNCTAD facilitates the formation of policies related to rapid economic development in underdeveloped countries.

7. Co-operation in international institutions: UNCTAD increases cooperation among various international institutions to promote economic development and international trade.

8. Other functions: UNCTAD provides a centre for harmonious trade and related documents in developmental policies of the government. It negotiates multinational trade agreements.

In breif functions of UNCTAD are related to balance of payments, export promotion, increase in export income, favorable terms of trade, etc. among the member countries.

CONFERENCES OF UNCTAD UNCTAD

I was held in Geneva in 1964. Since then ten conferences have been held normally after every four year.

The first conference of the UNCTAD was held from 23rd March, 1964 to 16th June, 1964 in Geneva in which 1500 representatives of 122 countries participated. The main purpose of the recommendations made by the conference was to adopt a new international division of labour and make the external sector conducive to the developing countries. The second conference was held from February 2, 1968 to 29th March 1968 in New Delhi, UNCTAD-III meeting was held at Santiago in Chile from 13th April to 17th May, 1972. 120 member nations participated in this meeting of which 96 were developing countries, forming the so called “Group of 77.” The UNCTAD-IV was held at Nairobi on May 5, 1976. The Fifth Conference was held at Manila (Philippines) on May 7 to June 2. 1979. In July 1983, the sixth session of the UNCTAD was held at Belgrade (Yugoslavia). UNCTAD VII took place in Geneva from 9th July to 3rd August 1987. The Eighth Conference took place in Cartegena de Indias, Colombia from 8th February to 25th February 1992. UNCTAD IX met at Midrand in South Africa from April 27, to May 11, 1996. The Tenth Conference of UNCTAD was held from February 12th to 19th, 2000 in BANGKOK the capital of Thailand.

The Eleventh Conference of UNCTAD was held from 13th to 18th June, 2004 at Sao Paulo in Brazil. Conference of UNCTAD XII was held in Ghana in April, 2008. The Thirteenth Conference of UNCTAD was held in Doha (Qatar) from 21st to 26th April, 2012.

TWELFTH CONFERENCE OF UNCTAD

Conference of UNCTAD XII was held in Ghana in April, 2008. It was attended by 193 member nations. The main objective of UNCTAD-XII was to discuss opportunities and challenges of globalisation for underdeveloped nations. Following issues were discussed in the session :

(i) Strengthening UNCTAD and enhancing its role in promoting development of member nations.

(ii) Promoting South-South-trade i.e., trade among developing national this context, GSTP will be promoted, in which trade concessions will be given by developing nations to each other.

(iii) Strengthening productive capacity, trade and investment in developin nations.

(iv) Tackling key trade and developmental issues of world economy.

(v) Making global policy for poverty reduction.

(vi) Creating and developing such an environment as promotes growth and development.

THIRTEENTH CONFERENCE OF UNCTAD

The thirteenth conference of UNCTAD was held in Doha (Qatar) from 21st to 26th April, 2012. Main theme of UNCTAD-XIII was “Development Centred Globalisation towards Inclusive and Sustainable Growth and Development.”

The sub-terms of this meet were as follows:

(i) Enhancing the enabling economic environment at all levels in support of inclusive and sustainable development.

(ii) Strengthening all forms of co-operation and partnerships for trade and development, including North-South, South-South and triangular co-operation.

(iii) Addressing persistent and emerging development challenges as related to their implications for trade and development and interrelated issues in the areas of “finance, technology, investment and sustainable development.”

(iv) Promoting investment,’trade, entrepreneurship and related development policies to foster sustained economic growth for sustainable and inclusive development.

UNCTAD XIII was the first major United Nations ministerial gathering focusing exclusively on trade and development since the fall out from the 200809 economic and financial crises. It addressed issues of inclusive development, green economy and climate change, debt and financial and monetary reform; science and technology and the next era of globalization. The meeting convened for the first time in Arab country was addressed by economy, finance and trade ministers.

ACHIEVEMENT AND SUCCESS OF UNCTAD

United nation Conference Trade

The UNCTAD programme showed mixed result. In some programmes UNCTAD was successful while in some other programmes it made very slow progress. The following are the main achievements of UNCTAD:

1 Establishment of UN Industrial Development Organisation : Establishment of UN Industrial Development Organisation to encourage industrialisation in developing countries and for providing economic cooperation is the important achievement of UNCTAD.

2. Encouragement to trade: The UNCTAD has encouraged trade between countries of different economic and social system.

3. Establishment of General Fund : UNCTAD IV has contained that participant countries restructure the commodity trade of the developing countries with a view to create a common fund to maintain and buffer stock of 10 primary trade and Development (UNCTAD) | 261 commodities. Developing countries can take loan from this fund for purchase o good gains.

4. Monetary Problems : The UNCTAD V conference set up an adhoc inter-governmental group of experts to suggest reforms in the international monetary system to help LCDs to tide over their debt problems.

5. Commodity Agreement : One of the most important achievements of the UNCTAD VII was the agreement between the rich and poor nations on the integrated commodity programmes. Under this programme, developed countries will extend tariff and non-tariff concessions to the developing nations, so that exports of primary commodities from developing countries to developed countries can increase.

6. Increase in financial resources : The efforts made by the UNCTAD have increased the capital resources of International Monetary Fund, World Bank, International Development Association (IDA) and International Finance Corporation (IFC). The increase in the resources of these institutions has helped the developing countries to provide more development loans on liberal terms.

7. Liberalisation in loans: The UNCTAD V passed a number of resolutions concerning finance and debt problems of less developed countries. The UNCTADVI passed resolutions, relating to development finance, debt rescheduling, conversion of loans into grants to least developed countries. Thus UNCTAD has addressed the problem of increasing burden of debts and terms of debts of developing countries. It has led to provide cheap and liberal loans to these countries by the developed countries.

8. Expansion of Generalise System of Preference (GSP) : At UNCTAD-I the G-77 urged the developed countries to grant GSP to the exports of manufactured and semi-manufactured goods to the developed countries. It was UNCTAD-II (New Delhi) in 1968 that all members unanimously agreed for the early establishment of a mutually acceptable system of generalised nonreciprocal and non-discriminatory preference. GSP was formally accepted and it has been improved and expanded from time to time. GSP has increased the exports of developing countries and it has reduced the problem of foreign exchange in these countries.

9. Reduction in protective restrictions : The UNCTAD conferences decided to reduce the restrictions or protectionism. It has resulted into the increase in the exports of developing countries. The wind of liberalisation and free trade has started due to the effort of the UNCTAD. Now every country is interested in free trade.

10. Increase in development assistance : UNCTAD-II recommended that each developed country should contribute at least 1% of its GNPat market price as development assistance to the developing countries. France, Netherlands and Sweeden agreed to contribute 1% of their GNP while other countries also agreed to make efforts towards this goal.

United nation Conference Trade

FAILURE OF UNCTAD

UNCTAD has contributed a lot in the expansion of international trade and resurrecting the interests of developing countries. But it can be UNCTAD was not very successful in attaining its objectives. The main fo of UNCTAD are as follows:

1 Increase in debt burden: In UNCTAD conferences it was decided that the developing countries will give loans on concessional rates of interests and liberal terms, contrary to it, the burden of debt and repayment liability of developing countries has increased.

2. Negligible financial assistance: Regarding foreign aid programmes, only a few advanced countries have implemented the 1% target as laid down by UNCTAD for development assistance. In 1966, for instance, only 0.62% of the GNP of the developed countries was transferred in the form of aid to poor nations. Moreover, aid is given on hard terms and conditions so that poor countries are burdened with high debt-servicing charges.

3. Share of developing countries in world trade declined: The basic objectives has been to minimise the restrictions over international trade to increase the share of developing countries in the world trade. But this has not been attained. The share of the developing countries in the world exports which was 34% in 1950 had fallen to 26% in 1988 and 24% in the year 2002.

4. Weakness in GSP: The UNCTAD has failed in implementing the General System of Preferences (GSP) it has neither been expanded world wide not it has been imposed on all commodities. Textile, watches, footwear, handbags, leather products are excluded from GSP and these are the main items of exports of developing countries. Besides the GSP schemes are restricted to a limited number of less developed countries and thus these are in the nature of discriminatory benefits.

5. Increase in debt-service burden : Loans provided by the developed countries were on hard terms and conditions and as a result poor nations were burdened with a high debt servicing charges.

1 Other Failure :

(i) Tariff and non-tariff concessions are given at very low rate.

(ii) Gap between rich and poor countries has been increasing rapidly.

(iii) Developed countries did not show any interest in the technology transfer.

(iv) No serious efforts were made to solve the problems of developing countries. In conclusion, it can be said the UNCTAD has failed in attaining its obejctives.

United nation Conference Trade

SUGGESTIONS FOR FUTURE SUCCESS OF UNCTAD

Following are some of the important suggestions to make the UNCTAD more effective :

1 Technology and Economic Assistance : Developed countries should provide technical and economic assistance to the developing countries to exploit their natural resources.

2. South-South Assistance: A significant step should be taken to develop South-South trade and cooperation to build solidarity among developing countries and reduce their independence on the North. As a concrete initiative to promote South-South trade, ministers of 44 member of GSTP launched a new round of negotiations.

3. Discussion related one-one thing : UNCTAD should start a fresh discussions on one-one thing. These discussions should also comprise of those commodities also in which interests of developing countries are inhen

4. Encourage to long-term liberalised loan : Resources of international financial institutions like IMF, world Bank, international financial corporations, international development association should be increased. The flow of international soft loans to less developed countries should be stepped up.

5. To adopt liberal attitude : The very success of UNCTAD depends on the developed countries. The developed countries should grant unilateral tariff reductions or preferences to the less developed countries. Such tariff reductions, on the one hand, will increase the exports of the less developed countries and, on the other hand, will increase their imports from developed countries nad hence it will lead to an expansion of world trade.

6. Solid and time bound : The policy of UNCTAD should be solid and effective and it should be implemented through time bound programmes.

7. Special policy of exports : UNCTAD secretariat should implement some specific plans to increase expots of developing countries.

8. Other Suggestions: (i) UNCTAD should identify those key areas where it should concentrate its efforts to respond more effectively to the needs of developing countries.

(ii) UNCTAD should have a balanced outcome in particular with regard to the macro economic analysis of the effects of globalisation and to the role of market forces and governments.

(iii) GSP programmes should be expanded and should be implemented practically.

(iv) UNCTAD should be given representation in all major economic financial and trade institutions to plead the case of developed countries. It will lead to effective and useful forum of international standing.

EXERCISE QUESTIONS

Long Answer Questions

1 Throw light on the achievement and failures of UNCTAD.

2. Describe the organisation and functions of UNCTAD.

3. Explain the achievements of UNCTAD and write an essay on its importance for developing countries.

4. Critically examine the achievements of UNCTAD. Give your suggestions to make it more effective.

5. “It is said from the point of view developing countries that UNCTAD has been more a failure than a success.” Do you agree with the statement?

Short Answer Questions

Write the main functions of UNCTAD

United nation Conference Trade

1 What do you understand by conferences of UNCTAD?

2. Give your suggestions to make it more effective achievement of UNCTAD.

3. Discuss the Thirteenth Conference of UNCTAD.

4. Write the failures of UNCTAD.

Objective Questions

United nation Conference Trade

(I) Select the Correct Alternatives :

1 In attaining its objective, UNCTAD has been :

(a) successful

(b) unsuccessful

(c) progressive

(d) none of these

2. Declining share of developing countries in world trade is UNCTAD’S:

(a) failure

(b) progress

(c) achievement

(d) none of these

3. Thirteenth Conference of UNCTAD was held at:

(a) America

(b) Germany

(c) Network

(d) Doha

4. UNCTAD-I was held at:

(a) Geneva

(b) Bangkok

(c) Kenya

(d) Nairobi

5. Increase in mutual cooperation among developing countries is UNCTAD’S:

(a) achievement

(b) failure

(c) Progress

(d) none of these

6. UNCTAD-XIII held in:

(a) 20-24 May, 2010

(b) 29-31 March 2013

(c) 21-26 April, 2012

(d) None of those

[Ans.: 1. (b), 2. (a), 3. (d), 4. (a), 5. (a), 6. (c).]

(II) Write True or False :

1 The main function of UNCTAD is to formulate policies on international trade and related problems of economic development.

2. UNCTAD-I met on 23rd March 1948 in Geneva.

3. Every UNCTAD conference emphasised on the policy of mutual economic cooperation.

4. The Thirteenth Conference of UNCTAD was held from April 21st to 26th, 2012 in Bangkok, capital of Thailand.

(Ans.: 1. True, 2. False, 3. True,  4. True]

(III) Fill in the Blanks :

1 In UNCTAD-XIII, the member countries emphasised on ……….. … among developing countries.

2. The UNCTAD conferences passed a number of resolutions concerning debt problems of …

3. Tariff and non-tariff concessions have been granted to the developing countries at very..

(Ans. 1. mutual co-operation, 2. developing countries, 3. slow speed.)

United nation Conference Trade

 

 

 

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