Comments of ECA Secretariat on the report of the Preparatory Meeting of the Group of Governmental Experts on Economic Co-operation among Developing Countries

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(~, \~I _~-'7~~

UNITED NATIONS

ECONOMIC AND SOCIAL COUNCIL

JOINT OAU/ECA. J1Em'ING

OF AF;RICAN EXPERTS AND· OFFICIALS ON ·ECONOMIC CO-OPERATION AMONG DEVEIDP.ING '.COUNTRIES.

Addis ~baba, 26-30 ~ugust

1976

COHlIENTS OF EGA SECRETARIAT ON THE REPOBT OF THE PREPARATORY MEE.'rING OF

THE GROUP OF GOVERNMENTAL EXPERTS ON !OOONOr-iIC C(}"()PERATION

~'!ONG DEVEIDPING COUNTRIES

-A.

'Co-oneration in'the trade rield

/ ' . • J

-1

^{f (}

l~i~II&

Distr.

LD·nTED

E/CNo14/ECDC/2

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Z4 August 1976 Original: ENGLISH

1. The p~oposa~s concerning co-.operation among developing countries ~ - the t~de field

fall .under .~h:ree headings:, ^1\\

Ie. StrenRthenin£ and creation of Producers'Associations

II~ Creation?f

a

system of trade preference III. . Trade co-operatiqn·through active measures

2. The recommendations adopted by the Group of Inte~governmental ~er~s o~ Economic Co-operation among Developing Countries must

be

Helcomed. froui'an'Af'rican standpoint, if only because to a large e::rtent they coincide \4"i th those that were· made at ·the joint ECA/UNAPEC* meeting on African Producers'Associations held in Addis AQaba from 7 to 9 July 1976.

3.

Both meetings emphasize the need for the membershi9 of producers'associations to be as universal as possible and for efforts to be ma.de to create net., associations of

producers of primary commodities for which no producer arrangements exist among develop- ing countries. Both groups of experts also stressed the need to set up .. the Council of Producers' Associations- of Dev.eloping Countries Producers-Exporters of Raw rraterials.,

ill accordance Hi th Resolution 6 of tho .I:akar Conference' on Rat'1 Uateri;).ls. Similarly, it

t,1Cl,S agreed .t.ha.t ·Producers' Associations should ha.moll.ize their pooit1ona in international

negutiatione and' sho~id thcIilselves embody market research centres, inforn:.a.ticn .

\ali te .. and . multinational rr.arlceting enterprises.. Morecv~rt' the experiences of

*

^{Cnited ~htior~} Action Programme for Economic Co-operation among NOn-Bligned and other Developing Countries.

M76-1375

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a number of Produo~rs' Associations, both regiollal and inter-regional, in whioh African countries participat~,.as recounted at the Addis Ababa meeting, confirm the relevance and validity of the recommendation made by the Group of CO\"c!'IL'l1ental Experts 011 Economic

Co-ope~a~ion to.the ,effect that "existing producers' associations should be strengthened by ensUring

that

the developing oountries participating in them fully exercise control over their resources as well as over their means of production and distribution."

4. However, tdlat needs to be stressed a.t this point, is that if dev:eloping countrie~

,.l

in general a.nd African countries in particula.r are to make' any meaningful ·advance, in . the field under study/full aocount ~rill need to be taken of the'problems

and

'obst~c~~~

that stand in the ^\iay of Prducero" Associations. The Working Group which'met at· Addis Ababa observed that in the African context, these problems rel~ted,mainly.to the. fact: - that the objeotives which the associations set themselves are generaily not defined and programmed strictly enough and are therefore frequently out of proportion to the re- sources used to achieve them. Also the administrative and financial support available to the associations is, more oft~n tha~ not t ina.4equat'e:'l'heir secretariats frequently do not have technically competent ··6r sufficient staff, and at times they face serious difficulties in financing their ~perating budget, not to mention their trade promotion aotivi ties.

5. Furthermore, the activities of most producers' associations at .. the m~rketing .. l~vel

are significantly hampered by the role of transnational oorporations; l.'/hich to' a' gr'eat

e~ctent dominate the Illr3.rlteting and distribution channels.. Iast+y, the countries members of the aesociations often oompete severely among themselves. Thus, ,African.countri~s .'.

r~presented at Mexico might wish to stress the need for the adoption of a co~~rehenaive

programme a~ed at solving these proble~s, including those ~elating to the provisio~ of technical and financial assistance and to aotion vi~vis transnationals. They

may

also

~rish to recommend the setting-up of regional mechanisms for the co-ordina. tion of producers I

associations to be' linked up with the proposed Council of Producers' ASSOCiations o~ . Developing Countries Producere-Exporters of Raw Materials. ECA, for it~ part, plans to prepare a numoer of studies identifying in as much detail as possible the potential for creating new associat:'ons of interest to African countries a.nd to assist in str~ngthenine:

existing aSSOCiations.

.

-

II. Creation ~f a 8YS~~rn of trade Ereferences

6. In supporting the principle of establishing a system of trade preferences among developing (;ouncries:' the' Group .of E~1)erts on Economic 'Co-operation among Developing Countries rightly puints out that the prinCiples governing such a system should make it possible rlto take full a.ccount of the different levels of development achieved by develop-

ing'countries^lf, With due ·r~ga.rd to the need for special measures to qe instituted in favour of the least developed countries, from whom "no reciprocity sho~ld be requestedu •••

in· return for' preferences extended to themrf. Attention is also drawn to the need to IItake full account of the interest of ~xisting subregiop.a.l and regional integration

" , ' . . .. ...

groupings".

7.·

The.cruc1al :importance for'AfriCan cOlLltries' of :safeguards of the kind ~mich. have just been mentiioned hardly needs to 'be stres,sed hereo From a cl.,yriarnic standpoint f hOl.fever,.

what is . likely to prove perhap's· of equal if' not greater inrportance for them' is the need . as th~ e.;;:perts suggest, to devise, "appropriate links betHeen trade preferences a.nd·

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co-opcration in other are.as, in particular productionf transport and payments .in order rneaningf'ully to reinforce their effectiveness^fl• African qountries should insist that particular 'attention '~~ giv~n to the' concretization of this recommendation in future studies' to be undertakEr. Preferences given in respect, for instance, of imports of capital goods should fo:rm part of a package of measures including the transfer of

technology., the creation of a~pr6p!iate infrastru.cture in the importing countr.ies \'ihere such imrastructur,e does not yet exist, payments arrangements and arrangements' for joint production in the im90rting countries at stages and on t~r.ms to be define4 from the out- set to compensate to the maximum extent possible for the sacrifices financial and other- wi.se ~·/hich the granting of such preferences is likely to entail for the preference-

granting countries. In short., .special care should be 'taken to ensure that any preference scheme on a Third. ~,Jorld level incorporates not only classic defence mechanisms of the safeguards type, but also provisions for the installation of mechanisms for self- sustcining grotrlh in African countries~

8.

;Al~o, attention will need to bo given to possibility of establis~ing a preference scheme at the Int~rican level prior to or concurrently ~nth the establishment of the Third Horld Preference System. The Group of experts rightly recommended that UNCTAD and GATT should be cailed upon to assist in further studying the proposed scheme (or

sCh.emes). African delegations may \·ri.sh to inssist ,that regional economic commissions

~hould also be rcqu~sted to assist in the pre~aration of these studies.

III. Trade co-operation throuci1 active m.!3a.sures

9. Africa's trade with developing market econol'D3' countries rose from ~n,240tOOO,OOO in 1910 to S~,020,OOO,OOO in

1974.

However the share of ~tfriears trade with these countries which was at 10.1 per cent in

197

0 , remained at the,same level in

19740 11

This lack of progres,s in relative, terms is to be set against the increase registered, from 81.9 to

(>.?·:7. per cent in the olrc.ady very high share of l~fri6a.' s trade ,·ti th developed market economies, registered for the corresponding years. Such a state of affairs is all the more regre,ttable 'as there are many ~ndication8 "that there is an appreciable potential for mutually beneficial tr~de exPansion betwee~ African and other developing countries,

\-lhich has not been tapped yet ¹ and tha. t such expansion \'10uld significantly assist African countries in diversifying their over~~l trade patterns.

10. This is why, from an African standpoint, the recommendations made under this heading must b3 welcomed, all the more so 'since many of them can be tied to policy objectives and mea.sures already adopted at. the intra-Mrican level ''Ii thin the framework of the African strategy for' the implementation of the new interr~tional economic order in the region. These recommendations relate ill particular to the establishment of commodity exchanges "located in and. controlled ^by developing countries", which it has already been

agrecd.s~ould be set up at the llfrican regional level, to the prepa~tion of studies on the identif'ica. tion of "coDunodi ties and manufactures in \ihich there is a potential for new or e:·:panded trade'. among developing countries") which ECA W"d.S requested to undertake for member States, ^a~ the use of.joiLt import procurement aild purchasing policies, for which a sta~t has alrea~ been

made

at'the African level with the Betti~p of the African Procurement and Sup~lies Association (APSA).

-.--- _!I

_~nlile

for the same years Africa had a continuously positive trade balance with Latin Ame::ica. with a surplus amounting to

:;235

million ill

1974,

the reverse obta~ned in its trade

\-lith ASia, where a deficit of :~1,740,OOO,OOO waG registered in that year. (Source: United Nations Honthly Bul.1etin of Statistics, Vol. XXIX, No .. 0, June 1915 and Volo XXIX, No .. 7, July 1915.)

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11. The: :implement~tion of these r-ecoinniel1dations would in principle go a 'long way toWard' making it possibl~ ~o expand ,trade meaningful~.y ,among developing cpuntri'es. SUch .a ' result ,is no:t l~(ely .!.;o be achie~ed however, 5.f adequate, infrasiru,cture and. machi!l:ery

are not properly .. laid: dovm. '

12. ~1e :'establishment of trade information and joint marke~ing and research system among developing countries as a means of promoting eA~anded and diversified trade.flow~

; ,t1(j-{~ ihemselvee^a liould be a major step in this direction.

13. The maldng of joint arrangements aimecl a.t improving the co~di tions under which trade presently takes place betlieen developing countries and dev,elope.d ,countries needs pGrhaps to _ be given mor,e attention than it was in the Report' of ,the Group of Experts.

'I'he setting up of Umultinational marketing enterprises among developing cOuhtries ,as a means of participating in the benefits of the marketing and distribution of developing countries ^t commodities and marketing goods ''lould^lt is only one of the possibilities that could be e::ploi ted. In line with the trade C\:I:l production integrated approach, provision- should also be made for these enterprises to market capital or consumer goods to be

produced on a co-operative basis ~y developing count:ries not only on the markets of developing countr:i,es themselves, but also eventually in the markets of third cOWltrie.s, i. e., developed countries. Attention will need also to. be g:i,ven to joint i~)ort pooling at the inter-... regional level, similar to the poolinti ECA is plarming at the African

regional level. Furthermore, inter-regional- import and export enterprises co~ld also be set up either as part of the above-mentioned multinational -marketing enterprises or as separate entitieso

14. From the African standpoint" the. issue ~f .mo~etary·, and fina.ncia~, co-operat~on among third world countri~s. must be seen aga:inst the backgro\Lld of the present' almost' exclusive reliance of i~rican countr~es ^O!1 the cur!encies of developed countries for financing , their trade transactions, including those with other African countries, and on provision of development and other. financing orig.J.nat,in.::; in the developing countries.'

15.

As far as dependence on e~~er!1al sources of financing is concerned, it should be

"borne in mind that Africa's debt burden rose from ~;6 billion in 1965 to ;~22 billion in

1973

and the percentage increase for the region during the same year was much higher than that registered for As~a and Latin Americao As ~ result, outlays for interest and amortization charges represent a rapidly growing percentage of total export earn- ings, e~~ceedill€ 20 per cent in a number of co~trieso

16. Over' the past two years or so, there have been some signs of qhange in a positive , ^{. "}

direction ~"ri th an increasingly important role beinG played b~r regional and inte:r-regiolJB,l funds and insti.tutions, such as the Arab ~nk for Economic Development in Africa (BlillEA.) and the 8800 .milli0l1 fund for development assistance l"lhosc establishment is currently being envisaGed.. Also," the recent establishment of the \-lest African Clearing House clearly shows that African countries arc more and more determined to take self-reliant action in the monetary field.

i 7." lIou.:.:vor, "much mor~' remains to be "done, a.nd

in

fact proposals are being made il1 the fielcl of fi~iancial and monetary 'co-operation:

vn

thin the frameNork of the strategy. for the impleIne!~tatio!l

of

^{the' ric"l} interr~tiona.l economic order in Africa:

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Nl'D/3(I) Page 5 18. To 'support and stimula. te intra.-A.:frican indu strial e:::pa.nsion' and trade, it \-/ill be necessary not only to set U~) !)ayments unions in the c .... iffercnt subregions to be linked eventually by an African payments Union but also to consider the feasibility of adopt- ing a standard monetary wlit of account such as an African SDR, which could be used for botb clearing operations and the settlement of net balances. Co-operation in the manage- ment of monetary reserves with a vie\'[ to preserving their real value is also advocated.

Pr090sals corresponding to all these points, have been made by the Group of Governmental Experts with res~ect to the ThiIXl World as,a whole. As such these can be re~rded as 'useful extensions of the African proposals, it being llnderstood, ,ho\<lever, tha. t the.

question of the most a)pro,riate timing for the impl~melltation and articulation of the two sets of proposals needs to be clarified at the present African meeting and, in any case,: before th~ meeting in Mexico.

19.

Furt~ermore, from,an African ~erspective it'is of paramount importance that pro-' posa.'ls ^~elating to the strengthening of finances and monetary co-o,eration be directly related to ?-nd clearly focused on mechanisms aimed at assisting the region in: me,eting cri t~,cal developmental needs, including 'the 'need to setting u:.) industries 'which -provide other industries l-dth basic inputs, sqch a.s rnet'als and chemicals,'and industries which can exert pONerful growth promotinG effects on other inclustrieso The idea of setting up State-owned African multinational corporations for the purpose of establishing;such ,

in~ustri06, l'lhich t-ras' endorsed at the intra-Af'rican level, could for certain specific

types of industries, usefully be extended to cover ,statc-<)tmed inter-regional' ,corporations.

- l{OreOVer, the f~sibility of establishing inter-r~gional mining and industrial banks to , raise the necessary finance for these enterprises also deserves to be carefully·stUdied~

20. Finally, i,t will be 'necessary to em9hasize the im:?ortance of establishing such vital infrastructure_as commercial baru~ing facilities especially for eXport~redit

financing pu~oses and insurance an~ re-insurance institutionsG In that connexiont ' the recently established African He-insurance Corporation (AFRICARE), could provide a

nucleus for the establishment of a similar institution at the Third World level.

C~ f..~~~.J.n 0roducti.v~eotors': Pror::-r(l.~!LQLAQlliE.2.Q:..eed b.Y.QQX~ .. r~~t experts

.!rLr~-E~1...!£...ind~.2.~a ' -

I. Recommendations

21. The meeting of int8rgovernrnental e:;perts and offiqials on economic co-operation among developing cOlUltries in connexion with its consideration of co-operation in iridustrJT

recommended the follo\'ling action:

(i)

Co-operation with respect to control ov~r foreign investments, and the,activities of trar.l.sIAtior~l corporations, in close ccr.L110xion t"1i th the \"zork of the Non-

Aligned CoUntries;

(ii) The elaboration of long-ra.nge national dcv~lopment"policies' in major'productive sectors relevant to the domestic needs bf ,-the-:'cQuntries concerned as a T)re- condition' fo'r co-ope~a.tiol1: ' ' . . , ' "

(iii) Joint research and development efforts by developing countries in industry:

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(iv) Promotion of joint industrial ventures in any of their many forms, provided that they coincided with the industrial development plans of their host countries:

· (v) The elaboration of inventories of mul tina tional proj ects by regional and sub- regional financial institutions as a first step in identifying possible co- operative projectso

22. In order to assess the implications for the African of the above-mentioned programme ot action and of economic co-operation among developing countries in general, region,.it is n~cessary, first of all, to ro-state the primary development objective of the African countries. This objective, which in ~olitical terms is referred to as economic

independence and self-reliance, in economic terms ~s lcnown as dynamic self-sustained growtll and diversification through self-reliance and through development and f'uller utilization of domestic resources. Appropriate policies and programmes of action must be instituted by developing countries at the national, subregional, regional and multi- national levels among developing countries in order to achieve this objectiveo . This policy objective is related to it~ (b) in the Programme of Action.

23. 'The implementation of such pro~es, with particular reference to industry, implies fundamental change in the industrial structure of the African region to ensure inte:r-plant, sectoral and inte~sectoral 'forward and te.clcWa.rd linkages. This calls for the integrated.

development of capital goods and machine tools sectors on the one hand and industries processing primary products and those producing final goods on the other. This will develop dynamic internal capability flexible enough'to respond to changes in domestic and world demand in industrial. products. Such diversification in production will alter the composition of industrial output in the African region" enabling it to share in world tra.de in manufactures.

241. The, uanufacturing sector in At'rica has ap to:, now been concentrating on the develop- ment of light industries, ~ecislly the food ancl beverages industry. Eoreover, the region's share in world output of metal and engineering products remained unchanged at the low level of 0.2 per cent during the 15 years between 1955 and 1970. Thus, i f Africa is to achieve its share of 2 per cent of world industrial output in the year 2000 as stipulated by the Lima Declaration, African countries have to make about 10 times the effort they have mado' since' they started their industrialization programme.

25. In terms of in~uts and the organization of production, the African region is well endowed only with natural resOurces: it is highly deficient in skilled manr>Ol<ler of' various types such as entrepreneurs and e;~erts Capable of formulating, designing, developing and implementing projects, especially in the critical sectors referred to above, or of managing the kind of enterprises called for in the programme. Another major deficiency is theunavail~bility of appropriate technoloBY at reasonable cost and with no restrictions, and the inability to adapt and develop technology to take local re!3ource coruU tione into account. The ccp1tGl needed to finonoo' ir.dustrial development is equally ~)ortant as an i~t but ~lBO scarce in the region.

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26. Of all the d~veloping regions, Africa is by far the most deficient in all the inputs required for ~namicself-austained growth and diversification apart from natural re- souroes. Eighteen of the twent.>-aix least d(;7eloped of the dWl;lloping countries are in Africa. The African region proba.'oly d.epends more heavily than any other region, on

developed countries not only for industrial manpower but also for technology, financing and equipment. These inputs are made available under conditions well known to be restric- tive. In

1915,

for exa.m:>le,

15

,er oent of all UNDP resouroes earmarked for Africa were allocated to the recruitment of foreign expertise and to projeot formulation, design and development •

III. §.t~j;egy: for ,economic oo-op.eratio,!l amollg develoniB£t,.s.o.~.mtries ca;eable o,'£:. iprolep1ept-

i.n.K...~f-sustaj.n!M. gowth. alld.,9-i ver.!U£;~J.sm in t~ ;~~.E...J'W..2.n

21. Except for those contained in paragraph 2l(d) al~ (e) above, the rccommendatio~

made by the preparatory meeting of e:cperts on co-operation in general and. the industrial sector in particular seem to be based on the assumption that the developing countries as a .whole and Africa in :pa.rticul~r already possess industrial production capacity and that co-operation should therefore focus 011 the efficient utilization of that capacity by expanding trade among developing countries. It is, hOl-lever, clear that it wOuld be inappropriate, in so far as Africa is concerned, to focus on trade as the bas;i.s for 00-

operation among developing countries as e=~eriencG of subregional and regional co- operation shows that trade-eentred co-operat~on ventures tend to polarize the distribu- tion of benefits in favour of the more highly develo)ed member countries. It may be ooncludedthat economic co-operation among developing countries based on trade trould not

b~ significantly beneficial to the African region at the present time.

28. There is, however, scope for co-operation, lihich does not rule out trade expansion and may be beneficial to the African region. Such co-operation may take at least three different forms which integrate trade and productioa. One such ap:9roach is for the more advanced of the developing countries to sup)ly the African region with the goods needed for production on better terms than are provided by the developed countries and at the

same time to provide it uith technical know-how and management <..lso on preferential basis wit·~­

:::~. t1l0 fnu:cuork of investmen'c pr(}gJ.~al.Wut.H:l "';:;,.;:,u01d.ted with the importat.ion of equipnent to industrial SGctor3 tihere the final ^~roducts are ^COl~er goods intended primarily for national, S1.1.bregional and regional marlcetso E:::ports to other developed countries may be considered, and co-<>peration may be ap~lied to marketing.

29. The other possible form of co-o~eration likely to ba beneficial to the African region is an integrated programme unc¹er 'Hhich goods needed for l)roduction are supplied from

otb.er developed countries for the produJ'}tion of other ^i:1:.11t goods under conditions similar to the ones described above except that in this case the output is intended for the

domestio, subregional and regional markets.

30.

Other forms of co-operation which may be related to trade arG possible in relation with the following activities:

(i) Tho oreation of common undertaldngs where one party supplies only documenta.- tion and blueprints while the other malces the investment:

(ii) Th3 manu.fa.cture of new products wi thin the framework of an associa.tion of two countries, one of which is the main e~orter and the other, the main ~orter

which sup)lies the blue;>rints and technical knOlHlOli'r

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(ii~). The joint manufacture of components which will be put t()gether to make a single final product~

(vi) The exchange of specialists and of technical documentation for R and D

pu~oses with a view to improving the design of existing products of interest to two or more countrieSi

(vii) Joint research and development:

(viii) The creation of mixed joint enterprises with majority shares going to the host country: .

(ix) The creation by developir.g countries~ whether or not they belong to the same subregion or region, of multinational corporations for the purpose of proces- sing complementary raw materials available in the countries concerned and . joint marketing of the products. This may entail Rand D in connexion with·

new products made from theproccssed raw ma.~erials.

IV. . Ob,iectiv.es for eponomic a.nd. technical co-<)l)2~tionh a.m,p .. ng develo'l)in,& countries 3J. The objectives of developing countries in economic co-opere.tion among themselves may be divided into tlro categories: primary objectives relating to policies and objeo- ti'.res at the national level and to objective·s and ::.>olicies which are required among developing countries within the same group and are cOM9lementary to their national objectives and secondary objectives and strategies relating to economic relations between developing and advanced countries.

32. It JNJ.y be postul~tted that at the national level the· pI::'mar;i objective of each developing oountry is c1~mi" se] ~~.·rn:. -I;~ ;.:r~: :: S"".:-l·;I:;h 'Elnd the gradual substitution of uomestic resources for foreign resources. The im:':Jleme:llta.i:ion of this national objective woulci. require the development of a sec·torally integrated productive capacity wi thin individual celltres a.nd. among sectors to ensure that developing coun·tries have a growing ct).paci ty to convert their savings and raw JNJ.terials into industrial inputs wi thin their own economi es.

33. Because of the problems of sldll 8:'1.d the scarcity of various resources, such a prog'-

~JDme can hardly be implemented by the majority of developing countries si~e-banded1y.

1neYlwould require technical and economic co-operation with other developing countries to implement such a ^pro~e.

34. 'l.;his is then the point· ... of cl.eparture in defining the objectives of economic and technical co-operation a.mOl18 devel~ping countries. The programme of action to be dis- cu3sed in Mexioo is aimed at the tm,lementation of policies of mutual support in pursuance of individual and collective objectives. If the nation of multi-regional co-o,aration among developing countries to be destined in riexico is to be effective,

.', ,-.. -.~ 'L:~ supplemented by regional e.!W. sv.l.)::.'::-r!.ollt'l coonai>E.!' ... "':!.on ^{~. ·I~;,·· .~} ... c<:' :. ^~

Ue development of hlililan and ~tura.l res,)urces, and capital goods and. technology in the pooling of services and finance resources and in the elimination of trade barriers.

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35. As indicated above th~ seoondary objeotives of' oo-operation among developing. CClm-

tries are: to strengthen their bargaining pc~:er in negotia.t10nE: with advanced countries.

on the allcoation of world resOluroes, ~rtici,ation in teohnology, acoess tc wcrld markets in· general and ways of seouring remunerative prioes f'or primary products and getting on appropriate moneta~J system adopted.

v •

36. Institutions are required f'or the implementatioll of' these b'o broad objectives.

Under the programme for oo-operation among developing cO'Wltries, the required instito- tions are to perform, inter ali~, the following aotivities: defining appropriate co- operation, polioies and strategies spelling out methods of oo-operation for application within individual sootors, doing researoh into appropriate ways and meallS of 'iml)lementi!l«

speoifio measures and projects, carrying out a periodio assessment of the effectiveness of eoonomic oo-operation among developing oountries and advising individual countries on strategies oonsistent with this kind of' oo-operation.

31. tlith a view to implementing the l)rogramme of mutual support among developing COUD-

tries in their relations withad'9a.noed oountries, the neoessary -institutions DIlst concern themselves with suoh matters a.s the continuous emmination of· international monetary trends, pe:nna.nent support of negotiations lri th advanoed oountries and the identification of their. objeotives and interests, a oont.inuous assessment of the objeotives and strate- gies to.be adopted by UNCTAD, GATT, Dfii', the World :Bank, UNIDO and other international orsan1zations with a view not only to avoiding oontradiotions or a lack of coherence between prime.ry and seoondary objectives but also to ensuring that· secondary' objectives are designed and. implemented in suoh a way as to be oompatible with the overall development strategies defined at the national and regional levels.

_ 38.

^In' establishing the various institutions, aocount shOUld be talcen of any !>rio~ity peculiarities and interests of the different developing regions aooording to the extent to whioh they partioipate in these aotivities and the advantages to be derived from the distribution of suoh institutions among the reGions. If t~ese institutions are distributed among various regions, it will be neoessary to plan for a oo-ordinating unit. As a mark of the~r independence, individual developing oountri~s must at . their own expense provide .these institutions with the 11eoessary rosources and personnel even though they may set an upper limit on the personnel t'ihich can be supplied by any one oountry so as to maintain some kind of balanoe in the oomposition of the staff of such seoretariats.

Do Natural Res.ouroes I. Water Resouroes: _{I • •}

39. Asia has had some experienoe in the management of international rivers, a prime

eDlDple being that of the Nekong. J\frica has a number of river and lake basin commissions.

IAtin America has its own problems as shown by the arguments between Brazil and Argentina.

It will be very valuable if. oo-o,el'6tion

in

the exohange of information on managerial, teohnical lcno~ow and orBBnization can be established between the different reg1ons.

This would appear to be the case also in areas where new methods, such a.s the ma.thema.ti oal modelling of basin development, have been or are being used.

40.

Islands, suoh as the Comoros aM Zanzi ba.r have their own special problems conoern- iug drinking water S\..'Ppl~es. An institutional arrangement for the exohange of infOl'2J&ooo

tioD and e~erienoe between say Western Se.mOL in the Paci.fic, 11.ialta in the Mediterranean aDd the Comoros in the Indian Ocean would be most valuable.

41.

The problems of the use of water for irrisation and for hydroelectrical development on both a . large and a small scale, could also be dealt with in the same w83.

. .

42.

Reoently a committee was set up to consider underground aquifers in nortb-eastern Af'J;'ioa and the Arabian peninsula. This too is an area which can be recognized as involving interregione,l cc>-operation.

.

.,

II.

!wm:

43. There are already regional organizations dealing ^with the various aspeots of the development of electrioal energy, suoh as UPDEA in Africa. and OIADE in Latin America. It would be usetul to call for co-operation between such organizations.

~ In the field of no~onventional sources of energy, there are considerable ~ossibili­

ties for inter-regional cOMOperation in the fields of biogas generation, ^so~ar energy, geothermal energy and ^wind energy.

45.

Inter-regional o~peration is already a reality in the case of ^OPIOO and OAPPxJ 7 but it would· seem important for such organizations as ARPEL ill Latin America, which deals with all aspeots of energy, to have oounterparts in Africa and in Asia. Among the·

resolutions adopted by the Regional Conference on the Petroleum Industry and 'Manpower Requirements in the Field of HYdrocarbons were some which related to the development of an African Petroleum Institute, a Petroleum Documentation Centre and an African Petroleum Oraanization. In considering the feasibility of establishing suoh or~nizationst there will be need for co-operation with similar agencies,for instanoein India and in Bolivia.

UI. Nine~ls:

46.

There is already some international co-operation in copper, lead, zinc and

tin,

mainly in oonnexion. With trade. There . will be a need to strengthen the organizations responsible for suoh ~peration so that they can be of greater assistanoe to developing oountries in Asia, Africa and Latin Ameri.ca. There will also be need to set up others.·

47.

The oreation of national as wall as subregional institutions in the field of mineral resources development requires interregional co-operation in conne::cion with their design, establishment and development. There is an urgent need for co-operation in dra~ng up mining legislation and in the field of mineral production in general.

IV.

CartoJliE'!P&:

48.

There is at the present time the yrospeot of co-operation in geodetio operations in North ~rica between the countries of the African region ancl those of l!hrope. Suoh ^00- operation could also be developed between the nort~stern part of Africa and western Asia..

•

v.

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49. There is a need for inte~egiona.l co-operation in dealing with problems of coastal and maritime pollution.

50.

Studies of wind patterns in the lower and upper atmosphere are of general concern to all countries, and as these patterns llave a considerable influence on rainfall and other phenomena. which can affect the human environment, some arrangement for co-

operation should be devised in connexion with their study. The same applies to studies of ocean currents.

51. The desert locust knows no national boundaries, and. there is need to forge stronger lines between the countries of Africa and those of western Asia in the efforts to control this insect.

52. As Africa beoomes involved in the usc of satellites for the dissimination of in- formation and for surveying natural resources and monitoring environmental changes, there will be need for co-operation with developing oountries in Asia and Latin America tPAt have done more in the use of these satellites.

53.

Finally, there is need for inter-regional co-operation in dealing with the problems of drought and desertification.

VI. ~oicnoe and Technolo£

54. The summary of the report of the Group of 77 spells out a number of areas in which oo-operation is needed. We might add that there is a need for oo-operation in the re- vision of school programmes in soience and technology in such a way as to emphasize the technical, mental and Bocial skills needed by the agricultural and industrial sectors.

55.

There is at the moment considerable interest in co-operation between universities and industry. The e~erience acquired in this area in one developing region should be made available to the others, and an institutional mechanism should be set up to further

co-opera.tion in this a.rea.

56.

There will be need for oo-operation in the implementation of the World and Regional Plans of Action for the Application of Science and Technology to Development.

E. HUman resources

I. Technical cQMOnerat,ion among develo!'ipg counJiries

~7. Lb TS&u:c1s reccmmEmdt:.i.~cfl (f), in palc.g.ra.ph 120 cf the repcrtof the Preparatory

Meeti~g, semirars and expert group meetings are not very effective forums for sharing and exchanging yechnical and soientific information and development experience. Emphasis should be placed on the training of technical and managerial personnel, including re- search personnel: i~lant and development project attachment training: the exohange of research and teaching staff: the establishment of a clearing house on technical and scientific information~ and joint research projects on a regional or ecological zone basis. Also, research institutions should focus on one region, subregion or econological zone, but regional institutions should exchange research staff and research findings with other similar or related institutions in other regions.

58. Recormnendation (:') should ~ncll:lde trainLlg in research labvratories, attachment training on the management ot' development projects and special. programmes for training technical co-:operatiol1 persolUlel (ECA is currently planning such prograDlt!les and in . doing so r vl::>uld like to co-<>perate VIi th, for example, economic co-operation organiza- tions in Latin America. Developing'coUntries should l~eep an open door in facilitating

t.~chnological and management eJ...~ericnce sharing.

59.

Iri recommendation (d), consiueration should be given to taldng advantage of the

·l'8.g:L:nw.l organizations for the shC:J.ring of experiences in educational innovation tihich·

UNESCO is promoting in Asia and Africa. Information on educetional systems can also be i"':i.owui .. t:cully derived .bY pe!sons on visi tine fellol'lShips and from individual and grou!'l

ztudy' tours. . , '. '

IIIe ~9ssi .. ble institutional ar.ra.n~ment,s

60. It is imp'ortant tha. t there be appropriate machiner:y for: promoting and administering tc~hnical co-operation activities at both the national and the regional levels~ A global 0rganization may be necessary and can be considered as part 'of any secretariat structure

'i';~1ich the Group of 17 might wish to establish. This should, however, be secondary in ::,! .. ~po:;:ta:nce to t'he or~nizations required at· t~e national and regional levels. The"

::,eg~.~)·l~l.l commissions should be encouraged to provide regional machinery' and adequ.a.telY :~-,lrpo:r'i,~d i!1. their efforts to do SOD -

ii'. ... Techniertl co-oneration

.

^...

61. It is ~ggested that the following be included among the recommendations in pa~

~r,:~.pr:. 120 o~, the Report:

G.

(i) The establishment of a Central Information System as a focal point loTi thin eacD of the developing regions (such as the secretariat of the regional economic COIr.missio:ri) for the co::'la~'~~vn~ f;;'~o:,,"'~ge and dissemination of informa.tion 011

manpower and other capacities for the promotion and execution of programm~s

for technical co-operation among developing countries7

(ii) The mobilizaticn of financia.l resources "Ii thin each ·tleveloping region for the

pro~otion of pro~es for technical co-opcration among developing countries, the establishment of appropriate machinery for the management and utilization of the financial resources mobilized for this purpose, and a clear definition of the objectives and circumstances for which such resources can be utilized.

Services and infrastructure _{. • I . . -}

.. ^'

62.. !The set of proposals put fon·ia.rd by the Preparat'ory Heeting cover a' wide range of subjee-ts ancf are concrete. As regards teleconnnunications, progress i's being made in the es~~ablishment of the Pan-African TelccoDmrunications Nct\'lOrk, including the creation of n. pan-African telecomrrIU.lucations union~ Postal seMZ'iccs within the Regio:l are in a poor

u ()

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." state. Improvements are'requirect in the quality of "administrative and financial manage- ment, in the structure of routing and tariffs the e::::pcnsive practice of routing', from one African state to another via Europe is still extensive and ill the harmonization of mail tariff. More manpOl'ler is also needed to co:!.)e \"1i th the ra.pidly" increasing demand in postal communica.tions. ClearlJr these ilnprovements must" be und'erta!.:en early if the additional burden of communicating with other developing regions is to be sustaineda 63. Gra.ve wea!;:nesses afflict maritime shipping ap.d mal":;:e it difficult for Governments

• to talce advantage of the Code of Conduct.. These '"lea.lW'iesses relate principally to' the

or~nization and use of data, to shortages in ,off-shore and onshore manpower, to

\'lealmesses in middle- a11d high-level !lanagement and to policy-making i11 generaL. liore-

• over, there is little to indicate t~t ma.ny Governments arc ready to face ~he challenge of e'stabl~shi"l!-g "multinational shippi11g lines, Hhich must be done before "exclusive lin.er conferences for d"evelophig countries" can" be esta.blished and the o!JPortuni ties provi"ded for in. the Code can be exploi tecL. It is difficult to see half' the region can enter into commitments in this area lnth the far more sophisticated countries in other Regions wi thout a tremendous effort to re-organize and improve its Olm ShiPllillg services

(including its facili tics for reIJairs, 'maintenance and ship-building).

64. It should be noted that national" shillPing lines tend, t-then" they become members of the existing conference, lines, to become powerful sUD',orters of conference line philoso- phies and policies; This will certainly affect propoSals for the lIestablishInent of preferential freight rates".

65. Port congestion ~y be clue to inadequate port capacity, layout or administration.

In many' cas"e::; 3. t has little to do, \'Tl. th, the ports themselves" Nevertheless, the prospect of rapid increases in sea-borne freight" will call for co~peration bet\vecn l)Ort ma.nage- ment associations in Africa a.nd their counterparts in other developinB' regions. The f~:~t step may well be t~~ o~ forgine li~c~' between t1!-em. "

66. As re~rds the facili ta:t,ion of the movement of goods, vehicles and passengers' across frontiers btems (Viii) and

(ixYJ,

ECA ha.s tal::en the step of organizing a study of the legal and administrative barriers to tra.vel and trade along the Mombasa-Iagos Hight-tay in -connexion ,..,i th the development

ot

the trans-African highWay ~etwork.. This study is more' . comprehensive tlian th9 TIR convention which covers only the movemellt of road vehicles across land'frontiers~ The ECA study'covers t~e facilitation not oulyof documentation . but 'of organization and legislation as we'll.' ' '.

67. In the c?se of, air transport it i~ suggested tl~t priority be given to, the develop- ment of' indigenously owned and clirected. intra- and int~rcontinentQ,l freight' airlines. ' The "Mr~can Civil Aviation Commissioll should be given 'che primary rcs!.)ol1sib~li ty of establishing contact ,·Ii th airline associati'ons in oth~r developing regions wi th a. viet'l to "co-operating on studies and. technical assist~nce in this conne::i.on.. Attention t-till also have to be paid to "the" £acili tat ion of ~irfreight.. ""

680 The princi!1al difficulty in raill·.ray developme"::'1t al1~l linkage is the fact tha.t the technical cha:ract'e:tistics~ of different sec"tions ancl. systems are ~ not th~ same and that mineral eJ...'ire,ctiol1 for e:~port "outside .. ^{t' ..} frica. continues to b~ the ma:l.n rationale for ' nel'! constructiOj,l or extell~i~n. There is ¹¹⁰ al tern2.tivo to a deliberate effort to halt"

the process of constructing raill-rays to differellt technical specifications if railtqays are to play their essential role ill the long distance movemellt of industrial raN

materials i!.l bulk ancl of semi-finished a.nd finished products.. The Union of African Railvrays may be invited to establish conta.ct t'li th other regions and advise on the prospects ,for and "rays and means of joillt ,rogrammes tri th them ..

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69.

At present there are five trans-African highway projects in ,rocess on th~ continent:

(i) Trans-saharan Road: Algeriers-Gao-Arli t:

(ii) Trans-African Higln·ay: Kombasa-Iagos:

(iii) Trans-Sahelian Highway: Ia..k.ar-Ncljamena.:

(iv) Coastal HighNa.y: Iagos-Nouacl:chott:.

(v) Trans-Fast African Higill1aY: Cairo-Gaoorone.

These five high~~ys, which cover

40

African countries, have a tptal length of

27,100

Idlo~etrEls, 1ilhile the feeder links to them account for an addi tionai 40,800 ·kilometres.

Together they cover a major portion of the region.

10.

To these five Trans~frican. High~ays, three others could be added with a view to having a netl'lOr!;: co.vering the whole of Africa.. These are:

(i) . Ncljamena.-Irassawa (eJ...~ol1sion of the D9.kal'-Ng,jamena Higtn·ra.y) ~

(ii) Cairo-Ra.bat-~touakchott (along the llediterra.nean and Atlantio coastS)7 (iii) rripoli-Kinshe~sa.

7.1. These ei[Jht Trans--.L\frican High\'TaYs'l together Hi th developed inland wate~ys and

rail~tay networks, wo:u1d serve ~s the arterial transport system of tho continent.

12..

Intergovernmental co-ordinatinG committees have been cstablisheu for the trans-·

African highway· projects. The tasle of the Co-ordinating cormni tteos is to plan and co- . ordinate not only the d~fferent construction stages of th., international higtllBYS but also the studies and measures required for thoir sound util~zation.

13 •. The establishment· of a .HiGhl-rey Authority for the Momba-sa.-lagos Hi~Wa.y is in prog- ress. The Authority lrill be a legal entity res::?o:l.sibJ.e for the co-ord.il1ated. construction and maintenance of the Highway and for its efficient utilization, which it will ensure particularly by easing and removing non-physical barriers to travel and trade-al~ng the highway.

74,,· A goocl·deal of technica.l assistance in carrying ont l)I'efeasibili ty alld feasibility

studies for sections of these highloJays that are substandard for. international traffic or are l1on-existent has be,en received from Hestern European countri~s and Japan. lior~ help is'required from them

as

\-Iell as directly from the Africo.a States. themselves if progress is to be made. The tasle of mobilizin~ financia.l res.ources for const~ction lies ahead.

There is little doubt tha·t ol1Portuni ties e::ist for inter-regiona.l co-operation in all stages of the d~vclopment of these roads. This could. be e::tended to include an exchange of experiences of the relationship of road research to 'clcsig,.l and construction, the association of universities and I>olytechl1ical institutes t'1i th design and the usc of coating and construction work in training highway engineers as \-Iell as the fundin~ of construction...

•

•

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75. It may have been noted that 'for tccl\nic?-1 ~n~. e.co}1o.mi~ .. ~easo.n~, _q.o~~cte~t :'t·~'thM the smooth and rapid ~ovement of'goods, a groat deal of attention np,cds to be given to the subject. of design sta:ildardizationo" This factor Nill a1so affect. the e::rtent to t·rhich - the po;t~ntial of the African marJ.~ct: for road, ra.il allcl telecommunications cqui~)ment·

"rill develo}) and the speed 't-li th "1hich the, manufacture of spare pa.rts, com!,'>onents, accessories, and- complete equipment can be establiched i'1ithin the. regiono

76. An importe.i1~ element in the l-lho18 programme to development transport and commi.lnica- tions infrastructure is clearly the supply of competel1t manpO\V'er.

. ^{~. ~.}

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H. Transfer, adaptation and development of technology

77.

The recommendations of, the Preparatory Meeting give priority to restructuring'

"the present 'legal 'frainework'for the transfer of technology" and revising "the system of intellectual property protection, in particular the Paris Convention". These priorities. reflect the sophistication of ^~ome members of the Group of Governement Experts and will be of immediate usefulness to the more advanced countries in the developing world.

78.

Where the African Region is concerned, it is necessary to determine what is to ^be transferred and what is the meaning of "transfer^ll• It is therefore suggested that we refer not 80 much to ~quipment, blueprints, operating handbooks, formula~ and the like as to a technical system which in the first place is capable of identifying a specific type or form of technology (e.g. equipment for manufacturing cement) and secondly is able to negotiate its ownership or use; set up, operate ^u:d maintain, the equipment, produce spare parts, components and accessories; adapt and improve on the process or product and produce new. types and forms of related technology~ This definition is necessary in order to make clear how much needs to be transferred if a technological process or product is really to take root in compliance with the principle of increas- ing self-reliance.

79.

The elements in a programme aimed at reducing dependence and at promoting this process of taking root would include

(i) Legislation, machinery and competence used in unpackaging technology contacts or technology elements in project contracts and in negotiating with regard to:

(a) Costs;

(b) R(',etrictive conditions which inhibit the use, adaptat'ion and development of technology. This is what the priorities ^select~d refer to.

( i ) Technological self-reliance; i.e. the development of competence in the appraisal, design, constr~ction and. management of technological processes intended to develop and market a given product, i.e. mustering or having the capability to :

(a) Ca,rry out feasibilit~1 6-~udies, market surveys and other investment and pre-investment analyses;

(b) Determine the range of technologies appropriate to a given mix of resources, and needs or a given objective;

(c) Execute engineering designs; plant, process and product modification and adaptation and plant installation and maintenance;

(d) Perform tasks relating to mana@ement and operations and marketing, sales and other consumer services.

(iii) The identification and orientation of recipients of technology:

,

(iv)

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- state corporations and private enterprises in countries in the least developed category or a combina,tion of both, including their foreign subsidf\:r'ie's· .'

,

- Those which are often ignorant of the technological bargain;

- Those which are deficient in the analytical skills needed to evaluate the commercial offer and ita economic implications are unaware of sources of alternative technology, are ,highly disorganized and often engaged in competition to attract foreign investment and lack the framework in which

·to develop national technology policies;

Institutions for national (and multination~l) policy making:

(a) Analysis of existing administrative and policy framework in relation to the attainme!lt of national technological goals:

Institutions for policy making and planning in science and technology in the context of economic planning and co-ordination and effective- ness of these institutions;

Analysis of institutions and policy concerning the importation of foreign technology;

Monitoring and control of industrial investment, import controls and foreign trade regulations in relation to development of national technolOgical capability; framework for commercial and industrializa- tion policy, poor mix of resources and needs.

(b) Creation of institutional machinery dealing with the development and transfer of technology for a co-ordinated approach to technological ,planning:

Registration, deposit ·and approval of contractual agreements I-clating .~(j '~l:I.~ i.i'allafeJ: of technology;'

Evaluation of investment agreements;

Assistance in negotiating and renegotiating technology agreements;

Looking for and selecting alternative sources of technology;

Fonnulation of policies: .. for developing national scientific capahili ty in various s~ctors;

Applied research in connexion with adaptation of imported technology and the development. of local tec.t;'l(Jlo~n . Interregional co-operation in developing comrr.un technological approaches in sectors of vital importance •.

(v) Deli berate orientation of nat ional, mul tinational : "and· regional research and development capa~·~ilities whose main use so far, has 'been in connexion with the

agro-biologi~al problems of agricultural export crops;

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(vi) ProfoUnd understanding of' the ca~abilitiest role, motivation

and

operations of the producers

c.m

sellers of technology (mainly trans- national corporations);

(vii) Building a rel~~~onship between R and D capabilities an4 the strategies a~ .. plans" f~.·r .socio-economic ch.;.nge; e. g., restructuring of indust~y; . tnodernizing ~gricu~ turG; transforming the rural sector and. enabling'

.Governments .a¢ communi ties to attack effectively problems of. rr.ass poverty, unemployment, 'pathological urban growth and" to attain increasin_{. b} a measure of self-reliance as well as self~sustaining"growth.

In effect, therefore~ the proposed priorities sidestep. some aspects of technology transfer that are of critical importance to .the African Region.

80. Al though the concrete recommendations put for\-lard later in the Report go well b~yond. these priori ties they still do not" fully cover all of the bas:i,.c issues in which the Region would be interested, e. g •.

i ) th-e rol~. and development of appropriate technology;·

ii) the design and effectiveness of focussing devices and inducement mechanisms j

iii) "management education for technological innovation including the role of the technical entrepreneur;

iV) the organiz2tion of diffusion.

More could be added. For example, it must be borne in mind. that technolo'gy transfer,.

use, adaptatio.n am development is inseparable from production, production is inseparable from inputs (ravl rna terj als, m~,npowert capi tal ,goods and services

am

finance) as well as from the size and characteristics of demand (i.e. markets). If, to go further, development banks (and. financing insti tutions in general) are unwilling to finance invention

c.m

innovation Ii ttle will happen in circumstances where they provide the main source of investment fW'rl.s for industIJ ... ·

81.: Again, a powerful factor affecting diffusion is the strong preference (reinforced by ease of access, assured performance, and other considerations)

't1hieh indigenous entrepreneurs hav~ for imported rather than home grown technology.

These are all issues connected 'with the reality of use t adaptation. and development rather than \tIi th the simple geographical concept of transfer. .

82., So far we have concentrated on technology transfer related to industry.

The problems of transfer in the agricultural sector are somewhat different for at least tt-iO reasons: the highJ:y specifi.c .location-bourrl character of production and the 'socio-cultural and. geographical problems of' widespread. d:iffusi·on' •. :

83..

The scope of co-op~ration should, therefore, be extended to cover ma~

additional aspects of transfer, use, adaptation and development.

•