Supachai Panitchpakdi, secretary-general of the UN Conference on Trade and Development believes that developing countries need to diversify to take advantage of globalisation.
The UN secretary-general said that in terms of trade, investment, technology exchange and finance, the overall effects have been rather positive. “Look at annual 5% growth in Africa, for example, of exports. Without globalisation, meaning linkages between the markets and the world in trade, trade growth in Africa would not have been achieved at the level of 5% export expansion.
To reap the benefits of globalisation developing countries need to diversify, Supachai said. “You have to diversify, you have to keep the flexibility, you have to be able to tap into markets. That’s what Asia is doing so well these days. (â€¦) For globalization to produce the real effect, you have to have the right governance, the rule of law and the right macroeconomic policies. You have to have the education and skill level.”
Many economies depend on exports of mineral resources and agricultural products and thus tend to be vulnerable. To counteract this Supachai said that they must be cost-efficient, because the revenue sides are always highly volatile and depend on the international situation and the market. Also important is diversification, meaning that even if you do normal agricultural production, you can go into industrialisation or processing. “But even within agriculture, you can diversify. Take, for example, organic farming. Organic products are becoming so popular around the world because they are environmentally friendly and healthy. But of course, farmers do not have the information. So we need policies to address those issues for linking up with the markets, to get producers to be connected with the distributors.”