UN Reports on Poor Nation Exports
By NAOMI KOPPEL
Associated Press Writer

April 29, 2002, 3:50 PM EDT

GENEVA -- Developing countries are increasing their share in the export of
manufactured goods but are reaping little benefit, according to a U.N.
report released Monday.

High-tech goods may look like they're coming from poorer countries, but in
fact those nations provided only the low-skill labor needed to assemble
items produced elsewhere, the U.N. Conference on Trade and Development said.

"Goods travel across several locations before reaching final consumers, and
the total value of recorded trade far exceeds the value added," said the
178-page Trade and Development Report 2002.

The report said up to 30 percent of world exports are produced that way by
large international corporations, almost all of which are based in developed
countries.

"Although the industrial countries have seen their share in global
manufacturing exports reduced from 80 percent to 70 percent in recent years,
the developed countries were able to increase their value added and their
participation in manufacturing income," said UNCTAD Secretary-General Rubens
Ricupero. "The opposite happens in developing countries."

The report also said that developing countries have been hit hard by the
global economic troubles. International trade has transmitted the slowdown
in richer countries to developing nations, with a number of poorer countries
going into recession.

"After growing by 14 percent in 2000, export volumes for developing
countries grew by less than 1 percent in 2001. For developing countries as a
whole, growth was 2.1 percent, down from 5.4 percent the previous year," it
said.

Ricupero said the success stories of a few countries, mostly in Asia, are
skewing figures that suggest improvement across all poorer nations.

"Many of the developing countries still remain highly dependent on the
export of products that are based either on natural resources or on labor,"
he said.

Real improvements will depend on an increase in the market for
labor-intensive products in developed countries, and in a move away from
such production in middle-income countries, UNCTAD said.

Large developing countries such as China and India also need to expand their
domestic markets to overcome deep-seated problems of unemployment and
poverty, the report said.

UNCTAD said China might not benefit as much from its membership in the World
Trade Organization as had been expected.

Although China is a strong competitor in some traditional labor-intensive
goods such as clothing and footwear, and in assembly of high-tech goods, it
is facing a surge of imports of goods such as textiles, electrical items and
motor vehicles.

The report said China also had to start replacing imported parts and
components with domestically produced ones.
Copyright © 2002, The Associated Press

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