1. In accordance with the recommendations
of UNCTAD IX that least developed countries will constitute a
cross-cutting issue in the work of UNCTAD and with the focus assigned to
them in UNCTAD's technical cooperation activities, the Secretary-General
has established a Trust Fund for their benefit. Member States have
expressed support for this initiative and the Trade and Development
Board, at its forty-third session in October 1996, invited contributions
to the Fund.
2. The Trust Fund will facilitate the
start-up of new activities in the four main areas of the UNCTAD, namely:
globalization and development; international trade in goods and
services, and commodity issues; investment, enterprise development and
technology; services infrastructure for development and trade
A. Main activities to
be covered by the Trust Fund
3. The Trust Fund will be used to provide
technical cooperation to LDCs in the following areas:
(a) Support for implementing
macro-economic reforms, particularly in the areas of trade policy and
trade diversification, and financial and fiscal sector reforms,
including for the mobilization of public and private resources for
development of LDCs;
(b) Strengthening export supply
capacities at the national level, to produce tradeable goods and
services on a competitive basis. The focus will be on improved trade
and investment supporting/promoting services, including in such areas
as enterprise development, enhancing the role of women in the
development process, trade efficiency, and technology;
(c) Promoting participation of the
private sector in development, including in the context of UNDP round
tables, and organizing country-level investment promotion meetings;
(d) Assisting countries in the
preparation of projects and programmes in areas which strengthen their
(e) Providing support for national
authorities in the evaluation of existing and new programmes in the
areas of trade, investment and services; and
(f) Providing support to complement
national programmes normally funded by IPFs but which require rapid
agency response and support (e.g. requests for assistance on debt
management, WTO accession, etc.).
B. Modalities for the
operations of the Trust Fund
4. An important objective of the Fund would
be to seek contributions from as many countries and institutions as
possible. In particular, the Trust Fund should be seen as a collective
endeavour involving all States members of UNCTAD and relevant NGOs. A
broad-based Fund will provide a vehicle for drawing in some
non-traditional developed donor countries as well as developing
countries willing to share resources and experiences with least
developed countries. If their participation were to materialize, some
additionality to ODA flows to LDCs may be possible.
5. The Fund will have an initial target of
US $ 5 million; the aim is to secure regular replenishments so as to
maintain annual expenditures at around that level. Contributions will be
sought from developed countries as well as from developing countries in
a position to do so.
6. The Trust Fund will also provide an
umbrella for different types of contributions from interested countries.
For example, developing countries could make contributions in kind, by
providing experts for work in LDCs, by facilitating training of LDC
nationals in relevant institutions and by promoting the exchange of
successful development experiences. Triangular cooperation is another
area, covering cooperation between the beneficiary LDC and a developing
country financed by a donor country.
7. The Trust Fund will also aim at
obtaining financing from the non-governmental sector, for example
development NGOs, foundations, and private companies seeking involvement
in particular areas of UNCTAD's LDCs-related work (trade-supporting
services, investment, sustainable development, etc.).
8. To accommodate donor interests and
procedures, contributions to the Trust Fund will be either unearmarked
9. There will be a "core
project", financed by unearmarked contributions to the Trust Fund.
Such contributions will be allocated by the Secretary-General of UNCTAD
to support the above-mentioned activities on the basis of either
requests by LDCs (individually and collectively) or pursuant to relevant
decisions of UNCTAD IX and of the Trade and Development Board regarding
expanded technical cooperation for LDCs.
10. Earmarked contributions to the Trust
Fund will be allocated to specific objectives and activities agreed with
the donor. Separate reporting will take place on each project.
11. Substantive and financial reporting on
the "core project" will be performed annually, it being
understood that it will not be possible to determine which particular
activities had been funded by which donor, given the unearmarked nature
12. The Special Coordinator for LDCs will
coordinate the "core project". The Divisions of the UNCTAD
secretariat will implement "core project" activities, as well
as activities funded by earmarked contributions, in accordance with
their substantive responsibilities. Any residual functions not covered
by the Divisions will be implemented by the Special Coordinator.
13. Operations of the Trust Fund will be
guided by the financial regulations and rules of the United Nations and
will be carried out by the secretariat in accordance with internal
arrangements for UNCTAD's technical cooperation.
14. Beneficiaries of, and donors to, the
Fund will meet for consultations regarding the activities financed by
the Fund at the time of the annual consideration by the Trade and
Development Board of issues relating to least developed countries.
15. Information on the Trust Fund, as well
as on other activities concerning LDCs, will be included on a regular
basis in the secretariat's annual report on technical cooperation
submitted to the Working Party on the Medium-term Plan and Programme
Budget and to the Board.