Mukhisa Kituyi used his first public speech as the Secretary General of the United Nations Conference on Trade and Development (UNCTD) to encourage integrated global manufacturing.
Speaking at the International Investment Forum in Xiamen, China, where this year’s theme is global value chains and development, Kituyi praised the benefits of collaboration.
“The phenomenon of global value chains is one of the truly significant developments in global production in recent times,” he said.
Global value chains (GVCs) are created when several countries join forces to deliver goods and services in the most efficient way.
Using statistics from UNCTD’s latest World Investment Report, Kituyi underscored the importance of global value chains claiming that 60 per cent of the $20 trillion worth of global trade consists of transnational products.
In the developing world, participation in GVCs has increased from 20 per cent in 1990 to 40 per cent today.
“GVCs can contribute to the ‘catch-up’ of developing countries GDP and income levels,” said Kituyi.
However, as Kituyi encouraged the audience, he also unpacked a frank assessment of the current economic climate.
“We find ourselves still embroiled in one of the most pressing, persistent and widespread financial and economic crises of our time,” said Kiutyi. “The overall news is not good. Global foreign direct investment in 2012 contracted by 18 per cent.”
One of the main reasons for the declining amount of trade is widespread hoarding of resources.
“Skittishness about the fragile economic environment globally as well as policy uncertainty in the face of this fragility led investors to stash their cash, rather than investing it,” said Kituyi.
According to Kituyi, major investors have six trillion dollars worth of cash on their balance sheets. He advocated this be used productively to foster global growth.
Not all the news was pessimistic, especially for Africa and the developing world. In 2012, for the first time ever, developing nations received more FDI than developed countries by $142 billion.
Kituyi was named the Secretary General on June 10, 2013 and officially took over the position on August 31.