UNCTAD Press conference 08 February 2021

Yes, Steve Mcfilippe, Ardonte de Elasticion, the statistic statistic.

Without any delay, I will now give the follow to Mukisa Kituye, my Secretary General of Wong Tall.

Doctor Kituye, over to you.

You have the floor.

Thank you very much.

Good morning, members of the press, and thank you very much for coming online at this launch of our Productive Capacities Index.

Before I go into the details of the launch of this product, allow me to say a few things.

This is my last press conference as Secretary General of ANTAD as I step out of my position at the end of this week.

And I want to use this location to express my appreciation to you, members of the press, the members of the Geneva Press Corps within the UN family, for your continued contribution to putting out the world, our technical products, our intellectual products, in a way that has been very important for us to be enjoying to international discourse.

Without your support, your role, a lot of what we've been able to say to the world will not have reached our destinations.

And so as I move out of my role, I wanted to use the occasion to express my appreciation.

Unfortunately, given the challenges of COVID, my preferred possibility of our farewell cocktails cannot possibly be held.

And even as I leave, I thought that there could be no better way of a send off for me from my position as Head Bank Ted than at a time when we're discussing what to me is a game changing tool like the Productive Capacity Index.

You may remember that over the past year we have been discussing with you, sharing with you our development of tools on the centrality of productive capacity.

Really this discourse started doing after this LDC report 15 years ago where we're talking about the importance of building competitive innovation, building capacities in the productive resources, enhancing entrepreneurial capabilities and anchoring clear linkages in production as a way of developing an engine for sustainable development.

Today we consider it very, very important, particularly under the current circumstances when the world is not only looking for the post COVID economic recovery but is fearing an equal recovery, an equal momentum to build back and even uncertain possibilities of building back better.

That we look at what are the underpinning considerations that can give many of the developing countries, and particularly the LD CS, are fighting chance of recovering better.

And for us, the centrality of the confluence of productive competences, sound linkages and entrepreneurial capabilities is more important today than it has ever been before.

So a step further in this work is to develop a tool that can be used by Member States not only to talk about productive capacity, but to identify policy areas of weakness and potential improvement to monitor progress in building productive capacity.

And this is where the Acted Productive Capacity Index comes in.

I want to express my appreciation to my team led by Paula Kiwani and the people in this division.

But not just all at home is division, but he's liaising with other divisions of the organisation, but tickle the statistical office to develop this index, which is attracting substantial, substantial attention across the board within the development community, in the UN family, but also with other multilateral institutions.

And I hope that as we unveil this index today, we'll capture more attention to a critical area that is going to inform the pathways to stronger recovery after the COVID.

I will now like to thank you all for your attention and perhaps pass back to the moderator for Paula Kuby to give you a bit more detail about the productive capacity Index.

Thank you for your attention.

Thank you very much.

Over to you, Paul.

Paula Kiwi, Director of the Africa Division, African LDCs.

Yes, over to you.

We can't hear you.

Can we unmute Paula Kiwi?

Ken, OK.

Yes, we can hear you.

OK.

Excellent.

Thank you very much.

Doctor Kitui as a follow up to what Doctor Tu mentioned, which is very important, is that building productive capacity is the engine of growth to achieve the Sustainable Development goals and the national development plans.

And what is unique about this is as Doctor Katui mentioned, there's so many facets involved in dealing with productive capacity.

And this index is so important because it is a multi dimensional index and it has a unique ability to capture key drivers and enabling factors that foster productive capacity.

And it's not a unisexual index.

What is important here with this index is that it has the ability to for it has the capability to measure the ability of countries to achieve their development aspirations.

Now this index is composed of eight categories and 46 indicators.

8 categories include human capital, which draws on education and health statistics, Natural capital which measures the level of use of natural resources, energy capturing availability and also the efficiency, efficient use of energy, Icts availability and ICT use, transports, road infrastructure, rail infrastructure, connectivity, institutions which is covering basic governance indicators of the World Bank, Structural change which is measuring the structure of the economy as well as a change and private sector covering some of the doing business indicators such as time it takes to establish companies and support given to companies.

Now these categories and indicators were chosen for their relevance specifically with regard to the concept of productive capacities and secondly due to the availability of consistent data.

Now the index WE, which we're launching today, has covered 193 economies from the year 2000 to 2018.

And it allows policy makers to specifically assess how productive capacity are being developed in a country.

It also allows them to benchmark country performance over time or across countries.

It also allows them to monitor the effectiveness of past policies and most importantly, therefore, to be able to improve policies in the future.

Now, what is the index has shown us is that the interest broadly follows the distribution of GDP.

So you have developed countries having a **** index, middle income countries have a lower index and least developed countries the lowest index.

And the PCI, not only is it closely correlated to the GDP, what we've seen here is that in Asian economies it shows the highest scores among developing region as opposed to in contrast to sub-saharan African countries and LDC showing the lowest level.

When we have a closer look at the PCI components, it reveals further insight between different countries and regions.

Developed countries lag behind developed countries in all categories except, as we all know, natural capital.

And this is further evidence that export of primary commodities is not the way to move in the future.

And commodity dependence economies have the lowest PCI index.

And the difference between developed and developing countries is most significant when you look at the components of structural change, human capital, energy, institutions and ICT.

So these are areas where the index will point to specific areas where countries can then re evaluate their policies to either improve them to either ensure that they implement it or to either develop new policies.

Thank you very much, Catherine.

I think I'll leave it there and please pass on to Musi de la Ling.

Thank you.

But we, we thought it would be interesting to, to drive you through the, the website linked to the, the PCI.

So, and I'll give the floor to Musi de la Ling, who is heading the the landlocked countries developing countries section.

Musi, over to you.

And we have on the screen.

You have on the screen the the page, the web page dedicated to the PCI over to you.

Can we unmute Musi de la Lane?

Musi can I?

Musi, you're online.

Musi, can you?

Can you hear me be unmuted?

So it's it's OK.

Yes, please go ahead.

Go ahead.

Thank you very much for giving me the floor.

I will walk you through the dedicated page on the Ankita and web page on the index, which you will see on the screen.

As you can see, you will find the conceptual foundation and definition of the productive capacities.

You will find the logo and different colours.

The colours by the way, are not randomly chosen.

These are colours, relevant colours from the relevant SDGS where you can find each of the the the the the web page.

You see actually one stop shop for all the the product.

You will see category or components of the PCI which have their own icons.

Each of the 8 categories also have SDG colours, but more importantly you will find the conceptual definitions and relevance of each of the category for fostering productive capacities and kick starting structural transformation.

And each of the icons you will find the definition of the the the component of the category itself, but also the indicators that it combines.

For example, on the human capital you will find the composite element is that compose the human category in the areas of education, skills, health but also more importantly fertility rates which have direct bearing is on productive capacity formation and also transforming economies.

So each of the categories have their own nation or those indicators.

Identification of the key indicators the the the visualisation part of it.

As you will see also some direct bearings on the economies and also the performance of countries.

You are.

You see here is the regulation between the productive capacities index and the the the GDP per capita of nations.

This is the strongest correlation that you will find when you click on developed countries.

Actually you will find the that the all developed countries are on the highest productive capacity scores but also as you know they have the highest GDP per capita.

When you look at developing countries, these are the countries you see in blue which are next to developed countries but they are below the levels of developed countries on productive capacity scores and also the level of GDP per capita.

The the the the the the worst performance.

The two category of countries are LLD CS which you will see in in red.

These are landlord developed countries in red and you will find the the weakest of all countries, the LD CS in yellow, which are the lowest level on the distribution bit of GDP per capita and productive capacity.

Basically what we are saying here is these are the countries that are the lowest productive capacities and also the lowest level of development.

So this is the the way the productive capacity index actually measures economies in a different way that never been thought of before.

Just instead of measuring economies only on GDP per capita, now the PCI actually is serving, providing another hint and in insights on how economies have been performing the the next curve.

The next line shows you between the the correlation between export concentration and also the productive capacities index.

As you can see on the lowest echelon, these are the countries that have the the the the highest export concentration index, but the lowest productive capacities, which means higher productive capacities are very much associated with less concentration of export, which means more diversification of export.

That's also more economic resilience to shocks.

Whether it is COVID related, or the shock that we have seen during the global and financial crisis of 19, 2008, 2009, the economy that have better productive capacities, more diversification, less export concentration, are the economies that resistance such shocks.

Now, the PCI web page also contains various tools, analytical tools, methodological descriptions, how the PCI was constructed.

By the way, this is the culmination of at least the tech at the technical level, 4 years of work that went through multiple and extensive review processes, the reviews by experts, statistical experts, academic, but also more importantly for policy practitioners and policy makers in pilot countries.

So you will find the the the this year's LDC report also had a chapter on productive capacity Index focusing on list developed countries.

As you will see here, you will find the productive capacities Index analysing the conditions and the state of productive capacities in landlocked developing countries.

The the second one we'll find is the the methodological approach and the result is covering 103 economies along the age categories, but also more importantly the key indicators used in productive capacities.

You will find another tool, analytical tool where we have been looking into coherence between trade and industrial strategies.

But more also on this you will find operational manual which will guide countries how to foster productive capacities, utilise the existing capacities and also kick start the process of structural transformation.

I think I will, I will stop here.

Then my colleague Steve McPhee will will walk you through the anchor portal, the statistical portal.

Thank you very much.

Thank you very much, Mohsin.

Can we unmute Steve Mcfeely for a few words on the, on the statistical aspect of this new PCI.

Steve, can you, can we hear you?

Good afternoon, everybody.

Can you hear me?

Yes, perfectly.

Please go ahead.

Let me share my screen.

So can you see my screen?

Not yet.

OK.

So one of the challenges when you build a statistical index like the PCI is that it produces a number.

And the challenge then is how to interpret that number.

So let me bring it to the PCI page.

So once you have this number, how the challenge for statisticians is how to present that in a way that's useful to policy makers.

So this is the productive capacities page and what I want to show you quickly is we've developed some tools to try and help you as journalists or as policy makers.

How do you use this information?

So there's lots of information here, but what I want to do quickly is bring it to one of the maps.

So here we have a, a map of the world.

And when you, when you enter the, the map, there's a default set of countries.

But we, we will, let's get rid of that and let's pick one or two countries very quickly.

So we've picked Togo and down at the bottom you can see straight away it shows you the, the different sub indices that Moosie mentioned.

So you can see Togo's quite strong and natural capital quite strong private sector, but then weak in other areas around energy, transport, ICT.

So that's interesting.

But if we compare it, say with a country in another region, so let's take Bangladesh for example, we can contrast straight away the differences.

So we can see Bangladesh is much stronger in energy, stronger transport, but weaker in other aspects.

So as a journalist, let's say again, you're interested in comparing with the developed country just to contrast.

So if we pick Germany, you can see here Germany is kind of stronger on institutions, but also stronger in, in areas like ICT.

And again, so, so now you've picked your countries and you're you're interested in exploring now something like ICT.

Well, why is that different?

So if we look at say ICT, so I click over here and you could, one of the things that's striking straight away is Togo and Bangladesh.

They begin while their ICT capacity has improved over the last 20 years.

You can see two things in the chart.

You can see there's a marked contrast both in level, but you can also see that Germany improved much faster and has put a lot of effort into ICT in recent years.

But if we pick something like human capital, again, we can see there's been a very marked improvement in Togo and Bangladesh over the last 20 years.

But again, we see there's quite a disparity between between Germany and Togo and Bangladesh.

So what this tool allows you to do is investigate different sub indices.

You can also pick individual years if you're interested in a particular year and you can see what's been changing over time.

So it gives you quite a strong policy tool which allows you to investigate what's been happening and why.

Crucially, of course, when we for fronted as AUN agency, we want to make a global public good.

So what's critical is that the data are available to you and not just to you, but to everybody.

So they're freely available to everybody.

There's no charge.

These are publicly accessible and you can see here in UNTAD stat, all of the data are available for each individual country for the last 20 or well, the last 18 years.

And we'll update this on an annual basis.

Again, this is 1 tool of many.

So just finally, let's say you were interested in in the Togo story.

So now you understand a bit about the productive capacities.

You can also go to the UNTAD country profiles and you can pick Togo and this gives you some broader context.

So you see Togo here and now you can see a lot more information about Togo, what's been happening.

And it allows you to contextualise all of this information either to write stories or from a policy makers point of view to understand what's going on, what's what's the relative strengths and weaknesses of the countries that you want to compare with.

And that allows you then to formulate well informed policy decisions.

So I'll stop there, Catherine.

Thank you.

Thank you very much, Steve.

It's very efficient training.

If you if you need more help on that, of course, you can call us back later.

Now I will open the floor for question.

I already see Peter Kinney.

Peter, over to you.

You have the floor.

You're muted.

Yeah.

Question, Catherine and I would like to wish Doctor Kadu all the best for his future adventures and thank you very much for the interactions over the years.

My question concerns African countries.

In your report, the top three countries are Mauritius, South Africa and Tunisia, and there's quite a gap between Mauritius and South Africa.

So I was just wondering if you could explain what that is and why the other leading African economies such as Nigeria, Kenya and Egypt are not figuring in their top three?

Thank you, Paul.

Paul, can we unmute?

Yes, thank you very much for that question.

I think what what is important about the index is that one has to realise and look at certain aspects of of the countries and the data of the countries.

As you can see, Mauritius is an island country and the others too are not.

And some of the aspects of which we have a note in, in the methodology is that some of the aspects of the island economy, because they're much smaller, because they have less road infrastructure and so and so forth, it is also very difficult simply to compare them without understanding for the background and the history of those countries.

And as Steve pointed out, the next phase of that was to show the more detailed breakdown, so you get a more contextual framework.

But what we have concluded with regard to like Mauritius is that that they have built their productive capacities in certain sectors which will help their economy, for example, the tourism sector, as you're well aware.

But also more recently now island states are moving towards the financial sectors, services sector.

And Mauritius has done a considerable amount of work in there.

So you have to pay into consideration the population, the size of the countries as well vis A vis the other countries and that's why they feature there.

Nigeria has a massive population, so the data is slightly different with regard to that.

But the most important thing about the index, which everybody has mentioned is that it allows policy makers to focus specifically and have more targeted strategic policy development in certain areas of the 8 sector, 8 sectoral areas and they can understand what is going on.

I might add quickly here, Peter, that what we're doing as a follow up to this index is that this year we have a large project which we're going to country by country to train people on the ground how to use this index.

Also the statisticals point of view.

But more importantly, for the policy makers to be able to interpret this index because we believe that this is the area where policy makers will really get a close look at what policies did work, what didn't work or what needs to be improved or whether they need new policies for that area.

Thank you very much.

If, if, if Moosie would like to add a few comments, he could on this stage.

Moosie, over to you.

Yes, No, I think it's well explained.

Just the other part of the the question is was why other countries such as Nigeria and also others are not performing as well.

I think this is has to do also with the structure of the economies of these countries.

As you know, Nigeria is heavily commodity dependent country, so are many African countries as well.

There there is huge gap in terms of diversifying their economies.

For Nigeria.

Just to give you an example, close to 98% of their export earnings come from only the oil sector.

That also shows you how weak the economy of Nigeria is in terms of productive capacities and structural transformation despite the fact that it is actually the second largest economy in in in sub-Saharan Africa, actually in Africa itself after South Africa.

So it it, it really shows you also the lag in terms of the other areas.

If you go to China, Nigeria, the private sector is not performing as well because the infrastructure is not working.

The electricity is problematic and also access in terms of weight of the huge sheer weight of population access to electricity and also ICT is more problematic in Nigeria than other smaller countries such as Mauritius for example.

But having said that, Mauritius is one of the top performing economies in in in the region, both in terms of competitiveness, diversification, as Mr Rakumi was saying that this is the economy that is actually well into the financial intermediation and also becoming a hub for ICT and also using ICT for productive and business purposes more than any other countries in the region.

Thank you very much.

Thank you very much for your answer.

Doctor Kitui, you may want to add something at this stage, actually just to express my appreciation to the kind words that were expressed to me.

And thank you very much.

I wish you well as well as you continue in these challenging times.

Thank you.

Thank you very much.

I I don't see any additional question on on the screen.

You may need a little bit of time to digest the the statistical aspect.

Peter.

Yes, please follow up for you.

Yeah, I was saying as there's no other question, Sam, I was just wondering if somebody could speak a little bit about the South African economy.

You see mentioned that it's the largest, the strongest economy in Africa.

What are South Africa's prospects in terms of its development index?

Is it going in the right direction or how can it improve its position?

Thank you.

Thank you, Peter.

I understand it's for you.

Mercy, Mercy.

Can you, will you take the floor?

Yes.

I just, you know those.

If you look at what Steve has shown you on the data, you will find where South Africa is lagging behind other developing nations such as you know countries such as I'm having in mind, even China or other top performing countries in Asia, you will find South Africa's performance a little bit lower in terms of the human capital.

Also, you know, South Africa itself is highly mining and natural capital dominated economy and there is a lot amount of value addition and diversification that is growing in South Africa.

But it's not as comparable as as the larger performing developing regions.

But being the second top performing country in, in, in in Africa, it is doing well.

The other thing you might look at the, the capacity utilisation of firms in South Africa is is not as **** As for example, I think the average if I'm not mistaken is close to 65 or 70 for firms capacity.

Capacity utilisation which is really much lower than capacity utilisation of firms in the Asian countries, which is for example in China is about 8485%.

So which means there is a lot that can be improved even in countries that have been performing better.

You will see at index, you will find that because of the multi dimensionality of the index, there is rarely you can find in developing countries nations that are performing equally and as best on all the categories and all the indicators used in the composition of productive capacities.

So, but for every nation there is improvement, but the improvement varies as Steve has shown you between countries and regions as well.

So I will stop here, but if there are more questions, I will come back to it.

Thank you.

Thank you, Missy.

I don't see any raised hand on my screen still wanted to add, I think something.

Yes, please, Steve, please.

Yes, thank you again.

If I can just share my screen quickly and let's just take a look at South Africa.

So I've just pulled up South Africa here on the charts.

So you can see the overall in this is 34.

But again, like Moosie said, if you look across, you see it's, it's got relative strengths in some places, but in particular what jumps out is transport and things like ICT are still relatively weak for such a large wealthy country.

So while you see correlation with GDP at the aggregate level, this gives you a different perspective.

And let's just look at ICT.

So we see South Africa has made very, they've made good strides in developing their ICT capacity, but from a very, very low base.

So even though they've made quite dramatic improvements, it still remains quite low relative to a lot of other countries.

And I think this, this allows you to look maybe into the future because I, I think it's issues like energy ICT, these are going to be big issues for the future.

So I think that's part of the, the South African story.

Thank you, thank you, Thank you, Steve.

Paul, do you want to add?

Yeah, yes, you have.

Thank, thank you, Catherine.

Just to to to sum up that what Steve and Mussi have just mentioned is it's exactly the type of questions that policy makers should be asking and interrogating the system to be able to get the answers that we're giving now.

And This is why we think it's going to be a a useful tool and a ground breaking tool for policy makers to move in a new trajectory and how to achieve sustainable development, structural transformation.

And especially for the least developed countries.

As you may be aware, there are only 6 countries who have graduated from least developed status in over 50 years.

And they must be doing something wrong and we all must be doing something wrong.

So This is why this is a new approach of a more composite holistic approach to development, which can be answered by more composite holistic approaches to policy decisions, to trying to improve things and to get the countries on the right course to achieve structural transformation and then eventually the Sustainable Development Goals.

That's all I have to say.

Thank you very much.

So I, I think, well, probably you will need some help to go through this, this tool.

So there's a whole team behind this new PCI.

So please feel free to come back to us and all the experts will be available to, to go into details if you need.

I think we're going to stop here unless the I see any other hand raised.

It's not the case right now.

So we're going to stop here.

We're all at your disposal to to answer any requests for clarification or interview.

I would like to take this opportunity to say goodbye to Doctor Kituyi and wishing you all the best in your first uncted life.

And dear colleagues will will see us soon again on on you different on you research and analysis made by by our teams.

Thank you very much.

Thank you.

Please beware the embargo.

It's 5:00 PM GMGMT tonight, so 6:00 PM Geneva time.

Thank you very much.

Bye, bye, bye.

Bye.

Bye, bye, bye.