DAMODARAM SANJIVAYYA

NATIONAL LAW UNIVERSITY

SABBAVARAM, VISAKHAPATNAM, A.P., INDIA

TITLE :
UNCTAD – TRADE AND INVESTMENT DEVELOPMENT, IMPROVING SECURITY
AND PEACE.

SUBJECT:
INT. ORGANISATION Law -

NAME OF THE FACULTY:

DR. CH. LAKSHMI MADAM

NAME OF THE CANDIDATE: JASHASWEE MISHRA

ROLL NO.: 20LLB040
SEMESTER: VII

1
 Acknowledgement

I extend my heartfelt gratitude to Dr. CH laksmi madam, our esteemed int.organisation Law
teacher, for affording me the invaluable opportunity to engage in and contribute to this
project. Her guidance and support have been instrumental in shaping my understanding of
different international regimes and laws. Her expertise, encouragement, and insightful
feedback have played a pivotal role in the successful completion of this project. I am truly
grateful for the mentorship and knowledge she has shared, which have significantly enriched
my academic and professional journey.Furthermore, I acknowledge that all the information
incorporated into this project is presented to the best of my knowledge. I have strived to
ensure accuracy and diligence in the research and execution of this work.

2
Contents
ABSTRACT –......................................................................................................4

Chapter -01..........................................................................................................5

Introduction.........................................................................................................5

Literature review................................................................................................9

RESEARCH QUESTIONS..............................................................................10

Research design.................................................................................................10

Chapter 2- functions of unctad........................................................................11

Chapter 03-........................................................................................................13

Globalization and development:......................................................................13

Brief case studies...............................................................................................14

Chapter -04........................................................................................................18

Effective Outcomes of UNCTAD:...................................................................18

Instances Where UNCTAD Faced Challenges:.............................................19

Comparison of the World Without UNCTAD and With UNCTAD:...........19

UN Organization Involvement in Israel-Palestine Conflict:.........................20

Chapter -05 UNCTAD POLICIES..................................................................21

Conclusion.........................................................................................................22

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ABSTRACT –
The project aims to investigate the multifaceted role of the United Nations Conference on
Trade and Development (UNCTAD) in promoting sustainable trade and investment as crucial
elements for peace and development. UNCTAD, as a specialized UN agency, plays a pivotal
role in guiding member states towards equitable, inclusive, and sustainable economic growth
through trade and investment. This project will explore the organization’s impact on fostering
peace and development by connecting the dots between its principles, actions, and their
consequences.
The Main Functions of the UNCTAD are:
 To promote international trade between developed and developing countries to
accelerate economic development.
 To formulate principles and policies on international trade and related economic
development problems.
 To make proposals for putting its principles and policies into effect,
 To negotiate trade agreements.
 To review and facilitate the coordination of activities of the other U.N. institutions in
the field of international trade.
 To function as a centre for harmonious trade and related documents in the
development policies of governments.

4
CHAPTER -01

INTRODUCTION

UNCTAD (United Nations Conference on Trade and Development) is a United Nations body
that deals with trade, investment, and development issues. It provides a forum for member
countries to discuss and coordinate their efforts in these areas. UNCTAD’s principles and
guidelines are often referred to in the context of international trade and development, and
they have significance in several ways:
1. Guiding International Agreements: UNCTAD’s principles and guidelines often serve as the
foundation for international agreements and treaties related to trade and investment. Member
states of the United Nations may draw on UNCTAD’s work to inform the content and
provisions of such agreements.
2. Capacity Building: UNCTAD provides technical assistance and capacity-building
programs to help developing countries navigate the complexities of international trade and
investment. These programs often incorporate UNCTAD’s principles and best practices to
support sustainable development.1
3. Research and Analysis: UNCTAD conducts research and analysis on various aspects of
international trade and investment. This research can inform policymaking and business
decisions, and it is often cited in academic and policy discussions.
4. Dispute Resolution: While UNCTAD itself doesn’t issue case laws, it plays a role in
facilitating dispute resolution in trade and investment matters. It provides a platform for
countries to discuss and resolve disputes, which can help maintain stability in the global
trading system.
5. Promotion of Sustainable Development: UNCTAD emphasizes the importance of trade and
investment for sustainable development. Its principles and guidelines are aimed at ensuring
that the benefits of these activities are equitably distributed and contribute to economic
growth and poverty reduction.
6. Influence on National Policies: Member states often incorporate UNCTAD’s
recommendations and principles into their national policies related to trade and investment,
as they seek to align their strategies with international best practices. 2

1
Asian Development Bank (2006). Carbon Market Initiative: The Asia Pacific Carbon Fund. November 2006.
2
Abbott, Frederick M. (2009). “Innovation and technology transfer to address climate change: lessons from the
global debate on intellectual property and public health”, ICTSD Global Platform on Climate Change, Trade
Policies and Sustainable Energy, Issue Paper, No. 24.

5
7. Capacity for Developing Nations: UNCTAD’s work is particularly important for
developing countries, which may lack the resources and expertise to navigate complex trade
and investment issues. UNCTAD’s principles and capacity-building efforts can help these
nations participate more effectively in the global economy.
Established in 1964 as a permanent intergovernmental body, UNCTAD is the principal organ
of the United Nations General Assembly dealing with trade, investment and development
issues. It is also the United Nations focal point for the least developed countries. Maximize
the trade, investment and development opportunities of developing countries and assist them
in their efforts to integrate into the world economy on an equitable. Provides a forum for
intergovernmental consensus-building where all member States interact freely on policy
issues concerning trade and development. Carries out policy and research analysis, capacity-
building activities and technical cooperation in the following areas: promotes the
participation of developing countries in international trade and assists them in their trade
negotiations; strengthens service-sector capacities in developing countries; promotes the
integration of trade, environment and development; analyses issues related to competition law
and policy; seeks to reduce commodity dependence through various aspects.3
Research Objective:
The primary objective of this research is to comprehensively examine and evaluate
UNCTAD’s contributions to peace and development through its efforts in promoting
sustainable trade and investment. This involves:
1. Assessing the effectiveness of UNCTAD’s policies and guidelines in promoting
responsible investment practices.
2. Analyzing UNCTAD’s role in facilitating trade as a mechanism for reducing conflicts and
fostering economic interdependence.
3. Investigating UNCTAD’s capacity-building initiatives and technical assistance to
developing countries, focusing on their impact on peace and development.
4. Exploring UNCTAD’s initiatives related to post-conflict recovery and economic
development.
Scope:
The scope of this project encompasses:

3
Abbott, Frederick M. (2009). “Innovation and technology transfer to address climate change: lessons from the
global debate on intellectual property and public health”, ICTSD Global Platform on Climate Change, Trade
Policies and Sustainable Energy, Issue Paper, No. 24

6
1. An in-depth analysis of UNCTAD’s principles, policies, and programs related to trade and
investment.
2. A review of relevant literature on the subject, highlighting research gaps and emerging
trends.
3. Case studies from various regions, showcasing the practical impact of UNCTAD’s work
on peace and development.
4. An examination of UNCTAD’s contributions to gender equality and inclusivity within
trade and investment policies.
5. A focus on the organization’s initiatives in conflict-affected regions and their role in
building peace.
Significance:
This project is significant for several reasons:
1. It sheds light on the practical impact of UNCTAD’s work, helping member states navigate
complex trade and investment issues.
2. It underscores the importance of responsible investment practices in promoting sustainable
development.
3. It highlights the role of trade as a peace-building mechanism, especially in regions with
historical conflicts.
4. It offers insights into the unique challenges and opportunities in different regions and the
effectiveness of UNCTAD’s region-specific programs.
5. It emphasizes the need for gender-sensitive and inclusive trade and investment policies.
Concept in Relation to UNCTAD:
The project aligns with UNCTAD’s core mission of supporting economic development,
particularly in developing countries, through trade and investment. It acknowledges
UNCTAD’s role as a facilitator of international dialogue, technical assistance provider, and
promoter of responsible investment. It also recognizes that UNCTAD operates in a dynamic
global landscape, where peace and development are interdependent, and trade and investment
play essential roles in achieving both. By exploring the concept of peace and development
through the lens of UNCTAD, this project aims to enhance our understanding of the
organization’s contributions to building a more equitable and peaceful world through
responsible trade and investment practices.
Research gap
Research Gap 1: Impact Assessment of UNCTAD’s Role in Peace Building

7
One common research gap in the literature is the lack of comprehensive impact assessments
of UNCTAD’s initiatives and guidance in the context of peace building. While there is an
abundance of literature highlighting UNCTAD’s involvement in trade and investment for
development, fewer studies specifically measure the organization’s contribution to peace and
stability in regions with a history of conflict. Scholars have recognized that UNCTAD’s work
can indirectly support peace building, but there’s a need for more empirical evidence and
case studies that demonstrate the concrete impact of UNCTAD’s programs on peace and
conflict resolution.
Research Gap 2: The Role of Trade and Investment in Peace Building
Many articles and papers discuss UNCTAD’s activities and principles in general, but they
often lack a deep dive into the specific mechanisms through which trade and investment can
contribute to peace building. This research gap involves a more detailed exploration of the
connection between economic development, investment policies, and peace, including case
studies that illustrate how improved trade and investment conditions have positively affected
conflict-affected regions.
Research Gap 3: Regional and Country-Specific Analyses
The literature often lacks comprehensive regional and country-specific analyses. Peace
building and conflict resolution are context-dependent, and what works in one region may not
be applicable in another. To address this gap, more research should focus on the unique
challenges and opportunities for peace building through trade and investment in specific
regions, such as the Middle East, sub-Saharan Africa, or Southeast Asia.
Research Gap 4: Gender and Inclusivity in Trade and Investment for Peace Building
Gender and inclusivity aspects are sometimes underrepresented in the literature. To promote
sustainable peace, it’s crucial to consider the impact of trade and investment policies on
gender equality and inclusivity. Research gaps exist in exploring how UNCTAD’s work can
be more gender-sensitive and how it can help address gender disparities in conflict-affected
regions.

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LITERATURE REVIEW
1. UNCTAD’s Role in Capacity Building: Many articles and papers emphasize UNCTAD’s
role in providing technical assistance and capacity-building support to developing countries.
This includes helping nations improve their trade and investment policies and institutions,
which can lead to more stable and prosperous societies.4
2. Promotion of Sustainable Investment: The literature often highlights UNCTAD’s emphasis
on responsible and sustainable investment practices. This includes addressing environmental
and social considerations in investment decisions, which can help avoid conflicts related to
resource exploitation.5
3. Trade as a Peace-Building Mechanism: Several articles recognize that increased trade can
foster economic interdependence between nations, reducing the likelihood of conflicts.
UNCTAD’s work in trade facilitation and regional integration is seen as contributing to
regional stability.6
4. The Role of Investment in Post-Conflict Recovery: The literature often discusses the
importance of investment in post-conflict recovery. UNCTAD’s guidance on investment
policies can help countries rebuild after conflicts, creating jobs and economic opportunities. 7
5. Conflict Resolution and Dispute Settlement: Some papers discuss UNCTAD’s role in
providing a neutral platform for countries to discuss and potentially resolve trade and
investment disputes, which can contribute to reducing tensions and conflicts.
In conclusion, while there is a significant body of literature on UNCTAD’s role in trade,
investment, and peace building, research gaps exist in terms of measuring the organization’s
impact on peace, exploring specific mechanisms of trade and investment in peace building,
providing region-specific analyses, and addressing gender and inclusivity considerations.
Scholars are working to connect the dots between UNCTAD’s work and the broader goals of
peace and stability, and more research is needed to fill these gaps and provide a deeper
understanding of the topic.8

4
Bonin, John P., IIftekhar Hasan and Paul Wachtel (2005). “Bank performance, effi ciency and ownership in
transition countries”, Journal of Banking and Finance, 29: 31–53.
5
Baumert, Kevin A., Timothy Herzog and Jonathan Pershing (2005). Navigating the Numbers: Greenhouse Gas
Data and International Climate Policy.
6
Bahnsen, Niels, Christiana Figueres, Morten Pedersen, Sine Skov, Hans Jürgen Stehr and, Jonas Valdimarsson
(2009).
7
Study on the potential use of micro-financing in support of CDM projects in LDC countries”. Final report
produced for the Ministry of Foreign Affairs of Denmark.
8
Arquit Niederberger, Anne and Raymond Saner (2005). “Exploring the relationship between FDI flows and
CDM potential”, Transnational Corporations, 14(1): 1–40.

9
RESEARCH QUESTIONS

1. Whether the key trends and challenges in global trade and investment affect, and how do
they impact developing countries?
This question can explore recent trends in international trade, foreign direct investment, and
the implications for economic development in developing nations.
2. Whether the trade policies and agreements affect sustainable development in emerging
economies, with a focus on environmental and social factors?
This question can delve into the impact of trade agreements, tariff policies, and trade-related
regulations on issues like environmental sustainability and social equity in developing
countries.
3. Whether the opportunities and challenges for digital trade and e-commerce in developing
countries are present and how can these nations harness the digital economy for inclusive
growth?
This question can examine the potential of digital trade and e-commerce in driving economic
growth and reducing inequalities in developing countries, while also addressing the
challenges they face.
4. Whether foreign direct investment (FDI) play in the industrialization and diversification of
economies in the Global South, and what policies can enhance its positive impact?
This question can explore the impact of FDI on industrialization, job creation, and economic
diversification in developing nations, as well as the policy measures that can attract and
optimize FDI for their benefit.

RESEARCH DESIGN
Chapter 1: Introduction
 Introduction to the research topic.
 Background and context of UNCTAD.
 Research objectives and questions.
 Justification and significance of the study.
 Outline of the research structure (mentioning the subsequent chapters).
Chapter 2: Literature Review
 Overview of the history and mission of UNCTAD.
 Review of key concepts related to international trade, development, and investment.
 Analysis of existing literature on UNCTAD’s work and its impact on global trade and
development.
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  Identification of gaps in the literature.
Chapter 3: UNCTAD’s Role in Trade and Development
 Detailed examination of UNCTAD’s activities, programs, and initiatives.
 Discussion of UNCTAD’s contributions to global trade and development.
 Case studies highlighting successful projects or policy recommendations.
 Analysis of challenges and criticisms faced by UNCTAD in its mission.
Chapter 4: Impact of UNCTAD’s Work
 Assessment of the actual impact of UNCTAD’s policies and recommendations on
developing countries.
 Quantitative and qualitative analysis of economic and social indicators.
 Evaluation of the effectiveness of UNCTAD’s policy recommendations and their
implementation.
 Examples of countries or regions that have benefited or faced challenges as a result of
UNCTAD’s work.
Chapter 5: Future Directions and Recommendations
 Discussion of the future role and relevance of UNCTAD in a changing global
landscape.
 Recommendations for how UNCTAD can adapt and improve its strategies to address
emerging challenges.
 Policy recommendations for governments and international organizations to enhance
the impact of UNCTAD’s work.
 Conclusion and summary of the key findings and insights.
This chapter structure provides a logical progression from introducing the research topic to
examining UNCTAD’s role and assessing its impact, ultimately leading to recommendations
for its future work. Adjust the content within each chapter to align with your specific research
objectives and findings.

CHAPTER 2- FUNCTIONS OF UNCTAD

UNCTAD’s functions are outlined in paragraph 3 of resolution 1995 (XIX). One of its
primary roles is to promote international trade with the goal of advancing economic
development. This mandate is broader than that of GATT, which mainly focuses on
eliminating trade barriers and promoting market forces in trade. UNCTAD’s responsibilities
encompass protecting the interests of less developed countries in the global trade system,

11
addressing market failures in commodity trade, negotiating state interventions for this
purpose, dealing with restrictive business practices at national and international levels, and
connecting trade with broader development factors such as finance, technology, and money.9
The second function of UNCTAD involves formulating principles and policies related to
international trade and economic development. This is where UNCTAD’s negotiating role
primarily lies, creating soft laws that are morally binding and should guide policies and
actions across a wide range of trade and development issues. This aspect has been a
significant success for UNCTAD.
Furthermore, UNCTAD is tasked with initiating action for negotiating and adopting
multilateral legal instruments in trade. This includes agreements like commodity agreements
and conventions such as the Convention on the Transit Trade of Land-Locked Countries,
negotiated under UNCTAD’s auspices. Hence, UNCTAD has a clear mandate to serve as a
platform for negotiating both soft laws and legally binding instruments.
UNCTAD’s third function is to serve as a centre for harmonizing trade and development
policies of governments and regional economic groups, aligning with the U.N. Charter’s
purpose of harmonizing the activities of nations. During the “golden era,” discussions at
UNCTAD forums included examining the implications of developed countries’
macroeconomic policies on developing countries and the global economy.
In a broader political context, UNCTAD took on additional roles beyond what was initially
anticipated in resolution 1995 (XIX)10. It became a forum for developing countries to
challenge the existing world order, seeking to restructure it to address its inequities and
imbalances. This intention was expressed in the Joint Declaration of the Seventy Seven
Developing Countries, which viewed UNCTAD as a step toward creating a more just
economic order. UNCTAD also became the primary platform for articulating and aggregating
the demands of developing countries in the field of trade and development, with the Group of
77 playing a crucial complementary role in this process.
Over its 40 years of existence, UNCTAD has achieved numerous pioneering
accomplishments, including influencing the IMF to expand its compensatory financing
facility, stimulating discussions in the World Bank on Supplementary Financing, and helping
operationalize the ODA target. UNCTAD played a role in the creation of the Paris Club to
address external debt issues, negotiated the first-ever generalized system of preferences
(GSP), and laid the groundwork for international commodity agreements through its
9
Arquit Niederberger, Anne and Raymond Saner (2005). “Exploring the relationship between FDI flows and
CDM potential”, Transnational Corporations, 14(1): 1–40.
10
Ibid

12
Integrated Programme for Commodities (IPC). While IPC didn’t fully materialize, it was a
significant initiative. UNCTAD’s research and policy analysis work also contributed to
greater transparency in the global economic system by highlighting issues like declining
terms of trade, the cost of tied aid, non-tariff barriers, and the gap between effective and
nominal tariff rates. In the words of a commentator from a developed country, UNCTAD
raised awareness about the problems of the less fortunate, spurred new proposals, and
encouraged other international agencies to intensify their efforts.

CHAPTER 03-

GLOBALIZATION AND DEVELOPMENT:

Services infrastructure, transport and trade efficiency, and human resource development:
Least developed, landlocked and island developing countries: analyses trends in foreign
direct investment and their impact on development; helps countries to promote international
investment and understand the issues involved in international investment agreements;
devises strategies for the development of small and medium-sized enterprises; identifies
policy options and implements capacity-building programmes to encourage the use of new
technologies. researches the broad trends and prospects in the world economy; proposes
effective solutions to the debt problem of developing countries and to the management of
external debt; examines successful development experiences; contributes to the
implementation of the United Nations New Agenda for the Development of Africa in the
1990s (UN-NADAF).11 Facilitates trade through better use of information technologies in
trade-supporting services; carries out capacity-building and training in these areas; analyses
the opportunities developing countries could derive from e-commerce and e-business
practices. Monitors the implementation of the United Nations Programme of Action for the
Least Developed Countries (LDCs); analyses the effects of major international initiatives on
the LDCs and assists them in understanding the key issues in multilateral trade negotiations.
As United Nations focal point for the LDCs, UNCTAD has played a leading role in
organizing the three United Nations Conferences on the Least Developed Countries (Paris
1981 and 1990, Brussels 2001). All activities take into account the issues of sustainable
development, gender and economic cooperation among developing countries.
The United Nations Conference on Trade and Development (UNCTAD ) assists developing
countries in strengthening their capacity to design and implement mutually

11
European Private Equity & Venture Capital Association (2009). “New report shows impact of crisis on
funding for Europe’s businesses”, Press Release, Brussels, December 3.

13
supportive trade, environment, climate change and sustainable development objectives
in development strategies at all levels. The Bio Trade Initiative of UNCTAD, in
partnership with BioTrade partners, promotes the conservation and sustainable use of
biodiversity and includes value addition and sustainable commercial use in a variety of
sectors in Africa, Asia and Latin America.
Bio Trade involves activities of production, transformation and commercialization of
products and services derived from native biodiversity (genetic resources, species and
ecosystems) under social, economic and environmental sustainability criteria,
following seven Bio Trade Principles: (1) conservation of biodiversity; (2) sustainable use of
biodiversity; (3) equitable benefit sharing; (4) socio-economic sustainability; (5) local
compliance; (6) respect for actors’ rights; and (7) clear land tenure and resources access. The
Bio Trade Principles and Criteria differentiate Bio Trade from other trade and biodiversity
initiatives, as all activities (downstream and upstream) along the value chain operate in
compliance with these principles (UNCTAD, 2007).12

Brief case studies

1. Argentina and the United States (2017 - 2020)13:- Facts: Argentina faced multiple
investment treaty claims due to policy changes in sectors like energy and utilities. Investors
alleged breaches of bilateral investment treaties.
Issue: The issue at hand was the balance between protecting investors’ rights and the
government’s right to regulate and develop its economy. UNCTAD provided Argentina with
technical assistance and policy advice. This assistance helped Argentina address its disputes
while ensuring that it could maintain a favorable investment climate for economic
development.
Conclusion and Legal Relation: UNCTAD’s guidance facilitated a balanced approach in
Argentina’s investment policies. The case demonstrated the importance of UNCTAD’s role
in helping countries navigate investment disputes and maintain a supportive investment
environment while adhering to international standards.
2. The Philippines and the European Union (2018 - present)14:

12
European Private Equity & Venture Capital Association (2009). “New report shows impact of crisis on
funding for Europe’s businesses”, Press Release, Brussels, December 3.
13
Fries, Steven and Anita Taci (2005). “Cost effi ciency of banks in transition: Evidence from 289 banks in 15
post communist countries”, Journal of Banking and Finance, 29: 55–81.
14
Fries, Steven and Anita Taci (2005). “Cost effi ciency of banks in transition: Evidence from 289 banks in 15
post communist countries”, Journal of Banking and Finance, 29: 55–81.

14
 Facts: Disputes between the Philippines and the EU over trade policies, including concerns
over labor and environmental standards, led to trade tensions.
Issue: The issue at hand was how to reconcile trade policy differences and maintain a
productive trade relationship. Significance: UNCTAD provided the Philippines with technical
assistance, helping the country understand EU regulations and trade preferences, fostering
negotiation and dispute resolution.
Conclusion and Legal Relation: UNCTAD’s involvement helped reduce trade tensions and
maintain a positive trade relationship. This case illustrates the role UNCTAD plays in
assisting countries in addressing trade policy differences while promoting a rules-based
trading system.

3. Indonesia and International Arbitration (2016)15

- Facts: Indonesia faced investment arbitration cases following changes to its mining
regulations, leading to disputes with foreign mining investors.
-Issue: The issue was how to manage the tensions between the government’s regulatory
changes and investors’ expectations. UNCTAD provided technical assistance and policy
guidance, which contributed to the resolution of disputes and the development of more
balanced mining regulations. UNCTAD’s support helped Indonesia navigate investment
disputes, striking a balance between sovereignty and investor protection. This case
emphasizes the importance of UNCTAD in assisting countries in managing investment
disputes.
4. Mozambique and Natural Gas Investments (2013 - present):
Facts: Mozambique faced challenges and disputes related to natural gas investments,
particularly concerning resource management and benefits distribution. The issue was how to
ensure that natural resource investments benefit the country’s economic development and
local communities. UNCTAD provided technical assistance and capacity-building support,
helping Mozambique navigate negotiations and investment contracts for sustainable
development. UNCTAD’s assistance contributed to better agreements, ensuring that natural
gas investments align with Mozambique’s development goals. This case underscores
UNCTAD’s role in assisting countries in managing complex natural resource investments.
5. Ecuador and Bilateral Investment Treaties :
Ecuador faced investment treaty disputes related to policies in the oil and gas sector, leading
to multiple arbitration cases. The issue was how to balance the need to attract foreign
15
Ibid

15
investment with the government’s right to regulate key sectors. UNCTAD provided policy
guidance and advice on investment treaty negotiations. UNCTAD’s involvement assisted
Ecuador in addressing investment disputes and developing a more balanced investment
policy, demonstrating its role in helping countries manage disputes related to investment
treaties.
6. Venezuela and Investment Disputes.16
Venezuela faced several investment treaty disputes due to policy changes and resource
nationalization. The issue was how to protect the rights of investors while safeguarding the
government’s policy sovereignty. UNCTAD provided policy guidance and technical
assistance to help Venezuela address these disputes. UNCTAD’s support aided Venezuela in
addressing its investment disputes and balancing investor rights with the country’s policy
objectives, illustrating UNCTAD’s role in assisting countries in managing such challenges.

In each of these cases, UNCTAD’s involvement was critical in helping the countries balance
their trade and investment interests with international legal standards and agreements.
UNCTAD’s technical assistance and policy guidance were instrumental in achieving
resolutions that considered the rights of investors, the sovereignty of nations, and sustainable
development goals. These cases highlight the practical application of UNCTAD’s principles
and its role in facilitating responsible trade and investment practices.17
International investment rule-making takes place at the bilateral, regional, inter-regional and
multilateral levels. Policy-makers, negotiators, the civil society and other stakeholders are
required to be well informed about foreign direct investment, international investment
agreements (IIAs) and their impact on the economy of the states involved. In the last few
decades, Bilateral Investment Treaties (“BITs”) have become an integral part of international
investment relations. Their existence has a great impact in influencing formulation of
international public policy. The 1990’s witnessed a surge of BITs between developed and
developing nations. Since then, there has been an exponential growth in their number. In
2000, the United Nations Conference on Trade and Development (UNCTAD) noted that
BITs are the most important instruments for protection .of foreign investment. While BITs
are generally titled as agreements for promotion and protection of investments, and contain
provisions on ‘protection’ of investment, they seldom contain provisions relating to
16
Demirbag, Mehmet and Hafiz Mirza (2000). “Factors affecting international joint venture success: an
empirical analysis of foreign–local partner relationships and performance in joint ventures in Turkey”,
International Business Review.
17
Ibid

16
‘promotion’ of investment. Even if incorporated, such provisions are effectively non-binding
in nature. Nevertheless, it is assumed that a formal offer of protection to foreign investors
through a BIT will encourage and promote cross-border investments. While the efficacy of
this assumption is debatable, it is predicted that increased foreign investment is crucial for
developing countries which aim to use foreign direct investment and BITs as tools to enhance
their economic development.
As economies across the globe expanded beyond their domestic markets, the global market
evolved to become more organized and regulated. Since the risk of a host State government
controlling a foreign investor’s investment was substantial, this global expansion necessitated
provision of fundamental protections to foreign investors. To alleviate the aforesaid concerns,
countries initiated the practice of entering into formal arrangements which granted essential
protections to a foreign investors and investments.
Fundamental principles of international investment law have had their origins in the 19th
century - through Friendship, Commerce and Navigation (“FCN”) treaties. These treaties
were used to promote international trade by facilitating inter alia, navigation, inter-state
trading rights and rights over property by foreign individuals. The growth of corporations and
technology in the mid-nineteenth century led to the advent of foreign investment. Increase in
foreign investment also saw an increase in expropriation of foreign projects. Historically, in
public international law, foreign investors as “outsiders” did not share equal status with the
nationals and were consequently denied legal capacity. Since national courts of the host State
did not entertain denial of justice claims from foreign investors, they were left with little
remedy but to resort to their own domestic courts to seek compensation for expropriation.
Thus, the home State would have to exercise the right for diplomatic protection of its injured
national against the host State (for unequal treatment and expropriation). The Permanent
Court of International Justice (PCIJ) recognized this as a right under public international law.
However, whether a State would exercise such protection would depend on its whim (beyond
the merits of the dispute), and political or other reasons which could undermine the investor’s
claims. In such a situation, the foreign investor was virtually left remediless, especially when
local courts refused to admit claims and declined jurisdiction. 18 Against this background, the
need for an independent, treaty based right to protection seemed eminent. One of the early
and prominent cases of the PCIJ which dealt with an investment dispute is the Chorzow
Factory case. In this case, an agreement was signed between a company and the German
Reich for construction of a factory in Chorzow. This lied in the disputed region of Upper
18
EBRD (2009). Transition Report 2009: Transition in Crisis? London: EBRD.

17
Silesia. Subsequently, the Geneva Convention was signed between Poland and Germany
whereby Chorzow region was handed over to Poland. The Convention required reparation
damages to be provided by Poland where the property of German government was taken
over. Disputes arising from the Convention were to be referred to the PCIJ. The question
arose whether the land was private property of the company or the public property of
Germany. If it were German property, Poland could have seized the same - subject to the
reparation. The PCIJ held that the land was privately owned and that Poland’s action
amounted to seizure and expropriation of private property. It held that “there can be no doubt
that the expropriation is a derogation from the rules generally applied in regard to the
treatment of foreigners and the principle of respect for vested rights.”

CHAPTER -04

EFFECTIVE OUTCOMES OF UNCTAD:

1. UNCTAD’s Role in Debt Relief (e.g., HIPC Initiative): UNCTAD played a significant role
in the Heavily Indebted Poor Countries (HIPC) Initiative. This initiative aimed to reduce the
crippling debt burdens of many poor nations. UNCTAD’s technical assistance and policy
guidance helped countries restructure their debts, freeing up resources for poverty reduction
and development. This initiative has been effective in alleviating the debt burden for several
countries.
2. UNCTAD’s Assistance to Landlocked Developing Countries: Landlocked developing
countries often face unique challenges related to trade and development due to their lack of
direct access to the sea. UNCTAD’s support for these countries, including the Almaty
Programme of Action, has been effective in improving transit systems and trade facilitation,
fostering economic growth and development.
3. UNCTAD’s Support for Investment Promotion: UNCTAD’s Investment Promotion
Framework has assisted countries in attracting foreign direct investment (FDI) and building
institutional capacity. This support has contributed to increased FDI flows, job creation, and
economic growth in several nations.
4. UNCTAD’s Contribution to Sustainable Development Goals: UNCTAD has been
instrumental in advocating for and assisting countries in implementing sustainable
development goals (SDGs). Its work on trade and environment, sustainable agriculture, and
responsible investment has contributed to progress in these areas.

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Instances Where UNCTAD Faced Challenges:

1. Limited Enforcement Power: UNCTAD lacks enforcement mechanisms, which can limit
its effectiveness. It provides recommendations and guidance, but member states are not
bound to follow them. Consequently, some countries may not fully implement UNCTAD’s
suggestions, hindering the organization’s impact.19
2. Political Differences: UNCTAD is a forum for member states to discuss trade and
development issues, and political differences can sometimes hinder consensus. For example,
during trade negotiations, countries with conflicting interests may find it challenging to reach
agreements, which can lead to stalled progress.
3. Resource Constraints: UNCTAD’s effectiveness can be limited by resource constraints.
Adequate funding is necessary for it to provide technical assistance and capacity-building
support to countries effectively. Resource limitations can affect the depth and reach of its
programs.
In conclusion, UNCTAD has been effective in several areas, particularly in debt relief,
support for landlocked countries, investment promotion, and contributing to the achievement
of sustainable development goals. However, its effectiveness can be hampered by the absence
of enforcement mechanisms, political differences, and resource constraints. Hypothetically,
UNCTAD’s work in promoting inclusive economic growth, conflict prevention through
trade, capacity building for governance, advocating for responsible investment, and providing
a platform for conflict resolution can contribute to building peace and stability in the world.
While UNCTAD may not be a direct peace-building organization, its work indirectly
supports the conditions for peaceful and stable societies.

COMPARISON OF THE WORLD WITHOUT UNCTAD AND WITH UNCTAD:

1. Trade and Investment: Without UNCTAD, there would likely be less coordinated global
efforts to promote fair trade and responsible investment. The organization’s absence would
lead to fewer international guidelines and standards, making it harder for countries, especially
developing ones, to navigate the complexities of global trade and investment. With
UNCTAD, there’s a framework in place for countries to access technical assistance, share
best practices, and collaborate on trade and development issues.
2. Debt Relief: UNCTAD has played a crucial role in debt relief initiatives for heavily
indebted poor countries. Without UNCTAD, these countries might struggle even more to
reduce their debt burdens, resulting in greater economic instability and poverty. With
19
EBRD (2009). Transition Report 2009: Transition in Crisis? London: EBRD.

19
UNCTAD, there is a platform for debt relief discussions and guidance for sustainable
economic recovery20.
3. Development Goals: UNCTAD contributes to the achievement of Sustainable
Development Goals (SDGs) by offering support for policies and practices that align with
these goals. Without UNCTAD, there would be fewer resources and coordinated efforts
directed toward achieving these critical global objectives.
4. Investment Promotion: UNCTAD’s Investment Promotion Framework helps countries
attract foreign direct investment (FDI). Without UNCTAD, countries might find it more
challenging to create the conditions needed to attract investments that can drive economic
growth and job creation.
5. Conflict Resolution: While UNCTAD is not a primary conflict resolution body, its absence
could mean the lack of a neutral platform for countries to address trade and investment
disputes. This could result in more prolonged and potentially more hostile conflicts.
In summary, the world with UNCTAD generally benefits from greater coordination,
assistance, and guidance in trade, investment, and development issues, which can lead to
more stability and prosperity, especially for developing nations.

UN ORGANIZATION INVOLVEMENT IN ISRAEL-PALESTINE CONFLICT:

UNCTAD, as an organization within the United Nations system, does not directly involve
itself in conflicts or disputes but can provide a platform for dialogue and contribute indirectly
to conflict resolution by addressing economic and developmental aspects of conflicts.
However, the Israel-Palestine conflict is a complex and long-standing political issue with
historical, social, and cultural dimensions, making it a difficult case for organizations like
UNCTAD to address.
1. Economic Development: UNCTAD can support economic development efforts in the
region, which could contribute to stability by improving living conditions and providing
economic opportunities for people in the area.
2. Trade Facilitation: UNCTAD can work on trade policies and infrastructure to promote
economic cooperation between Israel and Palestine, potentially reducing tensions through
economic interdependence.
3. Resource Management: UNCTAD can provide guidance on the equitable management of
resources, which is often a source of conflict in the region.

20
Gentry, Bradford S. and Jennifer J. Ronk (2007). “International investment agreements and investments in
renewable energy”, Bradford S. Gentry, Leslie Parker and Jennifer J. Ronk (eds.), From Barriers to
Opportunities: Renewable Energy Issues in Law and Policy.

20
4. Humanitarian Aid: UN organizations often provide humanitarian assistance to alleviate
suffering in conflict zones.
It’s important to note that the Israel-Palestine conflict involves deep-rooted political and
historical disputes, and while UN organizations can contribute to addressing some aspects,
they cannot independently resolve the core political issues. Therefore, their involvement
should be viewed as complementary to broader peace efforts and negotiations.
The presence of organizations like UNCTAD in the Israel-Palestine conflict is a reflection of
the international community’s desire to address economic and developmental aspects of the
conflict in the hope of promoting stability and peace. However, the overall resolution of the
conflict requires political will, negotiations, and a broader diplomatic effort involving many
stakeholders.

CHAPTER -05 UNCTAD POLICIES

Investment: UNCTAD continues to play a significant role in shaping international investment

policies and promoting responsible and sustainable investment. Some key trends and issues
related to investment under UNCTAD include:
 Promotion of sustainable and responsible investment practices, including adherence to
environmental, social, and governance (ESG) principles.
 Ongoing support for developing countries in attracting foreign direct investment (FDI)
and improving their investment climates.
 Emphasis on the impact of the COVID-19 pandemic on global investment patterns and
the need for recovery strategies.
 Monitoring of investment treaties and arbitration cases, as well as discussions on
possible reforms in the investment dispute settlement system.

2. Trade: UNCTAD’s work in trade focuses on facilitating trade, promoting inclusive trade
policies, and addressing challenges faced by developing countries. The status quo of trade
under UNCTAD includes:
 Efforts to reduce trade barriers and promote sustainable trade practices, such as
promoting the digitalization of trade procedures and e-commerce.
 Monitoring and analysis of global trade trends, including the impact of the COVID-19
pandemic on trade flows.

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  Advocacy for trade policies that prioritize the needs of developing countries and LDCs
(Least Developed Countries).
 Technical assistance to countries in trade-related areas, such as trade policy analysis and
capacity building.

3. Commerce: UNCTAD’s work in commerce covers a wide range of topics related to

economic development, including:
o Support for small and medium-sized enterprises (SMEs) through programs that
help them integrate into global value chains and access international markets.
o Research and analysis of economic and development issues, including reports on
the state of the global economy.
o Advocacy for the integration of the Sustainable Development Goals (SDGs) into
economic policies and practices.
o Technical assistance to enhance the competitiveness of industries in developing
countries and LDCs.

UNCTAD continues to serve as a vital platform for member countries to discuss and
coordinate their efforts on investment, trade, and development issues. It also conducts
research, produces reports, and offers technical assistance to support its objectives. The
organization’s work is guided by its principles and goals, which include promoting equitable
economic development and sustainable trade and investment practices.

Conclusion
The United Nations Conference on Trade and Development (UNCTAD) plays a pivotal role
in promoting international trade and sustainable development, particularly in developing
countries. However, as we have explored in this research, there are areas where its work can
be further improved to maximize its impact. This section offers a concise set of policy
recommendations for governments and international organizations to enhance the
effectiveness of UNCTAD’s efforts.
1. Strengthening Regional Collaboration: Governments and international organizations
should encourage deeper regional collaboration. UNCTAD can support regional trade
agreements and facilitate dialogue between countries within a region. By doing so, it can help
nations leverage their collective resources and address shared challenges more effectively.

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2. Empowering Developing Nations: Governments should ensure that UNCTAD has the
resources it needs to continue its capacity-building programs. This is vital for empowering
developing countries to participate fully in international trade. International organizations can
provide financial and technical assistance to strengthen UNCTAD’s efforts in this regard.
3. Fostering Inclusive Trade Policies: It’s crucial for governments to adopt inclusive trade
policies that take into account the needs and concerns of vulnerable populations, including
small-scale farmers and marginalized communities. UNCTAD can assist in the development
of policies that promote equitable trade and prioritize social and environmental sustainability.
4. Data Collection and Analysis: UNCTAD should collaborate with governments to
improve data collection and analysis in developing countries. Accurate and up-to-date data is
essential for informed decision-making. International organizations can support capacity
building in this area.
5. Aligning with Sustainable Development Goals (SDGs): Governments and UNCTAD
should ensure that their efforts align with the Sustainable Development Goals (SDGs). This
alignment will help direct resources and strategies toward poverty reduction, gender equality,
environmental protection, and other critical global development objectives.
Conclusion and Summary of Key Findings and Insights:
In conclusion, our research highlights the significant role that UNCTAD plays in
international trade and development. It has made substantial contributions over the years,
fostering greater inclusivity and advocating for the needs of developing countries. However,
there are areas where improvements are needed to enhance its impact further.
Key findings from our research include the importance of regional collaboration, the
necessity of empowering developing nations through capacity-building programs, and the
critical need for inclusive trade policies. Additionally, accurate data and alignment with the
SDGs are fundamental to UNCTAD’s success.
A significant shift in UNCTAD's functions has occurred, with a heavy emphasis on the
domestic development policies of developing countries at the expense of addressing external
factors influencing development. This transformation has been driven by a deliberate
campaign orchestrated by developed countries. Reverting to the previous approach of
excluding domestic measures entirely from UNCTAD's agenda is neither feasible nor
desirable, as domestic policies play a crucial role in development, and the effectiveness of
international measures depends on corresponding domestic actions. Even during its peak,
UNCTAD's agenda encompassed domestic measures, such as strategies for mobilizing
domestic resources and diversification, as seen in the First UNCTAD's Final Act.

23
What is needed is a restoration of balance in UNCTAD's focus, as it has now shifted
significantly towards domestic measures. Achieving this balance requires removing
contentious and politically motivated domestic topics from UNCTAD's agenda, allowing
more time for discussing and negotiating measures aimed at creating a supportive external
environment and institutions for development.

Over the past 25 years, United Nations (UN) reforms have primarily aimed at weakening the
UN system and diminishing the influence of developing countries within it, to align it with
the interests of major powers. Unfortunately, this objective has largely been achieved, and
among UN bodies, UNCTAD has suffered the most from this process. The Secretary-General
of UNCTAD noted during UNCTAD X in Bangkok in 2000 that no other UN body had
experienced such a drastic reduction in its budget as UNCTAD.
Given the ongoing reform process, there are limited expectations for a positive outcome for
UNCTAD. Instead, it is likely that the UN system and UNCTAD will face further
weakening, particularly in addressing the structural challenges of the world economy and the
international development environment.
Developing countries should refrain from engaging in defensive responses to the reform
agenda set by developed countries. Instead, they should present their proactive agenda for
restructuring the UN, particularly concerning UNCTAD. This background paper offers a
blueprint for such an agenda. Developing countries must actively advocate for this agenda,
rather than reacting passively to reforms proposed by others.
In essence, the fight to preserve UNCTAD is closely intertwined with the larger battle to
restore the United Nations to its original role and functions under the Charter, especially in
the economic field. The success or failure of one effort depends on the other. Pursuing a
proactive agenda to revitalize UNCTAD presents a possibly last opportunity to regain lost
ground and reestablish the United Nations' primary role in the economic and social sectors.
Although developed countries have worked determinedly for nearly 15 years to transform and
dismantle UNCTAD, it may take developing countries several years to revive and reinvent
the organization. Nevertheless, UNCTAD must recover its influence and regain the support
and respect of the developing countries that have been aligned with its mission for decades.
There is no better time than the present to initiate a campaign aimed at restoring UNCTAD's
prominence and returning it to the forefront of global efforts to address complex global
development challenges, ultimately fostering a stable, viable, and truly democratic
international community. UNCTAD's broad mandate is well-suited for a new era where

24
promoting development, democracy, and equity is a principal challenge and prerequisite for a
peaceful and cooperative world.
By implementing the policy recommendations outlined above, governments and international
organizations can help UNCTAD navigate the evolving global trade landscape more
effectively. These recommendations underscore the significance of partnerships and
collaboration between governments, international organizations, and UNCTAD, emphasizing
the collective responsibility to promote sustainable development and reduce inequalities
across the world.
In summary, UNCTAD remains a vital instrument for trade and development, and it is within
our reach to amplify its influence and relevance. By acting upon these recommendations, we
can further strengthen UNCTAD’s capacity to foster equitable and sustainable development,
benefiting the international community as a whole.

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