WIDER ACCESS TO NEW TECHNOLOGIES IMPORTANT IN IMPROVING ECONOMIES OF DEVELOPING COUNTRIES, SECOND COMMITTEE IS TOLD

16 October 1996

Press Release
GA/EF/2723

WIDER ACCESS TO NEW TECHNOLOGIES IMPORTANT IN IMPROVING ECONOMIES OF DEVELOPING COUNTRIES, SECOND COMMITTEE IS TOLD

19961016 Debate Continues on Global Situation; World Bank, IMF Representatives Report on Programmes, Initiatives, Projects to Strengthen Poorer Nations

Developing countries should have stable and non-discriminatory access to technology, including new and sensitive technologies for peaceful uses, and environmentally sound technologies, the Second Committee (Economic and Financial) was told this afternoon by the representative of India, as it continued its debate on the world economic situation.

Proposals for setting up technology transfer rights banks and the building up information networks to provide environmentally sound technologies should be pursued, he said.

The gap of information technology between developed and developing countries and the role of the private sector in development should be discussed by the Committee, said the representative of Malaysia. The representative of the Philippines said attempts to impose measures of unfair competitive advantage or to erode the comparative advantage of developing countries must be resisted.

Assistance in capacity-building, good governance and institutional reforms, together with better access to markets, could make the integration of poor countries into the world economy easier, according to the representative of the Czech Republic.

Also this afternoon, a representative of the World Bank told the Committee that during 1996 funds disbursed by the Bank amounted to $19 billion, an increase of nearly 5.5 per cent from last year. During the same period, the Bank and its soft-loan affiliate, the International Development Association (IDA), had together committed more than $21 billion, allocated for 256 projects. The largest allocation went into electric power, transportation and agriculture.

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An official of the International Monetary Fund (IMF) reporting on the recent annual meetings of the Fund and the World Bank, said an initiative had been adopted to ensure that heavily indebted poor countries could attain a sustainable debt position over the medium term. The initiative encompassed total external debt, including, for the first time and in a comprehensive manner, multilateral debt. The Fund's contribution to the initiative would be within the framework of its Enhanced Structural Adjustment Facility.

Statements were also made by the representatives of Senegal, Niger, Thailand, Bulgaria, Slovak Republic, Cyprus, Kenya, Republic of Korea and the United Republic of Tanzania. Statements in exercise of the right of reply were made by the representatives of Turkey and Cyprus. The representatives of the United States, Suriname, Nigeria and Ireland spoke in a question-and- answer session which followed the statements of the World Bank and the IMF representatives.

The Committee will meet again at 10 a.m. tomorrow, 17 October to continue its general debate.

Committee Work Programme

The Second Committee (Economic and Financial) met this afternoon to continue its general debate on the world economic situation.

IBRA DEGUENE KA (Senegal) said that despite the end of the cold war, the world at the close of the century was much less stable than might have been hoped. A peace dividend which could have contributed to development had been woefully late in arriving. Was it acceptable that at the beginning of the third millennium there were 1.3 billion human beings living in poverty? The cycle of major international conferences, which would end next November with the World Food Conference, had highlighted the problems facing the international community. It was ironic that at a time when needs were increasing, the official development assistance (ODA) had declined. That drop, among other things, confirmed the existence of a North-South divide.

He called for "joint but differentiated" responsibility between the developed and developing countries; isolationism and protectionism must be given up. That was the price that the international community would have to pay in order to take advantage of the phenomena of globalization and liberalization. Despite laudable achievements like the organization of the upcoming Tokyo International Conference on African Development, the international community had not met the responsibility it had accepted under the United Nations New Agenda for Development in Africa in the 1990s. Africa expected the opening up of true opportunities for its products so that it could finance its own development. Simplistic clichés which reduced the continent to an area of conflict did not do justice to the people who worked for its development. Solidarity and cooperation should underlie international cooperation at the dawn of the third millennium.

BACHARD ISSOUFOU (Niger) welcomed efforts of the United Nations system to help poor countries. He said lasting peace could become a reality if steps were taken to eliminate poverty. Many United Nations Member States were far from attaining the expected level of development. More than half of the world's population lived in poverty, with the least developed countries the hardest hit. Their economic and social situation had reached untenable levels, and decisive steps were required to lift them from their situation. He said a number of developing countries remained victims of certain political forces in the north.

A proposal by the Bretton Woods institutions to restructure the debt burden of the poor countries was welcome, but it had been hoped those debts would be cancelled. He noted that the 0.7 per cent target for ODA had not been met; he applauded the efforts of some donor countries to achieve it.

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He said the working methods in the United Nations system should be improved to sensitize countries about the Organization's activities. United Nations radio and television programmes were not sufficient in publicizing the work of the Organization. There should be more transmission time to reach more people. He also proposed that space should be taken in newspapers for editorials and articles. There should be exchanges between parliamentarians and responsible public officials on issues related to development. The United Nations should adopt new working methods. Civil society should also be involved in the efforts to rid the world of the scourge of poverty.

ASDA JAYANAMA (Thailand) said that while some declared global economic growth to be the result of the globalization of economies, it had to be recognized that the globalization taking place was limited largely to interaction between the private sectors of various countries. That was because the private sectors shared a single goal of maximizing their earnings, while the objectives of public sectors were broader. A shared vision on globalization had not yet emerged. Thailand saw economic growth as an indispensable factor for human development. However, sustained economic growth could take place only with the implementation of consistent macroeconomic policies, together with other necessary decisions taken by governments.

He stressed that a common political will regarding international cooperation, particularly the role of the United Nations in development, was needed. Moreover, an Agenda for Development had yet to be completed. Delay in finding a consensus on the role of the United Nations in development would have repercussions on international cooperation in many fields. He urged all members to exercise fullest flexibility in the forthcoming negotiations on An Agenda for Development. The Second Committee should focus on the implementation of the documents of the six major United Nations conferences relating to development.

MARIA LOURDES RAMIRO-LOPEZ (Philippines) said, in the negotiations on the elaboration of an Agenda for Development, delegations had found it difficult to agree on whether to use the phrase "sustained economic growth" or "sustainable development". The Philippines believed that when referring to development, the two phrases should be used together to put the controversy to rest. All other important concerns like environmental protection and even the centrality of human beings as the objects of development were captured by those two phrases.

She suggested that the Human Development Index developed by the United Nations Development Programme (UNDP) could be expanded to include some measurable indices relating to environment like the levels of pollution. The east Asian countries had made a political determination to invest heavily in human resource development. Such investment had contributed to sustained economic growth in those countries for over a decade, further reinforcing

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their stride towards human development. While the Philippines did not wish to minimize the full importance of the recent positive performance of some developing countries, it wished to remind the international community not to be misled into believing that all was well with the developing world.

Growth in individual countries had to be substantial, possibly within the range of 5 to 9 per cent, she said. The process of continuing liberalization and integration should lead to an increase in exports where the developing countries enjoyed a comparative advantage, especially in labour- intensive goods, such as garments and textiles, or products where developing countries had begun to gain some market advantage. Attempts to impose measures of unfair competitive advantage or to erode the comparative advantage of developing countries must be resisted. In the same vein, protectionism in the guise of subsidies, environmental protection, labour rights, sanitary standards and other artificial or politically motivated barriers could not be accepted.

KONSTANTIN GLAVANAKOV (Bulgaria) announced that his country had, after prolonged and difficult negotiations, become a member of the World Trade Organization (WTO) on 2 October. He said countries with economies in transition had a longer way to go to become fully integrated into the world economy; he commended the efforts of the international financial institutions and the donor community in that regard. The level of foreign investment flows and the access of the products of the poorer nations to the markets of developed countries were, nevertheless, insufficient to generate sustainable growth. Poverty and desperation had dramatically increased to levels never experienced before.

He said the United Nations system should intensify its support of further integration of countries with economies in transition, according to the situation in each of those countries. The United Nations system should encourage private entrepreneurship and market-oriented management of State- owned enterprises. There should be a more systematic coordination of the activities of the United Nations, the international financial institutions and the WTO. The United Nations Commission for Europe, with its accumulated professional and managerial expertise, could assist in the implementation of specific programmes and projects.

The recent suspension of Security Council sanctions against the former Yugoslavia did not eliminate their long-term negative effects on third countries such as his, he went on. The ongoing peace process offered opportunities for the third States affected by the sanctions to actively participate in post-conflict reconstruction and rehabilitation of the crisis- stricken areas, thus, partially alleviating the negative impact of the sanctions they had felt. He announced that Bulgaria would introduce a draft resolution on the subject during the current session of the General Assembly.

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JURAJ SIKRA (Slovak Republic) said his country's economy boomed in 1995, finishing second among those of Central European countries in terms of growth, measured by an annual increase in real gross domestic product (GDP) by 7.4 per cent. The private sector played a major role in the economy, and its share was still increasing. The privatization of State enterprises was proceeding to its final stage; the process of transformation to a market economy had basically been completed.

Slovakia supported modern trends of sustainable production and consumption, and the principles of sustainable development. It approached environmental issues on the basis of cooperation with other countries. Slovakia had a pragmatic interest in cooperating with the United Nations Conference on Trade and Development (UNCTAD), and it was also interested in the organization's regional cooperation agenda. Slovakia also paid special attention to cooperation with the United Nations Industrial Development Organization (UNIDO), and it appreciated assistance from the UNDP. It supported the rationalization of the work of the Second Committee and reform of the Economic and Social Council.

DEMETRIOS THEOPHYLACTOU (Cyprus) said his country fully supported the views expressed by the "Group of 77" developing countries and China, and the European Union on development, particularly in Africa. It also supported the recently concluded Convention to Combat Desertification. Moreover, Cyprus had closely collaborated with the United Nations and its agencies to help east European and central European countries in the post-cold-war years.

The main objective of his country was the achievement of social justice, he said. The economic situation of Turkish-occupied Cyprus was dire, and inflation was at an all-time high there as against rest of the country. Despite the continuous occupation of a large part of its territory, Cyprus had managed to organize several international conferences, the most recent of those being on maritime issues.

He stressed that a new and equitable partnership between the developed and developing countries must be based on equality. Economic and social development, together with the protection of environment, was of paramount importance. The small States must rally together on issues of development, globalization and regional integration. To that end, Cyprus had, last month, organized a conference to discuss the repercussions of economic globalization on small States. Such States were particularly susceptible to risks because of their small size. He urged prompt implementation of the policy recommendations of the 1994 Barbados Conference on Small Island Developing States. Further, he pledged his country's support for the follow-up of major United Nations conferences.

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NJUGUNA M. MAHUGU (Kenya) said that despite Africa's overall improved growth performance, many States in the region still were among the poorest in the world. Unless that growth continued at higher rates, it would not be sufficient to significantly alleviate poverty, deteriorating social conditions and the high unemployment rates prevalent in the region. Kenya was committed to the implementation of comprehensive structural reform to achieve long-term economic growth and sustainable development. It believed that those reforms should be adequately matched by commitment, understanding and effective support from its development partners.

Kenya believed that an early consensus on effective debt relief, reduction and possible cancellation would go a long way to alleviate the debt problem. It hoped the consensus would include additional innovative measures that would provide social safety nets to vulnerable groups, particularly children, women and the rural poor.

The United Nations should continue its critical role in consensus- building for international economic cooperation. Kenya was confident that the Organization would continue to uphold its principles of universality, sovereignty and multilateralism in its decisions and operational activities. Its collaboration with the Bretton Woods institutions should be carried out through the Economic and Social Council to avoid any new conditionalities that might arise from any other arrangements. The Council's various organs should be strengthened to effectively follow up the programmes of action that had been agreed upon at various international conferences.

He called for new and additional resources to ensure the realization of the Programme of Action of the recent United Nations Conference on Human Settlements (Habitat II). Kenya was committed to regional economic integration and cooperation, he said, adding that a major milestone in the subregion was efforts to integrate the economies of the three East African countries -- United Republic of Tanzania, Uganda and Kenya. The process of cooperation and integration was already under way in the areas of trade, transport and communications, finance and investment, as well as subregional immigration and security.

E. AHMED (India) said the World Economic and Social Survey had suggested that global growth was likely to continue in the medium term, and the phase of cyclical expansion in most developed countries was expected to be prolonged. However, there were fears of inflation, with resulting suggestions to contain growth rates. Most developed countries continued to face the problem of "jobless" growth. On the other hand, many -- though not all -- developing countries continued to experience significant growth rates. Most developing countries had continued to face problems of poverty, lack of adequate infrastructure, human resource development and technological strength.

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He said India was committed to promote growth with social justice and to make a frontal attack on poverty with the aim of eradicating absolute poverty by the year 2005. It believed that economic growth and social sector investments reinforced each other. International financial institutions should consider the use of instruments such as guarantees, co-financing and insurance schemes to further the flow of investment to developing countries. Efforts could also be directed to developing physical and economic infrastructure and human capital that would attract foreign investment flows. Ways must be found, including through the International Monetary Fund (IMF), to tackle problems arising from the potential volatility of private capital flows.

He said the international community should steer clear of new issues such as the social clause and the multilateral agreement on investment, trade and competition policy since those were divisive and complex. Those issues needed consideration in forums like UNCTAD before a consensus could be built to take any of them to the WTO.

Attention must be paid to the rights of private operators and obligations of governments, he added. Real liberalization of trade could not take place unless it was enlarged and applied to movement of labour, a major factor of production across national borders. Further, there should be stable and non-discriminatory access to technology, including new technologies, sensitive technologies for peaceful uses and environmentally sound technologies. Proposals for setting up technology transfer rights banks and building up networks to provide information about environmentally sound technologies should be pursued.

TAN YEE KEW (Malaysia) said there was an urgent need to reform the Bretton Woods institutions to make their decision-making process more transparent and democratic. They should, above all, abide by their specific mandate to facilitate development and regulate the international monetary system, rather than work to the dictates of the money-lending nations of the north, she stated.

Malaysia was a strong champion of globalization in international trade, but questioned the way it had been used and manipulated by the industrialized north to serve their own interests and to preserve their economic dominance over the south. There were efforts to deny whatever competitive edge the developing countries might have, and those could be seen in the move to link the environment and labour standards to the trade in manufactured goods.

Commenting on the forthcoming ministerial meeting of the WTO in Singapore, she said Malaysia was against the discussion of new issues such as multilateral investment rules, competition policy and trade and labour standards. While national policies were the critical basis for sustainable

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development, the international economic environment should also be conducive to support sustainable development.

She said Malaysia was concerned that the availability of funds and access to international funding to carry out environmental programmes and projects in developing countries were often subjected to conditions that were irrelevant, and could not be met by recipient countries. The special session of the General Assembly for the overall appraisal of the progress of Agenda 21 adopted at the 1992 United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro should focus on the implementation of commitments made, rather than further debate on broad aspects of sustainable development.

She suggested consideration by the Second Committee of the gap in information technology between developed and developing countries, and the role of the private sector in development. She said advancements in the field of information technology were so rapid that keeping pace with them in the developing countries was a great challenge. If the issue were not addressed, the gap in information technology between the developed and developing countries would continue to widen and make more complex the current economic gap between the two groups of countries. She also said there was an increasing need for national development to be a shared burden between the public and private sectors. The role of the private sector as an engine of growth in Malaysia had been a deliberate national policy.

JANA BULENOVA (Czech Republic) said the world community should focus on restructuring the United Nations financial resources and improving the efficiency of its operations. Attention should also be given to the creation of an international legal framework for economic cooperation, including economic security. Moreover, the multilateral system must be strengthened and new forms of cooperation among developed and developing countries should be found. Also, assistance to capacity-building, good governance and institutional reforms, together with better access to markets, could make the integration of poor countries into the world economy easier.

She expressed concern that the Commission on Sustainable Development had not been able to balance views and "catalyse" decisive action of the international community, not only on financial resources but also on other cross-sectoral issues like the transfer of environmentally sound technologies, economic instruments for sustainable development and the relation between international trade and environment. The Czech Republic believed that the mandate of the Commission was best fulfilled by emphasizing cross-sectoral issues.

PARK SOO GIL (Republic of Korea) said an emphasis by the United Nations in fostering a consensus on development strategy was a vital step towards building a new global partnership. At the same time, the United Nations had a

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special role to play in providing concrete programmes to assist the least developed countries, including those in Africa.

He said the United Nations should strengthen its role in promoting and defining a new development strategy. It should increase cooperation with the Bretton Woods institutions. The capabilities of the Economic and Social Council in implementing major decisions on international economic issues and overseeing their follow-up should be strengthened, as should be the coordination of those tasks with affiliated institutions and programmes.

The Republic of Korea hoped that next year's special session to review Agenda 21 would be a forum for realizing a global partnership for sustainable development. There was need to engage in a cooperative search for a practical and realistic mechanism for progress on financing, technology transfer and vital sectoral issues. His country, commensurate with its economic capabilities, continued to increase its ODA and intended to do so in the years ahead. It would also contribute $30 million to the eleventh International Development Association replenishment. Through its Korea International Cooperation Agency, it had extended technical assistance and sought to share the knowledge gained through its own development experience. In the same spirit, it had, since 1994, worked jointly with the UNDP and the World Health Organization (WHO) to establish the international vaccine institute in Seoul which would be dedicated to capacity-building for developing countries in the development and use of vaccines.

DAUDI MWAKAWAGO (United Republic of Tanzania) said the need for the recovery and development of developing countries had become all the more urgent as globalization and liberalization had become driving forces behind world commerce. The international community, including multilateral and bilateral assistance agencies and the private sector, had an important role to play in providing additional resources to support national efforts in implementing the decisions agreed upon at United Nations conferences. Durable solutions to indebtedness were nowhere in sight. That raised serious questions about debt-management approaches that had been followed thus far. It was now recognized that developing countries could not service external debts and, at the same time, set aside resources to fund reforms and economic restructuring. He urged the Paris Club creditors to recognize that for the Paris initiative to have a positive impact, it was important to go beyond the "Naples Terms" for the highly indebted poor countries, especially in sub-Saharan Africa.

The international community must provide additional resources needed for commodity diversification, he said. Financial mechanisms such as the proposed African Diversification Fund should be created. He noted that the development partners had shown reluctance to support the creation of that Fund. He also expressed concern at unsustainable patterns of consumption and production processes, especially in industrialized countries.

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Statements for IMF and World Bank

J.B. ZULU, Director of the United Nations Office of the IMF, reporting on this year's annual meetings of the Fund and the World Bank, said practical steps had been taken to address the issue of external debt. The Fund's Interim Committee and the Bank's Development Committee had endorsed the IMF/World Bank initiative to ensure that heavily indebted poor countries could attain a sustainable debt position over the medium term. The initiative encompassed total external debt, including, for the first time and in a comprehensive manner, multilateral debt. The Fund's contribution to the initiative would be within the framework of its Enhanced Structural Adjustment Facility. Its policy-making body, the Interim Committee, had adopted a declaration on partnership for sustainable global growth. This reaffirmed the declaration on cooperation to strengthen global expansion adopted two years ago in Madrid, and underscored the need to alleviate poverty and provide well- targeted and affordable social safety nets, in addition to enhancing education and training.

He said four themes had echoed loudly throughout the annual meetings: a broad, but cautious, optimism about individual prospective performance of individual countries in the global economy; a strong consensus on the most effective economic strategies for realizing prospects; the need for a strong, effective IMF to assist members in the process; and a sense of common purpose and shared responsibility for the mutual prosperity of all countries in the global setting.

Representatives of both industrialized and developing countries, he went on, acknowledged the visible payoffs from macroeconomic stability and structural reform, while others highlighted issues such as the importance of investing in health and education, the role that such investments played in increasing social equity, and the link between social equity and sustainability of the reform process.

Referring to calls for the IMF to sell a limited amount of its gold holdings to cover the debts of poor countries, he said there was full commitment by all members of the Fund's Executive Board to secure the financing of the interim Enhanced Structural Adjustment Facility to ensure full participation of the IMF in the initiative on external debt. If the need arose, the Fund should be prepared to optimize the use of its resources to secure full financing, which could entail a gold sale.

ALFREDO SFEIR-YOUNIS, Special Representative of the World Bank to the United Nations, said that during 1996 the Bank and its soft-loan affiliate, the International Development Association (IDA), together committed more than $21 billion which was allocated for 256 projects. The lending by the Bank amounted to $14.5 billion, and by the IDA to nearly $7 billion. The largest allocation went into electric power, transportation and agriculture.

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Adjustment policy operations were only 21 per cent of total lending, compared with 24 per cent during the last fiscal year. During 1996, funds disbursed amounted to nearly $19 billion, an increase over last year of nearly 5.5 per cent.

He drew attention to three thematic areas of World Bank programmes: investing in people, including human capital development, like health and education; ensuring that development was environmentally sound and socially sustainable; and creating the right balance between the public and the private sector. Human capital development, he went on, was one of the fastest growth areas of the Bank, with lending growing more than fivefold since the 1980s. In a sense, he said, the Bank had become the world's largest single provider of external financing for human capital development. The programme for fiscal 1996 included support to education of nearly $700 million and to primary health of $1.6 billion. The programme also included new initiatives in the areas of unemployment compensation, creation and maintenance of safety nets and mainstreaming gender equity issues in country and regional strategies.

With regard to environmentally sustainable development, he said the Bank had approved loans for $1.6 billion, with the total active environmental portfolio reaching 153 projects with more than $11 billion. The Bank had increased its lending in those areas where the potential for private sector involvement seemed very promising. That area amounted to nearly $6 billion for 51 projects in financial sector development and banking, energy and power, telecommunications, oil and gas, industries and mining.

Question-and-Answer Session

The representative of the United States welcomed the chance for a discussion with the representatives of the World Bank and the IMF. He said the extent to which development issues had permeated the Fund was remarkable, and he asked to what extent the work in the United Nations influenced the IMF. Also, he wondered if the Bank could submit documents on the Multilateral Trust Fund it had mentioned.

Mr. ZULU, of the IMF, said the social dimension was indeed a feature of the Fund, and the Social Summit had added an impetus to move in that direction. Also, it had undertaken studies on income distribution.

Mr. SFEIR-YOUNIS, of the World Bank, said a document with the details of the Multilateral Trust Fund was available and he would be happy to provide it to the representative of the United States.

The representative of Suriname asked if the document could be made available to his delegation as well. The World Bank representative responded that he would be happy to provide it to him, and to any other delegations needing it.

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The representative of Nigeria welcomed the opportunity for discussion with the World Bank and IMF representatives.

Right of Reply

LEVENT MURAT BURHAN (Turkey) said some remarks that had been made by one of the speakers in today's debate about the Turkish Republic of Northern Cyprus would be appropriately responded to by a representative of the Republic.

Mr. THEOPHYLACTOU (Cyprus) said the occupied part of Cyprus was not recognized by the United Nations and, therefore, such a "representative" would not be the appropriate person to address the question.

Mr. BURHAN of Turkey said the representative of Cyprus would realize whether or not an entity called the Turkish Republic of Northern Cyprus existed when he received a letter in response, which would be circulated as an official United Nations document.

Mr. THEOPHYLACTOU of Cyprus said the so-called entity was not recognized under any United Nations resolutions. In fact, United Nations resolution 541 had called for non-recognition of occupied Cyprus by all the States.

Statement

PHILIP J. GRANT (Ireland) said he appreciated that the Committee had been provided with the opportunity for discussion with the World Bank and IMF representatives. He said it would need some time to absorb the statement made by the representatives of those bodies.

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