TEXTS ON GLOBAL FINANCIAL FLOWS, DEVELOPMENT ACTIVITIES, EXTERNAL DEBT PALESTINIAN RESOURCES INTRODUCED IN SECOND COMMITTEE

28 October 1997

Press Release
GA/EF/2776

TEXTS ON GLOBAL FINANCIAL FLOWS, DEVELOPMENT ACTIVITIES, EXTERNAL DEBT PALESTINIAN RESOURCES INTRODUCED IN SECOND COMMITTEE

19971028 Committee Also Begins Discussion of Industrial Development Cooperation, Business and Development

The Second Committee (Economic and Financial) this morning heard the introduction of four draft resolutions, concerning global financial flows; operational activities for development; permanent sovereignty of the Palestinian people over their natural resources; and enhancing international cooperation towards a durable solution of the external debt problem of developing countries.

Sponsored by the "Group of 77" developing countries and China and introduced by the representative of the United Republic of Tanzania, the draft resolution on global financial flows would have the Assembly call on the International Monetary Fund (IMF) to ensure flexibility in promoting capital account liberalization. The Assembly would also stress the need for strengthened international cooperation to prevent future currency turmoils, which negatively affected developing countries and the international and financial monetary system.

By another draft introduced by the United Republic of Tanzania, on behalf of the Group of 77 and China, the Assembly would request the Secretary- General, when presenting his report on the triennial policy review of operational activities for development to the Assembly at its fifty-third session, to take into account intergovernmental response to his reform measures and proposals relevant to operational activities for development.

A third draft text, also introduced by the representative of the United Republic of Tanzania on behalf of the Group of 77 and China, would have the Assembly call for a reduction in the period of time a country must maintain sound economic policies to be eligible for debt relief under the Heavily Indebted Poor Countries Debt Initiative. The Assembly would request that the period between the decision and completion point be shortened and that interim assistance be provided. Bilateral donors would be encouraged to contribute to the Heavily Indebted Poor Countries' Trust Fund of the World Bank and to the Enhanced Structural Adjustment Facility Trust Fund of the International Monetary Fund for the implementation of the Initiative.

Second Committee - 1a - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

The draft resolution on permanent sovereignty of the Palestinian people over their natural resources, introduced by Yemen, would have the Assembly call on Israel not to exploit or endanger the natural resources in the occupied Palestinian territory, including Jerusalem, and in the occupied Syrian Golan.

Also this morning, the Committee began consideration of industrial development cooperation and business and development.

The representative of Ghana said Africa was in danger of increased marginalization from the global economy, due to its continued dependence on a few primary commodities. African economies also suffered from inadequate infrastructure and low levels of human resources development and industrial capacity. The international community should strengthen its support of Africa's efforts to mobilize its own resources and investment.

Statements were also made by the representatives of the United Republic of Tanzania, (on behalf of the Group of 77 and China), Luxembourg, on behalf of the European Union and associated countries, United States, Russian Federation, Paraguay (on behalf of the Rio Group), Tunisia, Egypt, Turkey, China, New Zealand, Cote d'Ivoire, Sudan, Ukraine and Swaziland.

The Director of the Africa Bureau of the United Nations Industrial Development Organization (UNIDO), Kandeh Yumkella, and the Director of the Division for Governance, Public Administration and Finance of the Department of Economic and Social Affairs, Guido Bertucci, also addressed the Committee.

The Committee will meet again at 3 p.m. today to conclude its consideration of industrial development cooperation and business and development.

Committee Work Programme

The Second Committee (Economic and Financial) met this morning to consider, under the general heading "sectoral policy questions", the Industrial Development Decade for Africa and business and development.

The Secretary-General's report on the implementation of the programme for the Second Industrial Development Decade for Africa (1993-2002) (document A/52/480) describes the activities of the Economic Commission for Africa (ECA) and the United Nations Industrial Development Organization (UNIDO), the two main organizations directly involved in the implementation of the programme for the Second Decade. The report also discusses the work of the newly adopted Alliance for Africa's Industrialization initiative. The Alliance had been endorsed by the Assembly of Heads of State and Government of the Organization of African Unity (OAU) as the new mechanism for the attainment of the goals of a refocused programme for the Second Decade.

According to the report, a mid-term evaluation of the programme for the Second Decade was completed in 1997. The specific objectives of the evaluation were: to assess the achievements of the programme against its stated objectives and expected outputs; to identify and assess the factors that have facilitated the achievements of the programme's objectives, as well as those factors that had impeded the fulfilment of those objectives; to propose a course of action, at the policy and programme levels, and to draw lessons for the future design, implementation and monitoring of the programme; and to examine the relationship of the programme to the Alliance.

The evaluation revealed that the Second Decade was an expression of intentions and desires for Africa's industrialization, the report states. The evaluation noted that efforts should be redoubled to translate the objectives of the Second Decade into concrete and practical programmes for which funds could be mobilized. Special implementation mechanisms at the country level needed to be established and/or strengthened, and the existing national machinery--ministries of industry and trade or planning--should be encouraged to assume that responsibility.

The report says that implementation strategies advocated were not adopted at the country level. The nascent African private sector was not fully prepared to assume the new responsibilities in the industrial investment process and financial support, including term lending from both domestic and foreign sources, was not readily available for industrial projects.

According to the report, the mid-term evaluation contained the following recommendations:

-- The programme's scope and coverage should be narrowed to make it compatible with a country's capacity to mobilize the resources for implementation;

Second Committee - 3 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

-- Governments should concentrate on those segments of the programme that were considered necessary prerequisites for industrial development and leave the productive and manufacturing aspects to the private sector;

-- Governments should intensify their efforts to promote the economic environment and political stability that would make private-sector initiatives possible and productive;

-- The private sector, and the industrial community as a whole, should be given support to build up their capacity and enhance their competitiveness;

-- The donor community should be invited to seriously consider the revised priorities, and the opinions, endorsement and participation of the private sector, chambers of commerce and related business associations should be solicited.

The Alliance provided a mechanism for partnership between African leaders and the private sector to define industrial development visions and to commit political will and resources to their achievement, the report says. The Alliance was also complementary to the United Nations system-wide Special Initiative on Africa and the New Agenda for the Development of Africa in the 1990s. The Alliance's initial thrust was on linking industrial and agricultural development. The aim of the Alliance's strategy was to address those specific subsectors to which national decision makers attached greatest priority.

The Conference of African Ministers of Industry, at its thirteenth meeting, held at Accra in May 1997, adopted a Plan of Action for the implementation of the Alliance, the report says. The Plan of Action spelled out specific objectives to be achieved to fulfil the goals of the Alliance and the specific roles and actions to be undertaken -- at the national, subregional and regional levels -- and the areas where donors' assistance would be most needed.

The Committee has before it the Secretary-General's report on entrepreneurship and privatization for economic growth and sustainable development (A/52/428) which was submitted in response to General Assembly resolution 48/180 of 21 December 1993. The report contains policies and activities related to entrepreneurship, privatization, demonopolization and administrative deregulation.

The report says the degree of entrepreneurship in a country and the extent to which the potential for business creation is allowed to be realized is one of the determining factors in the economic growth of a society. Experience shows that the best results in entrepreneurial development are attained with programmes to promote and train entrepreneurs that are linked to

Second Committee - 4 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

support services, with direct help to the potential entrepreneur in accessing finance, technical, managerial and marketing advice and suitable physical facilities.

The report recommends that the United Nations and the organizations of the United Nations system should build partnerships and consult with the private sector to achieve development objectives, including the goals established by international conferences. The organizations of the United Nations should continue to support entrepreneurship, privatization, demonopolization and the simplification of administrative procedures in accordance with General Assembly resolutions 48/180 and 50/106.

The recommendations of the 1997 Micro-credit Summit, according to the report, should be implemented and micro-credit should be expanded to reach 100 million families by the year 2005. The organizations of the United Nations system should be encouraged to continue and enhance their micro-credit programmes and to support the gender objectives, in particular. Governments and the organizations of the United Nations should strengthen and coordinate their support to small and medium-sized enterprises. They should strengthen their support for the conversion of military industries and bases to civilian use. They should also assist governments in streamlining and simplifying their tax systems and strengthening their tax administration.

The report also urged the United Nations system and other donors to work together in advising and assisting governments at their request in ensuring that the public interest is respected in privately run public services. The conclusions of the Economic and Social Council on fostering an enabling environment for investment and trade should be implemented.

Introduction of Draft Resolutions

K. E. KAMANDO (United Republic of Tanzania), speaking on behalf of the "Group of 77" and China, introduced a draft resolution on operational activities for development of the United Nations (document A/C.2/52/L.5).

By that draft text, the Assembly would request the Secretary-General, when presenting his comprehensive report on the triennial policy review of the Assembly at its fifty-third session, to take into account intergovernmental response to his reform measures and proposals relevant to operational activities for development of the United Nations system. It would also request the funds and programmes in their regular reporting to the Assembly, through the Economic and Social Council, on the triennial policy review, to include in their reports actions taken to implement the outcome of the intergovernmental process of the Secretary-General's reform measures and proposals that would include an analysis of the implications of reforms on their respective operational activities, as well as inter-agency coordination.

Second Committee - 5 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

A. MWAKAPUGI (United Republic of Tanzania), speaking on behalf of the Group of 77 and China, introduced a draft resolution on enhancing international cooperation towards a durable solution to the external debt problem of developing countries (document A/C.2/52/L.8).

By that draft resolution, the Assembly would call for a reduction in the period of time a country must be operating under sound economic policies in order to qualify for the provision of debt relief under the Heavily Indebted Poor Countries Debt Initiative. It would request, in order to allow beneficiary countries to reach debt sustainability rapidly and avoid additional costs associated with delays in debt relief, that the period between the decision and completion point be shortened and that interim assistance be provided.

The Assembly would also call for the provision of additional financial resources by both bilateral and multilateral creditors, including interim financing, without affecting the support required for development activities of developing countries. It would encourage bilateral donors to contribute the necessary resources to the Heavily Indebted Poor Countries Trust Fund of the World Bank and to the Enhanced Structural Adjustment Facility Trust Fund of the International Monetary Fund for the implementation of the Initiative.

The Assembly would call upon the international community, including the United Nations system, and invite the Bretton Woods institutions and the private sector, to take urgent measures and action for the implementation of the commitments, agreements and decisions related to the question of external debt taken at the major United Nations conferences and summits organized since the beginning of the 1990s on development.

J. KISIRI (United Republic of Tanzania), speaking on behalf of the Group of 77 and China, introduced a draft resolution on global financial flows and their impact on developing countries (document A/C.2./52/L.4).

By that draft resolution, the Assembly would call on the International Monetary Fund (IMF) to ensure a flexible approach in the exercise of its role in promoting capital account liberalization, to enable members to adjust the pace and sequencing of the liberalization of their capital account. It would stress the need for strengthened international cooperation to prevent future currency turmoils, which negatively affected not only developing countries but also the international and financial monetary system.

The Assembly would also request the Secretary-General to analyze current trends in global financial markets, in close cooperation with heads of the Bretton Woods institutions and the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), and make recommendations in the 1998 World Economic and Social Survey and the Trade and Development Report on ways and means to address the problem of fluctuations in global financial markets.

Second Committee - 6 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

ABDULAZIZ A. KAID (Yemen), speaking on behalf of the co-sponsors -- Algeria, Cuba, Djibouti, Egypt, Jordan, Morocco, Qatar, Saudi Arabia, Sudan, Tunisia and United Arab Emirates -- introduced a draft resolution on permanent sovereignty of the Palestinian people in the occupied Palestinian territory, including Jerusalem, and of the Arab population of the occupied Syrian Golan over their natural resources (document A/C.2/52/L.6).

By that draft resolution, the Assembly would reaffirm the inalienable rights of the Palestinian people and the population of the occupied Syrian Golan over their natural resources, including land and water. The Assembly would call upon Israel not to exploit, to cause loss or depletion of or to endanger the natural resources in the occupied Palestinian territory, including Jerusalem, and in the occupied Syrian Golan. It would request the Secretary-General to report to the Assembly at its fifty-third session on the implementation of the resolution. The Assembly would also decide to include in the agenda of its fifty-third session the item on the subject.

Statements

KANDEH YUMKELLA, Director, Africa Bureau, United Nations Industrial Development Organization (UNIDO), said African industries had remained vulnerable, despite tremendous efforts by many African countries in recent years to introduce market reforms, ensure macroeconomic stability and promote private sector development. Africa was not only in danger of deindustrialization, but also of being marginalized in the investment and innovation-driven global economy. Factors constraining industrial transformation in Africa included weak support institutions, poor infrastructure, low level of technology, limited human capital development, and a weak private sector.

He said the nascent African industries faced formidable challenges, which further underscored the need for technical cooperation to promote private sector industrial development under a strengthened and refocused programme for the second Industrial Development Decade for Africa. A mid-term evaluation of the Decade recommended that -- efforts be redoubled to translate its objectives into concrete and practical programmes for the implementation of which funds could be mobilized; special implementation mechanisms at the country level should be established and strengthened; greater emphasis be placed on strengthening private sector and civil society involvement in the Decade; and closer partnerships be promoted between the lead agencies in the programme and the donor community and other United Nations agencies in the Decade.

GUIDO BERTUCCI, Director of the Division for Governance, Public Administration and Finance of the Department of Economic and Social Affairs, made an introductory statement on business and development. He said there was a need for public administration systems to be sound and efficient. The role of governments must be strengthened, particularly in creating an enabling

Second Committee - 7 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

environment for public sector activities. Countries were grappling with finding the appropriate mix between private and public intervention in the economy. Such plans included: enlarging the private sector role through partnerships with non-governmental organizations; the involvement of government procurement; and, privatization and outsourcing. The United Nations was also forging ahead with alliances with the private sector.

MARWA J. KISIRI (United Republic of Tanzania), speaking on behalf of the Group of 77 and China, said the State still had a critical role to play in creating a favourable environment for the establishment, consolidation and growth of small and medium-scale enterprises, as well as providing the necessary legal and regulatory framework for entrepreneurship development. A favourable regulatory framework would facilitate free and fair competition among all the enterprises within the market economy. The State also had a key function in deregulation at the macroeconomic level, through such policy tools as trade and budgetary policies.

Continuing, he said the State also had an important role in protecting and nurturing new and fragile industries. The State could also provide institutional and infrastructure support with respect to market information and sustainable human resource development. A free and unregulated market could not on its own provide certain services. There was a compelling need for the State and other agencies and partners to support entrepreneurship development and strengthen the private sector in developing countries.

JEAN GRAFF (Luxembourg), speaking on behalf of the European Union and Bulgaria, Estonia, Hungary, Lithuania, Poland, Romania, Slovakia, Slovenia and Cyprus, said the Union encouraged efforts to establish support centres for a public sector-private sector partnership. Those centres could act as a catalyst in the start-up and expansion of small and medium-sized enterprises. Programmes designed to improve access to information and foster direct cooperation between entrepreneurs had already been put in place. Particular attention should be given to improving access to training, among other things, through participation in programmes for exchanging best practices.

The Union shared the aims of the UNCTAD programmes for reinforcing capacities at the local level, he said. Those programmes took into account the links between investment, technology and development of enterprises. The issues of technology development and transfer and capacity-building were crucial for the development of small and medium-sized enterprises. Although the main activities in that area took place on a business-to-business basis, governments and international organizations had a role in regulating, facilitating and providing the necessary incentives for technology and capacity development.

A major obstacle to the development of small and medium-sized enterprises in general, and of micro-businesses in particular, was access to credit, he said. Micro-credit was an essential factor in meeting the

Second Committee - 8 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

financial needs of players who could not provide the guarantees demanded by the traditional banking system. A considerable number of those businesses were single-member companies run by women and their expansion could increase the integration of women into economic and social life. Support for the development of those businesses was also an important instrument in the fight against poverty.

SETH WINNICK (United States) said the private sector remained the primary engine of economic growth in successful development. Thus, the relationship between business and development was at the core of sustainable development. Demonopolization was a critical factor in development in all economies. State-owned monopolies and private sector firms that were able to establish monopoly positions were often a barrier to healthy economic growth.

He noted that the Secretary-General's report on the agenda item under consideration was neither timely, nor analytic and thoughtful. He went on to say that competition was a key objective of the privatization programmes in the economies in transition. Competition, privatization, the provision of an environment that fostered entrepreneurship, good governance and the eradication of corruption were critical to sustainable development.

NIKOLAI TCHOULKOV (Russian Federation) said it was clear that UNIDO needed a substantial reorganization, in order to improve its efficiency and give it greater relevance to the needs of Member States. His Government supported the useful work done by UNIDO secretariat and commended those areas of transformation in UNIDO, as presented in the Secretary-General's report on the second phase of reforms. Priority areas in the work of UNIDO should include: support for the attraction of foreign capital and the transfer of technology; expertise at the level of industrial sectors and enterprises; consultations on industrial policy, statistics and the preparation of norms and standards; and functioning as a global forum.

His Government supported the effort made by UNCTAD, UNIDO, the United Nations Development Programme (UNDP), the International Labour Organization (ILO) and the International Trade Center, he said. The Russian Federation had established a viable private sector in its economy, with more than 125,00 enterprises, including many with mixed ownership. Addressing enterprises that were inefficient would be the next project. In 1996, through the development of small businesses, more than 1 million new jobs were created. The federal government and local authorities had set the goal to increase the number of those citizens working in small and medium-sized enterprises. His Government was counting on the support of its traditional bilateral partners and assumed that it would be able to receive technical assistance from the relevant international organizations, in order to address such a large problem.

Second Committee - 9 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

B. HUGO SAGUIER CABALLERO (Paraguay), speaking on behalf of the Rio Group (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Panama, Peru, Uruguay, Venezuela, Honduras and Guyana), said cooperation for industrial and agricultural development should be based on an international environment that favoured access to markets for the products of developing countries. Such cooperation should also be based on the promotion of modalities favourable to development and access to competitive technologies. He was interested in the preservation and strengthening of UNIDO in the field of industrial cooperation.

He favoured liberalizing the international trade of agricultural products and eliminating the existing distortions in that sector. The successes of the Uruguay Round negotiations with respect to agriculture must be reinforced, he said. It should be done in the context of the agricultural committee of the World Trade Organization and, specifically, on the issues of access to markets and curbing internal support measures and export credit. Liberalization of international agricultural trade contributed to global food security, because it permitted diversification of food sources and stimulated competition.

ABDERRAZAK AZAIEZ (Tunisia) said that, with the Second Industrial Decade for Africa, the United Nations had established an ambitious programme to assist the continent in developing its industry. The programme aimed to transform the economies of African countries and environmental and energy issues were seen as key. It also addressed support sectors such as communications and transport. African countries, with the support of UNIDO and the Economic Commission for Africa (ECA), adopted the programme at the regional and subregional levels to bring about industrial advancement.

Despite the recent renewal of international support, Africa was facing great difficulties in implementing the programme for the Second Decade, he said. A mid-term review showed that the programme for the Second Decade involved a number of intentions and wishes. The review called for stepping up efforts to translate plans for the Second Decade into concrete actions. It also called for the establishment or strengthening of special execution mechanisms at the national level, which incorporated the concept of partnership.

He said that his Government had continued activities aimed at liberalizing its economy, such as issuing regulations that fostered efficiency and competitiveness and allowed business in Tunisia to cope with increased foreign competition. His Government had also established funds to foster competitiveness in tourism, agriculture and industry.

ADEL ABDELLATIF (Egypt) said the private sector was the backbone of industrial development. Private enterprises must be supported so they can act as catalysts for sustainable development. As had been noted in earlier reports, governments should also provide an enabling environment for such

Second Committee - 10 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

enterprises. However, what had not been given enough attention in the current report and past deliberations was the role of the United Nations system in ensuring such an enabling environment.

On the poor state of industrialization in Africa, he said the problem had not also been given adequate attention by international organizations and the donor community. The programme of the Second Industrial Development Decade for Africa should be supported and fully implemented. In addition, better coordination was needed among organizations in the United Nations system and between them and African States.

BURAK OZUGERGIN (Turkey) said entrepreneurship, supported by appropriate resources and technologies, now posed a challenge to the traditional roles of land and labour. Developments in the international political and economic domain had created a more competitive environment than ever before. Market forces, guided by the principles of free enterprise, had taken the place of command economies.

He emphasized the important role of small and medium-scale industries in the economies of developing countries and said they were the most reliable players in a market economy. They often produced more and varied output with less investment and created employment through reduced cost of investment. They could withstand economic fluctuations, because of their flexible structure, and they encouraged balanced regional development. Further, they tended to correct imbalances in national income distribution. Small and medium-sized enterprises should, therefore, be supported with technical and training services, as well as financial, management and marketing advice and assistance. The United Nations system should continue to provide such support.

YUAN SHAOFU (China) said the experiences of different countries had shown that privatization was neither the magic rod for economic development, nor the only outcome of enterprise reform. The right approach to such reform should be determined by the reality of a given country and the requirements of globalization and liberalization. In order to achieve economic and social development, the development of entrepreneurship was indispensable, as was enterprise reform.

The development of China's non-State sector of its economy, of which town and township enterprises were an example, illustrated the difference between entrepreneurship and privatization, he continued. Town and township enterprises, urban collective enterprises, shareholding enterprises and private enterprises were all created by entrepreneurs, but they differed in organization and in sources of capital. They also constituted important components in China's economy.

Almost all enterprises in developing countries were small and medium- sized and suffered from technical backwardness and a lack of human and

Second Committee - 11 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

financial resources, he said. Therefore, the international community, particularly the developed countries, must take measures to assist the development of those enterprises. Assistance could take a variety of forms, for example: joint ventures; stock participation; sub-contracting; technology transfer; strategic alliances; and licensing. Such forms of assistance were indispensable, he said.

MESSIE AMOAH (Ghana) said Africa was in danger of increased marginalization from the global economy, because of its dependence on a few primary commodities, inadequate infrastructure and low levels of human resources development and industrial capacity. In recent years, industrial capacity had been further weakened by the inability of local industries to compete, in the face of cheap imports dumped through trade liberalization. The industrial sector in Africa could be a major engine of growth in the transformation of African economies. In that way, it could play a fundamental role in the attainment of a lasting solution to the social and economic crises of the continent, particularly in poverty eradication and employment generation.

He said East and South-East Asia had accounted for most of the manufacturing value-added growth in the developing world. He believed that Africa could learn from the experiences of those countries. Some of the benefits of developing country cooperation came through South-South cooperation, economic and technical cooperation among developing countries and through the efforts of some donor countries to facilitate such cooperation. The international community should strengthen support for Africa's efforts to mobilize its own resources and to join in partnerships with others in its industrialization effort.

JEFF LANGLEY (New Zealand) said the role of the private sector in development was crucial. In the current world economy, the vast majority of financial flows were in private hands and, therefore, the greatest potential for advancing economic development lay in mobilizing private sector resources. His Government agreed with the Secretary-General's report when it noted that "the degree of entrepreneurship prevailing in a country and the intent to which the potential for business creation was allowed to be realized was one of the determining factors in the economic growth of a society". It was important to stress that an enabling environment related not just to foreign direct investment, but also to creating conditions favourable to the development of domestic entrepreneurship at all levels.

Official development assistance had a role in facilitating the creation of an enabling environment for attracting private financial flows, encouraging investment stability and providing essential assistance to the poorest countries, he said. It also had a role in filling the gaps where the private sector "feared to tread" or saw little potential for return on investment. In addition, such assistance could be used to help developing countries attract private capital and build the infrastructure and institutions to ensure

Second Committee - 12 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

balanced and sustainable economic growth. Official development assistance had an important role to play in the achievement of sustainable economic growth, but private financial flows and a vigorous business sector were also indispensable.

YOUSSOUFOU BAMBA (Côte d'Ivoire) said his country's economy was dependent mainly on cocoa and coffee and was seriously affected by the market fluctuations of those export commodities. Thus, Côte d'Ivoire needed to industrialize and diversify its economy. His country planned to be an industrial power in Africa and its industrialization policy was based on the development of the private sector. His Government was also cooperating with members of the Economic Community of West African States (ECOWAS), which had a market of 250 million people, as part of a regional effort to promote industrialization.

Calling on the international community to support both his country and the regional efforts towards industrialization, he said such support should assist in: formulating industrialization policies; establishing a machinery to give new impetus to the implementation of the Second Industrial Development Decade for Africa; and encouraging the development of larger economies through regional integration. Africa needed the support of the international community in that regard, both bilateral and multilateral. He commended the efforts of UNIDO in Africa and asked other United Nations agencies in Africa to support industrialization efforts.

MUBARAK HUSSEN RAHMTALLA (Sudan) said his Government had recently created a five-year development strategy and the resulting increase in industrial earnings was promising for industrial growth. The country had also increased its production of sugar, fabrics, weaving and leather goods. The industrial plan was aimed at improving the quality and quantity of industrial output. His Government was also preparing to join the World Trade Organization, while restructuring to bring about the transition to a market economy. He was confident that such reforms would provide a favourable macroeconomic environment and encourage medium- and long-term growth.

Regarding the Second Industrial Development Decade for Africa, he said development should be one of the core activities of the United Nations. Africa would not be able to have access to world markets and compete with others if it was forced to produce only raw materials. National and worldwide economic conditions had become unbalanced. Even though efforts had been made to assist the countries of Africa, they had not succeeded, in the face of the many internal and external obstacles.

One of those obstacles was that there had been an insufficient awareness in carrying out provisions in the programmes of the first and second Decades, he continued. The private sector was also too weak to play its full role, because it did not have adequate human resources and lacked an industrial base. The main donors and institutions failed to play a significant role in

Second Committee - 13 - Press Release GA/EF/2776 20th Meeting (AM) 28 October 1997

the second Decade, under the pretext that they had not been invited to draw up the programme. The Secretary-General's report contained recommendations, which were important, but not enough to meet future requirements.

SERHIY REVA (Ukraine) said the international community should aim at making industrial development an integrated process that included the mobilization of foreign and domestic investments and the achievement of competitive and sustainable growth. With its technical expertise, neutrality and multidisciplinary capability, UNIDO was uniquely suited to achieving that goal. A United Nations agency or special programme was still needed to promote wide-ranging international cooperation in the field of industrial development. At the same time, he wished to see UNIDO's activities streamlined, focused on real priorities and action-oriented.

The restructuring of military industry for civilian markets was a key aspect of industrial development in Ukraine, he said. Deep structural reconstruction, training personnel, renovation of existing equipment and introduction of modern marketing and management were crucial for the effective conversion of the military-industrial complex in Ukraine. The UNDP and UNIDO could help in solving those problems, by facilitating foreign investments and providing methodological support.

MOSES DLAMINI (Swaziland) said there was no doubt that the primary responsibility for development rested with African countries themselves, who must take charge of their own destiny. Yet, African economies were beset with high inflation and unemployment. In addition, official development assistance was declining and there was a lack of foreign direct investment. The debt burden in many African countries had become so unbearable that it threatened the success of the reform efforts aimed at the restoration of economic and socio-political viability. His Government urged developed countries to reverse the downward trend in official development assistance flows and to increase aid programmes to support the efforts of developing countries, particularly in Africa.

Developing countries in Africa increasingly required technical assistance for capacity building, he said. That assistance supplemented efforts to create an enabling environment for sustainable industrial growth and international competitiveness. Therefore, his Government was encouraged by the collaboration and coordination between UNIDO and the ECA in the mobilization of funds and implementation of projects, particularly the promotion of small and medium-sized enterprises and other agro-industries.

He further acknowledged the collaboration between UNIDO and the Alliance for Africa's Industrialization, particularly the provision of technical support for the implementation of national programmes. In the context of the aggressive programme of reform undertaken at UNIDO, developed countries should exercise their political will and provide the necessary funding for the organization.

* *** *