VULNERABILITY INDEX, WORLD FINANCIAL ORGANIZATION AMONG ISSUES DISCUSSED IN ECONOMIC AND SOCIAL COUNCIL

23 July 1998

Press Release
ECOSOC/5788

VULNERABILITY INDEX, WORLD FINANCIAL ORGANIZATION AMONG ISSUES DISCUSSED IN ECONOMIC AND SOCIAL COUNCIL

19980723 Reports on Economic and Environmental Questions, Implementation Of Decolonization Declaration, and Israeli Occupation Introduced

Several speakers this morning urged the Economic and Social Council to defer consideration of Vanuatu's graduation from the list of least developed countries until the year 2000. The Council began consideration of economic and environmental questions as part the general segment of its 1998 substantive session.

The representative of Vanuatu said consideration of his country's status should be postponed until the establishment of a vulnerability index to identify least developed countries had been established. Vanuatu, like other small island States, was vulnerable to the effects of economic and ecological shocks. That vulnerability was exacerbated by the distance between small islands States and large markets.

While many speakers voiced their support for the concept of graduation, they also acknowledged that equitable and agreed criteria played an important role in that process. There were many problems of methodology involved in formulating and applying a meaningful vulnerability index, and much more expert-level work was required before further action should be taken on the issue. Premature graduation from the list of least developed countries would not serve the interests of the country or the international community, they said.

The representative of Austria questioned the need to establish a "World Financial Organization", as suggested by the Committee for Development Planning. Speaking on behalf of the European Union, he conceded that there was a need to strengthen the international monetary system to minimize the frequency and severity of future economic disturbances. Yet, the functions of the proposed new organization could be undertaken within existing structures. The representative of the United States said the call for the creation of another international actor was questionable.

Also this morning the Council began its consideration of the implementation of the Declaration on the Granting of Independence to Colonial Countries and Peoples by the United Nations specialized agencies and the

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international institutions. In addition, the Council took up the economic and social repercussions of the Israeli occupation on the living conditions of the Palestinian people in the occupied Palestinian territory, including Jerusalem, and the Arab population in the occupied Syrian Golan.

In introductory remarks, Under-Secretary-General for Economic and Social Affairs Nitin Desai said the Council should determine the true role of the general segment and examine how it could be strengthened. The segment had a very wide function, including coordination, reviewing reports, the status of reforms and other pertinent issues such as decolonization and the rights of the Palestinian people. The Council needed to exercise a coordinating function in order to rationalize activities of Commissions with overlapping mandates and agendas.

Also making introductory statements before the Council this morning were the following: Director, Division for Public Economics and Public Administration of the Department of Economic and Social Affairs, Guido Bertucci; Officer-in-Charge for Economic and Social Council Support and Coordination, Sarbuland Khan; Director of the Population Division of the Department, Joseph Chamie; Acting Chairman of the Special Committee on decolonization, Bruno Rodriguez Parrilla (Cuba); and a representative of the Regional Commissions New York Office, Charles Kassangana.

Statements were also made by Indonesia (on behalf of the "Group of 77" developing countries and China), Vanuatu, Iceland, Mozambique, Barbados, Solomon Islands (on behalf of South Pacific countries), New Zealand, Democratic People's Republic of Korea, Samoa, Australia, and the Philippines.

Representatives of the United Nations Educational, Scientific and Cultural Organization (UNESCO) and the Food and Agriculture Organization (FAO) also spoke.

The Council will meet again at 3 p.m. today to continue its discussion of economic and environmental questions, implementation of the Declaration on Decolonization, and economic and social repercussions of Israeli occupation.

Council Work Programme

The Economic and Social Council met this morning to consider several issues under the agenda item "economic and environmental questions", including sustainable development, natural resources, energy, international cooperation in tax matters, public administration and finance, cartography and population and development.

The Council was also scheduled to consider the implementation of the Declaration on the Granting of Independence to Colonial Countries and Peoples by the United Nations specialized agencies and the international institutions.

In addition, the Council was scheduled to take up the economic and social repercussions of the Israeli occupation on the living conditions of the Palestinian people in the occupied Palestinian territory, including Jerusalem, and the Arab population in the occupied Syrian Golan.

Economic and Environmental Questions

The Council had before it the report of the Commission on Sustainable Development (document E/1998/29) on its sixth session, which was on 22 December 1997 and 20 April to 1 May. The report contains six draft decisions recommended for action by the Council.

The Commission on Sustainable Development was established in 1993 as a functional commission of the Council to ensure follow-up to United Nations Conference on Environment and Development (UNCED), as well as to enhance international cooperation and rationalize the intergovernmental decision-making capacity for the integration of environment and development issues. It was also mandated to examine progress in the implementation of Agenda 21 at the national, regional and international levels, fully guided by the principles of the Rio Declaration on Environment and Development and with the aim of achieving sustainable development.

By the first draft decision, on consumer protection guidelines for sustainable consumption, the Council would invite governments to undertake national consultations with appropriate stakeholder groups on guidelines for sustainable consumption. They also would be invited to submit their views on the proposed new guidelines to the Secretariat so that they can be made available to all governments. The Bureau of the Commission on Sustainable Development would be invited to organize open-ended consultations among States and to report thereon to the Inter-sessional Ad Hoc Working Group for its consideration.

By another draft decision, the Council would approve the Commission's request to hold the third session of the Intergovernmental Forum on Forests at Geneva from 3 to 14 May 1999.

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A third draft decision would have the Council take note of the report of the Commission on Sustainable Development on its sixth session and approve the provisional agenda for the seventh session of the Commission.

The report also asks the Council to take note of decisions taken by the Commission. The Commission had taken decisions on the following issues: strategic approaches to freshwater management; industry and economic development; transfer of environmentally sound technology, capacity-building, education and public awareness, and science for sustainable development; review of the implementation of the Programme of Action for the Sustainable Development of Small Island Developing States; information provided by governments and exchange of national experiences; and matters related to the inter-sessional work of the Commission.

In the report of its thirty-second, held from 4 to 8 May, the Committee for Development Planning (document E/1998/34) noted that international policy responses contributed to the speed and depth of the financial crises in East and South-East Asia. Avoiding a recurrence of such a financial debacle required multilateral institutions, as well as private financial entities, to closely monitor and respond quickly to emerging developments. The Asian financial crises would undoubtedly force the international community to re-examine whether existing international arrangements in this regard were adequate. In that context, it might be necessary to establish an Economic and Social Security Council in the United Nations to promote systematic consultations on and coordination of global economic action.

According to the report, bank-supervision practices should be strengthened and supervision extended to non-bank financial institutions. Where capital flows were large, exchange rates need to be watched carefully and exchange-rate policies adjusted where warranted. Sound macroeconomic policies also remained a necessary complement to sound financial policies, even though the inherent potential for volatility in capital flows may at times overwhelm traditional policy instruments. When formulating policy to minimize the fallout of potential financial crises, adequate safety nets for the population needed to be constructed.

There was also a need for an institution to provide overall guidance in the development and monitoring of international standards and codes of conduct for private financial management and capital flows, and to identify new needs for supervision of private capital markets in particular as they arise. For that purpose, a World Financial Organization could be established to promote sound financial principles and practices and curb destructive competition and inconsistency in national regulatory frameworks. That organization would review, establish and monitor sound international principles and practices in such areas as accounting, payments and settlements, and financial supervision, and could devise acceptable guidelines, regulation and supervision in the sphere of private international finance.

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Such an organization could also set standards for the functioning of credit-rating agencies and rules for the establishment and operation of international bankruptcy regimes. In addition, it should devise, in cooperation with other public and private institutions, acceptable formats for regulating short-term capital movements to complement national measures and to monitor the application of international guidelines for short-term lending and borrowing by private creditors and borrowers.

Multilateral financial institutions needed to improve their work and provide more effective warning mechanisms that would help prevent future financial crises. Under the existing arrangements there was a need for access to liquidity early on in a crisis and of a sufficient magnitude. Resources for the International Monetary Fund (IMF) could be further augmented by expeditious implementation of the agreement already reached for the upward revision of quotas of member countries. Also, further issuances of special drawing rights should be explored on the basis of the global need for short- term liquidity. This is more urgently required than ever in view of the spectacular increase in short-term capital flows and the need to deal with the impact of sudden outflows.

In addition to providing timely loans through existing facilities, the IMF should examine the possibility of establishing a permanent contingency fund that would provide automatic access, but at full cost, to upfront drawings prior to the conclusions of negotiations for Fund assistance for pre-certified countries, that is, countries deemed to have pursued prudent policies, but unexpectedly caught up in a crisis.

When financial crises erupted, foreign private lenders and investors should be intimately involved in their resolution and in sharing the costs through debt write-off, debt rescheduling or delaying claims on repayments. The World Financial Organization could play an important institutional role in devising ways to bring creditors and debtors together to negotiate timely responses to a crisis. As a rule, governments should refrain from guaranteeing the foreign-exchange risk or repayment obligations of the private sector.

A periodic review and evaluation should be undertaken by an independent group of experts of the ways in which various international actors, such as the multilateral financial institutions, respond to and manage financial crises. The review could form the basis for a discussion in the relevant governing bodies of the multilateral institutions and provide guidelines for concerted action in the event of future crises. Such independent experts should be appointed by the Secretary-General of the United Nations, the President of the World Bank, the Managing Director of the IMF and, when established, the head of the World Financial Organization.

The Committee also examined the economic and social implications of long-term demographic trends, the report states. Most countries, except in

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Africa, had aging populations and rising old-age dependency ratios. That trend was far more acute in developed countries than in most developing countries. As populations of developing countries aged and support from traditional sources diminished, formal old-age security systems would become increasingly important. Those would have to encompass three functions: insurance to pool resources and risks, redistribution of income from high to low lifetime earnings, and savings to shift income from economically active years to retirement years.

In response to a request by the General Assembly, the report states that the Committee examined the report on the development of a vulnerability index and its possible use in identifying least developed countries. The Committee underlined that structural vulnerability to some extent was already reflected in the economic diversification index. Moreover, even if vulnerability were to be given greater weight than hitherto in decisions about inclusion in or graduation from the list of least developed countries, Vanuatu would have been due for graduation in 1997, unless the criteria were changed. Therefore, the Committee reconfirmed the indicators for Vanuatu in 1994 and again in 1997, showing that Vanuatu was due for graduation with effect from 1997.

Also among documents before the Council is one by the Secretary-General (A/53/65-E/1998/5) containing a report of an ad hoc expert group meeting on vulnerability indices for small island States which took place at Headquarters on 15 and 16 December 1997. The 22 participants and 17 observers reviewed a number of studies on the vulnerability issue, including those specifically prepared for the meeting.

The expert group agreed that vulnerability indices are meant to reflect relative economic and ecological susceptibility to external shocks. The index is designed to identify which group of countries exceed a threshold of vulnerability at which they are particularly susceptible to risks and warrant special attention from agencies providing assistance. The group concurred that vulnerability indices should be simple to build and based on indicators that were easy to comprehend and suitable for inter-country comparisons or reflecting relative vulnerability of small and non-small island developing countries.

Judging from the results of different studies using a diversity of approaches, in particular two reports of the Commonwealth Secretariat and the United Nations Conference on Trade and Development (UNCTAD) and reports of consultants that were submitted to the meeting, the group drew a number of conclusions.

It was concluded that, as a group, small island developing States were more vulnerable than others to structural shocks, and that the indicators should reflect the magnitude and probability of the exposure.

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On the basis of the available data, the expert group examined the impact of natural disasters on a number of economic indicators and concluded that it would be useful and feasible to consider the frequency of their occurrence weighted by the percentage of the population affected.

Concerning other components of an economic vulnerability index, exposure to trade shocks was extensively discussed. It was agreed that openness to trade (or any indicator based on trade/gross domestic product ratio) should not be considered per se as an indicator of vulnerability, but as a weighting factor for measuring the exposure to risk incurred by a country. It was suggested that, in its future work, UNCTAD might consider the feasibility of including services in the computation of the concentration index, as this would increase its relevance to small island developing States and other developing countries.

The expert group expressed concern at the lack of data needed to compute variables relevant to economic vulnerability for many small island developing States, and recommended that emphasis should be given to filling those data gaps. It was noted that many of those States faced vulnerability related to social and cultural diversity, and that further studies on the subject were needed.

Finally, the experts considered that other groups or bodies, such as the Committee for Development Planning, drawing on a broad list of indicators, could build specific composite vulnerability indices most significant for their purposes, for example for, identification of least developed countries.

A report of the Secretary-General covers the preparation of a Consolidated List of products harmful to health and the environment (A/53/156- E/1998/78). The report provides an overview of major developments since the publication of the 1995 fourth review of the List, and makes proposals on their possible impact on the format, content and coverage of the List. It also discusses changes that may affect the production and distribution of the publication.

In 1985, the United Nations Secretariat, in close cooperation with the World Health Organization (WHO) and the United Nations Environment Programme (UNEP)/International Register of Potentially Toxic Chemicals, carried out the first review of the List, focusing on arrangements for the preparation of future issues, the need for criteria for determining the inclusion of products, the question of the legal and public health context of regulatory actions that had not been included in the first issue, and the treatment of commercial data.

According to the report, there has been an increase in the number of products listed and the number of governments reporting with each new edition of the Consolidated List. The first issue covered less than 500 products

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regulated by 60 governments; the fifth issue, the last to deal with both pharmaceuticals and chemical products, covered regulatory actions taken by 94 governments on more than 700 products. The sixth issue (1997), dealing with pharmaceuticals only, contained information on 366 products regulated by 77 governments.

The report notes that decisions taken by a limited number of governments on a specific product may not be representative of the policy position of other governments. It also points out that all pharmaceutical and chemical products are potentially harmful if not correctly used. In addition, the fact that a given product is not listed as regulated by a country does not necessarily mean that its use is permitted in that country.

The report observes that considerable progress has been achieved in the development of the Consolidated List and that a decision to focus exclusively on pharmaceuticals and chemicals in alternate issues, along with computerized maintenance and production, should make the List more user-friendly. It recommends that the List could be prepared and published regularly every year in English. Alternatively, it could be issued in other languages at the same time as English, as a text file without comparative formatting.

Coverage of reporting countries could be widened by increasing the scale of assistance to countries, particularly in the area of capacity-building, according to the report. The domestically prohibited goods notification system should be revived, with the World Trade Organization (WTO) Committee on Trade and Environment being invited to take speedy action on it, it adds.

The Consolidated List is the only document that presents, in a unified manner, information on restrictive regulatory decisions taken by governments on a range of pharmaceutical products and agricultural and industrial chemicals. It is a valuable source of information for governments in considering the scope for their eventual regulatory actions. Other users of the List are non-governmental organizations, academic institutions and media organizations.

According to the report of the Secretary-General on consumer protection: guidelines for sustainable consumption (document E/CN.17/1998/5), the guidelines for sustainable development adopted by the General Assembly in resolution 39/248 constituted a comprehensive policy framework for governments to promote consumer protection in areas such as safety, economic interests of consumers, quality and distribution of goods and services, consumer education and information, and redress. They recognized that consumers often faced imbalances in economic terms, education levels, and bargaining power, and bore in mind the right of access of consumers to non-hazardous products, and the importance of promoting just, equitable and sustainable economic and social development.

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The report notes that, more recently, there has been increasing concern with the linkages between consumption patterns and environmental protection, including discussions on the need to change consumption and production patterns to promote sustainable development. In 1995, the Commission on Sustainable Development also recommended that the guidelines for consumer protection be expanded to include guidelines on sustainable consumption patterns. In its resolution 1995/53, the Economic and Social Council requested the Secretary-General to elaborate guidelines in the area of sustainable consumption patterns.

The report states that, in its resolution 1997/53, the Economic and Social Council requested the Secretary-General to continue work on the elaboration of the guidelines to cover sustainable consumption patterns, through the convening of an interregional expert group meeting in collaboration with interested governments, Consumers International, and other concerned entities active in this field. The Council also recommended that the interregional expert group meeting elaborate specific recommendations for guidelines for sustainable consumption patterns for submission to the Council at its substantive session of 1998.

In response to the request of the Council, the Interregional Expert Group Meeting on Consumer Protection and Sustainable Consumption convened at Sao Paulo, Brazil, from 28 to 30 January 1998. It took into account the recommendations of regional conferences on consumer protection. At that meeting, a number of general conclusions were arrived at.

The reports says that it was concluded that sustainable consumption was an essential part of sustainable development. In promoting sustainable consumption, governments should act in partnership with all members of society. Particular attention should also be paid to the significant role played by women and households as consumers. In addition, governments should actively support consumer organizations and other organizations of civil society in promoting sustainable consumption. To achieve more sustainable consumption, it was crucial to promote public participation in policy-making for the management and use of natural resources that were essential for meeting basic human needs, in particular, freshwater, land and ocean resources.

Highlighting other conclusions, the reports states that sustainable consumption requires that consumers, communities, businesses and organizations of civil society be aware of the potential environmental effects of products and services, including local and global impacts. In applying any procedures or regulations for consumer protection, including sustainable consumption, due regard should be given to ensuring that they do not become barriers to international trade and that they are consistent with international trade obligations.

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Recognizing that the major cause of the continued deterioration of the global environment is the unsustainable pattern of consumption and production, particularly in industrialized countries, governments should cooperate in changing consumption patterns at the global level. In so doing, they should be guided by the principle of common but differentiated responsibilities and the equitable sharing among the world population of environmental resources and the environment's capacity to absorb waste.

Developed countries should support developing countries in promoting sustainable development and consumption, in particular, through financial assistance, transfer of environmentally sound technologies, support for indigenous research and development capabilities, and better access to markets.

Governments should fulfil their obligations under international environmental agreements, including the Montreal Protocol on Substances That Deplete the Ozone Layer, the United Nations Framework Convention on Climate Change, the Convention on Biological Diversity and Agenda 21.

A review and revision mechanism for these guidelines should be established under the aegis of the United Nations so as to assess progress in their implementation by Member States and to revise them as necessary. The Secretary-General should report regularly on the status of their implementation. Technical assistance should be made available to countries that may encounter difficulties in collecting and processing the required data.

A note by the Secretary-General (document E/1998/63) informs the Council that the report on the results of the interregional expert group meeting to elaborate guidelines for consumer protection had been issued under the symbol E/CN.17/1998/5. The Council had asked the Secretary-General to report to it at its substantive session on progress made.

Also before the Council was a report of the Secretary-General on the Seventh United Nations Conference on the Standardization of Geographical Names which was held at Headquarters from 13 to 22 January 1997 (document E/1998/47). It states that the Conference, which was attended by 211 representatives and observers from 71 countries, adopted 14 resolutions relating to the works of its committees on national programmes, technical programmes, and international programmes and exchanges.

The Conference called for the endorsement by the Council of its recommendation that the Eighth Conference should be convened for eight working days in the second half of the year 2002; and that the twentieth session of the United Nations Group of Experts on Geographical Names be convened during the fourth quarter of 1999. It requested the Secretary-General to take measures to implement the recommendations, especially with regard to the work of the Group of Experts.

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The Council also has before it reports on international cooperation in tax matters (document E/1998/57), public administration and finance (documents A/53/173-E/1998/97 and E/1998//77) and on population and development (document E/1998/25).

Declaration on Granting Independence to Colonial Peoples

The Council had before it the Secretary-General's report on the implementation of the Declaration on the Granting of Independence to Colonial Countries and Peoples by specialized agencies and the international institutions (document A/53/130). The report states that General Assembly adopted resolution 52/73 requesting the Secretary-General to prepare for submission a report on the action taken in implementation of the relevant resolutions, including that resolution, since the circulation of his previous report on the subject. In a letter dated 30 March, the Secretary-General transmitted the text of the resolution to the executive heads of 28 specialized agencies and international institutions and invited them to submit the information requested for inclusion in the report. Summaries of the replies received will be given in document E/1998/59 and addenda.

The Council was also scheduled to discuss the report of the President of the Council on consultations held with the Chairman of the Special Committee on the Situation with regard to the Implementation of the Declaration on the Granting of Independence to Colonial Countries and Peoples (document E/1998/76). In accordance with the terms of Council resolution 1997/66, the President maintained close contact with the Chairman of the Special Committee in the past year. The President considers it both useful and essential that contacts and cooperation between the two bodies continue to be maintained and strengthened to mobilize the maximum possible assistance to the peoples of the remaining Non-Self-Governing Territories.

The President of the Council states that United Nations specialized agencies and international institutions should continue to strengthen, support and formulate additional programmes of assistance to the Non-Self-Governing Territories. Most of those Territories were islands, small in size and population, geographically isolated and vulnerable to natural disasters, such as hurricanes and cyclones. They were also relatively undeveloped economically, and were thus particularly dependent on external assistance.

According to the report, during the period under review, a number of specialized agencies and organizations had continued to extend assistance to the peoples of Non-Self-Governing Territories, in response to the relevant resolutions of the General Assembly, the Council and the Special Committee.

The report states the United Nations Development Programme (UNDP) maintains programmes of technical cooperation with the following seven Non- Self-Governing Territories of the Caribbean: Anguilla, British Virgin Islands,

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Cayman Islands, Montserrat, and Turks and Caicos Islands, along with Aruba and the Netherlands Antilles. Continuing resource constraints faced by the UNDP, particularly during the recent fifth cycle and in the current programme cycle, had severely restricted the ability of the UNDP to respond more fully to the technical cooperation needs of the Non-Self-Governing Territories of the Caribbean.

A common feature of these Territories is their relatively high per capita income levels and the overall high levels of human development that they have achieved. Despite those achievements, however, the Territories are confronted by a lack of capacity at both the institutional and human resource levels.

The openness of the economies and societies of small Non-Self-Governing Territories further compound the difficulties faced by authorities in selecting and applying appropriate and effective policy instruments, the report states. Both their economies and their societies are heavily susceptible to external shocks, and are equally vulnerable to the ravages of both natural and environmental occurrences.

UNDP resident representatives assigned to some of the Territories have initiated the establishment of focal points within those governments, the report states. That initiative is intended to strengthen dialogue and promote contact between the territories, the UNDP and the rest of the United Nations system. An expected benefit will be the increase in awareness among officials and the general public of the Territories about the potential for collaboration with the United Nations system.

In addition to its role in all the above-mentioned respects, the UNDP also performs the function of maintaining critical liaison and coordination with other agencies of the United Nations system. This function has often proved necessary in the determination of needs and the delivery of assistance to the Non-Self- Governing Territories, particularly with respect to emergencies. According to the report, the International Labour Organization (ILO) undertakes the following two types of activities: standards-related activities and technical cooperation. The Food and Agriculture Organization (FAO) provides assistance to the small island Territories in the areas of food security, agricultural, forest and fisheries development.

Assistance to Palestinians

The Secretary-General's report on assistance to the Palestinian people (document A/53/153-E/1998/75) contains assessments of the assistance actually received by the Palestinian people and of the needs still unmet and specific proposals for responding effectively to them. The report, which covers the period from June 1997 through May, also includes an update on the living conditions of the Palestinian people.

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As part of efforts to improve United Nations coordination, the Special Coordinator in the Occupied Territories, Chinmaya Gharekhan, convened the fourth United Nations inter-agency meeting in Gaza on 2 and 3 July 1997. Representatives of 23 agencies attended the meeting in order to forge a common development strategy in response to needs and priorities identified by the Palestinian Authority. They provided a forum for finalizing the document entitled "United Nations programme of cooperation for the West Bank and Gaza Strip", which outlines United Nations strategies, priorities and plans for the two-year period 1998–1999.

The Palestinian economy had been severely affected by Israeli closures, the report states. Since 1992, the gross national product (GNP) of the West Bank and Gaza Strip had declined by approximately 20 per cent. Falling GNP and population growth have reduced per capita income by about one third to an estimated $1,600. The employment situation and the standard of living have also deteriorated. The decline in the purchasing power of wages had been a main feature of economic life in the past three years. Wages for Palestinian workers fell during the period 1995–1997, while the average price level has risen 6 to 12 per cent each year since 1992.

In 1997, there was a recovery in labour and commodity flows from the West Bank and Gaza Strip to Israel, the report says. Labour flows grew more than anticipated in the initial estimates of the Palestinian Authority Ministry of Finance and the IMF. Licensed monthly average labour flows from the West Bank and Gaza Strip to Israel were about 15 per cent higher in 1997 than in 1996, at approximately 38,000 workers. That indicated that the Palestinian economy has the capacity for recovery and growth in the absence of severe and extended closures. The Government of Israel also eased restrictions on the movement of goods and persons.

The report states that relative stabilization in the movement of goods and persons during 1997 led to a corresponding stabilization in tax revenues and improved public finances; the recurrent budget of the Palestinian Authority for 1998 envisages no deficit, unlike in 1996 and 1997. The modest economic improvements in 1997, taken together with the expected expansion in Palestinian public investment in the coming year, promised better results in 1998.

According to the report, significant economic and social progress depended principally upon meaningful advancement in the Israeli-Palestinian track of the peace process. Such political progress must entail greater Palestinian access to vital resources, such as land and water, and to external markets for inputs and exports.

In the long term, economic growth and development would be generated by the private sector, the report states. Commerce and service businesses account for about 50 per cent of the value of privately produced output, with

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manufacturing accounting for about 20 per cent of such output. However, grater amounts of invested capital did not appear to produce proportional increases in worker output, indicating that better management and marketing techniques may be needed to allow Palestinian businesses to take full advantage of additional capital investment.

In general, smaller firms have higher rates of return, perhaps owing to their ability to more easily adapt production and sales to political turbulence, such as closures, and to other obstacles in the economic environment.

The Office of the United Nations High Commissioner for Human Rights trains police commanders in the Gaza Strip and participates in bilateral police training courses. A major objective of the programme is to assist the Palestinian Authority in establishing a legal framework consistent with international human rights standards.

The UNDP Programme of Assistance to the Palestinian People was initiated in 1978, the report states. As mandated by Assembly resolution 33/147, the aim of the Programme was to improve the economic and social conditions of the Palestinian people by identifying their social and economic needs and by establishing concrete projects to that end. The UNDP was both a donor to the Palestinian people, through the programming of more than $13 million of core UNDP resources since 1994, and an implementation partner of the Palestinian Authority through the implementation of projects funded through large-scale bilateral donor contributions.

The UNDP also supported participatory planning methods and the decentralization of decision-making through its large-scale Local Rural Development Programme. Through its Agricultural Development Programme, the UNDP provided large-scale assistance at both the ministerial and field levels. UNDP also continued its support to the tourism sector by providing capacity- building assistance to the Ministry of Tourism and Antiquities.

The report says the activities of the United Nations Development Fund for Women (UNIFEM) in the West Bank and Gaza Strip since 1993 aim at strengthening the capacity of governmental and non-governmental organizations to mainstream gender-related issues in national planning and the State- building process. Since 1997, UNIFEM has been providing assistance to the Palestinian people through three projects: a post-Beijing follow-up operation; the women in development facilitation initiative; and the enterprise development project for women in the Gaza Strip.

The report also contains updates on assistance received by the Palestinian people in the occupied territories during the reporting period from United Nations agencies and programmes. Those included the Department of Economic and Social Affairs, the Economic and Social Commission for Western Asia (ESCWA), the FAO, the International Atomic Energy Agency (IAEA), the

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International Civil Aviation Organization (ICAO), the ILO, International Maritime Organization (IMO), the International Trade Centre, and the International Telecommunication Union (ITU).

Other programmes covered by the report are: UNCTAD, United Nations International Drug Control Programme (UNDCP), UNEP, United Nations Educational, Scientific and Cultural Organization (UNESCO), United Nations Population Fund (UNFPA), United Nations Children's Fund (UNICEF), United Nations Industrial Development Organization (UNIDO), United Nations Institute for Training and Research (UNITAR), World Food Programme (WFP), WHO, and the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

The Council also had before it a note by the Secretary-General transmitting the report of ESCWA on the economic and social repercussions of the Israeli occupation on the living conditions of the Palestinian people in the occupied territory, including Jerusalem, and the Arab population in the occupied Syrian Golan (document A/53/163-E/1998/79). The report was submitted in accordance with Council resolution 1997/67 and General Assembly resolution 52/207 which both requested the Secretary-General to submit to the Assembly at its fifty-third session, through the Council, a report on the implementation of the resolutions.

According to the report, which covers the period from June 1997 to May 1998, the stalling of the peace process has caused severe hardships to the Palestinians and the Arab population of the occupied Syrian Golan. It says Israeli occupation continues to aggravate the living conditions of the Palestinian people while settlements have been built at some 200 seized sites. By the end of 1998, more than 350,000 Israelis will be living in more than 200 communities established since 1967 in the West Bank, East Jerusalem, the Gaza Strip and the Golan Heights.

The report says government restrictions on Palestinian housing construction have ensured that Palestinians today comprise no greater a share of the city's population than they did in 1967. During the next 15 years, the outer ring of settlements of greater Jerusalem could accommodate more than 200,000 new settlers. Settlement expansion in East Jerusalem continues to play a crucial role in offsetting Palestinian population growth.

The report notes that there are regions such as the Jordan Valley where a direct link can be established between the loss of Palestinians' agricultural opportunities and the Israeli settlements. Limited access to water remains the greatest obstacle to Palestinian agricultural development, continues the report. In the West Bank, the report goes on, Israel is not only exploiting water for its own population in Israel and the occupied territories, but is also preventing Palestinians from increasing their water use to barely 20 per cent over the amount used in 1967.

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The report states that there are approximately 260 Israeli-owned industrial concerns in the West Bank. Environmental regulations on soil, air and water, and restrictions on industrial development, have been less comprehensive and less enforced in the occupied territories. The laxity has led to relocation of polluting industries into those areas. The report notes that there are hundreds of sites for the disposal of trash in the occupied territories, including dozens that are unauthorized. Most are simple, primitive sites with few, if any, environmental safeguards.

The report cites employment as another area which has been impacted by Israeli occupation. The unemployment situation in the West Bank and Gaza Strip remains critical, particularly due to closures and the increased reliance of Israel on expatriate workers. The number of Palestinian workers in Israel dropped from an average of 120,000 on a monthly basis in 1992 to an average of about 25,000 in 1996.

The report notes that the overall economic environment in the West Bank and Gaza Strip inhibits investment and growth due to the continued ambiguity of the legal and political situation. The Palestinian Economic Policy Research Institute states that the complex overlay of laws and Israeli military orders enforced during the occupation remains in place. This is further aggravated by border closures which often entails banning movement between the West Bank, Jordan and the Gaza Strip. Frequent Israeli closures are said to have been a major factor behind the 18 per cent drop in GNP in the West Bank and Gaza Strip, and the 35 per cent drop in per capita GNP between 1992 and 1996.

The report notes that bank lending and deposits in the West Bank and Gaza Strip have been modest. In 1997, lending remained at about 19 per cent of the total assets, reflecting a depressed demand for credit by investors. Tourism has also been hit by the stalemate in the peace process. According to the Palestinian Economic Policy Research Institute, "the Israeli authorities refuse to issue permits for new hotels or for expanding existing ones in East Jerusalem. This resulted in the freezing of the number of rooms at Arab-owned hotels in East Jerusalem, while the number of rooms at hotels operating in the rest of the West Bank and Gaza Strip declined".

On developments in the Syrian Golan, the report says that while incentives and investment continued to promote the Israeli civilian presence there, the Arab population faces further deterioration in living conditions due to Israeli settlements, restrictions on employment opportunities and education, and the Israeli taxation policy.

Some 2,000 Israeli dwellings are in various stages of construction in the Golan settlement, continues the report. Planning and site work for 1,000 additional units is currently under way.

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The report states that a number of incentives were adopted to attract prospective Israeli settlers into the Golan Heights, including individual grants and mortgage facilities as high as 95 per cent of the value of the house, with generous repayment terms. In addition, substantial State subsidies are provided in various economic sectors to strengthen the Israeli settlements policy.

Employment opportunities for the Syrian Arab population in the Golan Heights are extremely restricted, the report goes on. The available opportunities are limited to unskilled and semi-skilled daily wage labour. In most conditions, these workers have no access to social benefits, or health insurance, and are under constant threat of being made redundant with no compensation. In addition, a substantial differential in wages prevails, to the detriment of the Syrian Arab population.

Introductory Statements

NITIN DESAI, Under Secretary-General for Economic and Social Affairs, introduced the documentation on economic and environmental questions, and on the implementation of General Assembly resolutions on revitalization of the United Nations in the economic, social and related fields and on reform.

He said a lot had been achieved to revitalize the Economic and Social Council. Now, the issue was to establish the true role of the general segment of the session and examine how it could be strengthened. The segment had a very wide function, including coordination, reviewing reports, the status of reforms and other pertinent issues such as decolonization and the rights of the Palestinian people.

He said the question to be asked was: what value could the Council add to functioning commissions? The commissions had clearly defined mandates and agendas. Sometimes, however, they became involved in similar projects. In that context, the Council needed to exercise a coordinating function in order to rationalize such activities.

He said the Council had before it the report of the Secretary-General on the causes of conflict and the promotion of durable peace and sustainable development in Africa. The report had to be considered by the Council as a major effort had been made to identify the key developmental issues in Africa.

Highlighting some of the recommendations in the Secretary-General's report, he cited the creation of a positive environment for growth in Africa as one key area. The report also emphasized social development with a particular focus on women and urged ratification of the Convention on the Elimination of All Forms of Discrimination against Women. Recommendations on restructuring international assistance did not dwell only on revitalizing official development assistance (ODA), but suggested ensuring that aid was

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directed to high impact areas. The report also addressed reduction of the debt burden and proposed that all remaining bilateral debts be converted into grants. Other recommendations included the opening of international markets to support African development, and regional cooperation and integration in Africa. It was hoped that the report would provide political impetus for real action.

On the implementation of General Assembly resolutions on reform and restructuring exercises, he said the question of the Development Account was still pending before the Fifth Committee (Administrative and Budgetary). He urged that Committee to reach an agreement so that full use of the $13 million available for the account could begin.

GUIDO BERTUCCI, Director of the Division for Public Economics and Public Administration, Department of Economic and Social Affairs, introduced the reports of the Secretary-General on implementation of Assembly resolution 50/225 on public administration and development and on the fourteenth meeting of experts on the United Nations programme in that area (documents A/53/173- E/1998/87 and E/1998/77).

According to the report, General Assembly resolution 50/225 on public administration and development of 19 April 1996 invited governments and public agencies to strengthen their public administrative and financial management capacities through public sector administrative and management reform, with emphasis on enhanced efficiency and productivity, accountability and encouragement of decentralization of public institutions and services.

Mr. BERTUCCI said the United Nations system's approach to public administration had been influenced by the resumed fiftieth session of the General Assembly, which was devoted to public administration and development, and resolution 50/225, as well as by the Secretary-General's reform measures. Resolution 50/225 stressed the importance of public institutions and sound systems in the administrative process. The strong need to redesign the State for economic and social development was the over-arching theme. That would help avoid passivity and ensure the State's ability to respond to new dominant worldwide trends, such as globalization and technology. The emergence of civil society as a partner in public affairs was also an important emerging trend.

United Nations activities in the field had concentrated on providing Member States with up-to-date approaches to reform, he said. The report, which includes an analysis of information provided by United Nations agencies, showed that various agencies of the United Nations system had made important contributions in pursuing the goals of resolution 50/225. That text specifically recommended that the Secretary-General ensure maximum coordination in the field. The report provided information on steps taken to implement the resolution in the following areas: reform of the economic and social sector; better divisions of labour between the Secretariat and the

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funds and programmes; and the establishment of a standing consultative mechanism active in the field.

Action taken to implement the reform measures were also outlined in the report, he continued. Within the Department of Economic and Social Affairs, the Division for Public Economics and Public Administration also provided a forum for sharing of experiences and best practices. Technical assistance had been an outgrowth of work performed. Implementation of resolution 50/225 and reform measures had also contributed to linkages between public administration and sustainable development. The international community now must deal with the questions of where and to what extent the State should be involved and what relationship it should have with the market, the business sector, the social sector and other actors.

The report of the meeting of experts indicate that they explored current issues of governance, public administration and finance, and reviewed the United Nations work programme in those areas. The meeting called for an effective response to the challenges that face the governance and administrative systems of all countries. It urged focus of attention on four broad areas of need in the developing countries or those with economies in transition: management of change; institution-building and administrative reform; human resource development; and information.

The State should develop policy frameworks, promote the use of new technologies, overhaul administrative structures and design reliable and accurate data for policy-making purposes, it continues. The meeting called for decentralization, adaptability, flexibility, diversity and responsiveness. It also called for constant upgrading of skills, fostering a new image for the public service and emphasized the importance of integrity and professionalism.

Introducing the report of the eighth meeting of the ad hoc group of experts on international cooperation in tax matters (document E/1998/57), he said the group reviewed the following themes: tax havens; transfer pricing; new financial instruments; and international legal instruments regarding taxation between developed and developing countries. The group agreed that the changing economic environment should be reflected in taxes and taxation.

In its report, the group observed that the increasing sophistication of the world economy presented significant challenges to the tax systems of the world.

The development of international capital markets and transnational business had created a need to forge national, bilateral, multilateral and collective approaches to such important issues as international transfer pricing and transfer of technology. The group observed that tax havens represented threats to the tax systems of both developed and developing countries and that cooperative effort was required to tackle the problem.

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The group of experts noted that the phenomenal growth of international trade, commerce and international capital movements created complex and intricate problems of assessment and collection of proper tax liability in respect of incomes generated by international transactions. Tax administrators from developing and transitional economy countries encounter considerable difficulties in understanding the controversial taxation issues involved. The United Nations has proposed that six interregional workshops in international taxation be organized to improve the technical skills of tax administrators of those developing and transitional economy countries, including practical methods and strategies for combating tax evasion.

Among their recommendations, the group of experts said the United Nations and other organizations should enhance world awareness of the continuance of the tax havens phenomenon. Developed, developing and transitional economy countries through bilateral tax treaty negotiations should exert pressure on tax havens to exchange information so as to reduce their efficacy and the reason for their existence. A consensual approach should also be adopted and guidelines provided to deal effectively with the problem of transfer pricing, they said.

The group of experts noted that innovative financial instruments have brought about avoidable complications in the taxation systems of both developed and developing countries, and that serious efforts should be made for the necessary changes in fiscal legislation to deal with the problem. They urged the Secretary-General to ensure that the guidelines and provisions in the United Nations Model Convention and the Manual for the Negotiation of Bilateral Tax Treaties are consistent with the interests of developed, developing and transitional economy countries and to improve internal income allocation.

The group of experts also recommended that the ninth meeting of the group should take place in the first half of 1999, as envisaged in the proposed programme budget for the biennium 1998-1999, so that the report of the meeting might be submitted to the Council at its substantive session in July 1999.

SARBULAND KHAN, Officer-in-Charge for Economic and Social Council Support and Coordination, introduced the Secretary-General's report on products harmful to health and the environment. He said the Consolidated List of harmful products was part of the continuing effort undertaken by the United Nations system to disseminate information on such products. The List constituted a tool that kept governments up to date on decisions taken by other governments, and assisted them in their own regulatory actions. Other users of the list included, non- governmental organizations (NGOs), the media, and academic institutions and consumer groups.

With each new edition of that annual publication, there had been an increase in the number of products and the number of governments contributing

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to the List, he said . The List had been extensively used by Member States, particularly in developing countries. It was an excellent example of a project or programme coordinated among different agencies. The continuation of the project would be of benefit to the United Nations system and governments alike.

JOSEPH CHAMIE, Director, Population Division, Department of Economic and Social Affairs, introduced the report of the Commission on Population and Development (document E/1998/25). A Commission resolution on health and mortality, adopted last February, called for further action by governments, international organizations and NGOs to facilitate exchange of information, determine the causes for the stagnation or increase of mortality among adults in some countries, and to increase efforts to lower mortality and improve health. The Commission decided that its special theme for the year 2000 would be gender, population and development.

He said the Commission recommended the adoption of two draft resolutions and a draft decision for adoption by the Economic and Social Council.

By the first resolution, the Council would invite governments to give priority to the planning and undertaking of the next census. It would also recommend the collection and analysis of data on mortality in the census, and would call upon the United Nations and donor governments to provide the necessary support in undertaking censuses. In the second draft on the preparations for the next years's special session of the General Assembly, on implementation of the Programme of Action of the International Conference on Population and Development, the Council would request the Secretariat to prepare and make available to States a comprehensive plan for the preparatory process. In the draft decision, the Commission recommended that the Council approve of the provisional agenda for the thirty-second session of the Commission.

BRUNO RODRIGUEZ PARRILLA (Cuba), Acting Chairman of the Special Committee on decolonization, said the Council had an important role to play in assisting the people of colonial countries to achieve independence and self-determination. The struggle for self-rule was the struggle for human and civil rights. It was good that the efforts of the United Nations continued to support non-self- governing peoples. At a regional seminar held recently in Fiji, representatives of Non-Self-Governing Territories said that the period of decolonization had not been completed. Those territories would need support and assistance in socio- economic and sustainable development.

He said special initiatives needed to be put in place to help dependent people in the periods of post-colonial adjustment, particularly those in small island States. There was a need for flexible and innovative approaches, irrespective of the size of the Territory. There was also a continuing need for support from the UNDP, specialized agencies and international institutions

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in the decolonization process. The Special Committee and the Council should jointly review the task of assisting Non-Self-Governing Territories to achieve self-government. Necessary resources needed to be secured through major funding institutions of the United Nations so that the Territories could benefit from the related activities of the specialized agencies of the Organization.

CHARLES KASSANGANA, of the Regional Commissions New York Office, introduced the report on the economic and social repercussions of the Israeli occupation on the living conditions of the Palestinian people in the occupied Palestinian territory, including Jerusalem, and of the Arab population in the occupied Syrian Golan. He said Palestinians had traditionally constituted the bulk of the workforce engaged in the construction and daily maintenance of settlements throughout the occupied territories. The unemployment situation in the West Bank and Gaza Strip remained critical, due to closures and increased reliance on Israel of workers from outside the region.

Regarding the Syrian Golan, the Arab population faced further deterioration in their living conditions due to Israeli settlements, restrictions on employment opportunities and education, as well as the Israeli taxation policy, he said. The Arab population living in the Golan were subjected to prohibitive levels of taxation, including taxes on income, health services, local council, land and housing ownership, and use of water resources.

Statements on Economic and Environmental Questions

PRAYONO ATIYANTO (Indonesia), speaking on behalf of the "Group of 77" developing countries and China, expressed appreciation for Mr. Desai's introduction of the Secretary-General's report on the implementation of Assembly resolutions 50/227 and 52/12 B. Yet, discussion of the subject would be taken up by the Main Committees of the General Assembly. The issue of utilization of the Development Account was important to all developing countries and would be addressed thoroughly in the Second (Economic and Financial) and Fifth Committees. The utilization of the Account should not be discussed in the Council's substantive session. In addition, the proposed reduction in administration costs should not affect the carrying out of mandated programmes and activities.

JEAN RAVOU-AKII (Vanuatu) said his Prime Minister had made clear the reasons for deferring until the year 2000 consideration of Vanuatu's graduation from the list of least developed countries. Paragraph 167 of the Committee on Development Planning's report (document E/1998/34) specified that the vulnerability index had not yet been prepared. His Government was currently carrying out reform measures. On 1 August, new fiscal legislation would enter into force, and the international banking sector also would be restructured. Small island States of the Pacific were vulnerable to the effects of economic and ecological shocks. That vulnerability was exacerbated by the distance between those small States and the large markets. Those were only some of the reasons for the deferral to the year 2000 of Vanuatu's graduation.

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AXEL NIKULASSON (Iceland) said protection of the world's oceans was one of the most important tasks facing humankind today. Harvesting of marine resources must continue. The marine biosphere must be protected from pollution and the impact of climate change. Efforts by the international community should support sustainable development in small island States. It was important to recall the discussion of the Commission on Sustainable Development during its sixth session. Those shed light on the link between fresh water management and the status of the world's oceans. That required the active participation of United Nations agencies, as called for in the relevant Assembly resolutions. It was important to complete, by the year 2000, the negotiations on a legally binding agreement to eliminate or reduce persistent organic pollution in the world's oceans. Special attention should be given to the needs of developing States. His Government also emphasized the need to review issues related to marine resources, which should be undertaken in the context on the United Nations Convention on the Law of the Sea, he said. Industrial growth and sound environmental polices could be mutually enforcing. The Kyoto Protocol on Climate Change had marked a new era in the strides taken to reduce greenhouse gases. The next Conference of the Parties, to be held in Buenos Aires, must be fully exploited to address all outstanding issues.

CARLOS DOS SANTOS (Mozambique) thanked Under-Secretary-General Desai for his comments on the Secretary-General's report on the causes of conflict and the promotion of durable peace and sustainable development in Africa. Many delegations expressed views during the Security Council's debate that the Secretary-General's report covered different important aspects of the issue, some of which should be dealt with by the various funds and agencies of the United Nations system. Many of those bodies fell under purview of the Council, and it should look at those issues that would fall under its mandate. It also should ensure the necessary coordination and integration of action on economic and social activities discussed by the report.

He went on to say that the System-wide Special Initiative on Africa called for the participation of the entire Organization,as well as the Bretton Woods institutions. There was also a need to integrate the important recommendations from the Secretary-General's report into existing mechanisms and initiatives. The mobilization of resources to translate the words of Member States into concrete actions was of particular importance.

RADEN BAGAS HAPSORO (Indonesia), speaking on behalf of the Group of 77 and China, said that the financial crisis in South-East Asia had become a major concern that affected levels of output, negatively affected employment and contributed to inflation in many countries. It raised urgent questions about how best to sequence and finance capital market liberalization. The Group of 77 and China paid particular attention to the recommendation that regional development banks and economic institutions should assist countries in monitoring economic arrangements. Regarding the vulnerability index, the

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Group of 77 and China was disappointed that General Assembly resolution 52/210 on the subject had not been carried out.

CARLSTON B. BOUCHER (Barbados), speaking on behalf of the Alliance of Small Island States (AOSIS), said the pursuit of economic development by small island States had been difficult, especially in light of such processes as globalization and liberalization. The vulnerability of those States was reflected in relevant Assembly resolutions, but while good progress had been made in methodological work, debate on the index was ongoing. The graduation of Vanuatu from the list of least developed countries, while technically correct, was premature. The Alliance believed that the technical work being done on the vulnerability index would be useful for the future and, therefore, warranted further support.

REX STEPHEN HOROI (Solomon Islands), speaking on behalf of South Pacific countries, said his Government supported earlier statements made which sought to defer the removal of Vanuatu from the list of least developed countries. That decision should be postponed until the development and adoption of a vulnerability index. The Committee on Development Planning had yet to fulfil its mandate to that end. The findings of studies on that issue were tentative; they did underscore that small States faced external constraints, risks and threats that made them particularly vulnerable.

A country could adopt measures to mitigate the effects of natural disasters, he said. But proneness to such disasters should be included in the creation of a vulnerability index. There should be a thorough review of existing criteria, and work towards a widely acceptable vulnerability index must continue. If criteria for determining the list of least developed countries did not include such an index, it would render that list incomplete and unbalanced. There also should be dialogue between the country and the Committee on Development Planning, which would allow for more accurate evaluations. Further work must be undertaken to refine, develop and adopt acceptable vulnerability criteria.

MICHAEL POWLES (New Zealand) said his delegation was concerned at the recommendation to graduate Vanuatu immediately from the list of least developed countries. While his country supported graduating countries from the list, there was growing evidence to suggest that vulnerability was a crucial limiting factor in the achievement of sustainable development. It was an issue which, therefore, needed to be taken into account for all developing States. The requirement for an assessment of the usefulness of the vulnerability index was unfulfilled, and Vanuatu stood to be disadvantaged as a result. His delegation was also disappointed that the Committee for Development Planning had failed to carry out the important task entrusted to it, despite a clear instruction from the Assembly. He urged the Council to instruct the Committee to go back and carry out an analysis of the vulnerability index question, as requested.

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RI KWANG NAM (Democratic People's Republic of Korea) said the standardization of the geographical names throughout the world was important for promoting development and cooperation in economic, social and environmental areas at the international, regional and national levels. In addition, the just resolution of the issues on features beyond a single sovereignty or features common to two or more nations would contribute to strengthening relation and reconciliation within regions.

His Government had previously raised the issue of the wrongful reference of the sea lying between the Korean peninsula and the Japanese archipelago, he said. Regrettably, Japan have never shown a willingness to negotiate on that issue. It declined to resolve the issue in the Seventh United Nations Conference on the Standardization of Geographical Names, despite the strong demand by his Government and the recommendation of the Conference. The wrongful reference to the "Sea of Japan" should have been corrected 50 years ago at the time of the liberation of the Democratic People's Republic of Korea from Japanese colonial rule. His Government would continue to exert every effort for a fair solution of the issue in conformity with the interests of the countries in the region. It would also support the sound development of the international standardization on geographical names.

DESNA SOLOFA (Samoa) said the removal of Vanuatu from the list of least developed countries should be deferred until the year 2000. Her Government supported the graduation of countries from the list, but the particular status of small island developing States should also be taken into account. A vulnerability index should be the instrument in determining the indicator to be taken into account in considering the economic status and vulnerability of those States. There was obvious political support and logical justification for deferring Vanuatu's graduation. A decision on the matter should be founded on the basis of prevailing views and concerns of the small island developing States. JOHN CRIGHTON (Australia), speaking also on behalf of Canada, said that the two Governments did not agree with Vanuatu being graduated from the list of least developed countries. The General Assembly had asked the Committee for Development Planning to make an assessment of the usefulness of the vulnerability index as criterion in the evaluations of those countries. It was disappointing that the Committee had not complied with that request. That work had to be done before Vanuatu's status could be considered further.

He said Australia and Canada accepted that there were inevitable complexities in developing a fair and equitable vulnerability index. Nevertheless, they urged the Committee to develop one. While both delegations supported the concept of graduation, they acknowledged that equitable and agreed criteria played an important role in that process. The economy of Vanuatu, like many small island States, was particularly vulnerable. Premature graduation from the list would not be in its interests or the international community's.

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SETH WINNICK (United States) said the Commission on Sustainable Development had been at the forefront in developing innovative working methods to better address the complex issues which fell within its mandate. His Government strongly supported efforts to make the Commission more effective, particularly through the use of interactive dialogues.

Regarding the Committee for Development Planning, he said his Government was extremely disappointed in its report. The Council should to ensure that future reports conformed to the directives and mandates given to the Committee. In addition, many of the conclusions reached by the Committee regarding the Asian financial crisis were contrary to those reached by ministers and the heads of the Bretton Woods institutions who discussed the issue in April. Particularly questionable was the report's call for the creation of another international actor to provide "overall guidance in the development and monitoring of international standards and codes of conduct for financial management and capital flows". That role was already being filled by existing institutions, including the IMF and the Basle Committee on Banking Supervision.

Regarding the vulnerability index, he said many problems of methodology were involved in formulating and applying a meaningful index. Much more expert- level work was required before further action could be taken on the issue.

NINA SIBAL, of the United Nations Educational, Scientific and Cultural Organization (UNESCO), said UNESCO was committed to continuing its responsibility as the Inter-Agency Task Manager for science and education and sustainable development. That included coordinating and facilitating implementation of those recommendations of the Commission on Sustainable Development that were addressed to United Nations agencies.

The "World Solar Process" had been put into motion by UNESCO's General Conference in 1993, she said. The Process attempted to provide concrete follow- up action to the provisions of Agenda 21 by formulating reforms in energy sources development. That elaborate, multi-phase process, with UNESCO providing the secretariat, was directed towards promoting a stronger cross-cutting and international collaboration on renewable energy development and deployment. To provide the highest level of leadership for the process, the World Solar Commission was established in 1994, and it adopted the World Solar Programme 1996-2005 at the nineteenth special session of the General Assembly in 1997. It was now vital that the ownership of the initiative shift individually to each Member State, and collectively to the United Nations system.

FREDERICK H. WEIBGEN, of the Food and Agriculture Organization (FAO), said that a few months ago agreement had been reached on a Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade. It would be adopted and opened for signature in a few weeks. It would also be open for ratification at the United Nations Headquarters and would enter into force upon ratification by 50 countries. The Convention was

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based on the principle of prior informed consent, developed and applied since 1989 on a voluntary basis through the joint programme of the FAO/UNEP. The Convention covered pesticides and industrial chemicals that had been banned or severely restricted for health or environmental reasons.

He said that the crucial aspect of consumer protection related to international standards and codes of practice for a wide range of food commodities and to recommendations related to food safety. Since the successful completion of the Uruguay Round of Multilateral Trade Agreements, the work of the joint FAO/WHO Codex Alimentarius Commission had taken on heightened international significance. Codex standards had been selected as the benchmark for quality and safety requirements for food in international trade. There was now wider interest in the work of the Commission internationally and wider acceptance by governments of its standards. The FAO continued to promote risk analysis as an important underlying principle in food-control activities and consumer protection. It was also extensively involved in direct assistance projects to member countries aimed at strengthening national food-control capacity.

JOHANNES WEDENIG (Austria), speaking on behalf of the European Union, said the scope and nature of the challenges currently faced by Africa called for the comprehensive response envisaged in the Secretary-General's report. The Union was committed to a proactive policy on conflict prevention and resolution. It should focus on preventing the outbreak of violent conflicts at an early stage, as well as on post-conflict peace-building, and using the full range of policy instruments available, including development assistance.

Regarding the report of the Committee for Development Planning, he said there was a need to strengthen the architecture of the international monetary system to lessen the frequency and severity of future disturbances. Yet, the Union did not see the need to establish a world financial organization, as suggested by the Committee. The range of functions proposed for such a new organization might be, if necessary, undertaken within existing structures. Greater efficiency would not be achieved by increasing the number of institutions dealing with that issue.

LIBRAN N. CABACTULAN (Philippines) said the views expressed in the report of the Committee for Development Planning were very useful in addressing a broad set of global issues. All related events and expert meetings on the themes of oceans and seas, and patterns of consumption should be held as soon as possible in the form of inter-sessional sessions so that delegations would have time to become familiar with the issues and recommendations. It was important that those themes were also debated at the intergovernmental level. He said a draft resolution initiated by the Philippines would be introduced to the Council and would designate the year 2002 as the international year of ecotourism.

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