ECONOMIC COMMITTEE TAKES UP ISSUE OF POVERTY ERADICATION; CHINA URGES ROLE FOR THOSE AFFECTED IN FRAMING PROGRAMMES

2 November 1998

Press Release
GA/EF/2843

ECONOMIC COMMITTEE TAKES UP ISSUE OF POVERTY ERADICATION; CHINA URGES ROLE FOR THOSE AFFECTED IN FRAMING PROGRAMMES

19981102 Debate Concluded on Action to Help Least Developed Countries

Efforts should be made to ensure that those people suffering from poverty were actively involved in anti-poverty programmes, the representative of China said this morning as the Second Committee (Economic and Financial) considered the implementation of the first United Nations Decade for the Eradication of Poverty (1997-2006).

Nobody was more eager for a better life than those living in conditions of poverty, he added. For poverty elimination strategies to be successful, it was essential that the initiative and potential of the poor be brought into full play. People living in poverty must be encouraged to participate in transforming policies and programmes into their own concrete actions.

Economic growth would fulfil its potential for poverty eradication only if it could be qualified as being "pro-poor", said the representative of Austria, on behalf of the European Union and associated countries. Growth should promote a more equitable income distribution, and expand the opportunities and life choices of the poorest. Deliberate policies and strategies were therefore needed that reduced inequality and fought social exclusion by empowering poor people, in particular poor women, to actively participate in the economic, social and political life of their societies and to share in the fruits of development.

The representative of Indonesia, on behalf of the Group of 77 developing countries and China, said global poverty reduction concealed large regional differences. With the devastating financial crisis in Asia, the number of people living in poverty was increasing at a staggering rate. Tens of millions of people had been plunged back into poverty, clearly demonstrating the need to examine the poverty phenomenon in the context of globalization. Effective integration of developing countries into the world economy was a prerequisite for avoiding marginalization and should contribute to poverty eradication.

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Speaking on microfinance, the representative of the United States said that microcredit schemes were her country's strongest instruments for increasing development and unleashing the democratic progress of people around the world. Support of macroeconomic and microeconomic policies were necessary to enable small businesses to flourish. However, the direct provision of credit and other financial services was not an appropriate role for governments. Governments should be facilitators of microcredit and microfinance, rather than direct implementers or managers of private sector initiatives.

Statements on that topic were also made by the representatives of Bangladesh, Norway, Japan and India.

Also this morning the Committee concluded its general discussions on implementation of the Programme of Action for the Least Developed Countries. On that topic, a number of speakers stressed the need to examine the declining social conditions of those countries. The representative of Nepal said their status had deteriorated over the years and resulted in their being pushed to the fringe of global economic activities. There was an urgent need for the speedy implementation of the Programme of Action and to enable the least developed countries to benefit fully from the process of globalization and liberalization.

On that issue, the representative of Japan said the international community should pursue new preferential measures to aid least developed countries. But every effort must be made not to weaken those countries' competitiveness or marginalize them further. Preferences should be viewed as a transitional measure to be utilized only in the short-term.

Statements on that topic were also made by the representatives of Lao People's Democratic Republic, Myanmar, Maldives, Bangladesh, Benin, Mozambique, Republic of Korea, Ethiopia, and Sudan.

The Committee will meet again at 3 p.m. today to continue its discussion of the implementation of the first United Nations Decade for the Eradication of Poverty (1997-2006).

Committee Work Programme

The Second Committee (Economic and Financial) met this morning to consider sustainable development and international economic cooperation. (For background information on that topic see Press Release GA/EF/2828.) Under that heading, the Committee will discuss: implementation of the Programme of Action for the Least Developed Countries for the 1990s.

It will also take up the topic on implementation of the first United Nations Decade for the Eradication of Poverty (1997-2006).

The Committee had before it a report from the Secretary-General, requested by the General Assembly, on the implementation of the first United Nations decade for the eradication of poverty (1997-2006) (document A/53/329). By a resolution in December 1997, the Assembly asked the Secretary-General to describe progress made in implementation of the Decade, as well as measures, themes, recommendations and activities related to the Decade, including recommendations for possible actions taken by the United Nations.

Eradicating poverty was said to be the primary challenge facing the international community at the eve of the twenty-first century. The report stated that significant political, economic and social changes had overtaken the world in the 1990s and there had been renewed commitment to the eradication of poverty. This had been the theme of major conferences and summits and was a major challenge for the coming century. Policies aiming at a more equitable distribution of income and wealth, more widely shared possibilities for influencing decisions, as well as increasing opportunities for the poor, were of utmost importance for the eradication of poverty. The challenge to eradicate poverty and ensure sustainable development and lasting peace would fall on today's young people. Educating the young to meet the challenges had become a priority for every society, and investment in education was therefore fundamental for the process of enabling individuals and countries to realize their potential and make the most of their resources.

The Secretary-General noted that according to the World Health Report 1998, at least 120 countries (with a total population exceeding five billion) currently had a life expectancy at birth of more than 60 years. The global average was 66 years, compared with only 48 years in 1955. It was projected to reach 75 years in 2025. Based on the review by the World Health Organization (WHO) of overall health trends in the past 50 years, remarkable improvements in health had been due to socio-economic development, the wider provision of safe water, sanitation facilities and personal hygiene, and the establishment and expansion of national services.

Experiences of East Asian countries showed the powerful synergy between economic growth and social sector investment, as well as the need to achieve balance between growth objectives and social development with respect to

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resource allocation. The region had achieved remarkable development progress from the 1960s to the mid-1990s.

With the globalization of the world economy, the report stated concerns were increasingly expressed about the negative impact on human rights of the world liberalization of trade. While the globalization of the world economy provided new opportunities for all countries, it also increased the risk of marginalization of countries, groups and individuals that were not able to compete, and hence created or aggravated poverty. Poverty eradication had remained a major concern in the work of the United Nations since the establishment of the Organization.

The burden of external debt continued to be a constraint to many developing countries, especially in Africa and notably the least developed countries. Debt servicing payments contributed to poverty when it absorbed public revenue diverted from productive sector expenditure, such as education, health and physical infrastructure.

The Secretary-General noted that the Economic and Social Council, at its 1998 session on the integrated and coordinated follow-up to major United Nations conferences and summits, stressed that poverty eradication and improving living conditions of people everywhere should be the overriding objective of the Council's efforts.

The Administrative Committee on Coordination (ACC) had called upon organizations of the United Nations system to maintain support to countries in translating the commitments made at conferences, including the World Summit for Social Development, into concrete national policies and programmes. The regional commissions had a mandate from the General Assembly to follow up on conference goals. They provided advisory services and regional technical cooperation activities to assist governments in developing a range of policies and programmes for poverty alleviation in various development sectors.

An important activity of the Economic Commission for Europe (ECE) related to poverty elimination was the Programme for the Development of Small and Medium-sized Enterprises in countries in transition. The fifth ministerial conference on social development organized by the Economic Commission for Asia and the Pacific (ESCAP) at Manila in November 1997 had reviewed progress made towards poverty alleviation in the ESCAP region.

The Economic and Social Commission for Western Asia (ESCWA) had begun its work on poverty alleviation in 1995 and had progressed in three related areas: (a) measurement, characteristics and determinants of poverty; (b) policies to eradicate poverty; and (c) tools to eradicate poverty.

In developing countries, children were disproportionately represented among the poor. The United Nations Children's Fund (UNICEF) estimated that

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globally, children accounted for at least half of the poor, which implied that more than 700 million children in the developing countries currently lived in conditions of extreme poverty. Moreover, that number had been rising by some four per cent per annum in recent years in sub-Saharan Africa and Latin America.

The Secretary-General's report observed that the activities of the United Nations International Drug Control Programme (UNDCP) in the provision of alternative sources of livelihood for those currently dependent on income from the illicit cultivation of opium poppy or coca bush were, in effect, poverty alleviation measures.

Recognizing the "multi-dimensionality" of poverty, the United Nations Population Fund (UNFPA) actively promoted the widening of choices and opportunities in the various population and reproductive health programmes it supported. In this way, the UNFPA report continued, the trend contributed towards the achievement of the broad development goals of the international conferences.

Since its creation, the mandate of the International Fund for Agricultural Development (IFAD) had been directed at alleviating rural poverty and thus improving livelihoods on a sustainable basis. The agency had played a unique role in the United Nations system, as a leading institution with financial assistance focused strictly on the rural poor-smallholder farmer, the landless and, in particular, rural women in low-income countries.

The development work carried out by the World Food Programme (WFP) was consistent with the assistance framework for poverty eradication elaborated in the World Summit for Social Development and other major United Nations conferences. Environmental sustainability and resource use in developing countries were closely linked to social development, poverty reduction and management of demographic pressures, the report continued, and the role of the United Nations Environment Programme (UNEP) in promoting poverty reduction needed to be seen in the context of its primary functions. Those were the assessments and analyses of global and regional environmental trends, providing early warnings, coordinating emergency environmental assistance and other areas.

The Secretary-General said that in line with the activities of the first United Nations Decade for the Eradication of Poverty and the Plan of Action adopted by the World Food Summit in Rome in November 1996, the Food and Agriculture Organization (FAO) continued to support efforts to eradicate poverty and food insecurity. As the Secretariat of the Committee on World Food Security, the organization played a key role in supporting the monitoring of the implementation of the World Food Summit Plan of Action by member Governments, and in stimulating action at national, regional and international levels, to eradicate poverty and food insecurity.

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The strategy of United Nations Educational, Scientific and Cultural Organization (UNESCO) for the eradication of poverty was centred on human resources development and capacity-building, and designed to empower specific disadvantaged and vulnerable groups, particularly women, youth, the marginalized and the unemployed. The contribution of the United Nations Centre for Human Settlements (Habitat) to the United Nations Decade for the Eradication of Poverty was to focus on programmes and projects to assist developing countries reduce urban poverty at the level of slums and squatter settlements. In accordance with its mandate, Habitat provided targeted assistance to local authorities and non-governmental and community-based organizations to improve the living conditions of the urban poor.

The United Nations Industrial Development Organization (UNIDO) -- within its mandate of promoting sustainable industrial development in developing countries and countries with economies in transition -- continued to make significant contributions to the efforts of the international community to eradicate poverty. Its ongoing assistance programmes, in the areas of micro-, small and medium enterprises, agro-based and agro-related industries and the integration of women in industrial development and rural industrial development, had been designed specifically to address the needs of the poor in developing countries, particularly those in the least developed.

The network of the World Health Organization (WHO) on poverty and health aimed at enabling health professionals and the health sector to play an effective role in poverty reduction. It also contributed to the public debate on poverty and health, and provided collective support to political commitments to reduce poverty and improve the health status of populations. The report said the WHO ensured that all its programmes identify highly vulnerable economic groups and provide the means to improve and evaluate their health status.

On the activities of the World Bank, the Secretary-General's report said the Bank's fundamental objective was to help its partner countries reduce poverty and improve living standards. Its progress in implementing its poverty strategy was documented in the report on poverty reduction and the World Bank. The Poverty Reduction and Economic Management Network was formed in July 1997 to ensure that the Bank made the greatest possible contribution to poverty reduction.

The Committee also had before a report of the Secretary-General on the role of microcredit in the eradication of poverty (A/53/223 and Add.1). The report highlights the strengths and weaknesses of the microlending approach. It provides information from United Nations funds, programmes and agencies on their actions in the field of micro-credit.

The objective of the First United Nations Decade for the Eradication of Poverty (1997-2006) is to achieve the goal of eradicating absolute poverty

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through national action and international cooperation. The World Summit for Social Development, held in Copenhagen in March 1995, also underlined the importance of improving access to credit for small rural or urban producers, landless farmers and other people with low or no income, with special attention to the needs of women and disadvantaged and vulnerable groups. Governments were called upon to review national legal, regulatory and institutional frameworks that restricted the access of people living in poverty, especially women, to credit on reasonable terms.

Since the World Summit for Social Development, in March 1995, the priority given to poverty eradication had grown, the report states. It was now broadly accepted that robust economic growth that was labour-intensive and equitable, combined with larger outlays of social expenditures, especially directed towards the poor (now estimated at 1.3 billion people), were a winning combination in the fight against poverty. Several factors have led to increased interest in microcredit in promoting growth with greater equity. There had been a growth in the recognition of the importance of empowering all people by increasing their access to all the factors of production, including credit. In addition, the value of the role of non-governmental organizations in development was receiving more attention.

It was in that context that microcredit had recently assumed a certain degree of prominence, the report states. It was based on the recognition that the latent capacity of the poor for entrepreneurship would be encouraged with the availability of small-scale loans and would introduce them to the small-enterprise sector. That could allow them to be more self-reliant, create employment opportunities, and, not least, engage women in economically productive activities. Currently, there were estimated to be about 3,000 microfinance institutions in developing countries. Those institutions also helped create deeper and more widespread financial markets in those countries.

Several microfinance institutions had succeeded in reaching the poorest of the poor by devising innovative strategies. Those included the provision of small loans to poor people, especially in rural areas, at full-cost interest rates, without collateral, that were repayable in frequent instalments. Borrowers were organized into groups, which reduced the risk of default. Those are also effective mechanisms through which to disseminate valuable information on ways to improve the health, legal rights, sanitation and other relevant concerns of the poor. Above all, many microcredit programmes had targeted one of the most vulnerable groups in society -- women who lived in households that owned little or no assets. By providing opportunities for self-employment, many studies had concluded that those programmes had significantly increased women's security, autonomy, self-confidence and status within the household.

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On the situation in Asia, the report states that various institutions are involved in the delivery of microfinance services. They included formal commercial banks, rural banks, cooperative institutions, credit unions and non-governmental organizations. Their methods of doing business ranged from Grameen Bank-style solidarity groups and institutions dealing with individual clients to self-managed self-help groups. Reports indicated that some institutions had gone beyond credit to offer insurance and other financial services. Both the Grameen Bank and the Bangladesh Rural Advancement Committee offered non-financial services, such as retail outlet facilities for products of their clients.

Since its creation in 1966, as a capital funding window under the United Nations Development Programme (UNDP) umbrella, the United Nations Capital Development Fund (UNCDF) has been the channel for the UNDP to fund microfinance interventions. It has so far approved more than $100 million of investment credit activities, the majority being microfinance related, with the balance to small and medium-sized enterprises. Currently, UNCDF has an active microfinance portfolio of about $40 million, of which 70 per cent is in Africa, 20 per cent in Asia and 10 per cent in Latin America. The UNCDF has implemented microfinance projects through a variety of partners, ranging from state-owned financial institutions to credit unions and non-governmental organizations. It has also used several financial mechanisms in support of those projects, including grants to fund start-up costs and operational expenses, and provision of capital for lending.

The Committee also had before it an addendum to the report on microfinance, which covers the work of UNESCO in that field.

It states that UNESCO cooperates with microfinance institutions and other partners in designing and implementing complementary programmes aimed at helping the poor, especially women, to benefit from financial as well as social services. This involves support for the campaign to enable the maximum number of poor people, especially women, to have access to commercially viable microfinance services.

The report also states that, under the memorandum of understanding signed with the Grameen Bank, UNESCO would assist in providing education to more than 500 families in 22 training centres in Bangladesh. It would also seek to inform policy makers about the potential of microfinance in poverty eradication programmes, and to create awareness, among key government officials and banking sector managers, of the fact that microfinance requires specific lending methodologies, and administrative structures different from those employed in traditional development finance.

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Statements

KINGMANO PHOMMAHAXAY (Lao People's Democratic Republic) said that the marginalization of the least developed countries in world trade had put severe constraints on their ability to generate export earnings. If the developing countries were being offered equitable market access, the external earnings generated would go a long way in solving most of their financial needs for development and capacity building. Unfortunately, high tariffs were still being applied to products from the least developed countries. The international community had to promote enhanced market access for them, including the provision of zero-tariff of exports from them, and help strengthen their capacity to participate in the multilateral trading system. Further, there was a need to ensure the effective implementation of the special and differential measures in favour of least developed countries, as contained in multilateral trade agreements.

To minimize the adverse consequences of the current financial crisis, the Lao People's Democratic Republic had adopted a number of drastic measures like budget-cutting, credit-line control and a boost of domestic production, he said. Despite the challenges it would face, it attached great importance to poverty eradication. Even with its limited funds, his Government would intensify efforts to accelerate the implementation of the rural development programme, through expansion of market access, infrastructure development, and enhancement of social services. The aim was to integrate various minority and ethnic groups into the building of a just and prosperous society. In view of the economic constraints it was facing, financial and technical assistance from the international community was welcome.

U THANE MYINT (Myanmar) said that although least developed countries were poor, their people were proud and hardworking. Only because of the trying times and unfortunate situations they have had to face during those past decades, had their level of development lagged behind.

Support for the least developed countries by the international community could be targeted into many sectors where these countries' most prominent deficiencies lay, he said. Quick and effective international actions and support were now an unavoidable necessity. The main actions should be toward increased official development assistance (ODA), reduction of the debt burden or the eradication of debts owed and enhanced market access, with special consideration for the least developed countries. Thus, immediate concerted efforts by the international community were essential to halt the present peril.

HUSSAIN SHIHAB (Maldives) stressed the critical need for a secure and equitable multilateral trading regime, which would enhance trade and development possibilities for the least developed countries. While the Uruguay Round and the World Trade Organization (WTO) had achieved some

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progress in market access, their assistance, especially in the area of export interest to the developing countries and least developed countries, had been disappointing. His country urged its development partners to effectively follow up the results of the High Level Meeting on Trade and Development of Least Developed Countries, held under the auspices of WTO in October 1997. The notion that trade should be seen less as an end in itself, but as a means to achieving equitable growth and development, could not be greater in the current age of globalization.

The current globalization and liberalization process posed serious economic threats to the least developed countries, he said. In the context of containing further marginalization of the poorest countries, Maldives emphasized the importance of improvements in the existing least developed countries criteria to make it reflect structural weakness, impediments to development, and constraints to integration into the world economy. He also called for the early development of the vulnerability index for small island developing states. While a country's public policy could provide the essential intervention for faster economic growth, external assistance continued to play a vital role in the overall development equation. He strongly urged the developed countries to comply with the internationally agreed target for official development assistance (ODA) of 0.7 per cent and the fulfilment of commitments on new and additional resources to give least developed countries a real opportunity to integrate into the global economy.

ANWARUL KARIM CHOWDHURY (Bangladesh) said the multilateral trading system which had evolved over the last 50 years had greatly contributed to growth, employment and stability by promoting the liberalization and expansion of trade and by institutionalizing the framework for the conduct of international trade relations. The importance of an open, rule-based, equitable, secure, non-discriminatory, transparent and predictable multilateral trading system could therefore not be overemphasized. Close cooperation among the United Nations, the WTO and the Bretton Woods institutions, remained an imperative.

There existed a consensus that something meaningful and worthwhile should be done for least developed countries. Yet there was concern at the slow pace of implementation of the trade-related technical assistance to those countries. Therefore, it was an ethical imperative that least developed countries be expeditiously integrated into the world economy.

SHANTI RANA (Nepal) said it was matter of concern that poverty, hunger and disease continued to blight the lives of hundreds of millions of people in the developing countries, including the least developed countries. Growing populations in poor regions of the world which led to environmental and resource degradation, together with rising economic disparity and worsening social conditions were other areas of concern. The status of least developed countries had deteriorated over the years and resulted in their being pushed

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to the fringe of the global economic activities. It was important to point out that financial, communications and technology changes had eluded the developing countries. That was so despite deep economic and policy reforms, and painful structural and sectoral adjustments taken by those countries.

He added that there was an urgent need for the speedy implementation of the programme of action for least developed countries and the fulfilment of solemn international commitments, so as to enable the least developed countries to benefit fully from the process of globalization and liberalization. There was also an imperative need for special support measures in regard to the development efforts of least developed countries for their effective integration into the world economy.

CHARLES TODJINOU (Benin) said the least developed countries were the weak link in the chain of nations because of their vulnerability. Most of those countries were located on the African continent -- 33 least developed countries were in Africa. His country supported and encouraged all initiatives by the international community to help least developed countries. The international community was committed to urgent and effective action in that regard, based on the principle of shared responsibility. Despite globalization of the world economy, the economic circumstances of least developed countries remained depressed. Instead of reversing trends in the 1990s, least developed countries witnessed a period of decline during the decade. Their economic performance contrasted with growth in the rest of the world. Also, performance of least developed countries varied from one region to another. Those in Africa and Asia had seen even lower growth because of natural disasters and the financial crisis. There was an urgent need for financial assistance from the developed countries. However, most investments to least developed countries, he said, had been channelled to oil and mining enterprises, while other development projects had been ignored.

CESAR GOUVEIA (Mozambique) said that during the last few years, the least developed countries had been confronted with poverty, distortion of the socio-economic structure and marginalization from the global economy. His country was deeply concerned with the lack of progress in implementing the program of action for the least developed countries for the 1990s, especially with regard to the official development assistance. He welcomed initiatives taken by the WTO, in cooperation with other organizations, to implement the plan of action for least developed countries.

He also noted the importance of the meeting on microcredit held in Washington, D.C. in February 1997. To maximize the success achieved by many microcredit programs, he said that administrative structures of the microcredit programmes must be strengthened and loans extended to anyone with the ability to repay. Accountability was crucial to avoid the risk that the borrowers consume, rather than invest. Also, achieving long-term

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sustainability in microcredit operations required a link between credit unions and financial institutions.

HYE-RAN Y00 (Republic of Korea) said that in this era of globalization and liberalization, the risk of marginalizing the least developed countries was all too real. She said her country appreciated the European Union's generous offer to host the Third United Nations Conference on least developed countries, scheduled to take place in 2001, and expected it would provide the momentum to galvanize the international community to support efforts to reverse the situation of least developed countries. In order for that conference to bring about constructive results, the United Nations Conference on Trade and Development (UNCTAD) must ensure that an adequate preparation process was in place.

Despite the increasing role of private capital in development, ODA still played a critical and catalytic role in facilitating the development of least developed countries. The Republic of Korea had steadily increased its ODA since the establishment of the Development Cooperation Fund in 1987, and the Korea International Cooperation Agency in 1991.

She added that her country wished to emphasize the importance of facilitating the integration of least developed countries into the world trading system. In that context, she welcomed the adoption of ministerial communiques at the high-level segment of the Economic and Social Council in 1998. The international community should make concerted efforts to implement the recommendations contained in those communiques, so as to enhance market access for exports from least developed countries and to assist them in capacity-building.

WATARU NISHIGAHIRO (Japan) said that facing the negative aspects of globalization, increased support from the international community for developing countries and least developed countries was critical. In light of the current financial crisis in Asia, it was even more important for the international community to increase support in facilitating effective integration of the economies of the least developed countries into the global economy.

He added that, in his own country's efforts to help the least developed countries, it had adopted the Tokyo agenda for action. In that agenda, the least developed countries themselves had a responsibility to eliminate or reduce supply-side constraints, such as high tariffs and other impediments to free trade. At the same time, the international community should support the efforts of the least developed countries to enhance their competitiveness through commodity diversification, improvement of their trade infrastructure and development of human resources. The international community should pursue new preferential measures to aid least developed countries, but every effort must be made not to weaken their competitiveness and marginalize them further.

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Preferences should be viewed as a transitional measure to be utilized only in the short-term.

BERHANU KEBEDE (Ethiopia) said that the time was ripe for bringing the development problems of least developed countries into the forefront of the international agenda. Adequate external financial resources were of critical importance in sustaining growth and development. It was disturbing to observe a continuous decline in ODA to least developed countries at a time when there was an increasing need to build their infrastructure to attract investment and also a pressing need to allocate resources for their human and institutional development.

The agencies like the World Bank and the specialized agencies, and the regional development banks needed to step up activities in guaranteeing non- commercial risks. He cited some steps needed in this connection, such as giving professional advice and technical assistance on project development, and disseminating information to potential investors and lenders. He also said that it was necessary to relax the eligibility process of the Heavily Indebted Poor Countries (HIPC) Debt Initiative.

MUBARAK RAHMTALLA (Sudan) said the least developed countries in 1997 succeeded in holding on to their economic growth. That was important because that endeavour was accompanied by social suffering, due to economic reform programmes. Such programmes brought with them political dangers as well. Given the fallout of globalization, and the recent financial crisis, it had become imperative to devote attention to the plight of the least developed countries. That attention must come through increased commitments for international development aid. Helping the development of infrastructure was imperative in order to bring in investments by the private sector.

Statements on Poverty Eradication

SAODAH SYAHRUDDIN (Indonesia), on behalf of the Group of 77 developing countries and China, said that there were large regional differences involved in global poverty reduction. For instance, with the devastating financial crisis in Asia, the number of people living in poverty was increasing at a staggering rate. Tens of millions of people had been plunged back into poverty. That increase in poverty clearly demonstrated the need to examine the poverty phenomenon in the context of globalization. Effective integration of developing countries into the world economy was a prerequisite for avoiding marginalization and therefore should contribute to poverty eradication. International support to countries unable to benefit from globalization was indispensable.

He added that efforts to eradicate poverty were facing a basic contradiction. On the one hand, developing countries were urged to reduce the role of state and government expenditures, but on the other, they were

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expected to allocate increased resources to the social sectors and to poverty eradication. That would imply that priorities for promoting economic growth and development would be left to the private sectors. Experience had shown that market forces did not often benefit poverty eradication efforts. Therefore, with the lack of external financial assistance and sustained economic growth, social progress would also be constrained. In that context, it was important that the international community strengthen its commitments to provide assistance to developing countries for poverty eradication. The international community should also support the implementation of major initiatives on debt relief.

JOHANNES WEDENIG (Austria), spoke on behalf of the European Union and the associated countries of Bulgaria, Cyprus, Czech Republic, Estonia, Iceland, Latvia, Lithuania, Poland, Slovakia and Slovenia. He said that growth was the most important factor in achieving lasting poverty reduction. However, growth would only fulfil its positive potential for poverty eradication if it could be qualified as being pro-poor, promoting a more equitable income distribution, and expanding the opportunities and life choices of the poorest people. Deliberate policies and strategies were therefore needed that reduced inequality and fought social exclusion by empowering poor people, in particular poor women, to actively participate in the economic, social and political life of their societies and to share in the fruits of development.

Women were disproportionably affected by poverty, he added. More than two thirds of the world's poor were women. The empowerment and autonomy of women and the improvement of women's social, economic and political status, as well as ensuring their equal rights and full participation, were essential for the eradication of poverty. It was also crucial to ensure equal access of girls and women to education and other basic social services. Integration of a gender perspective into macro-economic analysis and planning was crucial in order to eradicate poverty and to achieve sustainable development. Legislative and administrative reform should be undertaken to ensure that women had full and equal access to economic resources, including the right to inheritance and to ownership of land and other property.

ANWARUL KARIM CHWODHURY (Bangladesh) said that his country was distressed to find that certain unsubstantiated comments were included in the United Nations report to the Assembly on the role of microcredit in the eradication of poverty. It impinged upon the dignity of the poor, trifled their unleashed potency and went contrary to common wisdom gained in the field.

While generally supportive of microcredit, observations made in one or more sections of the report were contradictory to facts presented in other sections of the document. Many remarks went against what the Secretary- General had acknowledged in his own statements.

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He said that his country was particularly disappointed by the coverage given by the Department of Public Information to the negative comments of this report in its press releases and publications. He said that his country believed that the United Nations, through reports requested by its Member States, should project the correct perspective, and not lead its readers and the media to draw incorrect conclusions.

REGINA MONTOYA (United States) said the very poor were among the hardest working people on the planet. They had to be able to survive and provide a future for their children. But hard work alone was not enough to get out of poverty and secure a future. Microfinance was one of her Government's most effective tools in aiding the poor and fostering bottom-up growth. However, financial services alone were not enough to lift many households out of poverty. Investment in components such as business development services for poor entrepreneurs, policy reforms, applied research and impact studies were important. Those efforts along with microcredit schemes were her country's strongest instruments for increasing development and unleashing the democratic progress of people around the world.

She added that governments had a key role to play in alleviating poverty. They should be actively engaged in providing health, housing, nutrition and education, among other things. To succeed in combating poverty, governments must strengthen, encourage and protect civil society. Poverty alleviation had to be a national priority for all. Support of macroeconomic and microeconomic policies were necessary to enable small businesses to flourish. With respect to private microcredit institutions, the primary role of government should be to ensure an adequate regulatory and supervisory structure. The direct provision of credit and other financial services was not an appropriate role for governments. Governments should be a facilitator of microcredit and microfinance, rather than direct implementers or managers of private sector initiatives.

OLE PETER KOLBY (Norway) said that poverty eradication required more than just a commitment on the part of the developed world. Developing countries had the responsibility for their own development, and an important motivating factor for development assistance was that resources were being put to good use in implementing policies and programmes that put the interests of the poor first. Official development assistance was unlikely to increase unless the taxpayers of the north saw that this was the case.

Support for microfinance should not be at the expense of other important means of intervention to reach the poor, such as support to health services and basic education.

The gender perspective should always be present in the efforts of the international community toward the eradication of poverty, he said. Special focus on women was a good strategy for development. Investing in the

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education of girls for example, led to higher productivity and lower infant and maternal mortality rates.

SHEN GUOFANG (China) said that during the Decade for the Eradication of Poverty, the international community should fully recognize that poverty was spreading like a contagion, rather than showing signs of being reduced. In that context, efforts should be made to study the new poverty phenomenon in the globalization process. While working to eliminate existing poverty, the world should explore ways to forestall or contain the emergence of large-scale new poverty resulting from economic turmoil. There should also be efforts to create an environment conducive to economic growth and poverty eradication. Domestically, efforts should be made to create conditions that would contribute to the promotion of sustained growth with equity. At the international level, a favourable external environment should be established in support of the efforts by developing countries to eliminate poverty and develop their economies through such measures as improving trade conditions, solving the debt problem, increasing capital flows and the transfer of technology.

He added that the international community should provide more meaningful assistance so as to break the vicious circle of poverty handed down from one generation to the next. There should also be efforts to ensure that those people suffering from poverty were actively involved in anti-poverty efforts. Nobody was more eager for a better life than those living in conditions of poverty. For poverty elimination strategies to be successful, it was essential that their initiative and potential be brought into full play. People living in poverty must be encouraged to participate in the formulation of poverty eradication policies and programmes, and in transforming such policies and programmes into their own concrete actions.

NORIKO SUZUKI (Japan) said the eradication of poverty continued to be the top priority for the United Nations and for her country. There were clear linkages between poverty and the over-use of natural resources, as well as inadequate education and health services. Capacity-building was a critical cross-cutting element in poverty eradication. It sought to empower people and unleash their creative energies. It also fostered responsibility for finding solutions and introducing the changes necessary to allow new programmes to take effect. To be successful, an output-oriented approach should be followed by all development actors. Since that approach should be pursued in collaborative efforts, and the United Nations system had an advantage and it should actively participate in poverty eradication. All development actors should collaborate with the United Nations system, in particular non- governmental organizations whose know-how and experience should be utilized.

S.K. BWISWMUTHIARI (India) said that it must be emphasized that the problem of poverty has its origin in a lack of income or command over the market, which in turn was linked to the general economic situation of the

Second Committee - 16 - Press Release GA/EF/2843 31st Meeting (AM) 2 November 1998

country and the pattern of income distribution. It was his country's belief that if the international community wished to conquer this malaise, it would need a strategy of development which combined efforts at general economic growth on a broad front with specific programs designed to address specific categories of population. In addition to efforts directed at favourable international economic environment, situation-specific approaches were also needed.

A complete strategy would also include taking note of the needs of communities and groups that might have been deprived of socio-economic rights and benefits for historical reasons, among others. Equally important was the gender issue, which needed to be addressed to eliminate centuries of inequality, born of certain patterns of male domination in society. That issue also failed to recognize the productive potential and productive contribution that women had made and continued to make to the growth and development of society as a whole. The strategy should also take into account the rights of the child and the needs of youth.

In addition, he said, his country believed that programmes for addressing that problem should include: guaranteeing a certain level of employment to the rural poor and to the educated but unemployed rural and urban youth; care of nutritional, educational and health needs of women, and the promotion of their empowerment and equality in terms of remuneration and share in wealth; and the inclusion of mass community-led literacy initiatives.

If the first international decade of to eradicate poverty were to be meaningful, the international community needed to be far more rigorous in identifying constraints and then seeking to evolve measures to overcome the obstacles.

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