PRESS CONFERENCE BY GROUP OF 77 DEVELOPING COUNTRIES

Scheduled for the first quarter of 2002, the High Level International Intergovernmental Event on Financing for Development, had tremendous potential to develop a new set of policies to create an enabling environment for developing countries, the Chairman of the “Group of 77” developing countries and China said at a Headquarters press conference this afternoon.

Briefing correspondents on the work of the second session of the Preparatory Committee for the Event, the Permanent Representative of Iran, Bagher Asadi said that its objective was to lay the groundwork for the undertaking through an assessment of the world's financial development needs.  The session, which began last Monday, will conclude 23 February.

Established in 1964 at the end of the first session of the United Nations Conference on Trade and Development (UNCTAD)in Geneva, the Group of 77 was the only universal body reflecting the views of the developing community of the South, he said.   The Group believed that the event should take the shape of an international conference at the summit level, preferably to be held in a developing country.   The level and the place of the gathering were yet to be decided, and he hoped that it could be done during the current Preparatory Committee. 

The historical significance of the upcoming event was shared by the countries of both the South and the North, he continued.  From the very beginning of the preparatory process, the developing countries had been keen to acquire the requisite resources for development.  To be comprehensive, the process needed to include all actors, including the intergovernmental organizations, the international community, the private sector and civil society, as well as the Bretton Woods institutions and the World Trade Organization.

At present, most important stakeholders were on board, he continued, and the statements at the opening of the current session of the Preparatory Committee testified to that fact.  The current Preparatory Committee had not yet begun its detailed consideration of the main substantive themes of the upcoming event, which included mobilization of resources, official development assistance (ODA), trade, international cooperation and foreign investments.  Those issues would be addressed at the next session of the Preparatory Committee, scheduled for 30 April to 12 May.

Over the first four days of discussions, the main groups of countries and individual States had presented a general outline of their positions, he said.  He hoped that the good will of participants would be translated into practical measures and action on all specific questions. 

The Group of 77 came to the Preparatory Committee with an open heart, prepared to sit down and negotiate with all partners in the spirit of cooperation in order to ensure a successful process and substantive outcome.  It had made clear its commitment to the Event, which should not turn out to be yet another political gathering that ended up with just "a piece of paper". 

A statement of the Group of 77 at the opening of the session was available to the press, he said.

Responding to a question on the need for a reform of international financial institutions, Mr. Asadi said that the point that the developing community had been trying to make was that globalization had caused significant changes in the world, leading to the widening of the gap between the rich and the poor within and between States.   Among the systemic issues to be addressed at the Event was the question of what needed to be done with the international financial structure in order to respond adequately to the needs and requirements of the changed environment.

He went on to say that, besides trade liberalization, foreign direct investments and access to markets, there were also issues of genuine international cooperation for development, the debt burden and an international agenda to address those problems.  Institutional arrangements for handling the world's financial and monetary problems also needed to be considered.  Obviously, the outcome of the event needed to be a product of consensus.  It was not just what the South brought to the table –- of equal importance was the question of what the North would contribute.  This time, the whole international community had to be involved in the work on an agreement. 

Regarding the position of the Group of 77 on globalization, he said that there was a traditional gap between the positions of the North and the South in that respect.   The developing community emphasized the importance of the international efforts and creating an enabling international environment.  The North stressed good governance and "tending to your own house". 

The problem was not that the South denied the importance of domestic measures and institution-building, he explained.  In the age of globalization, the outside environment had a negative impact on the domestic situation of developing countries.  Thus, it was important to overcome that negative impact and create an enabling environment.  Most developing countries faced difficulties in mobilizing their domestic resources.  They lacked the capacity to do so.  It was precisely in the area of capacity-building that the international community should be helping the developing countries, so that they could mobilize their domestic resources to achieve a higher level of development. 

The negotiations between the North and the South had been going for over four decades now, a correspondent said, and that had not resulted in additional resources.  What made Mr. Asadi believe that the Conference could change that situation?  Mr. Asadi said that the developing countries were not coming to the Event with a sense of euphoria or illusion.  However, he hoped that the gathering would make a difference, for efforts were underway to make it as participatory as possible.  Not just the developing community, but all the stakeholders would be interested in a positive outcome.  Everybody was also cognizant of the huge risks, in case of failure. 

Asked how the process could benefit countries under sanctions or boycott, Mr. Asadi replied that the process did not address particular concerns of

individual countries.  However, a positive outcome would invigorate development in the whole world, which would help to resolve specific concerns.

Responding to another question, he said that a high-level panel appointed by the Secretary-General, under the leadership of former President of Mexico Ernesto Zedillo, was a good initiative to mobilize political support for financing for development at the highest possible level.  That was a very welcome step and he hoped that the report of the panel, to be presented to the intergovernmental preparatory process, would be an important contribution to its work.

As for the goals that the Group was setting for the Event, he said that the target of devoting 0.7 per cent of developed countries' gross national product (GNP) to the needs of the developing countries had been agreed upon by the international community.  Only a few countries had met that target.  The majority were far behind.  One of the new goals was to earmark from 0.15 to

0.2 per cent of the overall ODA target for the development of the least developed countries.  However, that was a big challenge for the international community, and he hoped that the developed world would realize that making that contribution was the least painful remedy needed to invigorate the development process.  The world could not afford to see further exacerbation of the social and political instability emanating from economic deprivation. 

Responding to a question about the position of the Group on economic growth, he said that it was important to provide the necessary resources to achieve a higher rate of growth, in order to avoid worsening deprivation and poverty.  For their part, the developing countries realized the need to put institutions in place and strengthen their capacity to absorb the required flow of assistance for development.  It was a two-way street, and both the internal and the external elements needed to be in place.

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