PERSISTENT ‘GAPS, CONTRADICTIONS’ BETWEEN DEVELOPMENT RHETORIC, REALITY OF DEVELOPMENT COOPERATION, SECOND COMMITTEE IS TOLD

Fifty-sixth General Assembly

Second Committee

6^th Meeting (PM)

PERSISTENT ‘GAPS, CONTRADICTIONS’ BETWEEN DEVELOPMENT RHETORIC, REALITY

OF DEVELOPMENT COOPERATION, SECOND COMMITTEE IS TOLD

Resource Mobilization, Private Sector Participation,

Equitable Trade System, Seen as Crucial to Meeting Development Goals

The present world economic system did not provide adequate support to those countries most in need of financing for development, Malaysia's representative told the Second Committee (Economic and Financial) this afternoon as it continued its general exchange of views.

He went on to say that resources made available for development had declined substantially in recent years, adversely affecting programmes in most developing countries.  There remained gaps and contradictions between development rhetoric and the actual thrust of international development cooperation.  In that regard, the International Conference on Financing for Development, to be held in Monterrey next March, held great promise for renewing genuine partnership between the North and the South.

The Director of the Ministry of Foreign Affairs of Bhutan said that financing permeated discussions in every arena of development, whether it was poverty eradication, combating HIV/AIDS or environmental conservation.  A new consensus on the effective mobilization of resources, at the national and international levels, and the adoption of measures to implement that goal could provide substantial impetus in achieving sustainable development.

At the Monterrey conference, he added, the international community must agree on substantial and concrete commitments.  Merely agreeing on equivocal language subject to self-serving interpretation would not help overcome the serious and persistent problems confronting the issue of financing for development.

Official development assistance (ODA) and foreign direct investment were crucial for meeting the developmental needs of the developing countries, noted Nigeria's representative.  The continuing decline of ODA flows, especially to the African countries, called for urgent remedial action, especially by those countries which had not yet met the agreed target of 0.7 per cent of gross national product (GNP) for ODA.

He stressed that the crucial role of the private sector in development could not be denied.  The private sector should take its place among all the relevant stakeholders at the forthcoming International Conference on Financing for Development and work out effective modalities for public-private partnership and more equitable investment flows.

Guatemala's representative expressed concern at the declining role of the United Nations in the area of operational activities for development, particularly the continuing shortage of basic funds available to the United Nations Development Programme (UNDP).  The good news was that the decrease in funds that could be collected seemed to have reached its lowest possible level, meaning that there would likely be an upturn later in the year.  However, the UNDP was still far from its goal of mobilizing the necessary resources to enable it to support the efforts of programme countries in improving their own capacity for promoting development.

Also speaking this afternoon were the representatives of Singapore, Armenia, Syria, Cambodia, Mozambique, Paraguay and Kazakhstan, as well as the representative of the Food and Agriculture Organization (FAO).

The Committee will meet again at 10 a.m. on Wednesday, 3 October, when it is expected to conclude its general debate.

Background

The Second Committee (Economic and Financial) met this afternoon to continue its general debate.

Statements

TAN YEE WOAN (Singapore) said that against the backdrop of a global economic slowdown, the temptation for all countries to retreat into protectionism was very real.  However, retraction from globalization was clearly not the appropriate response.  It was agreed, even before the terrorist attacks, that it was in globalization that the antidotes to the problems of globalization should be found.  The challenge for low-income countries was to look for ways of increasing their share of globalization.  Therefore, the international community needed to act individually and jointly to harness the benefits of globalization.

She strongly believed that free trade continued to offer the best anti-poverty programme.  It was critical that the World Trade Organization (WTO) Ministerial Meeting in Doha, in November, agree to launch a new round of trade negotiations to maintain the momentum of trade liberalization and strengthen the multilateral trading system.  However, a new round must offer developing countries clear prospects of benefits in areas where they had comparative advantage.  It was simply not tenable that the burden of the cost of adjustment of trade liberalization continued to fall disproportionately on developing countries. 

Doha, she said, was the place where developed countries should demonstrate their political will to share in the adjustment burden by liberalizing their protected agriculture, sugar and textiles markets.  The developed countries, which advocated that new issues should be included in the WTO's agenda, would need to convince the others that their intentions were not motivated by disguised protectionism but by a desire to address systemic issues confronting the international trading system.

It would be simplistic to believe that trade alone was sufficient to lift countries out of poverty, she added.  At the domestic level, sustainable growth and development depended on the ability of governments to build the supporting legal, social and economic frameworks, nurture the necessary talents and effectively exploit available resources.  There was a critical need for assistance to developing countries in such capacity-building.

HASMY AGAM (Malaysia) said that while an impressive degree of global financial integration had been achieved, thanks to the introduction of an extensive regime of liberalization and globalization, the consequences for the real economy had not matched expectations.  Not only had the world economy expanded more slowly, it had also become subject to far greater fluctuations and to serious financial and economic crises.  It was clear from the bitter lessons of the Asian financial crisis that globalization was not the universal solution it was touted to be. 

It was also clear, he continued, that globalization did have its pitfalls and that the process of liberalization should be managed in a way that would not be disruptive to the commercial and economic activities of the developing countries.  It was equally clear that part of the problem had been the inherent defect or deficiency of the international financial system, which put developing countries at a great disadvantage.  To enable the developing countries to partake in the globalization process, it was essential for the system to be adjusted or corrected, so as to protect the weak economies from being attacked in the name of openness and globalization.

The present world economic system did not work to provide adequate support to those countries most in need of financing for development, he said.  Resources made available for development had declined substantially in recent years, adversely affecting programmes in most developing countries.  There remained gaps and contradictions between development rhetoric and the actual thrust of international development cooperation.  In that regard, the upcoming International Conference on Financing for Development, to be held in Monterrey next year, held great promise for putting genuine partnership between the North and South back on the international agenda.

MOVSES ABELIAN (Armenia) said that, despite some attempts to exclude his country from the East-West energy and trade corridors, he was confident that the Caucasus was in need of a regional system for cooperation, stability and security, and he stood ready to work towards its formation.  Armenia did not see either itself or the region as being condemned to marginalization.  Rather he believed that, through close cooperation, whether economic or political, the region of the South Caucasus would eventually enjoy lasting stability, based on a sense of solid and shared values.  The imaginative use of emerging technologies and the creation of cooperative approaches could accelerate development in troublesome regions and could reverse most worrisome trends.

He said that regional economic cooperation, striving to transfer differences in national economies into unity through dialogue, mutual respect, confidence and conciliation, would significantly contribute to overcoming the complex process of transition to the market economy.  Such efforts would also ultimately consolidate mutually beneficial partnerships in all fields of common interest.  Regional cooperation was one of the prerequisites for peace and stability in his complex region, and Armenia was prepared to develop relations with all countries in its neighbourhood.

Sustainable development and economic growth relied on political stability and the creation of an enabling environment, he added.  It was crucial for a transition country to replace the bureaucratic system of organization and management with the new organizational forms.  Entering the WTO would signify Armenia’s entry into the domain of open trade through establishment of trade relations with the members of that organization.

HUSSEIN SABBAGH (Syria) said the world economy was in a very difficult phase.  There was now the threat of a world recession, which might widen the gap between countries of the North and the South.  Aggravating development in countries of the South was the problem of external debt, which severely hindered development efforts.  In that regard, it was clear that the Heavily Indebted Poor Countries (HIPC) Debt Initiative would not be enough to solve the external debt problem.  Another problem was the tariffs and other protectionist measures placed on exports from developing countries.  There was a need to reform multilateral trade rules in order to remove such mechanisms that deterred free trade.

In reviewing United Nations operational activities, he said, it was important to seek ways to improve the efficiency of United Nations efforts in support of African development.  In that regard, nations should strengthen partnerships with African governments in order to aid development in that troubled region.  There was a need for international efforts, using the unique role of the United Nations to render globalization more able to meet the social and development needs of developing countries.

On the topic of development and the environment, nations should implement the commitments undertaken in Agenda 21.  That included providing the necessary assistance to developing countries and making technology available to those countries on favourable terms.  He had hoped that peace would have reached the Middle East by the beginning of the twenty-first century.  However, that had not yet occurred in the Middle East or in many other parts of the world.  There was now a need for international relations based on mutual respect and cooperation in order to build a better world for future generations.

SUN SUON (Cambodia) said that the irreversible process of globalization required a global response by the world community.  The North and the South needed to unite their efforts to ensure that the benefits of globalization were spread equally and fairly with minimum negative impact.  The challenges that lay ahead underlined the need for the international community to seek creative and innovative actions to deal with the setbacks being faced today.  Preventing marginalization and alleviating poverty relied exclusively on the full and fair participation and integration of the developing countries in the management of the global economic, financial and trading systems. 

Lack of financial and other resources was one of the major obstacles to development efforts, he said.  Crucial to those efforts were the mobilization of resources and the active cooperation and assistance of development partners to address concerns such as the decline in official development assistance (ODA) flows.  Among the other necessary measures were the removal of trade barriers, allowing for technology transfer, increasing market access for developing countries, and increasing foreign direct investment.  He believed that the upcoming Conference on Financing for Development would provide a unique opportunity to iron out those issues.

In tackling development questions, he said, priority must be given to information and communication technologies, which played a pivotal role in the emerging global knowledge-based economy.  Of great concern was that the majority of developing countries, especially the least developed countries (LDCs), were unable to reap the benefits of such technology.  It was important to ensure access for those countries to the new technology, a powerful tool for social and economic development.

CARLOS DOS SANTOS (Mozambique) said the implementation of the development goals contained in the Millennium Declaration required an active role of the United Nations through its operational activities.  The United Nations was crucial to the mobilization and coordination of resources for development at the international level, as well as being closely involved in their application in recipient countries.  The Declaration stated that poverty eradication was the overriding objective for concerted international action.  Therefore, poverty eradication should be the main objective of United Nations operational activities for development.

The United Nations development apparatus had acquired substantive knowledge and expertise in the area of development cooperation and assistance, he said.  That valuable experience should be shared with Member States and all stakeholders in the preparation of projects and programmes for poverty eradication and development.  Those projects should be based on national ownership, to ensure their effectiveness and consistency with national development agendas.  Ensuring national ownership of development projects gave them legitimacy and improved operational activities for development.

He said that a development project could only be successful if it could capture the essence of the problem in question, and provide for the active involvement of local communities in every stage of the programme, including design and implementation.  The most important aspect of the whole exercise was to ensure that local communities took charge of their own development.  That was the approach behind the New African Initiative:  a clear example of local ownership and leadership.  That was the way Africans had chosen to get themselves out of poverty, misery and underdevelopment.  What was now required was adequate support from the international community.

ELADIO LOIZAGA (Paraguay) said that next year’s Conference on Financing for Development would give the international community an opportunity to consider fully and comprehensively that complex problem, which included trade, resource mobilization and debt.  It would be the result of a long and difficult process and thus deserved the full attention of the international community.  For many countries, financing for development was the main issue currently being confronted.  Everything must be done to ensure the success of that conference.  He looked forward to the resumption of the work of the Preparatory Committee, scheduled for later in October.

The World Summit on Sustainable Development, to be held next September in South Africa, would give another opportunity to consider the various aspects of sustainable development, he said.  The true goal of that meeting was to undertake a review of the objectives established at Rio by identifying problems that had arisen.  The focus must be on the principles contained in the Rio Declaration and Agenda 21, with a special emphasis on the principle of common but differentiated responsibility.  The purpose of the Summit was not to renegotiate Agenda 21 but to analyse its implementation.

Landlocked developing countries, LDCs and small island developing States were at a higher risk of being marginalized, he said.  It would be a grave error to include all developing countries in a single group without taking account of the differences in their level of development and in their ability to participate in international processes.  The current international trade system, the most important means of achieving growth, posed the greatest problems.  Developing countries must have fair access to markets and be able to participate on an equal footing in the multilateral trading system.

JOSE ALBERTO BRIZ-GUTIERREZ (Guatemala) said the deceleration experienced by the United States economy, the stagnation of the Japanese economy and the irregular behaviour of the European economies had spread their effect to the rest of the world.  Despite lower interest rates, for most developing countries access to credit and private investment had contracted of late.  Likewise, there did not seem to be any resurgence in ODA.  In sum, the current world environment was anything but promising for development.

If it was already difficult to achieve the goals of the Millennium Declaration at a time when the world economy was growing moderately, he asked, what should be done when there was low or zero growth?  What could be done to ensure that globalization was perceived as a source of opportunities, rather than a source of obstacles to development?  The Committee should contribute to the search for the answers to those questions jointly with partners of the Bretton Woods institutions and the WTO.

The declining role of the United Nations in the area of operational activities was a matter for some concern, he said.  He was worried, in particular, by the continuing shortage of basic funds available to the United Nations Development Programme (UNDP).  The good news in that respect was that the decrease in funds seemed to have reached its lowest possible level, meaning that there would likely be an upturn this year.  But the UNDP was still far from its goal of mobilizing the resources needed to realize the Programme’s potential for supporting programme country efforts to improve their own capacity for promoting their development.

DAW PENJO, Director, Ministry of Foreign Affairs of Bhutan, said that the true success of the Third United Nations Conference on Least Developed Countries could only be measured in the numbers of people in those countries who were spared a life of poverty as a result of the Conference.  The outcome of the Conference needed to be implemented, followed-up, monitored and reviewed in the same spirit of cooperation and level of attention that produced the outcome.  While the primary responsibility rested with the countries themselves, it was equally vital for development partners to implement fully and in a timely manner the commitments undertaken, particularly in the areas of resource mobilization, external debt and trade. 

The Monterrey Conference offered an opportunity to address an issue that was of utmost importance if development goals were to be realized, he said.  The issue of financing permeated discussions in every arena of development, whether it was poverty eradication, combating HIV/AIDS or environmental conservation.  All aspects of financing for development needed to be addressed in a comprehensive, integrated and concrete manner.

A new consensus on the effective mobilization of resources at the national and international levels and the adoption of measures to implement that goal could provide substantial impetus in achieving sustainable development, he said.  At the Monterrey Conference, the international community needed to agree on substantial and concrete commitments.  Merely agreeing on equivocal language subject to self-serving interpretation would not help overcome the serious and persistent problems confronting the issue of financing for development.

MADINA JARBUSSYNOVA (Kazakhstan) said the acts of terrorism seen on

11 September revealed the essence of a globalized world that was both fragile and interdependent.  Underdevelopment of the economy, constant poverty, absence of education and health care, might all give rise to extremism and terrorism.  It was no surprise that the most wanted terrorist leader was being hosted by one of the world’s poorest countries, torn to pieces by a long-lasting civil war, poverty, and inner political conflicts.  Afghanistan had become one of the sore spots of the world.  The Committee, as the body that discussed sustainable development, could make a useful response to the challenges launched on 11 September.  In order to resolve the problem of terrorism, nations should turn to its economic aspect.

She said that this year the people of Kazakhstan would celebrate the tenth anniversary of the country's independent development.  Over 10 years of independence, it had made enormous strides in building its own statehood and winning true international recognition.  Since 1991, her country had consistently worked its way towards a market-oriented economy and a democratic system of governance.  Its priority task was the growth and development of the country’s economy.

She added that careful attention should also be paid to all aspects of environmental activities.  Environmental problems had long ago ceased to be a purely national concern and had become global.  Enormous resources would be needed to deal with ecological disasters, to clean up polluted areas, to cure those who had suffered and to ensure the safety of children born in affected areas.

In the sphere of social development and poverty, she said, Government support had led to the formulation of a national healthy-lifestyle development strategy.  Her country concentrated its efforts on the most vulnerable groups and geographical areas.  In particular, there had been a successful testing of the country’s first micro-credit schemes, aimed particularly at women in regions experiencing severe stress due to ecological disasters.

ETANOMARE OSIO (Nigeria) said the critical role of ODA and foreign direct investment in meeting the developmental needs of the developing countries was a recognized fact.  The continuing decline of ODA flows, especially to African countries, called for urgent remedial action, especially by the section of the international community which had not yet met the agreed target of 0.7 per cent of gross national product for ODA.  For Africa, the fulfilment of that obligation would help leverage national capacities to attract and more gainfully utilize foreign direct investment.

He added that the crucial role of the private sector could not be denied.  The private sector would take its place among all the relevant stakeholders at the forthcoming International Conference on Financing for Development, and would work out effective modalities for public-private partnership and more equitable investment flows.

The strangulating effect of the persisting external debt burden on the development efforts and resources of developing countries was a reality the international community must continue to consider -- with a view to finding a lasting solution among old and new initiatives.  Such initiatives should include a more beneficial and well-funded HIPC Initiative, as well as a debt moratorium and outright cancellation of debt for middle-income countries.  Those countries must be equipped with a clean and debt-free slate from which they could better cater to the needs of their citizens.

FLORENCE A. CHENOWETH, Director, Food and Agriculture Organization (FAO) Liaison Office with the United Nations, said that the FAO had recently completed, and would release on 16 October, the State of Food and Agriculture 2001, its annual report on current developments affecting world agriculture.  The report might be of interest to delegates during their debates and during deliberations in the Preparatory Committee for the Conference on Financing for Development, as it offered extensive global and regional overviews of agricultural situations and trends. 

In the early 1990s, the FAO had called the world's attention to the fact that millions of people worldwide were chronically hungry and millions were dying of hunger.  At that time, the number of hungry and undernourished people worldwide was estimated at above 800 million.  Faced with those grim figures, leaders at the World Food Summit (Rome, 1996) pledged to halve the number of undernourished people no later than 2015. 

Unfortunately, the annual reduction of those affected in recent years had been far below the average rate of 20 million per year necessary to reach the target, she continued.  The FAO had called for a World Food Summit, five years later, to be held in November, to take stock of the situation and take the necessary decisions to accelerate the achievement of the target.  The FAO planned to report to the Committee later in the session on the outcome of that Summit.

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