Fifty-seventh General Assembly

Second Committee

4^th Meeting (AM)

LANDLOCKED DEVELOPING COUNTRIES NEED MORE EQUITABLE WORLD TRADE,

SECOND COMMITTEE TOLD

Geographical Handicaps Keep Them from Being Competitive, Says Delegate

Lack of territorial access to the sea, combined with isolation from world markets and high transit costs made trade especially difficult for landlocked developing countries, the representative of the Lao People’s Democratic Republic told the Second Committee (Economic and Financial) this morning as it continued its general debate.

Speaking on behalf of the Group of Landlocked Developing Countries, he stressed that such geographical handicaps barred those countries from being equally competitive in the world trading system.  Calling for a universal, rule-based, non-discriminatory and equitable trading system, he said trade was a perfect tool for mobilizing resources and stimulating investment and economic development.  The World Trade Organization (WTO) must consider the needs and interests of such vulnerable countries as the landlocked developing States.

Chile's representative said it was time that developed countries ended the double standard of promoting global free-market reforms while using subsidies to protect their own economic interests.  Protectionist measures by developed nations had led to volatility in the prices of exports and raw materials from developing countries.  Eliminating trade barriers would increase the economic capacity of developing countries economic capacity to $130 billion, more than double the target proposed during the Millennium Summit, he noted.

Cuba's representative stressed the importance of reforming the current international trade system in order to stabilize falling commodity prices and give developing nations favoured treatment and greater market access.  The current system was impeding development, he said, pointing out that over the past five years, international trade had decreased in the developing countries, while developed nations received the lion’s share of foreign direct investment.

The representative of the Russian Federation emphasized that the United Nations should promote fair international trade and a stable international financial system as key external factors for sustainable development, saying that WTO membership should be made universal.  He also called for continued efforts to forecast and contain the impact of financial crises.

Turning to development, Iran's representative noted that declining financial resources for multilateral assistance and lack of resources at the domestic level were the major factors constraining the role of the United Nations.  The provision of resources for its operational activities should be predictable, continuous and assured, as well as commensurate with the needs of developing countries, he reiterated.  The successful promotion of substantive, global development would promote a more humane, and thus more secure, international environment for humankind.

Other speakers this morning were the representatives of Jamaica, Dominican Republic, Republic of Korea, Libya, Kenya, Yugoslavia, Monaco, Armenia, Burkina Faso and Nigeria.

The Committee will continue its general debate at 3 p.m. today.

Background

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

Statements

JUAN GABRIEL VALDES (Chile) said the United Nations should increase official development assistance (ODA) for the poorest countries in a transparent and unconditional manner.  It was time to end the double standard whereby developed nations advocated global free-market reforms while protecting their own economic interests with subsidies.  The elimination of trade barriers would increase the economic capacity of developing countries to $130 billion, more than double the target proposed during the Millennium Summit, he said.

Protectionist measures by developed nations had led to volatility in the prices of exports and raw materials from developing markets, he said, stressing the need to devise effective debt relief strategies for developing nations as well as to increase their involvement in the decision-making of international institutions for the prevention and management of economic crises.

He announced that Chile, in conjunction with the United Nations Industrial Development Organization (UNIDO), was organizing a World Biotechnology Forum to be held in December 2003 in Concepcion, Chile.

STAFFORD NEIL (Jamaica), speaking on behalf of the Caribbean Community (CARICOM), noted that development in the world economy had not been encouraging in the past year.  Growth had been sluggish and there had been a downward trend in commodity prices.  Disclosures of corrupt corporate practices had undermined business confidence and contributed to uncertainty in financial markets.  In trade, industrial tariffs and agricultural subsidies had contributed to setbacks in the opening of markets.

Stressing the importance of reviewing economic development to obtain global responses, he said the results of the Doha, Monterrey and Johannesburg conferences had provided some encouragement and a firm basis for moving forward.  Commitments made at those conferences must be implemented as must a monitoring mechanism to measure progress.  The consensus achieved at those meetings should be seen as a basis for building development cooperation within the global economic system.

Describing particular issues facing his region, he said that in order to benefit from globalization, the small-island developing countries should not be left out of the process.  They had already been excluded in the area of financial services, where decisions affecting the region had been made without effective consultation.  CARICOM wished to see a policy framework that would enable small-island States to work toward a system for mitigating natural disasters.  Regarding the environment and sustainable development, those States continued to face the consequences of excessive use of fossil fuels elsewhere as well as more frequent, intense storms and rising sea levels.

OSIRIS BLANCO (Dominican Republic) said that hungry citizens in developing countries like his own were anxiously awaiting concrete actions based on the development targets set forth at Monterrey and Johannesburg.  The Second Committee must channel all its resources and efforts into the rapid implementation of those goals.

He said his delegation was prepared to work very closely with those of other countries, as it had in Johannesburg, to work for compliance with the principles of Agenda 21.  Non-governmental organizations (NGOs), the business community and other working groups should also be active participants in the decision-making process, he added.

ALOUNKEO KITTIKHOUN (Lao People’s Democratic Republic), speaking on behalf of the Group of Landlocked Developing Countries, said that its main concerns were lack of territorial access to the sea, remoteness and isolation from world markets and high transit costs.  Such handicaps meant the Group could not be equally competitive in the world trading system and were a heavy burden for overall economic development.  They also made such countries unattractive to foreign investment and other financial flows, leaving them further marginalized.  For all of those reasons, poverty eradication and sustainable development efforts were undermined.

Trade was especially important for landlocked developing countries, since it was a perfect tool for mobilizing resources, stimulating investment and economic development, he said.  Given the geographical obstacles, however, those countries were not yet in a position to use trade fully.  Calling for a universal, rule-based, non-discriminatory and equitable trading system, he said the World Trade Organization (WTO) must consider the needs and interests of vulnerable countries.

He said the challenges facing landlocked developing countries were being presented to the General Assembly at a crucial time, as the Group was heading towards the International Ministerial Meeting on Transit Transport Cooperation.  Expectations were high and the outcome of the meeting would have a long-term impact on overall development in countries of the Group.  The meeting’s agenda covered the development of an efficient transit transport system that would benefit not only landlocked developing countries, but also their transit neighbours.  The mobilization of additional financial resources was a priority, since a considerable portion of them would have to come from extra-budgetary sources.

M. JAVAD ZARIF (Iran) said that the implementation of the substantive follow-up mechanism of the Monterrey Conference should be commensurate with the requirements for long-term development in developing countries.  While pursuing a consolidated and cooperative approach to implementation, the international community needed to ensure that important stakeholders continued to participate fully and to increase their substantive interaction.  It was also important that the General Assembly take the decision to follow up on the implementation of the Johannesburg Summit’s outcomes.

The importance of those international conferences was not due solely to the substantive issues discussed, he said, but also to their long-term implications for the future of multilateralism.  Faced with a gradual downgrading of developmental aspects within frameworks for multilateral work and activities, it was satisfactory to see that both the Monterrey and Johannesburg declarations had reaffirmed the commitment of world leaders to strengthen multilateralism by recognizing the leadership role of the United Nations.  Furthermore, because it was now evident that globalization had failed the poor, and international attention had shifted to the area of peace and security, genuine multilateralism and international cooperation needed a new boost.

As a developing country, he said, Iran had high expectations with regard to the development agenda of the United Nations.  The successful promotion of substantive, global development would promote a more humane, and thus more secure, international environment for humankind.  Poverty eradication in its broad interpretation should continue to be the main pillar of the Organization’s work.  Yet the major factor constraining its role was declining financial resources for multilateral assistance and lack of resources at the domestic level.  The provision of resources for operational activities should be predictable, continuous and assured, as well as commensurate with the needs of developing countries, he reiterated.

ORLANDO REQUEIJO (Cuba) said the current international trade system must be reformed so that developing nations received favoured and differential treatment, as well as greater market access for exports, and to stabilize falling commodity prices.  The current system was impeding the progress of development, he said, calling for the replacement of the International Monetary Fund (IMF) and the World Bank with institutions that unconditionally supported development in developing countries. 

He said the export of the financial resources of developing countries during the last five years had resulted in a decrease in their international trade.  Moreover, developed nations received the lion’s share of foreign direct investment (FDI).  In addition, external debt and debt service payments remained a formidable obstacle to development.  The debt payments made by Latin American nations in 2001 were two-and-a-half times the amount owed in 1990 and represented 36 per cent of those nations’ income in goods and services.

Developing countries still lacked adequate financial resources to achieve sustainable development, he said, stressing the need to mobilize necessary resources as well as breathe new life into ODA.  If developed nations would commit their pledged financial contributions, ODA coffers would reach $170 billion, an increase of $120,000, he added.

LEE HO JIN (Republic of Korea) said the past year had heralded an unprecedented slowdown for the global economy, with the first decline in world trade in nearly two decades.  The economic downturn in the United States had impacted nearly every country, making the significant links in the global economy more poignant than ever.  With those connected economic interests and consequences came the international community’s shared responsibility to ensure that developing countries did not suffer disproportionately, and that they continued to move towards prosperity and equitable integration into the world economy.

Commending the significant progress made at this year’s international conferences towards international commitments for sustainable human development, he said the Johannesburg Summit had continued the spirit of Monterrey in outlining the strategies and principles for combating poverty, preserving natural resources and changing consumption and production patters.  He particularly encouraged international efforts to harness information and communication technologies (ICT) in sustainable development.  Those technologies could become powerful, cost-effective means of promoting economic growth through human resources development, if countries with significant ICT infrastructure found innovative ways to provide technological assistance and training to less developed countries.

Building on the spirit of cooperation made at major international conferences, the Second Committee must now focus on an integrated and coordinated implementation and follow-up of their outcomes, he said.  It was imperative that this year’s session devote much of its discussion to effective implementation that would help ensure a timely achievement of the rigorous goals laid out in the Millennium Declaration.  Coherence, coordination and cooperation among the three-tiered system of the United Nations, Bretton Woods institutions, the WTO and the private sector would be vital in that regard.

JABER ALI RAMADAN (Libya) said the Monterrey, Doha and Johannesburg conferences had all had positive results and would help developing countries to gain a solid footing on the international scene.  It was important to implement the goals set forth during those conferences and to address such concerns as curbing the deterioration of the environment, soil and arable land. 

He said his country was plagued with millions of mines planted by colonial forces.  Libya called on those responsible to adhere to international demining strategies and to carry out the rehabilitation of mine-filled areas.

Pointing out that African development was a top priority, he noted that the Federal Republic of Yugoslavia had forged greater links with the region through various commercial and economic partnerships.  However, Libya and other developing nations continued to grapple with the protectionist trade practices of the developed nations.  They maintained sanctions against Libya, which grossly violated international principles and were thwarting the country’s development.  Libya had complied with the necessary United Nations resolutions and the sanctions should be lifted, he added.

BOB JALANG’O (Kenya) said the marginalization of developing countries had continued unabated, resulting in a rising debt burden, lower export earnings, lower levels of capital flows and higher poverty levels.  According to the latest report of the United Nations Conference on Trade and Development (UNCTAD), the proportion of people in the 29 African least developed countries living on less than two dollars a day had increased from 82 per cent in the late 1960s to 87.5 per cent in the late 1990s.  Those living on one dollar or less a day had increased from 54.8 per cent to 64.9 per cent in the same period.

He said the heavy dependence on primary commodities for exports, heavy debt-servicing obligations, the persistent net financial outflows, limited access to markets in developed countries and the adverse impact of trade liberalization were the undeniable causes of the scenario described by UNCTAD.  The high rates of HIV/AIDS had further aggravated the global economic imbalance.

Today, the internationally agreed ODA target of 0.7 per cent of gross national product (GNP) was far from being realized, he noted.  Investment flows to developing countries were still unbalanced, with a substantial proportion concentrated in a few countries.  Development in African countries could only be achieved by applying policies consistent with local conditions and development priorities.  Past development programmes prescribed for Africa had not taken that into account.  The current Poverty Reduction and Growth Facility, and the accompanying Poverty Reduction Strategy Papers (PRSPs), while preaching ownership and participation, were contradictory, given the conditionalities associated with them.

DEJAN SAHOVIC (Yugoslavia) said that the Economic and Social Council, particularly in its spring meetings with the World Bank, IMF and the WTO, must coordinate implementation of the targets set forth in Doha, Monterrey and Johannesburg.  The funds and programmes of the United Nations should create adequate mechanisms and guidelines for the timely implementation of those goals.

He said his country had adopted and had been implementing macroeconomic and market-oriented reforms.  However, it still needed international assistance during its transition to sustainable growth and economic stability.

Yugoslavia was wholly committed to European integration and regional stability, he said.  It sought in the near future to sign the Stabilization and Association Agreement with the European Union and was participating actively in numerous regional initiatives.  It was currently chairing the South-East European Cooperation Process.  Yugoslavia had also signed free-trade agreements with Hungary, Bosnia and Herzegovina and The former Yugoslav Republic of Macedonia.  Free-trade talks were also under way with neighbouring countries.

JACQUES BOISSON (Monaco) noting that the Monterrey Conference had put the human dimension back into development, stressed that the international community must now show determination in taking concrete steps to implement the commitments made there.  The reforming texts that had come out of that conference made it a duty of the Second Committee to make them a daily reality, especially for the most underprivileged.  They were the basis, the roots of the tree of economic development that would bear the fruits of sustainable development.

Monaco had long been making financial contributions to multilateral United Nations programmes and supported the work of non-governmental organizations headquartered there, he said.  The principality had been working with various organizations and local institutions on microfinancing in an initiative that targeted small communities that had realistic goals in keeping with their basic needs.  The new partnership concept for development was familiar to Monaco because of its own small size and few resources.

Noting the central place of the United Nations in development, he said that during the current session, delegations must show that they could establish a structure that could carry out mandates laid down at high levels of government.

MOVSES ABELIAN (Armenia) said that during his country’s post-Soviet era transition to a market economy, it had made significant efforts to create a favourable macroeconomic climate.  However, the further strengthening of financial stability remained Armenia’s key concern.  Its continued cooperation with international financial organizations -- particularly the Bretton Woods institutions, which had helped with the implementation of various economic improvement programs during the last decade -- was essential.

Armenia was at an advanced stage in negotiating membership of the WTO and it had harmonized its legislative and regulatory systems in compliance with WTO standards, he said.  The country was also actively involved in the Black Sea Economic Cooperation and was a member of two regional transport improvement programmes -- the Transport Corridor Europe Caucasus Asia and the Interstate Oil and Gas Transportation Agreement.

He said that this year, Armenia would adopt a poverty-reduction programme, creating a dialogue between Government, civic groups and international agencies to ensure cooperation and transparency in decision-making and implementation.

MICHEL KAFANDO (Burkina Faso) said it had been more than a decade since the international community had established a partnership between North and South to ensure lasting sustainable development.  However, sharpening economic disparities had continued, aggravated by globalization.  For their part, developing countries had been remiss with respect to good governance, but perspectives presented by recent conferences had allowed a glimmer of hope.  However, for that to become reality, priority must be granted to eradicating poverty.

To fight poverty, the international community must understand the interaction between development and the environment, he emphasized.  The rapid shrinking of the ozone layer, the disappearance of plant and animal species, desertification and the receding forests were all alarming signs.  He stressed that eliminating the obstacles to sustainable development must be addressed by all and that the international community must commit itself fully to financing for development.

He noted that his country’s economy had been able to achieve 5 per cent growth since 1995.  Basic services had been improved and protection of the environment had become the concern of all involved in development.  However, it was important to involve the United Nations in all actions protecting vulnerable populations.

YURI V. FEDOTOV (Russian Federation) said that the most significant aspect of the Johannesburg Summit had been its adherence to the objective of sustainable development and the determination to increase joint efforts to attain it.  It was important that the decisions taken there be implemented without delay, with special emphasis on their national and regional dimensions.  It was also necessary to intensify the dialogue on the conversion of debts into environmental investments and on the reimbursement of global ecological services rendered by world ecological donors.  In addition, the decisions taken at the Monterrey Conference offered realistic prospects to enhance development assistance and increase its efficiency, he said. 

The United Nations should provide effective assistance to developing countries and economies in transition in managing the process of globablization, he said.  It was also important to promote fair international trade and a stable international financial system as the key external factors for sustainable development.  WTO membership should, therefore, be universalized, he said, adding that efforts to forecast and contain the impact of financial crises should continue.  International cooperation to prevent and eliminate corruption and money laundering should also be fostered.

Emphasizing the need to strengthen United Nations operational activities and to enhance their efficiency and practical benefits for recipient countries, he welcomed the enhanced cooperation between the Organization and the private sector.  In particular, United Nations activities in the area of the Secretary-General's Global Compact initiative should be strengthened.  He also commended intensified international cooperation in the areas of health care, particularly the struggle against HIV/AIDS, tuberculosis and malaria.

OLUSEGUN AKINSANYA (Nigeria) said that despite the Heavily Indebted Poor Countries (HIPC) Debt Initiative providing for debt cancellation for developing nations, the economies of those nations continued to be vulnerable to external factors.  Six years after HIPC’s implementation, only 18 of the 33 countries

involved had reached the “decision point” and, of those 18, just four had reached the “completion point” qualifying them for total debt cancellation.

He said that even if all donor countries earmarked the targeted 0.7 per cent of GNP toward ODA, Africa would still remain a net exporter of capital due to debt payment and servicing obligations.  African debt should be cancelled to free up substantial revenues for investment in priority areas such as poverty eradication, agriculture and social programmes.  The HIPC Initiative also be expanded to middle-income countries, he said.

Turning to desertification, he said it was second only to HIV/AIDS in its severity and harmful consequences for Africa.  He stressed the importance of the Global Environmental Facility (GEF), of which Nigeria was a member, in funding anti-desertification efforts.

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