Fifty-seventh General Assembly

Second Committee

5^th Meeting (PM)

DELEGATES TO SECOND COMMITTEE EMPHASIZE IMPORTANCE

OF FOREIGN DEVELOPMENT ASSISTANCE

Speakers Point Out Gap Between Availability and Needs

Foreign aid played a vital role in the development of poor countries lacking the capacities and infrastructures to attract investment, increase production and expand trade, the representative of Nepal told the Second Committee (Economic and Financial) as it continued its general debate this afternoon.

He pointed out, however, that there was a serious gap between the assistance that was required and that which was available.  According to the World Bank, industrial countries had provided $56 billion in official development assistance (ODA) last year, which was $40 billion to $60 billion less than the amount required to meet the Millennium Development Goals of halving poverty by 2015.

Mongolia's representative echoed that statement, stressing that pledges by developed countries to increase ODA to 0.7 per cent of gross national product (GNP) were critical to development in a time of scarce private funding.  Both donor and recipient countries should make efforts to improve the quality and effectiveness of ODA by providing untied aid, enhanced capacity for its use and improved donor aid coordination.

Similarly, Viet Nam's representative said developed countries must fully implement their commitments to development by improving market access, providing adequate ODA, as well as debt relief and technology transfer.  He called for a substantial and guaranteed increase in ODA to meet the set GNP target of 0.7 per cent as well as the mobilization of new financial resources.

The Senegal's representative stressed that ODA alone could not spur African development, but should be combined with debt relief and trade.  The cycle of rescheduling aggregated debt payments in low- and middle-income African countries must end and be replaced with fresh investments in infrastructure, health, agricultural development, environmental protection, and information technology.

Singapore's representative, referring to the effects of globalization on development, stressed the importance of good governance as a prerequisite for the equitable redistribution of globalization's benefits.  While there was no

“one-size-fits-all” formula, transparency, accountability and the rule of law were

universal elements of good governance.  However, she added that attempts to align market access and development assistance with utopian human rights, environmental and labour protection standards should be resisted.

Also speaking during this afternoon's general debate were the representatives of Ethiopia, Croatia, Cambodia, El Salvador, Bolivia, Benin, Paraguay, Suriname and Kazakhstan.

The Committee will meet again at 10 a.m. tomorrow to hear a briefing on "Sustainable Development:  Lessons Learned from the Past" and to conclude its general debate.

Background

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

Statements

ABDULMEJID HUSSEIN (Ethiopia), noting that a fall in international commodity prices could easily compromise funds earmarked for global social development programmes, said that was occurring on a national scale in Ethiopia.  A sharp drop in export prices for coffee had strained the country's budget, exacerbated the national food shortage and negatively affected Ethiopia’s debt sustainability scores under the Heavily Indebted Poor Countries (HIPC) Debt Initiative.

The Second Committee should build on the Monterrey Consensus by creating integrated approaches to finance, trade and development, he said, noting the need for concrete steps to ensure fair market access for developing nations as well as increased funds and streamlined donor assistance programmes.  He also called for the cancellation of all external debt owed by heavily indebted countries.

The Johannesburg Summit had made it clear that poverty eradication could go hand in hand with environmental protection.  Key summit outcomes for Africa included new targets for energy development in rural areas, sanitation development programmes, and biodiversity protection agreements.

MURARI RAJ SHARMA (Nepal) said that although developing countries must take primary responsibility for their own development, they could not do it alone.  Wealthy nations, who dominated the world’s markets and finances, must create a favourable global macroeconomic environment for growth and development.  In the short term, wealthy nations must pull the global economy out of recession and ensure its expansion.  The United States must seek a robust economic recovery and contain its fiscal deficit, Europe must embark on major reforms to enhance productivity and growth, and Japan must pursue monetary and fiscal policies to emerge from a decade-long stagnation.

Noting that foreign aid played a critical role in providing poor countries with the capacities and infrastructures that were vital in attracting investment, increasing production, expanding trade and accelerating development, he said there was a serious gap between what was available and what was necessary.  According to the World Bank, industrial countries had provided $56 billion in ODA last year, which was $40 billion to $60 billion less than the amount required to meet the Millennium Development Goals.  To rectify that anomaly, wealthy nations must meet ODA targets as agreed.

Debt servicing had drained the resources of poor countries, he said, adding that due to underfunding, the HIPC initiative had failed to go beyond 26 out of

42 eligible countries.  It must be fully funded to offer complete debt waivers to the least developed countries and offer substantially deeper debt relief to low-income countries.  Developed nations should be generous in providing grant assistance for poverty reduction projects to prevent further debt build-up.

IRENA ZUBCEVIC (Croatia), stressing the need for renewed commitment to the creation of a transparent, rules-based and equitable multilateral trading system, said restored momentum should be on the table at subsequent World Trade Organization (WTO) negotiations.  Full global economic integration was a substantial challenge, requiring continued foreign direct investment (FDI) and overseas development assistance (ODA).  FDI was vital in expediting development in poor nations, while both FDI and ODA were necessary for balanced development.

She said that under its current president, her country's Permanent Representative to the United Nations, the Economic and Social Council (ECOSOC) had continued to strengthen that organ's role as well as joint efforts with the International Monetary Fund (IMF), the World Bank, the private sector and non-governmental organizations (NGOs).  The ECOSOC's Ad Hoc Group on African Countries had adopted resolutions to encourage and facilitate peace-building in conflict-ridden areas, she added.

OUCH BORITH (Cambodia) noted that the Second Committee was gathering in a rapidly changing and fragile world that had been seriously threatened by terrorism, the negative side of globalization, global warming and drastic climate change.  Those negative forces underlined a common vulnerability and a sense of urgency for more effective and sustainable development as well as the eradication of poverty.

The depressing economic situation affecting Europe, the United States and Japan would have serious negative effects on the developing world, especially the least developed countries, he noted.  One year after the disastrous 11 September attacks, there was a far larger downside risk in the world economy due to geopolitical factors, trade turbulence, debt and fiscal imbalances, corporate governance scandals and natural disasters.

The main thrust of the Millennium Declaration was the war on poverty, which should be all-pervasive and encompassing, he said.  For developing countries, one of the main challenges was how to deal with the irreversible process of globalization and make it work to their advantage.  Driven by advances in information and communications technology, increased mobility of capital, reduced trade barriers and cheaper international transactions, globalization was an unprecedented reality leaving no country untouched.

SUSAN GOH (Singapore) said that the intense debate about and relentless criticism of globalization proved that it was still very much alive.  The question was why some countries had been more successful than others in seizing the opportunities and benefits of globalization.  That answer depended in large part upon how different countries had adjusted to take advantage of the opportunities presented and the quality of their public governance.

In the present global economic slowdown, she said, the continual struggle against counter-protectionism had become even more pressing.  The international community needed to work collectively to ensure market access for all goods and services.  However, free trade would not be enough for the poorest countries, and development assistance directed towards capacity-building and training was still necessary.  Conversely, attempts to align market access and development assistance to utopian human rights, environmental and labour protection standards should be resisted.

Globalization was not itself a solution to underdevelopment, she said.  Good governance was a prerequisite for the equitable redistribution of its benefits and thus warranted as much attention as trade reform and poverty eradication.  While no “one-size-fits-all” formula existed, transparency, accountability and the rule of law were universal elements of good governance.  National governments bore the primary responsibility for progress, but good governance required inclusive, participatory processes at both national and international levels.  In its efforts to improve human resources capacity, reduce economic and environmental vulnerability and enhance the quality of life, the Second Committee should focus on how the recommendations of the recent international development conferences could be implemented.

O. ENKHTSETSEG (Mongolia) said that a clear and firm consensus had emerged on the pressing need to implement the commitments laid out in the Millennium Development Goals and reaffirmed at Doha, Monterrey and Johannesburg.  The central challenge now was to ensure speedy and sustainable implementation at both the national and global levels.  Mongolia had launched a national “Good Governance for Human Security” programme and the Government had resolved to ensure sustained economic growth by reinvigorating and encouraging domestic industry, rehabilitating the banking sector, upgrading living standards and ensuring equitable social and educational opportunities.

Yet internal policies might not be enough to ensure sustained economic growth in an era of growing interdependence, she said.  A new, more equitable system of international governance and multilateralism was required.  The United Nations was uniquely placed to provide for global governance in the economic and social areas, allowing the South equal participation in the decision-making process.  Additionally, the WTO's policies should actively level the playing field in the global trade regime, improving market access for developing countries.  Tariff peaks and escalations restricted export opportunities, and the abolition of all trade barriers would result in a larger development boost for developing countries than all ODA and debt relief granted so far.

However, in a time of scarce private funding, she said, ODA remained instrumental in supporting the development efforts of less fortunate countries.  Pledges by developed countries to increase their ODA to 0.7 per cent of gross national product (GNP) were critical, as were efforts in both donor and recipient countries to improve ODA quality and effectiveness through the provision of untied aid, enhanced capacity for its use and improved donor aid coordination.  Finally, the external debt situation of many developing and middle-income countries exceeded sustainable levels, according to the HIPC framework and greater flexibility in the eligibility criteria for debt relief should be extended to those States.

LAURA CRUZ RUBIO (El Salvador) expressed concern about the economic difficulties facing developing countries, particularly in Latin America, as a result of globalization.  While international cooperation was needed now more than ever, turning the clock back on globalization was not a viable solution, she said, adding that world economic integration continued to create opportunities for mankind’s well-being.

El Salvador recognized the importance of United Nations conferences in efforts to meet development goals, eliminate poverty and promote multilateral economic cooperation, she said.  The country was particularly interested in disaster aid and management programmes for developing nations.  It also supported the preparatory work for the upcoming World Summit on the Information Society and the potential benefits that connectivity and knowledge could offer free societies.

NGUYEN THANH CHAU (Viet Nam) said the international community should avoid the risk of seeing developing countries become further marginalized from the economic mainstream, which would threaten the economic security and long-term interests of all.  Globalization should be reshaped to make it more equitable and beneficial to people in the developing world.  The international financial architecture should be reformed to ensure financial resources for development, maintain economic stability and prevent financial crises.

Eradicating poverty, achieving sustainable development and bridging the development gap must be placed high on the international agenda, he continued.  Developing countries should undertake effective development strategies in striving to achieve development goals.  Commitments and measures made at Doha, Monterrey and Johannesburg conferences marked only the first important steps.  More painstaking and overwhelming global efforts would be needed to bridge the gap between commitments and actions.

He stressed that developed countries must fully implement commitments to development through better market access, adequate ODA, debt relief and technology transfer.  He called for a substantial, guaranteed increase in ODA to meet the set GNP target of 0.7 per cent and the mobilization of new financial resources.  Developing countries should also be granted preferential trade treatment to facilitate access for their goods to developed markets.

EDUARDO GALLARDO APARICIO (Bolivia) said the current global financial, economic and trade systems were not equipped to meet the challenge of halving the number of people subsisting on less than a dollar a day by 2015.

Emphasizing that trade created vast opportunities for development, he called on nations to embrace bilateral and multilateral free trade, and to slash tariffs, subsidies and non-tariff barriers.  Developed nations, in particular, must unilaterally open their markets to LDCs.  The heavily indebted countries needed the chance to reduce their debt to sustainable levels and redirect funds into development.

Bolivia also considered science and technology development a top priority, he said.  It avidly supported and promoted the work of next year's conference on Information Technology, particularly regarding developing countries.

FERNANDE HOUNGBEDJI (Benin) said that despite what had been said at Monterrey, Johannesburg and elsewhere, the international community had still not accomplished the minimum needed to pull several countries out of the poverty treadmill.  It could no longer allow itself the luxury of allowing one part of the world to remain marginalized, ravaged by disease and poverty.  The fight against poverty remained the absolute priority through which all efforts should be directed.

She recalled that seven commitments had been made in an action programme arising from last year's conference on development in the LDCs.  They included good national and international governance; reinforcement of human and international capacities; the establishment of production capacities to benefit from globalization; strengthening trade and protecting the environment; and mobilizing financial resources.  However, after more than a year, contributions were coming not from donor countries, but from funds and programmes of the United Nations.

Financial resources were required if the international community's support for LDCs was to rise from the realm of theory, she stressed.  That assistance would increase per capita growth rates in LDCs and lead to sustainable development.  Financial and technical support would also help LDCs to reinforce the productive capacities of their rural sectors.  Furthermore, the potential of South-South cooperation, especially in agriculture and energy, had still not been fully explored.

ELADIO LOIZAGA (Paraguay) stressed his country’s interest in macroeconomic policies, particularly those concerning next year's international ministerial meeting in Kazakhstan on Cooperation on Transport of Transit Goods.  Paraguay, like other landlocked countries, had to absorb additional operating and transport costs for the shipment of goods.

He said the Kazakhstan meeting would provide an excellent opportunity to find cost-effective alternatives and solutions for landlocked nations, which should receive preferential treatment to offset steep transport costs.  Paraguay had also offered to host next year's regional conference on transport for landlocked nations, he added.

IRMA LOEMBAN TOBING-KLEIN (Suriname) said her country was one of the small island developing States, with almost all its economic activities, including agriculture, husbandry, fishing and oil drilling taking place in the estuary area, which was vulnerable to the rising sea level.  Suriname could not afford to lose that area, and was actively taking part in discussions in that respect with similar States.

She said small island and lowland countries had to join together in bringing their vulnerability to the attention of the international community.  They had to unite in preparing their countries for flooding of their lands and the loss of valuable agricultural areas.  That would occur if no action were taken to protect the land due to the weak economies and lack of technical staff in most small island developing States.

The entire United Nations family, she said, must unite in preventing disasters that would accompany the rising sea level.  Member States must ratify United Nations conventions, especially on Climate Change, Biodiversity and the Law of the Sea.  Governments, civil society and non-governmental organizations must implement recommendations in Agenda 21 and the Johannesburg Declaration.  All nations must promote the implementation of the outcomes of major conferences in Doha, Monterrey, Madrid and Johannesburg, with special focus on poverty eradication, and doubling of official development assistance, to halve the number of poor people by 2015.

MADINA B. JARBUSSYNOVA (Kazakhstan) said that globalization remained a vital topic for discussion given the continually growing number of global problems requiring global solutions.  The United Nations had stepped up to develop the principles and practice of multilateralism and was a unique instrument for dealing with critical global problems that required the collective resources and cooperation of all countries.

Among the issues of particular concern to Kazakhstan, she said, were the integration of economies in transition into the world economy, the environment and sustainable development.  The country's.efforts to implement economic reforms had been showcased through recognition by the Council of the European Union and by the

United States, of Kazakhstan as a country with a market economy.  On the second front, Kazakhstan's Government attached great significance to cooperating with the United Nations on water resources management, the rehabilitation of environmental disaster areas in the Semipalatinsk region and the Aral Sea, the preservation of biodiversity and the prevention of soil degradation and desertification.

She said her country was interested in strengthening its cooperation with the United Nations to improve regional transportation infrastructure within the Special United Nations Programme for the Economies of Central Asia.  By reason of their geographical location, Kazakhstan and other landlocked developing States faced acute problems of access to world transport routes and markets.  She welcomed the decision by the General Assembly to convene an international ministerial meeting to consider that issue and the opportunity to host that meeting in August 2003.

PAPA LOUIS FALL (Senegal), applauding the recent restructuring plans announced by the Secretary-General, said it was necessary to assess the initial steps to implement the Organization’s development commitments.  He pointed in particular to Africa and the LDCs, saying that since 1986, the African continent had failed to reverse its economic marginalization.  The New Partnership for Africa’s Development (NEPAD) aimed to seek a way out of that.

While noting that African development strategies must focus on ODA, debt relief and trade, he stressed that ODA alone could not spur the continent’s development.  There was a need to examine seriously the insupportable debt burden crippling the economies of low- and middle-income African countries.  It was also important to end the rescheduling of aggregated debt payments and to replace them with fresh investments in infrastructure, health, agricultural development, environmental protection, and information technologies.

Through increased trade and private sector infrastructure development, Africa could meet the Johannesburg Summit’s goals, he said, calling for more open markets and increased production capacity as well as greater FDI in Africa.  He also stressed that the Convention to Combat Desertification was a key instrument in the struggle to end Africa’s serious shortage of water and arable land, urged greater participation by the United Nations Environmental Programme (UNEP) and other environmental entities in carrying out its goals.

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