Fifty-ninth General Assembly

Second Committee

12^th Meeting (PM)

ECONOMIC COMMITTEE TOLD OF PROGRESS BY UN-HABITAT IN EASING

problems of water supply, sanitation in slum areas

 

Agency Said to Need Increased Funds to Reach Millennium

Goals; Debate Concludes on Global Conference on Development Financing

(Issued on 15 October 2004.)

Increased contributions from Member States were helping to improve the lives of millions of slum dwellers worldwide, but more funds were needed to achieve the human settlement targets outlined in the Millennium Development Goals, the Second Committee (Economic and Financial) was told this afternoon.

Anna Kajumulo Tibaijuka, Director of the United Nations Human Settlements Programme (UN-Habitat), introduced reports of the Secretary-General on the coordinated implementation of the Habitat Agenda and on the implementation of the outcome of the United Nations Conference on Human Settlements (Habitat II) and strengthening of the United Nations Human Settlements Programme.

She said that, thanks to initial funding of $15 million, UN-Habitat’s Water and Sanitation Trust Fund had financed the Small Towns Water and Sanitation Initiative for the Lake Victoria region in Eastern Africa and similar plans were under way for the Mekong River Delta in Asia.  But if increased to $51 million, the Fund could attain and sustain within two years the millennium targets of providing water and sanitation to 1 million people in the small towns around Lake Victoria, one of Africa’s most important lakes and a source of the Nile.  In Africa, 72 per cent of urban citizens lived in slums, and that percentage was expected to rise, particularly among women, due to insufficient sanitation and water procurement.

She said UN-Habitat had forged new partnerships and strengthened existing ones among governments, regional bodies, non-governmental organizations and bilateral assistance agencies.  Their aim was to implement the Habitat Agenda and achieve the Millennium Development Goals of halving the number of people without access to safe drinking water and sanitation by 2015 and improving the lives of at least 100 million slum dwellers by 2020.  Despite stepped-up funding from Member States, the Programme’s coffers for special purposes continued to outstrip general purpose funding by more than four to one.  This had made it difficult for the Programme to plan financial commitments and implement its work plan around strategically focused goals.  She suggested that multi-year financial support frameworks, such as one already operative with the Netherlands, could ease the funding shortfall.

Ms. Tibaijuka noted that UN-Habitat was closely collaborating with the Commission on Sustainable Development on water, sanitation and human settlements issues.

Earlier this afternoon, the Second Committee concluded its discussion on the outcome of the International Conference on Financing for Development, with speakers emphasizing the need to increase official development assistance (ODA) and foreign direct investment; stimulate financial reform in developing countries; open up markets; improve coherence in international financial policies; relieve unsustainable debt; and ensure developing-country participation in international financial institutions.

Focusing on the current trend to seek innovative sources of financing for development, speakers also emphasized that such financing should not “crowd out” other commitments, especially ODA, and that developing countries be consulted in considering them.

Several speakers also noted that each country was primarily responsible for its own economic and social development, but enhanced cooperation between the United Nations, the Bretton Woods financial institutions and the World Trade Organization (WTO) were vital for sustainable growth.

Also speaking today were the representatives of Morocco, Viet Nam, Brazil (on behalf of the Rio Group), Nepal, Mongolia, Algeria, Venezuela, Peru, United States, Thailand, Republic of Korea, Ethiopia, Gabon, Côte d’Ivoire, Indonesia, Ukraine, Japan, Bahamas (on behalf of the Caribbean Community), Lebanon, and Azerbaijan.

The Committee will meet again at 10 a.m. on tomorrow, 15 October, to conclude its debate on implementation of the outcome of the United Nations Conference on Human Settlements (Habitat II) and of the twenty-fifth special session of the General Assembly.

Background

The Second Committee (Economic and Financial) met today to conclude its discussion of the follow-up to and implementation of the outcome of the International Conference on Financing for Development (for background information, see Press Release GA/EF/3079 of 13 September).  It was also expected to consider implementation of the United Nations Conference on Human Settlements (Habitat II), and of the twenty-fifth special session of the General Assembly.

Before the Committee was a report of the Secretary-General on implementation of the outcome of the United Nations Conference on Human Settlements (Habitat II) and strengthening of the United Nations Human Settlements Programme (document A/59/198).  It states that governments have increased support for the United Nations Habitat and Human Settlements Foundation and the Technical Cooperation Trust Fund, set up within the framework of the Special Human Settlements Programme for the Palestinian people.  Also, the United Nations Settlements Programme (UN-Habitat) Global Urban Observatory has been strengthened as a worldwide monitoring and learning network to assist countries and cities in collecting, analyzing and using urban indicators and statistical data.

In addition, the report says, UN-Habitat has strengthened the United Nations cooperation with women, young people, local authorities and all other Habitat Agenda partners in its shelter and sustainable human settlements development, disaster mitigation and rehabilitation activities.  Moreover, UN-Habitat and World Bank activities in the Cities Alliance have placed urban poverty and slums on the international agenda.  However, multilateral and bilateral assistance for housing and urban infrastructure of about $4 billion annually plays only a limited role in meeting the housing and basic service needs in developing countries.  While major gains were registered during 2000-2003 in implementing the United Nations Human Settlements Programme by engaging Habitat Agenda partners, human and financial resource constraints have limited better partnership results.

The report encourages governments to include water, sanitation and human settlements in national development plans, and to increase contributions to boost implementation of the Habitat Agenda, the Declaration on Cities and Other Human Settlements in the New Millennium, as well as the relevant commitments of the Millennium Declaration, particularly improving significantly the lives of at least 100 million slum dwellers by 2020.  It also encourages governments and financial institutions to contribute generously to the Technical Cooperation Trust Fund and the Special Human Settlements Programme for the Palestinian people, so that the UN-Habitat can help alleviate long-term deterioration in the human settlements of the occupied Palestinian territory.  Governments should also support the participation of partner groups from developing countries at the World Urban Forum, to be held in Barcelona, Spain, in 2004.

Also before the Committee was a report of the Secretary-General on coordinated implementation of the Habitat Agenda (document E/2004/70); a note by the Secretary-General on coordinated implementation of the Habitat Agenda (document A/59/382); and the report of the Economic and Social Council (A/59/3) (Chap. I).

ABDELLAH BENMELLOUK (Morocco), noting that the Monterrey Consensus was an integrated framework for international action to guarantee the finances needed for development, said the international community must find ways to accelerate implementation of the Monterrey commitments.  All stakeholders must be mobilized in creating conditions to increase the official development assistance (ODA) and the foreign direct investment (FDI), stimulate financial reform in developing countries, open up markets, improve coherence in international financial policies, and ensure the effective participation of developing countries within international financial institutions.  The Monterrey process would be strengthened by the recent trend to seek innovative sources of financing for development, which would help eradicate poverty and mitigate the effects of globalization on development.

NGO DUC THANG (Viet Nam) noted that two years after Monterrey, the pledges made at the Conference had yet to be realized.  In some regions, development finance was dwindling and insufficient ODA levels would make attainment of the Millennium Development Goals (MDGs) difficult.  The developing world’s debt remained unsustainable and trade barriers impeded the free flow of goods and services between developing and developed countries.  The disparities between the world’s richest and poorest nations were wider than ever.  While each country should take the primary responsibility for its own economic and social development, it was impossible to solve the problem of poverty without joint efforts by all countries and international organizations, or without enhanced cooperation between the United Nations, the Bretton Woods institutions and the World Trade Organization (WTO).

In order to attain the MDGs, it was estimated that in addition to the $50 billion in the ODA that was currently available, another $50 to $100 billion was needed, he said.  Although the ODA flow had increased in recent years, the available amount still fell far short of development requirements in many countries.  The World Bank should consider all alternatives and new concepts and instruments that favoured the allocation of new resources and provided a larger degree of flexibilities that could increase the overall financial sources for developing countries.  There was also a need to enhance the universality of the multilateral trading system by increasing WTO membership.  However, the accession requirement for new WTO members should not exceed the level of commitments undertaken by existing members.

RONALDO MOTA SARDENBERG (Brazil), speaking on behalf of the Rio Group, stressed the need to shore up and implement programmes funded by ODA to ensure attainment of the Millennium Development Goals and the success of the Monterrey Consensus. It was important to develop innovative financing mechanisms and to study the relevant proposals made by the technical group formed during the September 2004 World Summit to Fight Hunger and Poverty. During its most recent Cusco Summit, the Rio Group had begun hammering out proposals for financing mechanisms that would enable governments to expand public investment, particularly in infrastructure.

The report of the Commission on Private Sector and Development regarding the stimulation of private-sector investment and development capacity should be closely analyzed, he said. Implementation of the July package, which addressed the need for industrialized nations to slash agricultural subsidies and barriers to developing countries’ products, was essential to the development process. The Rio Group called for greater debt relief initiatives to enable highly indebted poor nations to sustain external debt loads while fostering economic growth and poverty reduction.

DURGA SUBEDI (Nepal) said that while individual developing countries were primarily responsible for social and economic development, national efforts could make no real headway unless they were supported by development partners. Developing countries should set their own national agenda and priorities, but conditionalities on loans or grants by multilateral and bilateral donors were often problematic.  Foreign aid should be linked to national priorities.

Emphasizing the inseparable relationship between poverty reduction and the Millennium Development Goals, he welcomed the slight increase in the ODA from $52.4 billion in 2001 to $68.5 billion in 2003.  However, the developed-country target of earmarking 0.7 per cent of gross national product for aid to developing countries and 0.15 per cent to 0.2 per cent to least developed countries (LDCs) had not been met.  In addition, the debt problem in the LDCs should be addressed promptly.  The international community should also focus on opening up markets and lowering taxes to help developing countries achieve economic growth and sustainable development.

CHOISUREN BAATAR (Mongolia) said his country cooperated closely and actively with bilateral and multilateral donor partners to strengthen economic growth and address market and institutional weaknesses.  Implementation of its Economic Growth Support and Poverty Reduction Strategy and the World Bank’s new Country Assistance Strategy for Mongolia were important steps for achieving the objectives of the Monterrey Consensus.  There had also been significant progress in securing development financing through bilateral agreements.

He said the Millennium Challenge Account was very important for his country, one of the first to meet its eligibility criteria.  Mongolia would conduct wide public consultations with civil society and the private sector at the subregional and sector-specific levels to elicit public views on the greatest obstacles to economic growth and the role of development assistance in overcoming them.  Such consultations were aimed at helping Mongolian officials prepare for detailed development projects funded by the Account.  Still, the international community needed a broader, longer-term strategy to secure more financing for development.  The Committee should take into account studies by the World Institute for Development Economics Research on innovative sources of financing.

DJIHED EDDINE BELKAS (Algeria) said the Monterrey Consensus had given rise to many hopes that developmental obstacles would be overcome, with the main goal of eradicating poverty and ensuring sustainable development.  It was vital to implement fully the commitments made to strengthen the coherence of the international financial and trading systems.  Efforts should also be made to facilitate emigrant remittances, which played an undeniable social and economic role.

The best way to ensure financing for development was to respect the commitments made at Monterrey and elsewhere to meet the Millennium Development Goals by 2015, he said.  In 2005, the international community would be reporting what it had done since 2002 to implement the Monterrey Consensus, but agreed development goals would not be met unless the necessary decisions in favour of viable financing for development were made.

FERMIN TORO JIMENEZ (Venezuela) said the Monterrey Consensus had laid the foundation for a global plan for poverty eradication and sustainable development. Political will and macroeconomic coordination were needed for a massive transfer of resources to developing countries.  In recent years, aid to the developing world had been relatively small and developing countries’ external debt continued to be a serious obstacle to development.  They needed sufficient external aid to bring about positive socio-economic change.  The Monterrey Consensus had not identified specific commitments by stakeholders to channel sufficient resources for the needs of developing countries.  Greater alliances were needed between donors and receivers of development aid.

South-South cooperation must be strengthened, he said, adding that the quality of aid from donor countries must be put to more effective use.  The Committee should address those concerns, with a focus on next year’s High-level Dialogue for Financing for Development.  New plans of action were needed to give continuity to the Monterrey Consensus and donor countries should make good on their pledges to earmark 0.7 per cent of their gross domestic product for the ODA. Venezuela had created an international humanitarian fund in connection with the goals set forth during the recent World Summit against Poverty and Hunger.  It would continue working with the United Nations to reform the international financial and trade systems to give developing countries a greater voice and role in decision-making and norm-setting. 

CLAUDIA ALEMAN (Peru) stressed that the international community must continue to open up its markets, increase the FDI and reform the multilateral trading system so that developing countries could institute good governance, create jobs and continue to grow economically.  Restricted public spending in developing countries called for the effective use of resources so that their populations could benefit from globalization.  Peru had decided to establish innovative financial mechanisms to strengthen governance, invest in infrastructure and eliminate poverty.  However, it was also vital that the international community assist developing countries by fulfilling the commitments made in the Monterrey Consensus.

JANE HULL (United States) said poverty eradication was a fundamental interest of her country which strongly supported and reaffirmed the Monterrey Consensus.  The United States had exceeded HIPC Debt Initiative standards by cancelling 100 per cent of eligible bilateral debt and had called for measures to enhance debt sustainability, including increased use of grants by multilateral development banks.  It had increased ODA by 50 per cent.  In addition, the President’s $15 billion emergency plan for HIV/AIDS relief was the largest international initiative ever to target a single disease.  The Millennium Challenge Account, $1 billion in 2004, would help support efforts by poor nations to govern justly, invest in their own citizenry and encourage economic freedom.  Sixteen countries, eight from sub-Saharan, Africa had qualified for funding under that Account.

Leaders of the Group of eight industrialized nations had committed to extend the sunset date of the HIPC Debt Initiative and to consider measures to further enable poor countries to achieve debt sustainability, she continued.  The United States was working with immigrant groups, developing countries and its Group of 8 partners to reduce the transaction costs of sending remittances, which totalled approximately $100 billion.  Some developing countries had made significant strides to strengthen governance and institutions.  For example, Nicaragua, Nigeria, Georgia and Peru had formed partnerships with the G-8 to promote transparency and combat corruption.  The United States was also working with countries in the Middle East and North Africa to support initiatives for economic reform and growth.

KHUNYING LAXANACHANTORN LAOHAPHAN (Thailand) stressed the need to make the international financial system more transparent and more representative of developing countries.  In particular, global governance must be improved by strengthening developing-country participation in international economic decision-making and norm-setting, especially in drawing up financial standards, rules and regulations, as well as conducting financial surveillance.  Greater coherence, coordination and cooperation were needed between the United Nations, the Bretton Woods institutions, the WTO and other relevant stakeholders.

Emphasizing also the need to strengthen developmental efforts at the regional, subregional and national levels, she said Asian countries had been cooperating to develop the regional bond market in answer to Asia’s rising demand for investment capital.  At the domestic level, innovative sources of development funding had been introduced, and the Government had supported small- and medium-size enterprises to bring about broad-based growth and prosperity at the grass-roots level.  Thailand had initiated and implemented innovative campaigns to encourage productive activities, a new wave of entrepreneurs, as well as specialized skills and knowledge.

KWON JAE-HWAN (Republic of Korea) said that while it was important to study new sources for financing for development, traditional financing sources should not be overlooked.  The Republic of Korea had continued expanding ODA, donating more than $33 million in 2003.  If the international community continued to steadily increase aid, it could go a long way in breaking the vicious cycle of poverty and putting countries on track for stable economic development.  Greater transparency was needed in national and international governance to facilitate economic development in ODA-recipient nations.

The Republic of Korea, in cooperation with the United Nations, would host the Sixth Global Forum on Reinventing Government in Seoul next year, he said.  The Forum would focus on working towards participatory and transparent governance, and its success would be instrumental to making the Millennium Development Goals a reality.  The Republic of Korea had also recently begun to provide financial assistance to the Economic and Social Commission for Asia and the Pacific (ESCAP) to facilitate the implementation of capacity-building projects for external debt management.

TSEDAY JEMANEH (Ethiopia) said her country was instituting policy reforms to create an enabling domestic environment for resource mobilization, including the strengthening of public expenditure policy and management, the tracking of poverty-related expenditures and the reform of the tax system in support of the private sector.  Foreign direct investment also played a crucial role in the development efforts of Ethiopia and other developing countries.  However, the flow of foreign funds to least developed countries like Ethiopia remained low.  Developed countries should provide their private sectors with the incentives needed to invest in the least developed countries.

She urged also developed countries to make good on their pledges to earmark 0.7 per cent of gross domestic product (GDP) for ODA, noting that the real increase in aid this year was just $2.3 billion.  The quality of ODA must be improved and development cooperation should be dictated by developing countries’ own priorities and programmes.  Ethiopia welcomed the efforts of some developed countries to provide direct budget support and encouraged others to follow suit since this was the best way to ensure that developing countries had ownership of development priorities.  Speedily implementation of the Rome Declaration on harmonization and simplifying donor procedures could also improve the quality of aid.

GREGOIRE LOMBA (Gabon) said the international community would need to double the current level of ODA to $100 billion per year, honouring its commitments to provide 0.7 per cent of gross national product, if developing countries were to attain the Millennium Development Goals.  Studies had shown that the targets would not be met by 2015 at the current ODA rate, especially in Africa, which would need nearly a century to attain the Goals.

Progress towards honouring the commitments in the Monterrey Consensus had been inadequate, especially those related to establishing coherence and consistency in international institutions and mobilizing resources.  However, the current trend to seek innovative sources of financing for development should aim at supplementing existing resources, rather than replacing them.  The 2005 High-level Dialogue on financing for development should take the opportunity to strengthen the commitments made at Monterrey.

SERGES EBA (Côte D’Ivoire), noting that the  mobilization of national and international resources for development continued to be a major concern, said his country had followed the example of other developing countries in trying to meet the Monterrey objectives by drawing up a poverty-reduction strategy.  However, it had not been able to implement that strategy due to the crisis of the last two years.  National resources were a fraction of the funds needed by developing countries to fulfil development objectives.  They needed access to external financing, but ODA was lagging.  Net private capital flows had reached $70 billion in 2003, but there were vast inequalities in allocation and investment.  Private investors were not rushing to enter Africa due to armed conflict and instability in many countries.

The eligibility requirements of the HIPC Debt Initiative were too rigid, limiting the Initiative’s scope, he continued.  Greater flexibility was needed so that more countries in crisis situations could benefit from eligibility and use available resources to fight poverty and build infrastructure in education, health and services.  The Monterrey Consensus had called for the development of innovative financing resources.  International solidarity to push that process forward was encouraging, and it was hoped that that would result in donor countries making good on their pledges to commit 0.7 per cent of gross domestic product for ODA.

PRAYONO ATIYANTO (Indonesia) said that prospects for meeting the Millennium Development Goals would improve if an enabling environment was established and made operational.  Developing countries were attempting to mobilize resources for development, but more attention should be paid to rural development.  Efforts to establish micro-enterprises should be enhanced through microfinance and microcredit.  Financial aid was vital in attaining the Millennium Development Goals, and ODA had greatly benefited developing countries throughout the years, but they should be allowed more space to implement domestic policies based on national consensus.

Noting that new sources of development financing had recently been the subject of intergovernmental debate, he said care should be taken that other commitments, especially ODA, were not crowded out by alternative financing.  Those sources should supplement developing-country efforts to develop sustainably, and developing-country voices should be reflected in considering them.

He said that the international community must increase its effort to resolve the debt problem, and that more committed action was need to open up international trade, including efforts to create a universal, rule-based and non-discriminatory multilateral trading system.

SVITLANA HOMANOVSKA (Ukraine) noted that each country was primarily responsible for its own economic and social development, but stressed that national development efforts must be supported by an enabling economic environment.  At the Monterrey Conference, the international community had confirmed that trade was an important vehicle for development, but the universality of the multilateral trading system must be further enhanced by increasing the WTO membership.  However, accession requirements for the new WTO should not go beyond the level of commitments made by existing members.

Ensuring the stability of the international financial system was also vital for sustainable development in developing and transition countries, she said.  Of prime importance was enhancing the stability and predictability in financial markets, preventing financial crises, strengthening the infrastructure of national financial and banking sectors.  Efforts should continue to fine-tune the international financial architecture with an eye to achieving greater transparency and increased participation by transition economies in the decision-making process.

KAZUO SUNAGA (Japan) said he saw no clear relationship between the extent of public resources and the level of economic and social development in developing countries. While the total population of East Asian and South-East Asian countries was much larger, they had received only two thirds of the amount of ODA received by sub-Saharan African countries over the past 25 years.  Despite that difference, the contrast in economic and social development on the two continents during the past quarter of a century was striking.  That suggested that ODA alone, whatever the amount, could not solve all the difficulties facing developing countries, but that other elements were indispensable, notably trade and investment.  According to the experiences of several East Asian countries, it was clear that economic growth, supported by trade and investment, contributed greatly to poverty reduction.

Stressing that efforts to promote trade and investment should be both multilateral and bilateral, he said it was vital that multilateral trade negotiators agree on an international trade regime that was more favourable to developing countries.  Coherence and consistency of the international monetary, financial and trading systems could not be overlooked in any discussion of development financing.

PAULETTE BETHEL (Bahamas), speaking on behalf of the Caribbean Community (CARICOM), said the grouping was doing its part to make the objectives set forth in the Monterrey Consensus a reality through concrete actions of coordination and cooperation.  CARICOM members were adhering strictly to domestic policy prescriptions and norms set by international financial institutions, demonstrating good governance, enhancing basic socio-economic infrastructure and opening their economies to international trade and investment.  They had mobilized the bulk of resources needed for sustainable development.

CARICOM’s efforts to integrate effectively into the global economy were inhibited by an international economic environment that was ill-prepared to give small island developing States the attention they needed, she continued.  The CARICOM called for further consideration of those issues within the framework of the financing for development process, and stressed the need for differentiated support and targeted assistance to small island developing States and other vulnerable groups of States.  Doing so would reinforce efforts within the context of next year’s 10-year review of the Barbados Programme of Action.

MAJDI RAMADAN (Lebanon), underscoring the need for political will in implementing the Monterrey Consensus, said ODA was insufficient, foreign direct investment was unevenly divided between developing countries, and the total net transfer of resources had been negative for 2002 and 2003.  In addition, developing countries were striving to achieve the Millennium Development Goals in 10 years, while, at the same time, honouring their debt.  A satisfactory solution to that problem must be found for heavily indebted, low- and middle-income countries.  Debt cancellation should be considered as an additional source of financing for development.

HUSNIYYA MAMMADOVA (Azerbaijan) said conflict, war and civil strife remained a major obstacle to tangible progress in developing countries.  Conflict settlement, peace and security were needed for the development process to move forward.  Azerbaijan was committed to achieving the objectives of the Monterrey Consensus and was channelling its limited resources into poverty eradication, infrastructure development and improvements in health, education and services.  Priority had also been given to structural and fiscal reform.  Preferential market access for least developed countries and landlocked developing countries, and the elimination of trade-distorting procedures were crucial if those nations were to attain the Millennium Goals.

There was a huge gap between the amount of ODA allocated and the amount required for poverty eradication and sustainable development, she continued, underscoring the important role of partnerships and the private sector in that process.  Studies and proposals put forth on the development of innovative sources of financing were encouraging and new methods merited further consideration.

Reports on Human Settlements

ANNA KAJUMULO TIBAIJUKA, Director of the United Nations Human Settlements Programme (UN-Habitat), introduced reports of the Secretary-General on the coordinated implementation of the Habitat Agenda (document E/2004/70) and on the implementation of the outcome of the United Nations Conference on Human Settlements (Habitat II) and strengthening of the UN-Habitat (document A/59/198).  The UN-Habitat had forged new partnerships and strengthened existing ones among governments, regional bodies, non-governmental organizations and bilateral assistance agencies.  Their aim was to implement the Habitat agenda and achieve the Millennium Development Goals of halving the number of people without access to safe drinking water and sanitation by 2015, and improving the lives of at least 100 million slum dwellers by 2020.

The Director said that last month the Second World Urban Forum held in Barcelona, Spain, attracted 4,200 participants from many parts of the world, and addressed such concerns as water and sanitation services for the world’ poor, improving urban governance and public participation in local decision-making, land and property rights, including security of tenure, cultural diversity, and financing slum upgrading.  The Forum also discussed the challenges of urbanization of Africa, where 72 per cent of urban citizens lived in slums, a percentage expected to rise if the Millennium Development Goals were not achieved.

During the Forum, she added, UN-Habitat and the cities and local governments group signed a cooperation agreement to address the global challenge of tackling urban poverty and improving human welfare and socio-economic prospects in the coming decades, as called for in the United Nations Millennium Declaration.

In that regard, she continued, UN-Habitat’s Water and Sanitation Trust Fund had initially received $15 million from Canada and Norway, enabling it to launch a Small Towns Water and Sanitation Initiative for the Lake Victoria region in eastern Africa.  Similar plans were under way for the Mekong River Delta in Asia.  If fully funded, the $51 million initiative would enable the international community to attain and sustain within two years the millennium targets of providing water and sanitation to 1 million people in the small towns around Lake Victoria, one of Africa’s most important lakes and a source of the Nile.

She said UN-Habitat was closely collaborating with the Commission on Sustainable Development, which was focusing its work on the thematic cluster for 2004-2005:  “Water, Sanitation and Human Settlements”.  The Commission had noted that cities and towns would absorb 95 per cent of the world’s expected population growth over the coming decade and that growth would increase poverty, particularly among women, because of insufficient sanitation and water procurement.  The Commission had suggested that the United Nations Development Assistance Framework (UNDAF) and the World Bank’s poverty-reduction strategy give priority to immediate water, sanitation and slum upgrading, to abate and ultimately reduce poverty levels.

She said that, as noted in the Secretary-General’s reports, while Member States had increased contributions to UN-Habitat, annual special purpose contributions continued to outstrip general purpose funding by more than four to one, reaching $37.8 million in 2003.  That had made it difficult for the Programme to plan financial commitments and implement its work plan around strategically focused goals, she said, and suggested that multi-year financial support frameworks, such as one already operative with the Netherlands, could ease the funding shortfall.  The report also noted that UN-Habitat’s recently created Slum Upgrading Facility was an innovative way to raise funds for grant and technical assistance for slum upgrading.

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