ECOSOC/6119
30 June 2004
Brussels Action Plan for Poorest Countries Presents Key for Unlocking “Prison of Poverty” Economic and Social Council Told
Increased Aid, Investment, Debt Relief, Preferential Trade among Issues Raised by Some 50 Speakers in High-Level General Debate
NEW YORK, 29 June (UN Headquarters) -- International plans such as the Brussels Programme of Action for least developed countries presented humankind with the key to unlocking the prison of poverty, the Economic and Social Council was told today as it opened the general debate of its 2004 high-level segment.
Yet, no one party could turn that key alone. An optimal balance of external assistance and domestic commitment to establishing the bases for sustainable growth must be achieved if the world’s poorest countries were to eradicate poverty, agreed the representatives of some 50 governments and international organizations addressing the theme of mobilizing resources for poverty eradication in the world’s poorest countries.
Responsibility for implementing policies conducive to fostering growth in the least developed countries (LDCs) was shared by both the world’s most and least developed nations, speakers affirmed. That meant donor countries must honour commitments to increase flows of official development assistance (ODA) and foreign direct investment (FDI), and expand existing debt relief, preferential trade and technology transfer initiatives. For their part, LDCs must improve their economic and financial environments, implement structural and institutional reforms and mobilize resources for investment domestically.
Caught in a “poverty trap”, the LDCs had seen slow growth and low income limit domestic savings, which had, in turn, limited increases in investment and economic growth, stated United Nations Under-Secretary-General and High Representative of the Secretary-General for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States Anwarul K. Chowdhury.
To combat that situation, he said, LDCs must continue domestic efforts for reform and reorganization by improving efficiency, transparency and accountability, and facilitating the emergence of governance structures and business-friendly environments. The international community, meanwhile, must fulfil its commitments to establish an enabling environment -- not only through increased and better quality development assistance, but also through increased investment, debt relief and free and fair trade.
Stressing the negative impact on development and debt sustainability of overdependence on a limited group of commodities, United Nations Under-Secretary-General for Economic and Social Affairs José Antonio Ocampo said all countries should commit to better assist LDCs in their efforts to diversify their production and exports, especially by providing free market access to their exports and removing tariff and non-tariff barriers.
Also urging industrial countries to eliminate subsidies and other trade distorting measures, he urged LDCs to utilize financial resources effectively to build capacity in manufacturing and other sectors, in cooperation with their development partners.
The LDCs should focus on building human and institutional capacity, fostering people-centred policy frameworks, promoting good governance, building productive capacities and mobilizing more financial resources, affirmed Ahmad Bin Abdullah Al-Mahmoud, Minister of State for Foreign Affairs of Qatar, on behalf of the “Group of 77” developing countries and China. Donor countries should continue providing free market access to the products of LDCs, removing tariff barriers and clearing the way for those countries to compete with others on an equal footing.
On behalf of the European Union, Tom Kitt, Minister of State for Development Cooperation and Human Rights of Ireland added that sound economic policies, solid democratic institutions responsive to the needs of people and improved infrastructure comprised the bases for sustained economic growth, poverty eradication and job creation, while freedom, peace, domestic stability, respect for human rights and the rule of law, gender equality, market-oriented policies and an overall commitment to just and democratic societies were also essential.
Yet, as Immanuel Ngatjizeko, Director-General of the National Planning Commission of Namibia, warned, the challenges faced by LDCs could be “too enormous”. Many LDCs were either landlocked, small islands or emerging from conflicts. Such constraints barely left room to create a domestic enabling environment for sustainable development. Furthermore, LDCs faced even greater present and future challenges in the HIV/AIDS pandemic and other infectious diseases.
Representing one of the few LDCs to have achieved the rate of growth in gross domestic product (GDP) recommended at Brussels, and having also seen that growth falter, Sam Kutesa, Minister of State for Investment in the Ministry of Finance, Planning and Economic Development of Uganda, said the lesson to be drawn from his country’s experience was that sustainable poverty reduction required more than development assistance. Least developed countries required a fair share in global trade, and such should be the focus of the Brussels Programme of Action.
Also addressing the Council today were Ministers from Finland, Tanzania, Burundi, Haiti, United States, Benin, Italy, Russian Federation, Lithuania, Azerbaijan, France, Japan, Ukraine, Cambodia, Nigeria, United Kingdom, Switzerland, Mozambique, Angola, Cuba, Poland, Sierra Leone, Germany, Indonesia and Mauritania, and representatives of Belize (on behalf of the Caribbean Community), China, Republic of Korea, Australia, United Arab Emirates, Tunisia and Morocco.
The observer from the Holy See also spoke, as did representatives of the World Tourism Organization, Inter-Parliamentary Union, World Bank, United Nations Educational, Scientific and Cultural Organization (UNESCO), United Nations Population Fund (UNFPA), Food and Agriculture Organization (FAO), World Food Programme (WFP), International Federation of Red Cross and Red Crescent Societies, NGO Forum Coalition, NGO Civil Society Forum of New York, Association mauritanienne pour le bien-être et le secours de l’enfant et de la mère and NGO Forum Coalition of Kelowna, Canada.
In other business, the Council agreed at the top of the morning meeting to hear statements by non-governmental organizations on the list contained in document E/2004/84, as well as by the Association for Democratic Initiatives.
The Economic and Social Council will reconvene at 10 a.m. on Wednesday, 30 June, to continue its high-level segment on resource mobilization and enabling environment for poverty eradication in the least developed countries. It is expected to conclude the high-level segment during the afternoon session, with the adoption of a Ministerial Declaration.
As the Economic and Social Council began the general debate of its 2004 high-level segment, it had before it a report of the Secretary-General on resources mobilization and enabling environment for poverty eradication in the context of the implementation of the Programme of Action for the Least Developed Countries for the Decade 2001-2010 (document 2004/54) addressing the question of resource mobilization -- which is central to the efforts to fight generalized poverty in the world’s 50 least developed countries (LDCs) -- in the context of the Brussels Programme of Action. It analyzes the challenges and prospects of resources mobilization, the creating of an enabling environment and the role of partnerships for the implementation of the Programme of Action.
As LDCs face numerous challenges in mobilizing resources for poverty eradication, the report lists a number of issues that require particularly urgent attention. Creating an enabling environment is necessary in order to unleash the domestic potential of LDCs for investment and sustained growth. Official development assistance (ODA) is required as a necessary first step to help build the conditions from which increased economic activity can take off. Official development assistance should be provided in the form of grants so that the debt burden does not increase.
The international community should reinforce its commitment to create a global policy framework that helps in generating resources, the report states. All policies and decisions should be made within a coherent framework of mutually supportive objectives, so that ODA does not become a dependency, debt-service agreements are sustainable, commodity’s prices are more stable and exports are not hindered by trade barriers and high subsidies, particularly in developed countries. Also, partnerships, including public-private partnerships, must be promoted at all levels in order to support LDCs’ efforts to generate resources.
Special provisions should be made for those LDCs that are in conflict situations or are emerging from one, according to the report, as 80 per cent of the world’s 20 poorest countries have suffered a major civil war in the past 15 years. Such instability is a major obstacle to making the business climate attractive to investors. At the same time, the lack of access to resources can undermine the basic mechanisms of governance and contribute to political disintegration and open social conflicts. Also, aid, targeted at the poorest countries, could contribute towards conflict prevention.
The report recommends that LDCs should, among other things, mainstream the objectives and priorities of internationally agreed targets, such as those of the Brussels Programme of Action and the Millennium Declaration, into national development strategies and policies. They should enhance the dialogue between national governments and other development partners, leading to the formulation and implementation of the poverty reduction strategy papers.
It is also recommended that LDCs improve the efficiency and transparency of domestic administration and public spending, increase accountability, promote effective governance and the rule of law, and invest in the education and health sectors. They should also promote guaranteed property rights through the creation of formal property systems for the poor and the landless, and expand and deepen financial intermediation systems, especially microfinance institutions. Avenues for expanding the share of domestic revenue derived from direct taxation of income and profit should be explored, together with the harmonization and modernization of the tax collection system.
The report recommends that the international community should, among other things, urge donor countries to increase ODA flows to LDCs to the level of 0.2 per cent of their gross national product (GNP) and emphasize that ODA to all LDCs be given in the form of grants and call on donors to harmonize ODA with national development strategies and priorities. The international community should also urge donor countries to provide adequate and timely grants to support long-term post-conflict recovery and reconstruction efforts in LDCs emerging from conflict.
It was also recommended that the international community accelerate implementation of the Heavily Indebted Poor Countries (HIPCs) Initiative for eligible LDCs and reduce, and wherever possible cancel, all multilateral and bilateral debt completely. The international community should also ensure that economic shocks and commodities-related uncertainties are more realistically factored into HIPCs’ projections, and consider extending to other borrowers the Commodity Hedge Instrument, currently available to all non-concessional or International Bank for Reconstruction and Development (IRBD) borrowers of the World Bank.
The international community was further recommended to build the capacity of the productive sectors and economic infrastructure, including, in particular, the promotion of small- and medium-sized enterprises in LDCs through targeted ODA, and assist LDCs’ efforts to diversify away from dependence on commodities.
All countries should be called upon to provide free market access to the exports of LDCs and improve the implementation of market access preferential schemes like the “Everything but Arms” Initiative [European Union] and the “Africa Growth and Opportunity Act” (AGOA) [United States]. Subsidies and other protectionist measures in developed countries should be eliminated, the report recommends, and trade development of LDCs should be promoted through the implementation in the current multilateral trade negotiations of a set of special and differential treatment (SDT) measures that are more contractual, operational and predictable.
The potential for South-South cooperation in expanding trade opportunities, capacity-building and debt relief should be explored, and more and better partnerships should be developed among Governments, multilateral institutions, the private sector and civil society, with special focus on resource mobilization and technology transfer.
Statements
Presenting the Secretary-General’s report to the high-level segment, JOSE ANTONIO OCAMPO, Under-Secretary-General for Economic and Social Affairs, said that it was entirely appropriate that the Council address the special problems of least developed countries as the international community prepared to review the progress towards the goals contained in the Millennium Declaration. The Brussels Programme of Action recognized that in order to achieve the target of “substantial progress toward halving the proportion of people living in extreme poverty and suffering from hunger by 2015”, the LDCs would have to attain gross domestic product (GDP) growth rates of at least 7 per cent per annum and increase the ratio of investment to GDP to 25 per cent. Although those countries as a group had grown faster than other developing countries in recent years, only 7 out of 45 countries for which data were available, had registered a real growth rate of 7 per cent or more, however. Given current trends, most LDCs were unlikely to reach the set benchmark.
Among the factors hindering development in LDCs, he mentioned debt, commodities, ODA and the special situation of countries at risk of conflict. On the first one of those, he said that some successes had been scored in reducing the debt burden in several countries under the HIPCs Initiative and, so far, 10 LDCs had reached completion point, benefiting from a greatly reduced debt burden, while a further 11 had reached decision point. However, only 32 of the 50 LDCs were eligible to participate in the HIPCs. Also, serious concerns remained whether HIPCs would be able to service their remaining debts, even after full provision of debt relief. Indeed, several such countries that had reached completion point had yet to achieve debt sustainability.
It was clear that a more systemic analysis of ability to repay was needed before loans were approved, he continued. The new debt sustainability framework being developed by the World Bank and the International Monetary Fund (IMF) was a welcome step in that direction. In countries where policies were sound, but the indebtedness called debt sustainability into question, lending should be provided on concessional terms, or in the form of grants rather than loans. Overall, there should be a significant shift in ODA flows towards grants and away from loans to counteract large or mounting debt.
Turning to the second concern, overdependence on a limited group of commodities, he said that fluctuation in commodity prices and consequent volatility of export earnings had had a serious negative impact on development and debt sustainability. Serious consideration should be given to the links between commodity prices and debt. On the other hand, all countries should commit to better assist LDCs in their efforts to diversify their production and exports especially by providing free market access to their exports and removing tariff and non-tariff barriers, especially for agricultural products. Industrial countries should also eliminate subsidies and other trade distorting measures. The least developed countries, for their part, should utilize financial resources effectively to build capacity in manufacturing and other sectors in cooperation with their development partners. Furthermore, international commodity agreements deserved renewed consideration.
External finance was essential to help LDCs escape the trap of low income and slow growth leading to poor investment, he said. It was necessary to increase foreign direct investment promotional programmes and use ODA and technical assistance to build the capacity and conditions to enhance foreign and domestic investment. It was essential to meet the overall ODA target of 0.7 per cent and the LDCs’ specific target of 0.15 per cent of gross national product (GNP). Also, while maintaining a high level of support to investments in human development, a renewed emphasis on the creation of production and trade capacities was required.
In extreme cases, the very lack of development undermined the basic mechanisms of governance and contributed to political disintegration, instability and sometimes open social conflicts, he continued. Eighty per cent of the world’s 20 poorest countries had suffered a major civil war in the past 15 years. Breaking that cycle, and establishing or re-establishing the environment conducive to economic growth and development required specific coordinated efforts in those countries by many actors. Special measures needed to be undertaken for LDCs emerging from conflict.
In that regard, he said in conclusion, the Council needed to be further strengthened to tackle those issues actively. It must build on the new role it had established in mobilizing international support to African post-conflict countries with the ad hoc advisory groups on Burundi and Guinea-Bissau. The Council could also turn its convening and analytical capacities to help anticipate future threats to peace and stability and stave off those threats through the integrated and coordinated action of the United Nations system.
Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States ANWARUL K. CHOWDHURY said a partnership for development, had been laid out in the Brussels Programme of Action. Given living conditions in the LDCs -- characterized by severe, mass poverty, weak human assets and a high degree of economic vulnerability, as well as prevalent conflict situations and natural disasters -- the key element for implementation had been identified as availability of financial resources for investment and creation of an indispensable policy and regulatory environment.
During the first three years of the millennium, he added, there had been some growth in the real gross domestic product (GDP) of the LDCs as a group. Significant differences among LDCs continued to be seen, however, with some LDCs performing well and others very poorly. Among those LDCs performing well, sustainability remained the critical issue. Yet, in the period 2000-2002, only seven countries had achieved the 7 per cent growth rate target set at Brussels, while the annual average growth rate for 22 least developed countries remained less than half the target rate, and that in a further 13 actually declined.
Least developed countries were caught in a “poverty trap”, he stated, where slow growth and low income limited domestic savings, in turn limiting increases in investment and economic growth. If current economic and social development trends continued, the majority of LDCs would be unable to achieve the Brussels goals by 2010, which would impact negatively on the achievement of the Millennium Development Goals) by 2015. The LDCs must continue domestic efforts for reform and reorganization through improving efficiency, transparency and accountability and facilitating the emergence of governance structures and business-friendly environments.
Yet, he stressed, the creation of an enabling environment also required mutually reinforcing international relationships between LDCs and their development partners. The international community must fulfil its commitments, not only through increased and better quality development assistance, but also through increased investment, debt relief and free and fair trade. Thus, although a 7 per cent increase in aggregate net resource flows to the group had been seen in 2002, more than two thirds of that increase had gone to only four LDCs. The quality of ODA delivery also had a major impact on effectiveness. Aligning donor assistance and simplifying and harmonizing donor requirements would contribute to reducing transaction costs and enhance aid effectiveness. Another major improvement in aid quality would result from a medium- to long-term ODA flow commitment, reducing uncertainty and unpredictability in the yearly allocation of ODA.
Other areas for further action included the speedy and effective implementation of the HIPCs Initiative, he added, combined with bilateral debt cancellation. Distorting subsidies and high peak tariffs in industrial countries should be eliminated and preferential schemes for LDCs expanded. LDCs should facilitate the transfer of remittances through the formal financial system. South-South cooperation also had the potential to open up additional sources of resource flows for LDCs, he noted, while the third round of negotiations for the Global System of Trade Preferences (GSTP) bore great promise, if LDCs seized that window of opportunity and avoided further marginalization in international trade.
ADMAD BIN ABDEULLA AL-MAHMOUD, State Minister for Foreign Affairs of Qatar, on behalf of the Group of 77 developing countries and China, said that the Group attached paramount importance to the implementation of the Brussels Action Programme and to putting such measures into tangible deeds and coherent national policy frameworks. The Council could play a major role in mobilizing international potential and exploring the best avenues for implementation of those goals, as well as addressing the challenges that hindered achievement of the Programme’s objectives in a timely manner.
He said that, while welcoming some improvement in terms of ODA flows and initiatives undertaken to enhance global market access for the exports of the least developing countries, prospects for improvement would still fall short, in light of the persistently negligible share of LDCs in world trade, insufficient foreign direct investment, overreliance on basic commodities, and limited external debt relief. Together, those had challenged the achievement of sustainable economic growth in the LDCs. The Group, therefore, reaffirmed the significance of implementing the Brussels plan and all other internationally agreed development goals.
Achievement of the goals laid out in that Programme required the implementation of several commitments made by the LDCs and their development partners, he said. Those concerned: building human and institutional capacity; fostering a people-centered policy framework; promoting good governance; building productive capacities; and mobilizing more financial resources. The problem of a high level of external indebtedness, however, continued to hinder economic performance. The Group emphasized the need to assist LDCs to take some necessary measures, through the promotion of genuine development partnerships, including with civil society and the private sector.
Meanwhile, he urged donor countries to continue providing free market access to the products of LDCs, removing tariff barriers and clearing the way for those countries to compete with others on an equal footing. He underscored the significance of the continuation, by donor countries, of according the LDCs the technological and technical support and other resources necessary for assisting them in meeting the Brussels goals. He reminded participants that the Group spared no effort in supporting international endeavours to assist countries emerging from armed conflicts, ensuring external debt relief for the heavily indebted poor countries, and increasing foreign direct investment (FDI) flows consistent with international initiatives.
Speaking on behalf of the European Union and associated States, TOM KITT, Minister of State for Development Cooperation and Human Rights of Ireland, said that sustainable development of LDCs was at the heart of the Union’s development activities. Having hosted the Third United Nations Conference on Least Developed Countries in Brussels in 2001, the Union had a special sense of ownership of its outcome and remained strongly committed to the achievement of its objectives.
Continuing, he expressed deep concern that many LDCs, particularly in sub-Saharan Africa, were not making substantial progress towards the achievement of the Millennium Development Goals and other internationally agreed development goals. If current trends persisted, the number of people living in extreme poverty in the LDCs would increase from 334 million in 2000 to 471 million in 2015. By that time, assuming current positive progress in Asia continued, the LDCs would be the major locus of global poverty.
The Millennium and Brussels Declarations had established a results-oriented and time-bound agenda and a political framework for international action, he said. Current donor practices provided for co-development with partner countries through nationally owned and driven planning processes, including country-led and participative poverty-reduction strategies. Good governance was essential for sustainable development. Sound economic policies, solid economic policies and democratic institutions responsive to the needs of people and improved infrastructure were the basis for sustained economic growth, poverty eradication and job creation. Freedom, peace, domestic stability, respect for human rights and the rule of law, gender equality, market-oriented policies and an overall commitment to just and democratic societies were also essential.
Gender equality was a goal in development, he said. No serious strategy for achieving those goals as a whole could fail to address women’s empowerment as a central concern. Another fundamental requirement was peace and security. On 25 May, Africa Day, the African Union had launched the Peace and Security Council in Addis Ababa. The Union warmly welcomed the establishment of that new institution. On its part, the European Union had established an African Peace Facility to help build African capabilities for addressing and resolving conflicts. The Union intended to continue providing political and financial support to advance the search for peace in the Sudan, Somalia, Ethiopia-Eritrea, the Great Lakes region, northern Uganda, Central African Republic, Liberia, Sierra Leone and Côte d’Ivoire.
Another acute concern was the advance of HIV/AIDS, he said. The Union had been instrumental in establishing, financing and promoting the effectiveness of the Global Fund to Fight AIDS, tuberculosis and malaria. As the resources devoted to the fight against HIV/AIDS increased, it was important to create coordination and avoid duplication of efforts, and the Union endorsed recent efforts in that regard. He also welcomed recent positive developments in relation to the provision of anti-retroviral drugs at affordable prices to the world’s poorest countries.
Regarding threats to the global environment -- a common concern of all countries -- he said that LDCs were acutely vulnerable to a variety of natural shocks and disasters. The Union was committed to supporting the LDCs’ efforts in environmental protection in the context of sustainable development.
Turning to development finance, he noted that net aid inflows to the LDCs as a group had expanded by 36 per cent between 2000 and 2002. That upward trend was linked to the effort of donors to concentrate international assistance more on the poorest countries. The share of total ODA disbursements going to LDCs had risen to 28 per cent in 2002. More needed to be done, however. In 2002, Union ODA had risen by 5.8 per cent in real terms, reaching 0.34 per cent of Union gross national income. That amounted to $29 billion, or approximately 50 per cent of global ODA. The Union was also working to make the use of ODA more effective. It aimed to make a substantive contribution to the Second International High-Level Forum on Aid Effectiveness in Paris in 2005. The Union also supported progress at international level on further untying of aid beyond the recommendations of the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD).
The overall share of LDCs exports in world trade must increase substantially, he said. By themselves, those countries had for the most part not been able to harness globalization to their development and had not been able to take full advantage of new market opportunities. The Union was implementing the commitment to provide duty and quota-free access to all products from the LDC. Preferential imports from LDCs under “Everything but Arms” Initiative and other programmes amounted to $10 billion. Such a commitment should also be implemented by all developed countries. As South-South trade represented an increasing share in world trade, advanced developing countries should also provide duty- and quota-free access to LDCs exports.
The Union was also committed to better integrating the LDCs in the multilateral trading system and strongly supported their facilitated accession to the World Trade Organization (WTO). In April 2004, the Union had adopted an action plan on agricultural commodity chains, dependence and poverty and a proposal for a Union-Africa partnership on cotton. The Union supported an effective and specific solution within the WTO agricultural negotiations, which should aim at elimination of all forms of export support on cotton. The Union had now agreed on the reform of its own cotton regime, which would reduce its trade distorting impact.
IMMANUEL NGATJIZEKO, Director-General of the National Planning Commission, Namibia, noting that since adoption of the Brussels Programme the number of LDCs had increased, expressed concern that the current gross domestic product (GDP) growth rate in many of those countries was even worse than it had been in 2001. Even more worrying than the unlikely event that the Programme’s targets, as well as those of the Millennium Development Goals, would be reached on time, was the fact that if the current trend continued, the number of people living under abject poverty would increase by 2015. The major responsibility for implementing the Brussels Programme lay with the LDCs, but the challenges they faced were “too enormous”.
He said that those challenges included a lack of capacity to mobilize domestic resources. In addition, many LDCs were either landlocked, small islands or emerging from conflicts. Those challenges hardly left room for creating a domestic enabling environment for sustainable development. Also, LDCs faced commodity price volatility, agricultural subsidies and other trade distorting policies. Development partners had committed themselves to mobilizing external resources through increased ODA, FDI, debt relief, coherence and harmonization of aid policies, among others. Yet, resource shortfall was the major impediment to the implementation of the Brussels plan.
Perhaps the greatest challenge facing the LDCs, as well as other developing countries, especially in sub-Saharan Africa, was the HIV/AIDS pandemic and other infectious diseases. It was not possible, therefore, to talk about sustainable development if that problem was not seriously addressed. The countries heavily affected by that pandemic deserved the attention and generous assistance of the international community. As the international community prepared to undertake a review of implementation of the Millennium Development Goals, he hoped that today’s high-level segment would contribute to that process by accelerating the mobilization of adequate resources and creating a better environment, at all levels, for implementation of the Brussels Programme.
PAULA LEHTOMÄKI, Minister for Foreign Trade and Development of Finland, said that more efforts were needed to meet the internationally agreed goals on the LDCs. The Programme of Action and the Brussels Declaration clearly emphasized that the main responsibility for sustainable development of LDCs lay with those countries themselves. It was equally clear, however, that partnership and shared responsibility were the basic principles of addressing those countries’ needs. Regional and South-South cooperation were also important. Intensified coordination, improved cooperation and appropriate institutional arrangements were important. Resource mobilization was an essential element in those deliberations. The issues of investment, production, trade, debt and aid could not be discussed in isolation.
Special attention should be given to linking poverty eradication to gender equality goals, she continued. Women were disadvantaged due to widely spread biases in the economy, some of which related to control over productive resources. Addressing gender differences through microeconomic measures could greatly facilitate the implementation of the poverty eradication goals. Another important problem was the spread of HIV/AIDS. Particular emphasis should be given to fighting the root causes of the disease.
Globalization should not cause further marginalization of the LDCs, she said. Their integration into the world economy demanded coherence in international trade and development policies. One of the areas requiring attention was agriculture. Capacity building and promotion of local commodities were among the priorities. The report of the World Commission on the Social Dimension of Globalization, established by the International Labour Organization (ILO) and co-chaired by the Presidents of Finland and the United Republic of Tanzania, contained concrete recommendations on strengthening the social dimension of globalization. Its most significant contribution was the importance it allocated to employment and decent work. Finland and Tanzania had also been active in the establishment of a new forum to promote more equal and balanced global governance. The Helsinki process had invited stakeholders from governmental and non-governmental sectors, academia and the private sector to discuss and identify new ways to solve global problems.
The Government of Finland had recently adopted a white paper on development policy for 2004-2007, which reaffirmed its commitment to the Millennium Declaration. Eradication of extreme poverty was the main goal of Finland’s development policy. Increased emphasis was put on policy coherence of actions in support of multilateral organizations, in the European Union context. Finland’s involvement at the country level would continue to be guided by the poverty reduction strategies of the partner countries. The Government had committed itself to increasing its ODA disbursements to 0.44 per cent of gross national income (GNI) by 2007. The aim was to reach to 0.7 per cent goal by 2010.
In conclusion, she added that to operationalize the link between trade and poverty reduction, it was necessary to make trade reforms and progressive trade liberalization part of wider, country-owned development strategies. The challenge was to improve the coherence between trade and development policies. The adoption of principles of good governance, the fight against corruption, the promotion of human rights and the introduction of mechanisms for fairer income distribution were also critical.
E.D. MAOKOLA-MAJOGO, Minister of State (Poverty Eradication), Vice-President’s Office, United Republic of Tanzania, said that the issue of resource mobilization was critical. Without the necessary financing, Africa, and the LDCs in general, would have fewer chances to make inroads in poverty eradication. A comprehensive strategy, therefore, was required. Internationally, trends in ODA should be addressed, as well as debt relief, trade openness and the issue of market access and foreign direct investment. Domestically, developing countries should examine their tax systems and ensure that there was an improved investment climate in terms of policies, institutions and the legal and regulatory environment.
He said his country had been implementing the Poverty Reduction Strategy Paper (PRSP) since 2000. In order to accomplish its objectives, his country had emphasized the need to mobilize and effectively utilize domestic resources. In 2002, it finalized the Tanzania Assistance Strategy, which was a framework for partnership in development aimed at improving aid coordination and enhancement of national ownership of the development process. Emphasis was placed on ensuring that donor support was channeled through the government budget and that the various processes were harmonized to reduce transaction costs, allow for flexibility in financing priority interventions and ensure predictability of such support. A standard assessment framework had also been development, which discouraged the creation of parallel structures in the process.
In the course of implementing the PRSP, he said his Government was continuing with its reforms to ensure that the operating environment was conducive for sustained growth, attractive to private sector investment and able to enhance the absorptive capacity, especially at community levels, for the effective and efficient utilization of resources. Efforts were also being made to ensure low cost access to credit for the poor and the formalization of property currently in the “extralegal” sector. In addition, steps were being taken to improve support infrastructure and strengthen the statistical structure necessary for monitoring progress and evaluating impact. Good governance, especially the fight against corruption, was also high on the Government’s agenda. At the same time, however, HIV/AIDS was ravaging the continent and undermining the foundations for development.
SERAPHINE WAKANA, Minister for Planning, Development and Reconstruction of Burundi, acknowledged that her country had descended into political, economic and social crisis in 1993, but affirmed that it had since committed itself to a ceasefire and peace agreement for national reconciliation. And, while implementation of those agreements had not been perfect, there had been definite steps taken by the Government to improve and stabilize the national situation. However, needs of the country and its citizens could not be met without additional flows of ODA, admission to the HIPCs Initiative and increased access to global trade and foreign direct investment flows. Noting specifically that the flow of ODA to the country had decreased dramatically during the crisis, she said the country’s level of debt had risen, while investors remained uneasy.
Thus, Burundi was grateful to the stabilization and development efforts of its international partners, she said, among them the United Nations system, which had allowed for the establishment of the Economic and Social Council’s (ECOSOC) Ad Hoc Advisory Group, and the International Monetary Fund, which had eased its customary practices. The Burundian experience had led to the following conclusions. The LDCs must redouble their efforts to improve the institutional frameworks in their countries to promote private and foreign trade and to improve the domestic investment climate. Donor countries must contribute the appropriate technical and financial resources to facilitate peace and security, and ensure the coordination and synergy of international initiatives. Customary lending mechanisms that involved conditionalities were nearly impossible for the LDCs to meet in post-crisis situations and consideration should be given to establishing a multilateral fund to redress that situation. Moreover, improving the implementation of the Brussels Programme of Action would require the establishment of performance indicators to measure a country’s progress on a comparative basis.
YVON SIMEON, Minister of Foreign Affairs, Worship and Haitians Living Abroad of Haiti, said that his country had great interest in the outcome of the brainstorming in ECOSOC on the matter of development of LDCs and eradication of poverty. Policies needed to be established to promote private investment, develop the local private sector and achieve development. Savings stimulation could lead to important results, as well as microcredit and microfinancing projects.
Adapting interest rates to the needs of small companies needed to be encouraged, he continued. Employment could be stimulated by creation of small businesses. It was important to increase the supply side of microcredit to promote sustainable development of self-employment in rural areas.
For some time now, developing countries had realized the need to encourage direct investment to strengthen competitiveness of their businesses, he said. Among the measures to promote direct investment, he listed information and technical assistance, tax advantages and market access facilitation. He also underscored the importance of strengthening the infrastructure and simplifying customs and export procedures. Despite the difficulties, his country was working to attract investment.
Turning to the issue of preferences, he said that the LDCs needed to ensure that development policies targeted rural populations. It was also desirable for developed countries to help developing countries to expand the range of targeted products by repealing tariff barriers. Of great importance was the development of partnerships, including South-South connections. All the sectors of society needed to be involved in the development efforts, including women and children. The development of private sector and promotion of small- and medium-size business was among his Government’s priorities. The country was also trying to encourage development of free trade and tourist zones, as well as organic farming centres.
He also emphasized the importance of water, sanitation and human habitats for the achievement of development goals. Management and protection of irrigation systems and promotion of water conservation needed to be advanced. Poverty eradication involved good public management and good governance at both national and international levels. The fact that ODA was still too low had a negative impact on the LDCs’ efforts to fight poverty. The solutions for development problems were not lacking -- it was the resources that were absent. The responsibility for development lay above all with the States themselves, but it was also important to implement the financial commitments made at recent international summits and conferences.
In conclusion, he informed the Council, that in July his Government was going to present in Washington D.C. a framework of interim cooperation with the international community, which clearly echoed the principles of today’s international discussions.
SAM KUTESA, Minister of State for Finance, Planning and Economic Development (Investment) of Uganda, said his country’s Poverty Eradication Action Plan, was anchored upon the four pillars of sustainable economic growth and structural transformation, good governance and security, increased incomes for the poor and improved quality of life. It had, from the outset, established strong linkages and synergies with both the Brussels Programme of Action and the Millennium Development Goals. Economic policy reforms undertaken throughout the 1990s had resulted in 7.1 per cent real gross domestic product (GDP) growth per annum from 1992 to 1999, although the rate of growth had dropped slightly to an average of 5.5 per cent per annum, as many of the initial gains from the reforms had been realized.
There was now a need to identify additional reforms to build upon the successes of the 1990s and return to 7 per cent per annum growth, he added. Moreover, due to inequitable growth, the persistence of conflict in some regions and slow improvement in human development outcomes, many challenges remained to be addressed.
The lesson to be drawn from the Ugandan experience, he stated, was that sustainable poverty reduction required more than development assistance. Least developed countries required a fair share in global trade and such should be the focus of the Brussels Programme of Action. The free flow of trade should also be accompanied by steady transfers of modern technologies from developed to developing countries. And as foreign direct investment was the main external driver for technology transfer, domestic climates even more conducive to private sector activity must be created to attract higher levels of such flows.
The investment climate for both domestic and foreign investment in Africa required further improvement, particularly in regard of sound legal and regulatory frameworks, strengthened public and corporate governance and improved access to key financial and infrastructure services. To that end, donors should assist recipient countries to put such structures in place by channeling aid to investment, enabling recipients to create employment, increase revenues and reduce debt.
WADE F. HORN, Assistant Secretary for Children and Families of the United States Department of Health and Services, said that his country was committed to eliminating poverty, expanding the circle of development and prosperity and strengthening domestic institutions to sustain that development.
The extent of global poverty was overwhelming, he continued, but it was important to remember the progress already made. From 1981 to 2001, the proportion of the global population living in extreme poverty had fallen by almost half, from 40 to 21 per cent. Gains had occurred in every region, except for sub-Saharan Africa. History also showed certain characteristics common to developed nations and sustained economic growth and development. Those characteristics were also needed in LDCs, particularly as they worked toward graduation from the LDC list. For example, they included the need for efficiency and transparency of domestic administration and public spending, accountability, effective governance and the rule of law, investment in the education and health sectors, guaranteed property rights, creation of inclusive systems and the empowerment of people, particularly women.
Promoting economic freedom was an essential ingredient for development, he said. Small private enterprises in developing countries represented the largest potential source of resources for development. The Group of 8 leaders meeting in Georgia earlier this month had endorsed an action plan for poverty eradication.
Elaborating on the United States’ efforts to combat poverty and promote sustainable growth, he said that last year his country had provided $15.8 billion in ODA. President Bush had announced the Millennium Challenge Account, which encouraged eligible countries to embrace political and economic reform. The Account would increase the United States’ ODA by $5 billion annually by 2006. To be eligible, countries must rule justly, invest in their people and promote economic freedom. They must unleash the energy and creativity needed for economic growth by opening their markets, removing barriers to entrepreneurship and reducing excessive bureaucracy and regulation. Eight of the 16 countries selected for assistance in the first year were in the LDCs group.
In 2003, 95 per cent of United States imports from AGOA-eligible countries had entered the United States duty-free. In the four years since AGOA had been launched, the exports to the United States under that initiative and its GSTP provisions had almost doubled to $14.1 billion last year. AGOA had spawned new manufacturing investment in Lesotho, Mali, Tanzania and Uganda, generating thousands of new jobs. In addition, the United States Generalized System of Preferences provided duty-free treatment for the vast majority of LDCs products.
The United States attached great importance to the successful completion of negotiations on Doha Development Agenda, he stressed. It had proposed ambitious worldwide reforms in market access, domestic support and export competition, with the long-term goal of eliminating all tariffs and other trade-distorting policies. Among other priorities, he also mentioned the need to confront the global crisis of AIDS. His country had committed $15 billion over five years to combat the disease in 14 severely affected countries.
Poverty eradication would not be accomplished solely through entrepreneurship, trade, investment and aid, he added. It was also important to strengthen domestic institutions, particularly the family, which was crucial for any long-term strategy for poverty reduction. In his proposal to Congress for reauthorizing the 1996 Welfare Reform Law, President Bush had prioritized the need to make welfare focused on the well-being of children and supportive of families. In that connection, his country joined the United Nations and the international community in celebrating this year the year of the family.
In conclusion, he addressed the issue of graduation from the LDCs list, saying that some countries on that list no longer met the objective criteria for LDCs, while others with similar conditions were not on the list. He hoped that the graduation process would resume at the current session of the Council.
ROGATIEN BIAOU, Minister for Foreign Affairs of Benin, said that the ECOSOC and the General Assembly had recognized the very low level of implementation of the Brussels Programme. He, therefore, wondered whether that Programme would not finish with the same fate as the two previous ones for the LDCs. At the same time, however, he welcomed the common will to explore ways and means to keep the LDCs afloat. Today’s high-level discussion would inspire better initiatives, keep the Programme running and encourage attainment of its objectives. It was essential to promote an enabling national and international environment to guarantee not only the mobilization of the necessary resources for implementation, but to ensure a suitable framework for implementation.
Nationally, he said that the LDCs, which had agreed to good governance and respect for human rights, had been trying to establish an institutional legal context to ensure the rule of law and encourage real cooperation for development, in close coordination with all national and local actors. That was under way in Benin. Development partners should respond to such efforts and follow the same practice of ensuring transparency and efficiency in granting assistance, both predictably and in a timely fashion. Those essential conditions would allow for the promotion and strengthening of resource mobilization.
Regarding ODA, he recalled that the Action Programme had recognized the need to reduce the dependency of LDCs, but it was imperative now to immediately increase the volume of aid. Otherwise, the LDCs could not respond to the implementation requirements due to the weakness and vulnerability of their economies. For their part, the development partners should honour their commitments. Concerning debt, it was essential that the HIPCs be implemented quickly, inclusively and efficiently and be extended to all LDCs, which must also enjoy other debt relief measures, such as a total write-off of their bilateral public debt. The Secretary-General had said yesterday that Iraq’s debt could be written off. So, too, could the LDCs debt.
With respect to trade, he said that that was an important instrument for mobilization, but, owing to unfavourable access conditions, the LDCs had not been able to take full advantage of trade. Again, the development partners should grant access to all export products of the LDCs without tariff restrictions and the imposition of subsidies. Foreign direct investment played another catalytic role in resources mobilization. There, the development partners should adopt national measures to encourage businesses to invest in the productive sectors of the LDCs. Remittances of LDCs workers living abroad was another important source of resources, which could be used for development.
ROBERTO ANTONIONE, Vice-Minister of Foreign Affairs, Italy, said his country’s priority action areas were: food security and rural development; education; access to health care and the fight against HIV/AIDS; the development of the private sector; and conflict prevention and post-conflict relief and reconstruction. In his statement, he provided a detailed review of Italy’s aims and achievements in the following areas: ODA; trade; debt relief; strengthening the role of the private sector; peace-building and post-conflict intervention; the Global Fund to Fight AIDS, Tuberculosis and Malaria; education; food security and rural development; environment; non-governmental organizations; e-government; and the Bretton Woods institutions.
On ODA volume, he said that, since the beginning of the decade, Italy had significantly increased the share of ODA disbursed to LDCs and, as a European Union member, was committed to increasing its overall ODA to 0.33 of gross domestic product (GDP) in 2006 and, consequently, its assistance to LDCs, aiming for an average share of 25 per cent of the total. Italy also fully supported a renewed commitment by the Union in addressing the challenges posed by the dependence of LDCs on commodities, particularly cotton. It had worked consistently to bring the Doha talks back on track and promote the development agenda in that round of WTO negotiations, including on the cotton issue. Concerning debt relief, Italy was now ready to cancel another $2.5 billion of HIPCs’ debt on top of the $2 billion already cancelled to date. About $1 billion of that amount would be additional bilateral debt relief cancelled beyond the “enhanced HIPCs Initiative”.
Regarding peace-building and post-conflict intervention, he said his country was committed to working jointly with multilateral organizations and developed and developing countries to reinforce and better coordinate the response capacity of the international community to the difficult challenges in post-conflict situations, taking into account the specific needs of the LDCs. Italy could offer experience gained over the years in terms of relief, rehabilitation and reconstruction activities, with the specific capacities acquired in the training of police officers and the handling of local police/security issues at the local level. The widespread activities of Italian non-governmental organizations and local authorities in post-conflict countries where Italy was engaged in peacekeeping represented an additional asset.
YURI FEDOTOV, Deputy Minister of Foreign Affairs of the Russian Federation, said that, as the majority of LDCs remained unable to attain growth rates necessary to achieve internationally agreed objectives, additional impetus was necessary. Much would depend upon the mobilization of additional external and domestic resources and the creation of a favourable environment for the achievement of development goals at all levels -- global, regional and national. In that regard, it was essential for efforts undertaken to address issues important to LDCs to be made up of an optimal mix of external assistance from the international community and measures taken at the national level by the countries themselves.
LDCs should focus on incorporating the Millennium Development Goals into their national plans and strategies, he said, including through improvement of taxation systems, overcoming administrative inefficiency, consolidating national financial markets, promoting microcredit schemes, reducing capital flight, guaranteeing property rights and attracting investments to the education and health sectors. Meanwhile, the priority task of donor countries should be to render coordinated assistance in the formulation of development policy, capacity-building and support for reforms and transformations. Also, as debt burdens remained a major obstacle to the development of LDCs, the Russian Federation reiterated its support for the HIPCs Initiative and affirmed that it would reduce the amount of those countries’ debt in conjunction with implementation of the Paris Club terms.
Eliminating poverty and marginalization also required further involvement of LDCs in world trade, he noted, in which regard his country was taking specific measures to provide a duty-free regime for the traditional export goods of LDCs. The most pressing trade-related problems, including abolishing export subsidies, reducing agricultural subsidies in developed countries, improving preferential access for poor countries and reducing or abolishing tariffs and non-tariff barriers, should be dealt with within the Doha round of trade negotiations. Finally, and under the guidance of the United Nations, a comprehensive approach to post-conflict situations should be elaborated, as overcoming poverty and marginalization would require finding a response to the large-scale challenge of global stability and world order in the twenty-first century.
SARUNAS ADOMAVICIUS, Undersecretary of the Ministry of Foreign Affairs, Lithuania, said that the LDCs had to make their own way towards progress. That could be done by building on the basics of certain experiences, best practices and an analysis of the specific country situations. Regional intervention also provided valuable examples of how to mobilize resources and coordinate actions. Lithuania had had to introduce essential economic reforms in a very short time period. Fourteen years ago, it started a painful process of economic and social transition from planned to market economy. Just 11 years later, that process could be officially deemed a success. That had been achieved by implementing the recommendations of the international community and through its assistance, which had proved essential for the formation of a government policy aimed at reducing poverty and eliminating social exclusion and all forms of inequality.
Last year, he said, Lithuania’s gross domestic product (GDP) had grown more than 9 per cent. Its economy was now recognized as one of the fastest growing in the world. That proved that the country’s nationally driven economic and social strategy, complemented by the knowledge and support of the international community, had justified itself. Lithuania’s experience in implementing reforms and building an open economy could serve as a model to other countries. Yet, its “rough and painful road to independence” had proved that any reform progress required a balanced and integrated economic, social and environmental approach, not only within individual countries, but also in the region. Regional cooperation was often the most effective means of eradicating poverty and reversing underdevelopment. Having become a member of the European Union, Lithuania had accepted new responsibilities for development.
MAKHMUD MAMED-KULIYEV, Deputy Minister of Foreign Affairs, Azerbaijan, emphasized the primary responsibility of least developed countries for the implementation of the Brussels Programme of Action, adding that the international community had a crucial role to play, as well. The LDCs’ efforts to achieve good governance and the rule of law, as well as their fight against corruption, needed to be supported. Only that way would they be able to mobilize internal resources and use international assistance efficiently. That would lead to serious progress in their sustainable development.
Effective use of natural resources deserved special attention, he continued. Making economy dependent on the export of raw materials was unacceptable, but, at the same time, it would be wrong not to pay attention to the development of extractive industries. As an oil-producing developing country, Azerbaijan was effectively using its oil reserves. He believed that if the policies were transparent and sound, the extractive industry could play a role of a locomotive driving the whole economy. Azerbaijan was ready to share its experiences with other developing countries, in particular, through providing training of foreign students.
Regarding international assistance to LDCs, he said that the main efforts should be focused on their integration into the global economy. First of all, it was necessary to assist least developed and landlocked countries in getting admission to the WTO on maximally favourable terms. It was also important to eliminate trade-distorting subsidies. Assistance to LDCs should be presented in the form of grants, which should be used for the development of infrastructure and human resources.
The special problems of LDCs emerging from conflict needed long-term development and targeted assistance, he said. Full-scale mobilization of domestic resources could not be ensured, unless peace and security prevailed. The Council should address the problems of such countries. He was sure that the outcome of the current session would play an important role in ensuring the sustainable development of LDCs.
JEAN-MAURICE RIPERT, Director-General of International Organizations in the Ministry for Foreign Affairs of France, said the major international conferences organized over the past decade had emphasized the need for solidarity in the achievement of internationally agreed development objectives. Therefore, welcoming the renewed focus on issues important to LDCs during the present session of the Council, he said the international community had set a daunting goal for itself, with the identification of poverty eradication as its primary objective. Poverty was a world scourge, to which the LDCs were the most vulnerable. However, the significant decrease of poverty in most emerging countries provided a sign of hope.
Poverty reduction could not be accomplished by decree, he cautioned, but required the cooperation of all, across all levels. At the national level, it would be indispensable to ensure that poverty reduction strategies met requirements for good governance, the establishment of economic, legal and financial frameworks, effective microcredit sectors and the promotion of sustainable rural development. At the international level, donor countries must meet their commitments with regard to ODA, both quantitatively and qualitatively. For its part, France provided the greatest amount of ODA of any Group of 8 country, and would continue to increase its allocations.
Yet, in addition to ODA, other resources and innovative financing mechanisms must be developed, he added. Therefore, his country supported such initiatives as the establishment of an international financial institution for LDCs. Furthermore, the implementation of the Brussels Programme of Action required preferential trade for LDCs, in which respect he cited the European Union’s “Everything But Arms” programme, which offered duty- and quota-free access to the European market for products originating in LDCs. Among other initiatives, he also welcomed the United Nations Conference on Trade and Development (UNCTAD) XI’s establishment of a task force on commodities and warned that the international community had a responsibility to ensure a soft landing for all former LDCs graduating from the list.
KAORU ISHIKAWA, Director-General, Unilateral Cooperation Department, Ministry of Foreign Affairs of Japan, said he came from a country that had been totally devastated 60 years ago. Nearly all of the cities had been flattened and burned down by the bombardments. It had taken more than a decade to rebuild the nation. Successful reconstruction from the post-war ashes was owed to the strenuous efforts of ordinary people. A “bottom-up” approach based on the main pillars of education, health and gender was absolutely required for the achievement of the Millennium Development Goals. Also essential was the creation of a sound national economic environment, free from corruption and fraud, in which regional revenue obtained within a country could be funneled into national investment. The participation of ordinary people was critical to nation building, which should be based on democratic elections and economic participation underpinned by a market economy.
He said his country had led the world in ODA for the last decade by shouldering alone more than one fifth of the world’s total ODA. He assured the meeting of Japan’s firm commitment to continued support of developing countries through the provision of ODA. He emphasized the importance of “human security”. That notion focused on the individual or community and promoted an approach of human resources development and community building, which empowered each individual and led to nation building. The concept was a basic policy of Japan’s Official Development Assistance Charter, revised by the Government in 2003. For its part, the international community should further develop the capacity building of the individual. Empowered people could stand on their own feet in the process of nation building, and if their number reached a critical mass, the nation would attain full “ownership”.
Drawing attention to the issue of natural disaster reduction, he said that they struck at the poorest and weakest. His country had notoriously been called a “department store of natural disasters”, as it had regularly been battered by typhoons, earthquakes, tsunamis and volcanic eruptions. The casualties, however, had dramatically decreased since the 1960s, because, while it was not possible to predict the exact timing of a typhoon, it was possible to tell people when and where to go. The world should not close its eyes to the fact that a single flood could wash away decades of nation building. He invited participants to come to Kobe in January of next year to participate in the World Conference on Disaster Reduction.
ANATOLIY A. DRON, First Deputy Minister of Foreign Affairs of Ukraine, said he shared the concern of Secretary-General and many speakers today with respect to the current trend in mobilizing resources. Implementation of the outcomes of international conferences must be accelerated, for which the Secretary-General, in his report, had laid down realistic expectations in the priority areas. Many of those had also had important practical significance for countries with economies in transition, including Ukraine. Those nations might not be LDCs, but they had some similar problems, including high unemployment and poverty levels, and the menacing spread of HIV/AIDS.
He said that such problems required additional international support aimed at accelerating those countries’ integration into the world trade system. Those countries were also potential donors and, in the near future, might considerably expand the donor base. In the joint activities of mobilizing development resources, the correct mix of efforts at the national level, in combination with external assistance, was key. The most important source of financing lay in domestic resources, which offered considerable potential for sustained poverty reduction and economic growth. Achieving structural reforms and addressing the challenges of economic and social development required the effective use of taxation. Taxation had always been at the centre of Ukraine’s leadership. Thus, the Government was steadily pursuing efforts to further privatize the economy and repatriate capital.
Enhancing oversight of financial institutions was another fertile area, he said. It would be useful to extend the United Nations Development Programme’s (UNDP) practice in that regard to countries with economies in transition, particularly the most vulnerable among them. Also critical was creation of a stable and enabling external environment for resources mobilization. And, international assistance should be concentrated. The key was to provide ODA as grants, as well as to ensure full accountability among the recipients. Greater integration of countries with economies in transition called for expanding their non-discriminatory access to world markets. Ukraine’s membership in the World Trade Organization, and the harmonizing of its domestic legislation with those norms and standards, was among the country’s priorities.
CHEM WIDHYA, Permanent Secretary of the Ministry of Foreign Affairs and International Cooperation of Cambodia said that, as an LDC, Cambodia had to overcome the challenges of poverty. Following some 24 years of war, genocide and international isolation, it also had to simultaneously rebuild all of its key infrastructure networks, institutions and human resources. Cambodia had come a long way in the last decade. During the period 1999 to 2003, the economy had grown at an annual average rate of some 6.7 per cent. The exchange rate had been stable, and inflation had been kept very low. Poverty, however, had shown only a slight decline from 39 to 36 per cent between 1994 and 1999, mainly due to the rapid pace of population growth. If past trends continued, poverty would decline to some 28 per cent by 2015, far from the goals indicated in the Brussels Plan of Action.
Focusing its domestic policy on poverty reduction, he said the Royal Government had, in March 2003, formulated its first National Poverty Reduction Strategy. It had put good governance at the core of its development priorities for the period 2004-2008. While he welcomed the achievements of the 1991 Brussels Conference, he shared the view that most LDCs would be unable to achieve the objectives of the Brussels Plan of Action. The active participation of development partners was crucial for attaining the Millennium Development Goals. The role of the rich nations in creating an enabling environment was crucial for achieving greater political stability and predictability. They should remain firm in their commitment to increasing ODA flows, and take the necessary steps to reverse the declining trend. Complex problems related to poverty eradication would require complex solutions.
MAGAJI MOHAMMED, Minister for Industry of Nigeria, said that mobilization of resources for development was a critical weapon in the war against poverty. Towards that end, his Government had put in place practical economic strategies, which would reduce poverty and enhance access to the basic needs for the country’s population. One of its poverty-alleviation programmes was the national economic empowerment and development strategy. That home-grown reform initiative sought to mobilize the country’s resources to make a fundamental break with the failure of the past and bequeath a united and prosperous nation to generations to come.
Among the country’s priorities, he listed human resources development, training and creation of institutions to enhance access to credit for rural communities. The national poverty eradication programme had been established in 2001 to coordinate the activities of federal ministries and other relevant organizations and identify areas where intervention was required.
Part of the comprehensive reform programme was the New Partnership for Africa’s Development (NEPAD), he continued. While it would be tempting to expect that the policies adopted by African governments to combat poverty would help them achieve the Millennium Development Goals, present indicators pointed to the contrary. The LDCs were unlikely to achieve the objectives of the Brussels Programme of Action. Among the factors that hindered its implementation were steady decline of foreign direct investment, the debilitating effect of external debt, the shrinking ODA resources and, lately, the economic impact of HIV/AIDS. The LDCs had a duty to assume responsibility for those matters that they could control, such as good governance, equitable distribution of national resources and transparency in the use of public funds. Given the scope of the challenges facing developing countries in Africa and elsewhere, however, the need for genuine partnership between the LDCs and the affluent nations could not be overemphasized.
The call for resource mobilization for the development of LDCs was timely and urgent, he said, but it should be conceived in the context of shared responsibility, with domestic and external components. Capital flows to the LDCs should be stable and predictable. He, therefore, called for an urgent review of the ODA portfolio. The situation where only six donors had met their 0.2 per cent ODA commitment was hardly desirable.
In conclusion, he commended the Ad Hoc Advisory Groups on Guinea Bissau and Burundi and urged the international community to recognize the special needs of post-conflict LDCs for reconstruction, rehabilitation and reconciliation. The Group on Guinea Bissau should continue its work until the presidential elections in 2005. In the case of Burundi, the Group should remain until the elections scheduled for November 2004.
MASOOD AHMED, Director-General, Policy and International Development, Department for International Development of the United Kingdom, said that the international community was falling short of what was required of it. What had to be done had been known in 2000. Both developed and developing countries had known that they had to work shoulder-to-shoulder to achieve the goals and targets. Clearly, developing countries needed to take ownership of their development. The NEPAD, with its peer review mechanism, had been an important step in that direction in Africa.
He said that the challenge for developed countries was to deepen their commitments, reform international trade and eliminate distorting subsidies. They must also provide aid more effectively to those countries that had demonstrated a commitment to poverty reduction and accountable governance. That required sustained, high-level political will and commitment. There was a chance in 2005 for them to rededicate themselves to the agenda. In many ways, that was a last chance to mobilize political will and resources, if the Millennium Development Goals were to be achieved by 2015. To do that meant challenging the way in which business was done. There were three key challenges -- mobilizing resources, using them more effectively, and making the most of the Council’s potential.
Development assistance could make a catalytic difference in countries with a real commitment to good governance progress and the establishment of accountable mechanisms, he said. The commitments at Monterrey had meant an additional $16 billion per year in assistance, and that was significant after years of long decline. Last week in Geneva, he had announced a 50 per cent increase over some years in the core funding for the UNDP, but more was needed, on a better scale than even the most well-intended donors could manage. The international community could debate the rights and wrong of that, or it could find innovative ways to address the problem. That was why his country had put forth an international financial facility proposal whose central aim was to provide money now against pledges made further down the road. That would allow financing for vital investments, building on the example of countries already reaching aid levels of 0.7 per cent.
He said, however, that that was not sufficient, so the United Kingdom was working with partners to extend the sunset of HIPCs by two years. Yet, increased aid was no substitute for more open trade. Agreement in the Doha development round could deliver substantial developments for both developed and developing countries. That process must be put back on track in Geneva this month. The absorptive capacity of recipients must also be strengthened. World Bank research had indicated that sub-Saharan Africa had the capacity to absorb up to 60 per cent more aid and use it more effectively. That gap must be plugged and resources must be made available more efficiently and better geared to sustainable outcomes.
Turning to United Nations reform, he said that perhaps Mark Malloch Brown had put it best in his address to the Executive Board in Geneva recently when he asked whether the United Nations was ready for prime time, or whether it risked allowing mobilization to flop at the point of implementation. He asked whether the United Nations needed to accelerate its own reforms, in order to be ready for success. Perhaps too few voices from partner countries had argued for more attention to be given to the quality, and not only the quantity, of aid. The Council’s reputation was far from perfect and, clearly, many felt that it could be playing a better role. The United Nations Charter said that the Council should have a key role in ensuring coherence and coordination of United Nations’ economic and social activity. The Council should aim to achieve stronger, more coordinated development efforts that reaped better results on the ground. It should also better assist countries emerging from conflict, and ensure the rights of the poorest to have a real stake in decisions that affected their daily lives.
SERGE CHAPPATTE, Assistant Director-General of the Swiss Agency for Development and Cooperation, said the situation of the majority of LDCs remained alarming. Switzerland devoted some 0.15 per cent of its gross domestic product to the LDCs. More than one third of the African LDCs were affected by conflicts. Conflicts destroyed all hope of development, as well as the financial and natural resources for development. As some of the causes of the conflicts were closely related to the lack of socio-economic development, it was essential to implement solutions that integrated efforts in the field of peace and security on the one hand, and the promotion of socio-economic development on the other. Efforts should also include security sector reform, the establishment of the rule of law and respect for human rights.
Regarding the access of LDCs products to the markets of developed countries, he said it was crucial that developed countries define processes for dismantling tariffs and for the progressive abolition of subsidies. The Generalized System of Trade Preferences must also be made more effective. He also stressed the need to reduce the debt burden affecting the LDCs. While he was pleased that the proposal to extend the HIPCs Initiative had been favourably received, it must be supplemented by a new strategy aimed at stabilizing the debt volume. The debt handling capacity of each LDC should determine the rate of concessionality of the new credits. The strengthening of institutions was needed in order for the LDCs to achieve the Millennium Development Goals. Along with indirect taxes, direct income taxes would also need to be introduced.
CESAR GOUVENIA, Deputy Director for International Organizations and Conferences, Ministry of Foreign Affairs and Cooperation of Mozambique, said that since Brussels the international community had been holding ever increasing discussions about ways and means to effectively bring about the goals set there. However, the figures available indicated that only seven countries had registered a real growth of 7 per cent or slightly more. The ratio of investment to gross domestic product (GDP) had been an average of nearly 22 per cent, and the share of LDCs in world trade had remained very low, since they continued to rely on a limited range of export goods, particularly commodities with volatile prices. The international community was far below the promised pledges, despite the fact that all major conferences, including Monterrey, Johannesburg and Doha, had reiterated the pivotal importance of paying attention to the special needs of LDCs.
Describing his country’s efforts to fight poverty, he said that in recent years, Mozambique’s economy had been registering an average gross domestic product growth of over 7 per cent, with low inflation, increasing exports, investment and ODA flows. That was starting to have an impact in the implementation of the Millennium Development Goals, with absolute poverty dropping from about 69 per cent in 1996-1997 to around 54 per cent in 2003-2004. The country had benefited from strong international and private sector interventions. With that new collaborative approach, Mozambique had been able to ensure coherence in its development drive, with a clear sense of direction, ownership and commitment.
Prevailing peace and stability had played an important role in the country’s success, he continued. Mozambique had been able to put in place sound economic policies and an attractive code of investments. Despite the impressive performance, however, Mozambique, like any other LDC, continued to experience structural problems that undermined its development efforts. One such problem related to infrastructure development. It was impossible to undertake changes in that respect based on limited domestic resources alone. That led to overreliance on international funding, particularly ODA.
He also pointed out that Mozambique, which used to have cyclical acute food shortages, now had food production surpluses in some parts of the country, and significant shortages in other areas. However, due to inadequate transport and commercial networks, it was difficult to move those surpluses to the areas in need, or even to the international market. LDCs also suffered from their reliance on commodities. The biggest challenge remained the creation of an effective and vibrant productive capacity. Nowadays, several useful initiatives, including Africa Growth and Opportunity Act and Everything but Arms, had been put in place, but most LDCs had been unable to take advantage of them, due to poor productive capacity.
In conclusion, he expressed his strong belief that the success of the implementation of the Brussels Programme depended on the shared responsibility of all stakeholders based on a strong financial support, a well-defined operational plan and effective follow-up and monitoring. While the LDCs had done their share in the area of democratization and adoption of sound policies, it was high time for development partners to pick up their share through additional, predictable ODA flows. Efforts should be made to increase foreign direct investment flows to LDCs and develop a global trading system that would truly allow those countries to benefit from market opportunities.
GEORGES CHICOTI, Vice-Minister for External Relations, Angola, said that eradicating poverty and hunger were among the main goals of his Government for the decade. The priorities included: increasing productivity in the agricultural and industrial sectors; increasing investments in the social sectors, namely health and education; and social reintegration of displaced people and demobilized soldiers. As a developing country emerging from conflict, Angola remained committed to macroeconomic stabilization, bringing into reality the IMF monitored programme to strengthen the private sector and render it more competitive. The programme also sought to foster foreign direct investment and create the best conditions for trade.
He said his Government remained committed to the fundamental principles of good governance, as reflected in the transparency and accountability with which resources resulting from oil exports continued to be managed. In order to overcome the short-term budgetary limitations, however, the Government would continue to rely on the assistance of the international community, in compliance with the provisions of the Brussels Programme. Consequently, Angola was working with developed partners and multilateral organizations for the holding of an international donors’ conference to mobilize resources for its economic rehabilitation and reconstruction.
He reiterated the importance for developed countries to honour their commitments in the areas of increasing public assistance for development, investment flows, debt cancellation and free market access. He also acknowledged the importance of strengthening the links between conception and the implementation of the Brussels Programme, as an imperative to sustaining the results achieved thus far. Declining ODA trends, however, had increasingly worsened productive capacity, investment, trade and increased debt to unsustainable levels. That phenomenon had impeded poverty eradication in the LDCs and remained the main obstacle to their development. While commending those countries that had reached 0.20 percent of ODA to LDCs, he reiterated the need for all developed partners to further support LDCs so as to allow them to take part in the multilateral trade system and hasten their integration in the world economy.
ABELARDO MORENO FERNANDEZ, Deputy Minister for Foreign Affairs of Cuba, said that urgent measures in implementation of the Brussels Programme should be taken in at least eight fields. The industrialized countries should effectively fulfil their commitment of devoting 0.15 to 0.2 per cent of their gross national product (GNP) to ODA to the LDCs, thus reversing the current downward trend. The way in which the LDCs were integrated into the world economy, particularly the multilateral trading system, must be substantially transformed. It was also essential to seek lasting and profound solutions to those countries’ external debt situation.
Among other requirements, he mentioned the need to ensure preferential market access, resolve the problem of LDCs’ dependency on primary products export and reverse the tendency leading to the loss of markets and the deterioration of the exchange levels of the LDCs, as a result of high rates of poverty and low levels of training. It was also necessary to favour the contribution of research by international institutions that helped the LDCs understand the structure of the supply chains, identifying the stages in which added value was generated. It was also important to assess the potential of LDCs to participate in those chains.
He added that it was essential to promote South-South cooperation as a complement and not a replacement of North-South cooperation. The main action that could be adopted in favour of LDCs and of other developing countries would be the exercise of solidarity.
In conclusion, he addressed the issue of consumerism in industrialized countries, saying that through a simple reduction in luxury expenses there, it would be possible to generate more than enough resources to guarantee the solution of many of the most pressing problems that affected not only the LDCs, but also the third world as a whole. With only part of the $18 billion spent every year on cosmetics in the North, it would be possible to cover the $12 billion needed to ensure reproductive health of all women on the planet. With the $17 billion used in the United States and Europe on pet food, it would be almost possible to obtain the $19 billion required to eliminate hunger in the world.
ABELARDO MORENO FERNANDEZ, Deputy Minister for Foreign Affairs of Cuba, said that urgent measures in implementation of the Brussels Programme should be taken in at least eight fields. The industrialized countries should effectively fulfil their commitment of devoting 0.15 to 0.2 per cent of their gross national product (GNP) to ODA to the LDCs, thus reversing the current downward trend. The way in which the LDCs were integrated into the world economy, particularly the multilateral trading system, must be substantially transformed. It was also essential to seek lasting and profound solutions to those countries’ external debt situation.
Among other requirements, he mentioned the need to ensure preferential market access, resolve the problem of LDCs’ dependency on primary products export and reverse the tendency leading to the loss of markets and the deterioration of the exchange levels of the LDCs, as a result of high rates of poverty and low levels of training. It was also necessary to favour the contribution of research by international institutions that helped the LDCs understand the structure of the supply chains, identifying the stages in which added value was generated. It was also important to assess the potential of LDCs to participate in those chains.
He added that it was essential to promote South-South cooperation as a complement and not a replacement of North-South cooperation. The main action that could be adopted in favour of LDCS and of other developing countries, would be the exercise of solidarity.
In conclusion, he addressed the issue of consumerism in industrialized countries, saying that through a simple reduction in luxury expenses there, it would be possible to generate more than enough resources to guarantee the solution of many of the most pressing problems that affected not only the LDCs, but also the third world as a whole. With only part of the $18 billion spent every year on cosmetics in the North, it would be possible to cover the $12 billion needed to ensure reproductive health of all women on the planet. With the $17 billion used in the United States and Europe on pet food, it would be almost possible to obtain the $19 billion required to eliminate hunger in the world.
FRANCESCO FRANGIALLI, Secretary-General of the World Tourism Organization, said that over the past decade, the annual growth of tourist arrivals in developing countries overall had been higher than the world average. Developing economies and those in transition enjoyed altogether a surplus in their tourism trade balance with the countries of the Organisation for Economic Cooperation and Development (OECD), which could not be said about many service sectors. In developing countries, international and domestic tourism created a demand for a large number of workers and led to the establishment of numerous small enterprises. That also opened up market opportunities for many people, outside the sector itself. Tourism in developing countries was exceptionally fertile ground for private initiatives; it supported the market economy and opened it up to external trade.
He said that in developing countries tourism foreign exchange earnings represented a substantial contribution to the balance of payments, financing imports, reducing foreign debt, and minimizing dependence on a single export sector, in most cases, a raw material of low value and subjected to international price fluctuations. In fact, the tourism receipts of the LDCs more than doubled in the 1990s, even if those receipts still represented a tiny share, less than 1 per cent, of the world total. The obstacles to tourism development facing the LDCs, whether with regard to air access, infrastructure, communications, training facilities, or health conditions, were formidable, they were surmountable if tourism was given clear priority in national development strategies.
Development policies should also seek to enhance the very strong links that tourism maintained with other related sectors, such as handicrafts, construction, and local fishing and farming, he said. Using tourism as a vector of sustainable development of LDCs and as an instrument for creating wealth and jobs were part of the body of commitments taken by the international community. Agreements concluded by his organization with financial institutions such as the World Bank and the Inter-American Development Bank were part of those commitments. Nevertheless, the liberalization of tourism services had not been accorded its rightful place in the trade talks. He repeated the call for the ”liberalization with a human face” of tourism and air transport, which would make it possible for the poorest countries to benefit from their competitive advantage in tourism.
JAKUB WOLSKI, Undersecretary of State, Ministry of Foreign Affairs of Poland, said that the report before the Council demonstrated the need to intensify assistance to LDCs to achieve the Millennium Development Goals and the objectives set in Brussels. It was essential to increase efforts at the national level and develop multilateral solidarity in that respect. Poland supported the international community’s efforts to mobilize resources for the LDCs. He also supported the search for new instruments for poverty reduction and development.
Turning to his country’s experience, he said a few years ago, Poland itself had been looking for ways and means of reducing its external debt. One of the most effective tools in that regard had been the debt for environment swap, which had released resources for investments in environmental protection and created conditions for foreign investment. His Government agreed that economic growth and acceleration of development in the LDCs depended, to a large extent, on their share in the international trading system. Liberalization of trade, regional integration and sector reforms should not be inconsistent with the needs of LDCs. Also important were consolidation of democracy and the rule of law, as well as strengthening of infrastructure.
Continuing, he also raised the issue of impact of failing States on the global economy, saying that it was necessary to formulate global strategy in that respect. The issue had been raised during a recent regional conference in Warsaw.
Increasing the effectiveness of development cooperation required responding to the needs of partner countries, simplification and harmonization of operational procedures and better coordination of activities. He was convinced that Poland’s membership in the European Union would give the country additional experience in that regard. Poland put great emphasis on education and development of human resources. It was prepared to share with others its experience in building democracy and meeting the challenges of transition economy.
IBRAHIM M. SESAY, Deputy Minister of Development and Economic Planning of Sierra Leone, said efforts to eradicate poverty continued to pose a daunting challenge to the LDCs and their development partners. While attention to the development of LDCs had been high on rhetoric, it had been dismally low on implementation. The Brussels Programme of Action was not on the agenda of some of the United Nations agencies. Unlike previous conferences, he hoped the conclusions of the session would be translated into concrete, deliverable actions. Fighting poverty required huge resources that could be mobilized through genuine, effective partnerships. He urged the meeting to come up with a partnership framework for the implementation of its conclusions.
Poverty problems were more pronounced in post-conflict LDCs, such as Sierra Leone, he said. Basic infrastructure remained inadequate, access to information and technology were very limited and mortality levels were amongst the highest in the world. Despite that rather gloomy picture, no one could doubt the long-term viability of his nation. The country was richly endowed with potential human and natural resources. Sierra Leone had initiated a series of interventions to reverse the negative trend caused by the conflict and was well in the process of relaunching its economy. Since 2001, it had been implementing an interim Poverty Reduction Strategy Paper (PRSP). He hoped that a draft of the full PRSP would be available by the end of July 2004. The PRSP would be the major tool for implementing major global commitments. Sierra Leone’s development policy hinged on reducing dependency on external funding for development programmes.
As a post-conflict country, most programmes were donor funded, he said. External budgetary support, which was about 85 per cent at the height of the war, was still standing at about 64 per cent. While some successes had been scored in attracting ODA for the recovery agenda, much remained to be done to attract foreign direct investment. The Government was creating an enabling environment to attract potential investors. It was also encouraging private-sector-led development of the economy. Sierra Leone had not benefited much from globalization. The capacity to harness natural resources was weak. In that regard, he called for collaborative efforts by partners and investors.
KLOKE-LESCH, Deputy Director-General of the Federal Ministry of Economic Cooperation and Development, Germany, said that LDCs were important partners in Germany’s development cooperation. The German Government had set the target of increasing the ratio of ODA to some 0.33 per cent of gross national product (GNP) by 2006. Deeply concerned by recent trends, he said the international community currently faced a number of challenges. Good governance was essential for sustainable development. Germany attached great importance to sustainable regional and national peace and security perspectives for improving an enabling environment in the LDCs, particular in sub-Saharan Africa. It had become clear that LDCs were facing major challenges on their way towards implementing the goals of the Brussels plan, including efforts to improve governance structures and enhance economic growth. There was a need to create new sources for financing the Millennium Development Goals. Recent developments in the oil market had led to dramatic increases of the oil export bills, making it much more difficult for LDCs to unfold their existing potentials for economic growth.
The German Government contributed to the challenge of reaching debt sustainability by cancelling all eligible trade debts for HIPCs and all debts arising from financial cooperation for HIPCs and LDCs. Recent experience showed, however, that the structural causes of indebtedness remained. That was why his Government supported the recent IMF and World Bank initiative to develop a framework of rules for low-income countries that would protect them from high debt levels. Following the setback at the Cancun conference, it was in the interest of the global economy that world trade negotiations were resumed as soon as possible. If the negotiations were to succeed, however, all sides would need to compromise. A balanced outcome would have to take into account widely diverging interests, as well as the strengths of the developing countries in terms of foreign trade.
DJAUHARI ORATMANGUN, Director for United Nations, Economic, Development and Environmental Affairs, Department of Foreign Affairs of Indonesia, said that while the 2001 Brussels Programme of Action constituted a strategic mechanism, which addressed comprehensively the key development concerns and goals of the LDCs, given current negative trends, it seemed unlikely that most LDCs would achieve the objectives of eradicating poverty and hunger, as well as the other Millennium Development Goals, by 2015. The present meeting must, therefore, review progress made and challenges faced since 2001 and contribute to creating an environment at the domestic and international levels that would facilitate LDCs in achieving those objectives.
Financing for development for the LDCs, he said, should begin with a comprehensive strategy to resolve issues related to trade, ODA and external debt. In regard of trade, that would mean finding solutions to the challenges facing commodity-dependent LDCs, including by ensuring freer and more predictable access to developed markets for the commodities of LDCs. Moreover, export diversification would become increasingly important for LDCs in order to enhance export revenues and financial resources, as would capacity-building through technology transfer. Overall, there was a need to establish a universal, rules-based, open, non-discriminatory and equitable multilateral trading system and to place the needs and interests of developing countries at the heart of the Doha work programme.
In regard of ODA, he continued, it meant ensuring credible and predictable medium- and long-term ODA commitments for recipient countries, as well as improving aid delivery mechanisms, including institutional capacity building for aid management, and aid effectiveness through greater policy coherence and coordination at all levels. On external debt, he noted that increased trade revenues unaccompanied by debt relief would only result in continued economic stagnation, as profits were used to service.
HAMADI OULD MEIMOU, Commissioner for Human Rights, Fight against Poverty and Integration, Mauritania, said that recent initiatives were evidence of the awareness of the urgent need to find solutions adapted to the specific challenges facing LDCs. National development depended, first and foremost, on a political resolve to strengthen and consolidate democracy and respect for fundamental freedoms, including the freedom of expression and association. Since 1991, Mauritania had had a pluralist Constitution. Today, the rule of law prevailed, as did an atmosphere of peace and stability.
He said that, in January 2001, his country adopted its first strategic framework to combat poverty. The approach had been broadly participatory, bringing together the private sector, civil society, and the country’s development partners. That approach was the strategic and operational nature of the framework, which had reflected the consensus of the State, civil society and the private sector. The effectiveness and impact of public policies, however, depended largely on new arrangements for partnerships between the State and those principal players, particularly civil society.
Accordingly, he continued, his Government had established a strategy for developing civil society, as that was seen as a crucial pillar of good governance. Also crucial had been the strengthening and consolidation of the participatory approach, as well as the promotion of human rights, good citizenship and democracy. Thus, Mauritania had developed a programme, in concert with the UNDP, to strengthen the partnership between the State and civil society on key issues, such as strengthening the rule of law, judicial reform, decentralization, public spending, and so forth, in line with the State framework for combating poverty.
STUART W. LESLIE (Belize), speaking on behalf of the Caribbean Community (CARICOM), said that severe poverty and mass hunger were all-pervasive in most LDCs, many of which were witnessing an upward trend in extreme poverty. It was disconcerting that the vicious cycle of poverty continued despite the fact that the world economy was starting to show signs of recovery. Poverty eradication required more than economic growth. LDCs should not be slipping further into poverty.
It was necessary to ensure that economic growth was also translated into poverty eradication. The analysis in the 2003 Human Development Report, which focused on the Millennium Development Goals, outlined the real story of globalization. The report illustrated that many developing countries continued to slip further behind acceptable levels of living standards. Given the existing gaps between those who had in abundance and others who had nothing, it would take about 120 years for many poor countries to attain universal primary education; 140 years to cut extreme poverty in half and 200 years to attain the goal of sanitation for all.
Among the urgently needed steps, he listed expansion of debt relief in the HIPCs Initiative; the development of a safeguard for heavily indebted poor countries to ensure that they did not return to unsustainable debt levels; the implementation of the obligation by donor countries to attribute 0.7 per cent of gross national product (GNP) to ODA; and achievement of transparency and good governance to guarantee a level playing field for all trading partners.
All partners should focus on the enlargement of their moral sensitivities, he said. Success in eradicating poverty required strong support for values other than pure economic growth; it required justice and fairness, as well as the awareness that all countries shared a common destiny. Countries of CARICOM knew that to succeed, indeed to survive, it was necessary to match the immensity of the challenge they faced with clearly focused, substantial commitment, sustained attention and deliberate action.
WANG GUANGYA (China) said that it was clear from the Secretary-General’s report that during 2000 to 2003, the growth rate of about half of the LDCs had been less than half the target rate set in the Brussels Programme and that about one third of the LDCs had actually experienced a decline in growth. On top of being handicapped by inadequate infrastructure, prevalence of diseases and geographical constraints, the LDCs today also had to contend with the twin challenges of a serious lack of investment and skilled human resources. What was more, with a steady decline in ODA, the LDCs had been increasingly burdened by heavy debt and worsening terms of trade.
Most LDCs had formulated strategies aimed at the implementation of the targets, he continued. They could not be expected to rely solely on themselves to realize the development goals. They needed the support and help of the international community in poverty eradication, capacity-building and economic development.
Aside from increased ODA, LDCs needed further debt alleviation measures, he said. Developed countries also needed to encourage their enterprises to expand investment in the LDCs; improve the external trade environment of the LDCs by honouring their promises of “zero custom duty and no quota”; and provide better market access for the LDCs.
For its part, for over 50 years China had been providing various forms of technical assistance and assistance in kind to LDCs. True to its commitment made at the first session of the China-Africa Cooperation Forum in October 2000, his Government had already cancelled the debt of 31 LDCs in Africa in the order of $1.3 billion and reduced the matured debt of some Asian LDCs. China also actively engaged in cooperation with LDCs in human resources development and had trained a great number of managerial and technical personnel from those countries. This year, China had launched negotiations on duty-free treatment of some of the African LDCs’ export commodities.
ROCH-MARC CHRISTIAN KABORE, President of the National Assembly of Burkina Faso, speaking on behalf of the Inter-Parliamentary Union (IPU), cautioned that the situations of most LDCs had not progressed adequately to meet the Millennium Development Goals by 2015. Instead they continued to be burdened by heavy debt and trade restrictions that prevented the effective export of their products to the markets of developed countries. As the essential channel through which parliamentarians of the world could communicate with each other, the IPU had addressed that situation often in the recent past and had several recommendations to make.
Developed countries must honor their commitment to allocation 0.7 per cent of gross domestic product (GDP) to ODA, he said. National ownership of poverty reduction strategies must be promoted to ensure their successful implementation. Moreover, as democracy rested upon true partnership between men and women, the disparities between the sexes in public life should be eliminated. Women played fundamental roles in many aspects of life and society and that should be duly reflected in political process and taken into account in development strategies.
The IPU would continue its work to democratize decision-making fora and bring together decision-making actors at all levels, he added. In terms of trade, IPU activities included the establishment of a permanent parliamentary conference on the work of the World Trade Organization (WTO) designed to increase transparency in that organization’s work and to ensure that developing countries were adequately represented at its negotiating table. The IPU had also worked to ensure fair trade and prices in commodity markets and to facilitate access to medicines for HIV/AIDS and other infectious diseases throughout the world.
YAHYA A. AL YAHYA, Executive Director for Saudi Arabia at the World Bank and head of the delegation, said that, while there were factors that LDCs could not change, there was room for improvement in their domestic and economic and social policy-making environments. The international community also had a great responsibility in that regard. In terms of facilitating domestic resource mobilization, high priority must be given to maintaining and strengthening domestic revenue generation, improving tax and customs administration, and curtailing expenditures. In addition, access to formal savings and loan instruments and long-term financing sources were still limited in many LDCs, yet the experience of several countries indicated that effective microcredit instruments could help strengthen small and medium enterprises and bring them into the formal sector.
He stressed the role of workers’ remittances, whose flows totaled approximately $80 billion annually. That was, in fact, larger than domestic assistance. As the Secretary-General had pointed out in his report, an important share of those flows went to low-income countries. He urged the LDCs, whose economies were the recipients of such remittance streams, to make every effort to place those in productive assets, such as small business development, rather than into purchases of consumer durables. Regarding official assistance, he commended those donors who had reached the 0.7 per cent of aid target and encouraged those who were making efforts to move in that direction. Saudi Arabia’s aid to the developing countries as a whole since 1973 had amounted to more than $80 billion.
A robust economic pay-off existed in investments in physical and social infrastructure, and his country’s aid had been directed accordingly, he said. Further steps could also be taken to harmonize donor’s procedures and lessen the administrative burden on recipients. Well-targeted technical assistance could also play a useful role if that was carried out in a spirit of partnership and genuine knowledge transfer. Short-term capital flows had been rightly characterized as unstable and unpredictable, but foreign direct investment played a useful role in helping grow a local economy, as well as bringing market knowledge and the transfer of needed skills. On trade, the responsibilities of the major industrial countries were evident, and although some recent initiatives had been promising, much remained to be done to move beyond rhetoric.
He noted that the World Bank had said that a doubling of per capita income in developing countries halved the risk of civil war. That implied that all partners, internal and external, engaged in grappling with the challenges of accelerated economic development in LDCs could see a tangible reduction in the risk of conflict, if the economies concerned grew on a sustained basis. A supportive regional and international environment could also help and, in that connection, the looming shadow over the Middle East region by the failure to solve the Israeli-Arab dispute needed special mention. In the LDCs, disarmament, demobilization and reintegration could play a positive role, although more should be done in that regard. Further, the international community should focus greater attention on what might be termed “pre-conflict” situations, rather than become involved reactively when conflict developed or ceased.
KIM SAM-HOON (Republic of Korea) said his country was widely regarded as a quintessential example of a nation that had transformed itself from one of the poorest in the world to a newly industrialized nation in a relatively short time frame. Although each country should tailor a poverty reduction strategy to its own strengths and needs, he wished to share his country’s experiences. In the early 1950s, when war had devastated his country, it faced the same extreme poverty as the LDCs faced now. The Government played an important role in the early stages of development by adopting export-driven policies and investing in human resource development. Indeed, international trade was an effective tool through which the LDCs could develop their economies and integrate into the world market.
He urged those countries to step up efforts to diversify their export base and enhance their production capacities. At the same time, the international community should increase its efforts to create a more “LDCs-friendly” multilateral trading system and strengthen its support for LDCs capacity-building to improve their access to global markets. Since January 2000, his country had provided duty-free market access for 87 items originating from the LDCs, and it was currently considering further expanding that preferential treatment. In addition, it had joined global efforts for trade-related capacity-building in the LDCs by hosting training courses on international policies and regulations since 1997.
Tax revenues and domestic savings were other important sources of domestic financial resources for poverty eradication, he said. Accordingly, the LDCs should improve their tax administration systems and encourage their citizens to increase savings in the domestic banking sector. Strengthening good governance and promoting wider participation in the development process were essential. The sustainable development of the LDCs depended on adequate and stable external, as well as domestic financial resources. The two pillars of international cooperation -- ODA and debt relief -- could play a critical role in that regard. In order to help the LDCs in their development efforts, his country had increased its ODA from $19 million in 2001 to $55 million in 2002.
JOHN DAUTH (Australia) said he shared the concern that the majority of LDCs were unlikely to achieve the objectives of internationally agreed development goals. He strongly supported the role of strong institutional and governance capacity in creating an enabling domestic environment, and its focus on international trade as an important channel of resource mobilization. Global commitment was needed to reduce poverty in the LDCs. Developed countries had a responsibility to LDCs to promote global growth, enhance market access and provide more and better aid. Equitable growth also needed to be promoted through greater trade liberalization and investment. LDCs, in turn, required stability, good governance and the rule of law. They also had to ensure that domestic resources were used to provide essential services and infrastructure.
Australia placed great emphasis on the role of good governance in creating an enabling environment for poverty reduction and sustainable development, he said. Poor governance undermined social and economic development and made countries more vulnerable to transnational crime and domestic corruption. In recognizing the particular needs of LDCs, Australia provided duty- and quota-free market access, without conditions, for all goods from LDCs. Multilateral trade liberalization played an important role in promoting economic growth, development, and alleviating poverty. A successful conclusion to the current Doha round of negotiations would be significant in meeting those goals. He urged all countries to join efforts in addressing widespread poverty in the LDCs.
ABDULAZIZ NASSER AL-SHAMSI (United Arab Emirates) said that it was unlikely that the goals of the Brussels Program and Millennium Declaration would be met on time and stressed the need for the international community to implement the outcome of recent international conferences and summits, the latest of which had taken place this month in São Paulo, Brazil. In particular, he stressed the need for the donor countries to fulfil their commitment to ensure timely flow of ODA. He also emphasized the need to accelerate implementation of the HIPCs Initiative and facilitate LDCs’ access to markets. The recipient countries needed to fulfil their pledges to reform and strengthen their economic and social institutions in order to create an enabling environment for development and attract foreign direct investment.
Turning to his country’s efforts, he said that the United Arab Emirates had adopted a development strategy aiming to strengthen its human capital and use its oil revenues for the development of the industrial and agricultural infrastructure, thus avoiding total dependence on oil as a sole source of national income. In 2002, the economic growth of the country had reached 15 per cent. Among the country’s priorities were liberalization of the economy, strengthening the private sector, development of social services, and protection of the environment as a source of natural wealth.
The country had also adopted an external policy based on the principles of international cooperation for development, he added, including through bilateral, regional and international partnerships to assist developing and least developed countries. His country provided easy term loans, financial grants and direct investments to LDCs. It had also opened its markets to migrant workers, who accounted for 82 per cent of its work force.
ALI HACHANI (Tunisia) said that despite the impressive scientific progress of recent decades, much of the human race continued to wage a daily war for food, shelter and access to health care. The world’s LCDs, he acknowledged, were primarily responsible for their own development, but would be unable to achieve sustainable economic development on their own. Since the adoption of the Brussels Programme of Action, LDCs had made many sacrifices for the establishment of an enabling environment for poverty eradication. In the spirit of true partnership and the sharing of responsibilities, as elaborated at the Monterrey Conference on Financing for Development, the developed countries must fulfil their commitments to do their part.
The LDCs were heavily dependent on ODA in financing their development, he noted, yet it must be recognized that ODA was insufficient, by itself, to enable LDCs to achieve the Millennium Development Goals. Among other initiatives, commitment to identifying new ways of resource mobilization based on cooperation and solidarity must be evinced.
As the lead advocate of the World Solidarity Fund -- now established by the United Nations General Assembly -- Tunisia felt that the Fund provided a specific example of how to help the poor emerge from poverty by involving them in microcredit programmes, he said. Such programmes could be funded by interested parties from all political levels the world over. Moreover, at a time when the world was experiencing a virtual communications revolution, the international community must work to use such developments as a means of propelling forward social and economic development in developing countries.
MOHAMED BENNOUNA (Morocco) said that collective thinking in the Council on the mobilization of resources for the LCDs was timely and useful. Morocco had committed itself within the frameworks of South–South cooperation and NEPAD to strengthening its cooperation with those countries through concrete development projects. Last year, it had hosted an international meeting, which aimed to foster support and mobilization of resources for LDCs.
Despite the efforts undertaken, the mobilization of financial resources in LDCs remained limited on the domestic level, he continued. The international environment remained unfavourable to the development of those countries. Continuing to depend on exports of a limited number of commodities, LDCs suffered from price fluctuations and market distortions. Morocco had decided to ensure free access for exports from LDCs to its markets and it appealed to other developing countries to follow suit. LDCs depended on ODA, which was a decisive factor in the financing of development in those countries. Developed countries needed to honour their commitments in that respect. Naturally, no conditions should be imposed on the LDCs in that connection.
Turning to the problem of debt, he stressed the need to mobilize international efforts to resolve the crisis of LDCs. The declaration adopted at an LDCs conference in Rabat last year called on the Paris Club and other creditors to cancel the LDCs’ debt. He added that it was necessary to remove obstacles to transfers from migrant workers, as significant resources of expatriate workers from Morocco were tied up in such countries as France.
MARY ANN GLENDON, observer for the Holy See, said that international plans such as the Brussels Programme of Action offered humankind the key to unlocking the prison of poverty, but no one party alone had the power to turn the key. The challenge of reversing the seemingly self-perpetuating cycle of poverty, especially in LDCs, was formidable. But, she said, reiterating Pope John Paul II’s appeal, “the poor cannot wait”. Globalization had accelerated the disruption of entire ways of life and, as new forms of poverty had emerged, the faces of the poor were increasingly those of women and children. Those most at risk in the economic and social turbulence were often the most ignored.
Investment in human capital must rank high on the development agenda, she stressed. Though LDCs were materially poor, they were rich in human potential. The liberation of that potential must entail careful attention to the situations of women and girls, ensuring their full and equal access to education and health, as well as to civil, political, economic, social and cultural rights. Toward those ends, the experience and resources offered by faith-based initiatives as partners in the fields of education, health care and relief should be fully utilized.
Now that the means of defeating humanity’s old enemies of hunger and poverty existed, there was no excuse for failing to press forward, she concluded. Only the political will to combat hunger continued to lag, as cited by the Secretary-General. That situation was explained as much by a poverty of imagination in developed countries as by the vicious cycle of material poverty in developing countries. What was needed was a change of heart. The international community must become bolder, more generous, more creative and more energetic in its struggle against the division of the world between areas of poverty and plenty.
NOUREINI TIDJANI-SERPOS, Assistant Director-General for Africa, United Nations Educational, Scientific and Cultural Organization (UNESCO), said the question was how to assuage the anxieties expressed here. The first obstacle was the very size of the LDCs. Those were small States with limited internal markets and mobilizing resources. Therefore, they required regional integration and enhanced links, for example, between the NEPAD and the African Union. In addition, textbooks should be standardized so that a generation of children regionally could compete internationally. The LDCs must realize that without integration, their problems would persist.
He said that the second obstacle was the range of post-conflict situations. The consequences of armed conflict, such as loss of life, deterioration of natural and cultural resources and heritage, and more AIDS, made it impossible to properly implement the Brussels outcome. When speaking about mobilization for the LDCs, the first mobilization had to be that of human resources and the creation of a critical mass enabling citizens to take their destiny into their own hands. But, today, the children were child soldiers. In fact, weapons were the only affordable item in the LDCs. Thus, the children were in the forests instead of in the schools, they were drugged and they killed.
Also critical was to ensure that LDCs’ populations did not die from all kinds of infection, he said, urging a complete review of their challenges, including lack of access to clean water. In terms of partnerships, the first aim was to ensure that the countries got together. The civil society of LDCs must help the people take their lives into their own hands. They should receive aid, not as beggars, but as free people, educated and thoughtful about their needs and aspirations. Once that was achieved, it would be possible to come back to the United Nations and talk about the other real obstacles. The LDCs had their backs against the wall, and when that happened, the only way was the way forward, he said.
KUNIO WAKI, Executive Director, United Nations Population Fund (UNFPA), said that mobilizing resources, both international and domestic, and creating an enabling environment to reduce poverty in the LDCs should be “at the heart of our work”. He reiterated UNFPA’s commitment, as an individual agency, a member of the United Nations Development Group, as a partner to other organizations, to achieving the vision of the Millennium Declaration and the Brussels plan of action. The Development Group must make better use of the available resources. That included achieving a sharper focus, better organizational competence and accountability, and drawing on its knowledge base. The global community as a whole must measure up to its Monterrey and Brussels commitments to free up additional resources.
He said that the unprecedented population and demographic challenges facing the LDCs must be comprehensively addressed, in order to reduce poverty. With population growth rates eight times higher than those in industrial nations, population was expected to reach 942 million people, or an increase of 220 million, by 2015. That was causing environmental degradation and reduced cropland per person, key issues in agricultural economies and for people living at the subsistence level. The LDCs also had large youth populations, which actually presented a vital opportunity for growth and transformation, if there was a concerted, massive investment in education, health care and livelihood training. That also presented an alarming threat of potential social unrest and conflict, if the world remained passive or offered only a limited response.
Scaled up efforts were also needed to fight HIV/AIDS in the poorest countries, he said. Those could not do it alone, although their leadership and commitment was absolutely critical. One of the most effective entry points for HIV prevention and treatment was the reproductive health service delivery points, including maternal health and family planning clinics. That was especially important for reaching women, who were especially vulnerable.Overall, progress was being made in terms of putting in place, domestically, policies and legal frameworks for population and development, reproductive health and rights, and gender equality. But, the international community was far from implementing its statements and aspirations. He urged investment in women and youth, which were the heart of a successful future.
DAVID A. HARCHARIK, Deputy Director-General, Food and Agriculture Organization (FAO), said that hunger was linked to all of the depressing statistics, including children’s mortality rates and life expectancy, and the number of hungry people in the LDCs was rising. Over the last decade, an additional 50 million people in LDCs joined the ranks of the hungry, bringing to 245 million the total number of hungry people. Forty-seven LDCs were classified by FAO as low-income, food deficit countries. Unless radical measures were taken now, FAO projected that there would be little or no decline in the numbers of the hungry in sub-Saharan Africa even by 2030.
He said that extreme poverty in the LDCs was also pervasive, with half their populations living on less than $1 per day. The number of poor was increasing. High poverty and hunger levels impeded growth and left those countries vulnerable to conflicts. LDCs would be the hardest-pressed to attain the first and overarching Millennium Development Goal of halving poverty and hunger by 2015. A major dilemma facing those countries was where to invest to unlock their development potential. There was a growing consensus that investment strategies must be based on a deep understanding of the underlying causes of poverty in LDCs.
The FAO, International Fund for Agricultural Development (IFAD), and WFP believed that reducing the incidence of chronic hunger and malnutrition was a fundamental part of opening the door to economic growth and poverty reduction, he said. That required actions along two mutually supportive tracks: improvements to rural livelihoods; and broadening access to food for those who could not produce or buy it. FAO had strongly advocated that greater resources, both domestic and external, should be allocated to agriculture and rural development, if national and international goals for reducing poverty and hunger were to be achieved. Far greater urgency and implementation of commitments were needed by all stakeholders, if the poor and hungry in the LDCs were to move beyond precarious survival to development.
CHARLES VINCENT, World Food Programme, noted that a cruel combination of factors meant that life for hungry people was likely to be even tougher in 2004. International food prices had continued a steady upwards climb and agricultural economists were predicting an historic growth in demand for food, driven mostly by rising income levels in China. While that was good news for increasingly prosperous Chinese citizens, it was disastrous for the millions of people who already struggled to buy enough food to feed their families each night. In March, wheat, rice and maize prices had hit their highest levels in five years. A donation to the WFP would buy less food today than at any time since the mid-1990s. With the rise in prices, stocks in major food exporting countries had shrunk to a five-year low. At the same time, fuel and ocean freight rates had risen even more sharply than food prices. Where poor families subsisted largely on a single staple food, rapid price fluctuations could send whole communities into crisis.
Three more factors would make 2004 a difficult year, he said, including the fact that nearly all Group of 8 members -- traditionally the biggest food donors -- were running budget deficits. The WFP’s purchasing power had been eroded by the dollar’s decline on world currency markets. Those factors had converged at a time when food aid was at a five year low. The volume of food aid had dropped by one third since 1999. When those numbers became faces, it was easy to feel overwhelmed. While most economists agreed that a new trade agreement on agriculture coming out of the Doha round was likely to be good news in the long term, people in poor countries that relied on food imports were likely to pay the price initially. While trade liberalization in agriculture should have tremendous payoffs for many countries, it was no panacea for the poorest of the poor.
Food and nutrition were at the heart of at least six of the eight Millennium Development Goals, he added. Reducing the number of children and mothers who died needlessly was imperative. Almost 11 million children under five died every year from preventable diseases, and malnutrition contributed to some 60 per cent of those deaths. The international community had no choice but to pick up speed on the Millennium Development Goals, as the cost of not doing so was simply too high.
ROBERT BARNES, Vice President of the International Federation of Red Cross and Red Crescent Societies (IFRC), said the principle preoccupation of the Red Cross/Red Crescent movement remained the alleviation of the suffering of the most vulnerable persons. Eradicating poverty eliminated the major cause of vulnerability. While the IFRC did not pretend to have a solution, it did strongly endorse calls for the building of an enabling environment that included the engagement of local communities and the use of local resources. An enabling environment fostered tolerance, respect and non-discrimination. More attention needed to be paid to the affirmation of shared ethical values. A community-focused approach to development should enhance the role of volunteerism and reduce institutional or legislative barriers to volunteer activities.
An enabling environment was one where the barriers to the immediate delivery of disaster relief were eliminated and where risk reduction programmes were fostered, he continued. An enabling environment also seriously addressed public health issues, in particular, the scourge of HIV/AIDS. While the IFRC had been effective in mobilizing public support for disaster relief, it had fallen short of extending the road from simple relief to meaningful risk reduction and sustainable development. The debate was an important forerunner to the work of the wider United Nations family on progress towards the achievement of the Millennium Development Goals, he said.
STELLA DAVIES, NGO Forum Coalition, NGO Civil Society Forum, New York, presented to the ECOSOC the recommendations emanating from a March civil society meeting in preparation for the current session. Fostering a people-centred framework would contribute to capacity-building of developing countries. It was also necessary to promote partnerships among various stakeholders, demilitarization of national resources, democratization, and increased accountability and transparency at all levels. Other recommendations related to the need to build human and institutional capacities, ensure participation of women, promote education for all, particularly at the primary level; improve access to the labour market through training; and achieve greater commitment from donor countries towards reduction of the spread of HIV/AIDS.
The civil society forum had also recommended that the international community build up the production capacities of LDCs, she said. Developed countries should increase ODA in order to reach the internationally agreed goals. Other priorities included removal of agricultural subsidies, promotion of corporate responsibility, reduction of vulnerability and protection of the environment. Without debt cancellation, most LDCs would not develop sufficiently to meet the Millennium Development Goals. It was also necessary to encourage foreign direct investment in those countries.
MOHAMED ELMAMY, of the Association mauritanienne pour le bien-être et le secours de l’enfant et de la mère, recommended, in terms of mobilizing domestic resources for sustainable development, that there needed to be an effective diagnosis of how best to use available resources, strengthen the processing of local products, allocate resources to promising sectors in each community, preserve the natural environment and natural resources and develop human resources, including through development of living standards and increased empowerment of women, children, the disabled and other vulnerable populations. There must also be promotion of micro-enterprises and increased access to micro-financing.
Externally, she called for debt cancellation for poor countries and a Marshall Plan for the LDCs. Attempts to facilitate access to international trade and the marketing of local products should also form part of efforts to increase the capacity for poverty eradication. Furthermore, eradicating poverty and ensuring sustainable development required ensuring good governance, marked by respect for human rights and the rule of law, at both the national and international levels. There should be additional attempts to involve non-governmental organizations and civil society further in the work of the United Nations and to develop cooperation and integration for developing countries regionally and subregionally.
NICK ARKLE, NGO Forum Coalition, Kelowna, Canada, reported on an NGO gathering, which had taken place in Canada in February concurrently with a youth forum. Among the many recommendations of those meetings was that each LDC must define their future, based on an assessment of their resources. All social, economic and political stakeholders should actively and effectively participate in the process of integrated development, with the participation of all levels of government. Attention must be paid to, among other things, land reform, agricultural technology, market access and trade policies, and aid commitments must be fulfilled and distributed effectively.
He also called for attention to be given to debt forgiveness. Education should be universal and a relevant curriculum should be elaborated through increased funding and proper training. It was important for education to be expanded to include life skills and ways and means to sustain development. The expansion and creation of NGO networks would help mobilize those changes. Of course, conflict prevention and peace-building must be prioritized, and the specific needs of children should be addressed, especially those victimized or orphaned by AIDS.
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