11:42 AM Apr 9, 1997

UNITED NATIONS: NORTH RENEGING ON UNCED PLEDGES

New York 8 April (Martin Khor) -- The Group of 77 and China have sharply criticised attempts of some countries of the North to escape from their aid obligation by pointing to private capital flows as the main source of resources for developing countries.

The criticism came in a statement by the Group of 77 and China on the opening day of the fifth session of the Commission on Sustainable Development's fifth session (CSD-5).

The statement on behalf of G77 and China, by Mr Msuya Waldi Mangachi, Minister Plenipotentiary of Tanzania, said the argument that private capital flows can replace aid commitments was "fallacious", Mangachi said, since most private flows of funds went to only a few countries, and poor countries needed aid to first grow before it could attract investments.

The G77 and China also pointed out that the new trade rules in the World Trade Organisation turned out to be more powerful than the UNCED agreements and have overshadowed the sustainable development approach.

For example, the stress on intellectual property rights protection as a result of the WTO's TRIPS agreement was at the expense of transfer of technology and denied the post-UNCED process of its key factor.

The CSD is preparing a declaration and statement to be forwarded to a Special Session of the UN General Assembly in June to review the implementation of Agenda 21, five years after the Rio Earth Summit.

Compared to the rather hum-drum proceedings of the past several years, there is a flurry of activity at this year's session, as various delegations are attempting to propose some new initiatives in an attempt to breathe new life to the post-UNCED process.

Whilst developing countries decry the retrogression since Rio in the development areas of Agenda 21, some developed countries are putting forward new action plans on the environment, especially on freshwater resources and energy.

The "hottest" topic, however, is a renewed attempt by several countries, North and South (including Malaysia, Canada and the EU), to launch a Forest Convention. A similar attempt before the Rio Summit failed and instead a non-binding set of Forest Principles was established.

The Convention move is however opposed by many countries, including the US, India and Brazil. The issue will be debated at the CSD on Thursday.

At the start of today's session, Dr. Mustafa Tolba of Egypt, the former executive director of UNEP, was elected Chairman of CSD-5.

In his statement on behalf of G77 and China, Mangachi said that at Rio there was an upsurge of optimism about a new era of global partnership where developed countries would help developing countries move towards sustainable development by providing financial resources and enabling easier technology transfer.

"The developing countries would then have more development space with which to improve their people's living standards, and simultaneously attempt to have more environmentally sustainable practices," said Mangachi.

"Despite the pledges of aid increases at UNCED, the OECD countries' aid fell in volume and as a ratio of GNP. The aid decline is inevitably seen as a lack of commitment and sincerity of developed countries to implement the Rio agreement."

Mangachi said the developed countries should reaffirm their commitments to reach 0.7 percent of their GNP and to reach that target by the year 2000.

Furthermore there are moves by some countries to downgrade the need for aid by stating that an increase in private financial flows will take care of the need for financial resources. Mangachi said that this is a fallacious argument for the following reasons:

* Firstly, although a small minority of developing countries, mainly those already growing fast, are able to attract FDI, very little FDI or none at all is going to poorer countries which need resources the most.

* Secondly, a large portion of the private financial flows are short term and speculative in nature and thus cannot be relied on for financing sustainable development.

* Thirdly, FDI focuses on money-making projects and there is still need for public funds for sustainable development programmes.

Mangachi said that there was a need to ensure that FDI flows reach as many countries as possible, including marginalised regions such as Africa. Also, it should be ensured that FDI funds are invested on a long-term basis. "In this regard, short-term speculative FDIs should be penalised and incentive be given to long term FDIs."

He also called for an increase in the capital of the Global Environment Facility; resolution of the debt problem; and better terms of trade for developing countries.

On technology transfer, Mangachi said the G77 was also disappointed by the lack of progress. "In fact since Rio, there has been much greater emphasis on the rights of IPR holders, mainly as a result of Uruguay Round's TRIPS agreement.

The stress on IPR protection at the expense of technology transfer, like the decline in aid, has denied the post-UNCED process of its key factor, since technology transfer was the second plank of what was seen as developed countries' commitment to facilitating sustainable development," he added.

The G77 was of the view that responsibility for technology development cannot be confined to market forces alone, nor could the market approach be relied on to assure that such technologies become widely available and can be used.

The G77 proposed that publicly funded technology R&D projects be initiated and also that a clearing house be created for environmentally sound technologies. Patent rights and licenses should be acquired and paid for by the international community so that these can be made available to developing countries on concessional and non-commercial basis.

Mangachi also said that "the new global economic regimes within WTO have major implications for developing countries. The Uruguay Round agreements of 1993, and the paradigm they represented, turned out to be more powerful than the UNCED agreements of 1992 and the partnership approach they promised.

"Indeed in the past five years, the liberalisation free-market paradigm has overshadowed the sustainable development partnership paradigm.

"The UN Special Session should re-emphasise the UNCED approach which represents a proper paradigm for international cooperation, that of consensus-seeking, incorporating the needs of all countries, partnership in which the strong would help the weak, integration of environment and development concerns, intervention of the state and international community on behalf of public interest so as to attain social equity and bring about sustainable development."