7:24 AM May 3, 1993

CHAIR FOR CLOSER RELATIONS WITH G-24

Geneva 30 Apr (TWN) -- The Chairman of the Group of 77, Amb. Luis Fernando Jaramillo, Permanent Representative of Colombia to UN in New York has called for reactivating closer relations between the Group of 77 and the Group of 24 (the developing country group) at the Bretton Woods institutions.

Jaramillo was speaking at the ministerial meeting of the G24 on the eve of the Fund/Bank Interim and Development Committee meetings in Washington. A copy of his speech was made available by the G77 office in New York.

"The activities that both groups undertake," Jaramillo said, "collectively represent the untiring efforts of the developing world to forge a more requitable system of international relations, a system in which the basic principles governing world finance are applied equally to all countries of the Third World as well as those of the industrialized world."

The Group of 77 committed considerable efforts every single day aimed at the difficult task of enhancing international economic cooperation, putting forth solutions to the economic difficulties facing developing countries and coordinating positions on different issues.

"For the achievement of this end, collective will, dedication and imagination are required, all of which are easier to attain if the various negotiating fora available to the developing world complement each other and are guided by adequate coordination."

The G77 chair criticised the failure of the major industrial countries to have an effective mechanism of policy coordination or achieving the discipline and commitments to correct macroeconomic disorder of the last several years or cut fiscal deficits and stabilize interest rates or show the capacity to break the impasse in the GATT negotiations.

"The developed countries," he added, "has been powerless to follow the same magical recipes that have been part of the package of recommendations for solving economic problems of the countries of the South."

While the political leadership necessary to conclude the Uruguay Round had not emerged, trade disputes and mutual recriminations had increased among the industrialized countries, accompanied by implicit threats of unilateral measures.

It was not only necessary to conclude the Uruguay Round but it was equally critical that negotiations translate into net benefits for the developing countries.

The G77 Chair added: "It was not clear, as some recent analyses have suggested, that on balance an agreement based only on the Draft Final Act proposed in December 1991, would not favour the countries of the Third World. given a possible reopening of negotiations on the draft in order to bring it into line with new agreements reached among developed countries, it would be indispensable to fully take into account the interests of developing countries and avoid any renegotiation of the draft that would only translate into concessions ton developed countries to the detriment of our countries."

On the World Bank run Global Environment Facility (GEF), Jaramillo stressed the need for the GEF to operate on basis of transparent and democratic mechanisms and decision-making based on consensus if the spirit that prevailed at Rio is to be retained. The priorities for use of GEF resources should take into account the needs of countries of the South and "we cannot sacrifice our right to development and the fight against poverty because of priorities that only respond to the environmental needs of the North."

The GEF had to be adjust itself to the policies of sustainable development set by various bodies of the UN concerned with this subject and the G77 would remain vigilant "in achieving a balance between the handling of the GEF by UN organizations on the one hand and the World Bank on the other and maintain followup and evaluation systems in accord with the interests of developing countries".

Referring to the restructuring of the UN's economic and social sectors, the G77 chair said this should result in its enhanced capacity to coordinate with specialized agencies, including multilateral financial institutions.

The United Nations, established mainly to coordinate the various agencies and to provide resources for cooperation, were not created to serve as an agent for the massive transfer of resources to the developing countries. That function was assigned to the Bretton Woods institutions. "Thus to set one institution against the other would be an approach based on a false assumption."

"But it would be a false alternative to state that because of the degree of specialization, such institutions should be managed independently, at the expense of the role assigned to the UN," the G77 Chair declared.

"On the contrary, it is necessary to effectively integrate them to the United Nations system, to which by definition, they belong as specialized agencies. They should not therefore be detached from the global policy coordination of the (UN) Organisation in the economic and social fields. Greater democracy, universality and transparency in financial institutions would be coherent with a new dimension of relations with such agencies as well as with greater participation by developing countries in defining their own future."