Mar 28, 1990

HELP TO LDCS TO BE PART OF REVIVAL OF COOPERATION.

GENEVA, MARCH 26 (BY CHAKRAVARTHI RAGHAVAN) -- The Secretary-General of UNCTAD, Kenneth-Dadzie warned Monday that the support of Industrialised Countries for an effective new programme of action for the LDCs, unless situated in the context of a general revival of development cooperation aimed at supporting efforts of all Third World Countries, would be "a divisive ploy and an exercise in tokenism".

At the same time, Dadzie added, it was in the interest of the remainder of the Third World countries to work for a positive result from the Paris conference since a failure might lead to a further marginalisation of the South as a whole in the political and economic calculations for the North.

Dadzie made these comments while addressing the seventh session of the Intergovernmental Group on Least Developed Countries (LDCs) which began a two-week session Monday.

Earlier, Amb. John Sankey of the United Kingdom, who was elected to chair the meeting, noted that despite the good intentions of the SNPA, the 80ís saw a deterioration in most of he LDCs.

"The lessons learnt and the experiences gained will help us elaborate a strategy for the 1990ís", he added.

Referring to the long preparatory process that had preceded the Preparatory Committee meeting, Dadzie said that while the eyes of the world and the hopes of the 400 million people (in the LDCs) would turn to Paris in September, "it is here in Geneva, over the next two weeks, that the foundations must be laid for a satisfactory result in Paris".

The Preparatory Committee had to address twin challenges set for it: "learn from the past and innovate for the future".

The 1990ís had been a "dismal decade" for most of the LDCs. This was largely the result of domestic policy shortcomings, insufficient international support, inadequate structural adjustment programmes and an inclement international environment.

The SNPA, Dadzie said, had been ineffective, despite the undertakings written into it. But even the firmest undertakings might have been ineffective in face of the growth of debt burdens, difficulties of structural adjustment and collapse of commodity prices - none of which had been foreseen in 1981.

"Therefore, the programme of action for 1990ís must be qualitatively different and must, in particular, facilitate the mobilisation of all human and financial resources and be adaptable to change in external economic conditions".

The 1990ís could not be allowed to reproduce the experience of the 1980ís. The reversal of the deterioration of living standards experienced by most LDCs was an ethical imperative reinforced by long-term economic interest and ecological solidarity.

The governments of LDCs and their development partners must shoulder their respective responsibilities according to their capabilities and join in a committed partnership to remedy the failings of the 1980ís and ensure that the structural transformation of the LDCs is set on a steady course towards achieving the national development objectives of the 1990ís.

An essential component of the programme of action, Dadzie underlined, was to increase ODA very substantially and significantly enhance debt relief. The ODA target should rise to 0.20 percent of donorsí GNP by end of the 1990ís, after doubling ODA in the next five years.

The new programme of action, Dadzie continued, must also explicitly address the specific characteristics of the LDCs - e.g. poverty, disarticulation and structural fragility of economies, vulnerability to external shocks, lack of savings and entrepreneurial capacities, paucity of trained and skilled personnel and weakness of institutions, as well as geophysical and ecological handicaps.

"The new programme", Dadzie said, "will stand or fall on the effectiveness of its follow-up mechanism, at national, regional and global levels. It is those mechanisms that that will monitor commitment, maintain focus on national situations and priorities, ensure responsiveness to changing exogenous conditions and provide for sharing of national experiences as a basis for strengthening and deepening the development partnership. It is essential that a follow-up mechanism be in place in each LDC".

In what he termed a "political comment", Dadzie then addressed a common fear among the Third World countries, namely that the LDCs and support to them was being sought to be used by the major ICs to divide the Group of 77 and their unity - whether in the Uruguay Round multilateral negotiations or in other fora dealing with North-South cooperation and issues.

"The conference on LDCs", Dadzie said, "is not an isolated event but an important chapter in the development dialogue".

"Support by the Industrialised countries for an effective new programme of action for the LDCs will be universally viewed as a politically constructive move only in the context of a general revival of development cooperation, aimed at supporting the development efforts of all developing countries in the interests of the global community".

"Outside this context, it might be regarded as a divisive ploy, an exercise in tokenism".

"At the same time", Dadzie added, "it is in the interests of the remainder of the developing countries to work for a positive result from the Paris Conference. This is not only on account of the importance of maintaining the collective solidarity of the developing countries, but also because failure to achieve such a result might lead to a further marginalisation of the South as a whole in political and economic calculations of the North.

"It is important to make these points when there are justifiable fears that the rising tide of change in Eastern Europe is diverting governmental and corporate attention and resources from the North-South agenda ... This situation calls for far-signed political vision by all the governments concerned".

In a message to the meeting, the UN Director-General for Development and International Economic Cooperation, Antoine Blanca, called for a fresh look at international economic relations in the light of the major economic and political changes of the 1980ís.

In Blanca's view these called for:

Firstly, the strengthening of international economic cooperation should again be placed on the top of the international economic agenda.

Secondly, the profile of global financial flows should change significantly, returning to net positive transfer of resources of increased volume to the Third World.

Thirdly, special efforts should be made for the large part of humanity living in the least developed and other low income countries - particularly, though by no means exclusively, in Africa Ė to help them find their way out of their painful socio-economic situations.

Fourthly, environmental considerations should be more closely integrated into the mainstream of economic concerns of the world community by actions at national, regional and global level.

Lastly, to deal with the new challenged of interdependence, the role of the United Nations as a forum for global policy formulation and collective action should be strengthened.

Referring to the setbacks and failure to achieve the SNPA targets, due to the unfavourable economic environment, Blanca said it was absolutely necessary for all partners to renew their mutual commitments.

Speaking for the Group of 77, Amb. Azikiwe of Nigeria, said the principal challenge before the IGG was to identify the needs of LDCs and recommend national actions and international support measures.

Azikiwe placed the situation of the LDCs in the wider context of the world economy with its contrasting pictures of progress and decline, of new opportunities and compounding problems, and of hopes and frustrations.

"This most worrisome bifurcation of the world into areas of dynamism and stagnation poses a major challenge", Azikiwe said. "The Group of 77 is seriously preoccupied with this unevenness and asymmetry in the global development pattern. In this context, our group shares the deep concern over the unabated worsening of the endemic development crisis in the LDCs".

Presenting the Dhaka declaration and the Dhaka document of the LDC Ministerial meeting, Azikiwe that the recommendations should form the core of inputs emanating from the preparatory meet and be the basis for a new Plan of Action for the LDCs for the 1990ís.

Azikiwe underscored the critical role of a supportive external environment and called for increase in ODA flows to the LDCs through additional resources in real terms.

The measures to support the LDCs should also squarely address the important question of stabilisation of commodity prices and compensation for shortfalls in export earnings.

Significant improvements were also needed in improving the access to markets for LDC exports. Though accounting for an insignificant part of total world trade, the LDCs have had to face a renewed upsurge of protectionism.

Denmark speaking for the Group B countries steered away from any assessment or review of the implementation of the SNPA, one of the tasks of the IGG.

The Danish delegate made some extensive comments on what the LDCs should do, with repeated references to realism and structural adjustment, and was less specific on what the Group B countries would do particularly in terms of ODA.

The concrete and "realistic" measures to be adopted at Paris, Denmark said, should be based on the concept of partnership in development and pertaining to the "current reality" in individual LDCs as well as in the international community, and bearing in mind that they should be valid beyond the conference since the words set on paper should be translated into "practical and sustainable development policies in the countries concerned".

The "partnership in development" (called for in the UNCTAD documentation) had to be based on realism and true commitment. Where "sound and realistic" policies and strategies are developed by an LDC, this should be supported by the international community, the Danish delegate conceded. But the growth prospect of an LDC depended crucially on policies to maximise competitiveness and efficiency and structural adjustment to adapt policies to changing circumstances.

While there could be room for improvements in design and implementation of structural adjustment policies, there were no alternatives to adjustment. Structural adjustment programmes should have the full political backing of the LDC in question, and designed to reduce the potential short-term adverse effects "to the extent possible". In these conditions the international must stand ready and be committed to the efforts of the LDCs.

On aid, the OECD coordinator spoke of aid effectiveness and aid coordination to achieve more rational use of scarce resources and the problems of limited absorptive capacity of many LDCs, but beyond saying that "aid volume is a principal indicator of the support provided by the international community" had little to say on increase of ODA called for in the UNCTAD documents.

On debt, the Danish delegate agreed on the need for full and speedy implementation of the 1978 UNCTAD resolution on ODA debt. On the full implementation and improvement of the Toronto menu, the Group B delegate spoke of the opportunity cost of using additional aid for debt relief to be weighed and assessed against use of the same resources to generate cash flow to the LDCs. He also underscored the OECD view that the Paris conference should not infringe on work and negotiating processes under way in competent fora.

While aid is important, Denmark added, it should not over-shadow the need for further efforts of LDCs to mobilise domestic resources by providing motivation for savings.

On Commodity problems, the discussions should identify "innovative ways" of multilateral cooperation on commodities of particular concern to the LDCs and other poorer Third World countries.

The Group B delegate also spoke of the need for peopleís involvement in decision-making processes, decentralisation of decision-making, participation of women in development and other parts of what the LDCs should do in terms of national measures. The Group B also called for integrating environmental concerns into all stages of development process and the need to break the vicious circle of poverty, high population growth rates and degradation of the natural environment.

The Group B also supported adequate follow-up measures at the national level in each LDC and of the role of the UNDP Roundtable World Bank consultative groups. And while agreeing on the need for monitoring and follow-up at the global level, with UNCTAD as the focal point, the Group was "hesitant" about any formal mechanism but preferred and "informal, business-like" approach that would concentrate on country experience, exchange of views and sharing of ideas. This in effect ruled out the global monitoring focussing on the performance of the international community and the "development partners" in great detail or formal accounting.