Sep 21, 1988


GENEVA, SEPTEMBER 19 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The third world debt crisis and need to find new solutions in the face of the failed strategy so far figured prominently in the opening speeches at the UNCTAD Trade (cc Spinelli) and Development Board Monday.

The 131-member board began its 35th session by electing Amb. Tobgye Dorji of Bhutan as President. Also elected were ten Vice-Presidents and a rapporteur to form the Bureau.

The board agreed to include on its agenda an item on the effects of floods and cyclones on development and growth of third world countries. In August Bangladesh was battered by the worst ever floods, which submerged under water three-fourths of the countryside and affected over 30 million people. More recently, the Caribbean countries and parts of Mexico have been struck by a hurricane.

The debt and development problems of third world countries, and the review of implementation of guidelines on official and officially guaranteed debt, agreed upon in board resolution of 222 of 1980 are specifically on the agenda of the two-week session of the board.

Also on the agenda are the items of follow-up and review of the implementation of the final act of UNCTAD-VII, as well as the annual debate on interdependence.

In his opening statement, Dorji said that the board would make a key contribution in meeting "an intractable problem affecting north-south relations", if it could arrive at a broad consensus on the many practical approaches, identified in the final act, to deal with the problem of the heavily indebted countries.

Dorji earlier noted that momentum imparted by the final act of UNCTAD-VII appeared to have faltered in the year since its adoption "as key issues warranting attention ... seemed to get bogged down in relatively minor procedural discussions".

"Before these tendencies begin to engulf our work and come in the way of discharging our collective responsibilities, let us dedicate ourselves to fully capture and translate this momentum into concrete commitments on the critical issues before this session of the board", Dorji said.

"To this end", he added, "the reaffirmation and the realisation of the role of this organisation as an important forum for generating ideas, building consensus and negotiating agreements, as well as for providing impetus to negotiations in other fora, will be instrumental".

Referring to the board’s agreement, in the context of its interdependence discussions, to follow closely developments and issues in the Uruguay round, Dorji urged delegations "to exert their utmost effort in discharging this important task in a balanced and thoughtful manner, and thus make an important contribution to the preparations for the Montreal mid-term review in December".

The spokesman of the Group of 77, Amb. Dr. Nabil Elaraby of Egypt, said of the problems facing the third world countries the most daunting were those arising from natural catastrophes and calamities that overnight wipe out fruits of years of toil and dearly acquired resources, leaving behind only destruction and human misery.

UNCTAD and the board, the G77 spokesman added, could at least address "another type of calamity that has best the developing countries, and that is tearing at the very fabric of their society, namely the burden of debt".

The debt crisis had now entered the seventh year, but sustained economic recovery continued to elude most debtor countries.

In many of them development had come to a halt, in sharp contrast with the expectations generated by the proponents of the current debt strategy.

While debtor countries had made extensive policy efforts to deal with their debt problems, they had not received enough support in the form of a favourable external environment and adequate financing.

As a result, debt indicators were by and large still close to their 1982 levels, per capita incomes were much lower now than ten years ago, and scarce resources continued to be diverted from investment to debt servicing.

"Under present policies and prevailing world economic conditions", Elaraby added, "debtor countries cannot break out of their foreign exchange constraint and resume growth and development".

"We hope other groups are ready to take up the challenge to the debt problem with us, and may be we can truly confound the cynics by making a constructive advance".

Earlier the G77 spokesman underlined that the final act of UNCTAD-VII was "a document of political consensus", and the G77 believed that it was adopted "in good faith and with goodwill".

It was not an imposition of or on any group but an expression of conviction in the need to revitalise development, growth and international trade, and thus an instrument of peace.

"We believe that we should now test our collective sincerity and political will by truly assessing how far we have been able to live up to the spirit and letter of the final act, to what extent we have or have not made progress in implementing it – and to reach an agreed assessment on what can be done in this regard in UNCTAD, and in other organisations and by national governments.

"We should do this if only to ensure that the political momentum of UNCTAD-VII is not fitered away and that we can continue to build upon the forces of consensus generated by UNCTAD-VII for a wider and more effective international economic cooperation".

Follow-up and review of the implementation of the final act of UNCTAD-VII is an item on the agenda of the board, but there are differences between the group B countries and other regional groups including the G77 on how this agenda item should be dealt with, and how it should figure in future meetings of the board.

It has been customary in UNCTAD to include in the agenda of the board, in between conferences, such a general item.

However, the group B countries do not want such a general item, which would enable to board to discuss not only implementation of actions within UNCTAD’s sphere but also those commended to other organisations and member-states.