Apr 23, 1987


HAVANA APRIL 22 (IFDA/IPS-CHAKRAVARTHI RAGHAVAN) -- The Group of 77 (G77) Third World countries was working around the clock Wednesday at its Sixth Ministerial Meeting here, trying to agree a draft political declaration, an overall assessment of the world economy and proposals for international action.

Egypt's Saad Alfarargi, chairman of the G77's Technical Committee, has prepared a paper which the committee is now considering and is expected to approve with some minor changes, outlining the group's overall assessment of the world economy.

The paper also analyses the four broad areas to be considered at the Seventh Session of the UN Conference on Trade and Development (UNCTAD-VII) July in Geneva --resources for development, commodities trade and Least Developed Countries (LDCS).

Four working groups were separately drafting proposals for international action in each of these four areas. These proposals, say participants, will provide a negotiating platform that the group could adopt here and table for adoption by UNCTAD-VII.

According to participants, Alfarargi's paper is essentially a "tighter" version of the papers that came out of the march meetings of the G77's three regional groups -- Africa, Asia and Latin America and the Caribbean -- and a "harmonised text" drawn up in Geneva by the group's preparatory committee.

It seeks to provide an analysis of the crisis facing the world economy, in particular the crisis faced by the third world and the development process.

The draft assessment, according to G77 sources, will note that the third world is now facing a crisis of unprecedented gravity.

The signs are the debt crisis, collapse of commodity prices, extraordinarily high interest rates and volatile exchange rates, reduced financial flows, net outflows from several countries, and drastic cuts in investments in infrastructure, machinery and human resources.

Noting that the policies of the major market economies continue to compound this grim situation, itself a legacy of their past policies and uneven world development, the G77 will argue that instead of providing remedies, industrialised countries are abdicating their responsibilities.

The draft assessment is expected to stress that third world countries have a major stake in the functioning of the world economic system, and that UNCTAD-VII provides an opportunity for devising a coherent multilateral strategy for revitalising development, growth and international trade.

But the G77 here is also aware of the possibility that UNCTAD-VII might end in failure, in so far as no serious international measures will be agreed upon or implemented.

The United States, delegates from leading third world countries here note, makes no secret of its attitude of "benign neglect" toward the third world and UNCTAD.

The countries of Western Europe and Japan, the delegates argue, while claiming to hold a different view and saying they envisage a continued role for UNCTAD, are merely disguising their unwillingness to act by "taking shelter behind U.S. obduracy".

They say Western Europe and Japan are actually opening up the way for transnational corporations by asking the Third World countries to find a way of accommodating the U.S. view that UNCTAD should look into their domestic policies and promote "market-oriented" development.

G77 sources say the major industrialised countries, particularly the Unites States, appear to think that by refusing to negotiate and by blocking any action at UNCTAD, they can "persuade" the third world to accept the U.S. and Western point of view.

This, the sources point out, involves submitting to institutions favoured by the Unites States -- the General Agreement on Tariffs and Trade (GATT), the International Monetary Fund (IMF) and the World Bank.

According to the sources, in this scenario, UNCTAD would either wither away or be converted into some king of a mere think-tank for third world domestic policies.

But participants here say that if no decisions for immediate corrective action in critical areas emerge out of UNCTAD-VII, this will have an important influence on the attitude of third world countries in regard to other international economic negotiations and activities.

One participant here notes that at the moment, the third world does not have the collective power, or at least is unwilling to use such power for confrontation, to achieve its goals.

However, he argues that the third world could easily not cooperate or slow down and block changes that the industrialised world itself needs in the international economic environment for its own purposes.