Jul 24, 1987

UNCTAD-VII: IF GOOD ATMOSPHERE CAN BECOME REALITY...

GENEVA, JULY 22 (IFDA/CHAKRAVARTHI RAGHAVAN) Ė The chairmen of the Conference Committees dealing with resources and Least Developed Countries (LDCS) reported Wednesday that they hoped to present to their Committees by the night a draft "non-paper" or chairmanís text outlining possible recommendations.

At a press conference, the chairman of the Committee on resources, Makato Taniguchi of Japan, and the chairman of the Committee on LDCS, Amb. Martin Huslid of Norway, both said that the atmosphere in their Committees was "good", but this did not necessarily assure good results.

Taniguchi and Huslid said they were drafting, and would provide by this evening to their Committees a "non-paper", outlining the discussions in their Committees on the policies and measures and possible recommendations.

These would be ultimately incorporated into a final document.

Both the chairmen underlined that ultimately what would be agreed to depended on the members of their respective Committees, but hoped it would be more than a mere summary of discussions or mere general statements.

Huslid said as far as the LDC Committee was concerned, they had the substantial new programme of action (SNPA), a comprehensive document negotiated in 1981 at the Paris meeting.

No one wanted to renegotiate the whole thing here. At the same time there were some problems which had become acute since 1981, and these had to be tackled.

He mentioned in this connection the fall in commodity prices which had reached historical lows, and the very serious debt problem of the LDCS, which might not shake the international financial system and might not attract attention like the debt of a Mexico or Brazil, but nevertheless was very acute for the countries concerned.

"I hope in these areas we will be able to go a little further than in the SNPA", Huslid added.

Huslid noted that the UN General Assembly has already decided on holding another Conference on LDCS, as the Paris one in 1981. At UNCTAD-VII they would not be going into what that Conference should do, but perhaps they could take note of an welcome the offer should do, but perhaps they could take note of and welcome the offer of President Mitterand to host the Conference to be held in 1989.

On the links between disarmament and debt and development, Taniguchi, noted that the Soviet Union had raised the issue in his Committee, but there had not been much reaction form others.

Huslid agreed that this was a serious issue. While the world arms expenditure was 1.000 billion dollars a year. The ODA aid was only 35 billion dollars or 3.5 percent of the arms expenditure, ODA was growing at an even lesser rate than the arms expenditure.

The issue was to be the subject of a special international Conference to be held in New York from august 24.

Huslid is Vice-chairman of the Preparatory Committee.

Huslid said he noticed a certain reticence on all sides to deal with the disarmament/development issue here at UNCTAD. Apart from the political factors involved, most countries did not have their experts in this field at the Conference.

But Huslid was hopeful that these issues would be dealt with in all aspects at the Conference in New York.

Taniguchi said that UNCTAD has had a long history of dealing with financial and monetary issues in relation to trade and development. The "related monetary" issues had been discussed in his Committee in relation to other topics.

There was a general understanding in his Committee on the need for an internationally accepted debt strategy, based on development and growth orientation. There was also agreement on the need for specific measures to increase flows of private and public capital, and improving the external environment such as by lowering interest rates and stabilising foreign exchange markets.

Taniguchi was asked how the final single document of the Conference, incorporating the assessment and recommendations in all four areas, would be reconciling the contradictory viewpoints on issues of the major market economy countries.

The correspondent noted that in the commodities and trade Commodities, the leading market economy countries (U.S., Japan, U.K., Germany, etc.) were taking the position that everything should be left to market forces and there should be no intervention by governments to stabilise prices, etc.

At the same time in the Resources Committee they were endorsing the plaza and louvre agreements, which were no more than collective market interventions by these countries on foreign exchange markets to stabilise the price of what had become merely another commodity, namely money and currencies.

Huslid said that as far as the LDCS were concerned, market forces would not solve their problems.

"The market will not help the weakest, will not bring about stability or equity or take account of long-term ecological considerations needed for the concept of sustained development", Huslid said.

"This has not been a great controversy in our Committee. I donít think it will in any way interfere with formulation of agreed policies and measures", he added.

Taniguchi tried to avoid an answer by referring to the fact that his Committee was considering public and private debt, and public and private flows, debt strategy, etc.

But pressed to answer the specific issue of contradiction between non-interference in commodity markets and interference in foreign exchange markets, he said there was antagonism in his Committee to "too much use of market".

Some spoke of the "magic of the market", but there was no recognition of this widely. There were no absolutely free market forces operating in the world economy, and there were public and private sectors, and a mixed economy.

"It is too ideological and categorical to take a public or private sector view. In our Committee we agree that we have to use both public and private sectors".