Journal of the Group of 77
Washington D.C. - Addressing the sixty-first meeting of the ministers of finance of the Group of 24, Ambassador Samuel Insanally of Guyana said the issue of financing of development is identified by the Group of 77 as the most critical and core issue in the quest of evolving a dynamic international cooperation for development. In fact, all of the outcomes of the all of the major international summits and conferences have explicitly and implicitly addressed and highlighted the indispensability of financial resources for development.
The reviews undertaken on those outcomes highlight that the major factor for not implementing effectively the recommendations of those outcomes have largely related to deficient actions on financial resources for development, he said. "For this reason, many delegations are suggesting that our conference should be made into a "joint endeavor" of the Untied Nations and the Bretton Woods institutions, and thus benefit from the inputs of the intergovernmental bodies as well as secretariats of both sets of entities," he said. "This is an idea to which the Group of 77 is giving serious and careful consideration and, on which we would like very much to have your views, your ideas and your support," he added.
It is also the view of the Group of 77 that Bretton Woods institutions should join the UN effort in formulating a global strategy for the eradication of poverty in developing countries. Ambassador Insanally said one of the greatest challenges facing the international community is effective mobilization and provision of financial resources for development as well as the creation of a conducive international environment.
The Ministerial Meeting of the Group of 77 held in September last year pointed to the inadequacies of the present economic system for achieving the goals and objectives of development and has called for meaningful reforms. It is now recognized that the gravity of that challenge is increasingly manifested, particularly in the wake of the Asian financial crisis and its great impact on the entire world economy. "In this context, the issue of strengthening the architecture of the international financial system should therefore become an important and major focus for the G-77 and the G-24," he added.
The problem of inadequacy of financing of development is closely linked with the issues of external debt and development. External indebtedness has emerged as one of the major obstacle to the development efforts of developing countries. The development endeavors of developing countries, in particular towards the provision of social and economic services, severely hampered by the obligation to set aside a substantial portion of national budgets for serving external debt, he said.
This situation is further exacerbated by the negative effect of structural adjustment programmes, decline in official development assistance (ODA), deteriorating terms of trade of developing countries and sharp falls in commodity prices as well as escalating protectionism in the developed countries. In fact, the various debt relief measures undertaken so far, including the Heavily Indebted Poor Countries (HIPC), have not gone far enough in alleviating the burden of debt and debt serving of developing countries, he said. Certainly, more needs to be done in terms of debt cancellation. "In our view, the criteria for eligibility of HIPC initiative should be made more flexible to enable more countries to benefit from these arrangements," he added. As it is now, it is almost a nightmare for a country to meet the conditionalities involved and the time it takes before reaping the first benefits after qualifying. What is urgently needed today is an affective development-oriented and durable solution to the external debt problem of all developing countries.
It is obvious that in order to effectively and meaningfully accelerate the development process of developing countries, there is an imperative need to reverse these declining trends in the ODA flows, which remains the principal source of development financing for most developing countries, he said. In particular, developed countries should comply with the internationally agreed targets of ODA and commitments for new and additional resources with view to assisting developing countries in achieving their development needs.
Ambassador Insanally said that many developing countries are not able to benefit from the twin processes of liberalization and globalization of the world economy. These processes benefit some countries, mostly developed countries while causing instability and marginalization in developing countries. Most of developing countries face the greatest risk of further marginalization. Thus, there is a need for measures which should include long-term financial and technical support, transfer of technology, and the improvement of the trade performance of developing countries. It is also necessary to ensure full and effective participation of the developing countries in the international economic decision-making processes.
Eradication of poverty remains a priority goal of all developing countries. However, despite increased efforts to eradicate poverty, the total number of people living in poverty is increasing. The majority of the population in these countries continue to live in extreme poverty, unable to access basic human needs such as nutrition, health, water, sanitation, education, and housing, he concluded.
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