Amb. Daudi N. Mwakawago
Permanent Representative of Tanzania to the United Nations Chairman of the Group of 77






"The Group of 77 fully supports the streamlining of the UN system but cannot accept any move to abolish or distort the development agencies in the name of 'division of labor' or comparative advantage."

G-77 Chair calls for enhanced collaboration between U.N. and Bretton Woods institutions

WASHINGTON, D.C., April 27, 1997 (G-77) -Addressing the annual spring meeting of the Ministers of Finance of the Group of 24 held on 27 April at the IMF/World Bank headquarters in Washington, D.C., Ambassador Daudi N. Mwakawago of Tanzania, Chairman of the Group of 77, stated that the Group of 77 fully supports the streamlining of the UN system but can not accept any move to abolish or distort the development agencies in the name of 'division of labor' or comparative advantage. Institutions and agencies that have a sound track record of supporting concretely the development of the South need and indeed expect our support. Those that have negative record should be reformed or wound up.

The Chairman of the Group of 77 made his address at the opening ceremony of the fifty-sixth meeting of the Ministers of the Intergovernmental Group of 24 on International Monetary Affairs, which was chaired by Mr. Antonio Casas Gonzalez, President of the Central Bank of Venezuela. Algeria and Sri Lanka were elected as first and second Vice-Chairmen.

The meeting was attended, among others, by Mr. Michel Camdessus, Managing Director, International Monetary Fund; Mr. James Wolfensohn, President, World Bank; and Mr. Nitin Desain as Special Envoy of the Secretary-General of the United Nations.

In his address to the Group of 24, the Chairman of the Group of 77 declared that "the Group of 77 considers it essential that collaboration between the UN system and the Bretton Woods Institutions be strengthened at all levels – at the level of intergovernmental decision-making, at the inter-secretariat levels and at the country level. Through a systematic sharing of ideas, information, expertise, and within the context of their respective mandates and comparative strengths, organizations of the United Nations system and the Bretton Woods Institutions could collectively enhance their capacity to provide support to the developing countries. This collaboration assumes added significance in the context of steadily diminishing resources for development", he added.

Ambassador Mwakawago added that "in stimulating and sustaining economic growth, the Group of 77 believes that developing countries would benefit a great deal from the combined wisdom of the Bretton Woods Institutions and development institutions such as UNDP and other UN agencies. The combination of expertise in macro-economic policies and sectoral strategies in those organizations would enable developing countries to view development issues from a broader perspective. It is the G-77’s view that the UN system and Bretton Woods Institutions should jointly explore alternative models of structural adjustment, especially those models that have built in the social dimension in the adjustment process, rather than devising measures to deal with the social consequences of structural adjustment after the fact."

In considering the various modalities of strengthening collaboration between the UN system and the Bretton Woods Institutions, the Chairman of the Group of 77 stressed the importance of policy dialogues, the resident coordinator system, effective aid coordination, joint country missions, the programme approach and complementary use of various financing sources and modalities. "The example of the Special Initiative for Africa needs to be emulated and expanded", he said.

Finally, the UN system and the Bretton Woods Institutions should expand their collaboration in cofinancing field programmes and projects. They should continue to explore innovative ways of combining their resources in support of a common programme to optimize the benefit to the countries concerned. And they should work closely with recipient governments to determine the optimal mix of funds from grants, concessional and commercial loans and private sector financing in support of development programmes and projects", he concluded.

In the final communique adopted by the Group of 24, the Ministers of Finance recognized that globalization brings both opportunities and risks; presently, it appears that these are unevenly distributed because of imperfections in factor and product markets. A more equitable distribution of benefits and mitigation of risks require careful management of public policies and coordination of national policies dealing with markets, as well as stronger international support for improvements in infrastructure and human resources in developing countries.

Addressing the issue of ODA, the Ministers stressed that, although flows of private resources to less developed countries are expanding, they continue to be channeled to only a few developing countries. Furthermore, ODA is showing a disturbing downward trend, and 1996 saw the lowest lowet level of ODA in over a decade. Stressing the critical role of such assistance for the poorest countries, they emphasized that private capital flows are no substitute for official flows for facilitating growth and alleviating poverty in these countries. The Ministers acknowledged that the absence of adequate ODA flows would inhibit recipient countries from contributing to global prosperity and would exacerbate migratory pressures on countries with better prospects. The Ministers finally reiterated also their deep concern that IDA-11 donor contributions are not adequate to support even current levels of lending, and urged the Development Committee to work towards modalities that provide for adequate long-term financing for IDA.