Ambassador Daudi N. Mwakawago, Chairman of the Group of 77 for 1997

Developing nations continue to face rash of economic problems, says G-77 Chairman

UNITED NATIONS, Oct 13 -- The chairman of the Group of 77 told the U.N.'s Economic and Financial Committee that despite some positive trends in world economic growth, most developing nations are still suffering from a rash of economic problems.

Ambassador Daudi Mwakawago of Tanzania said the G-77 notes with "great concern" that poverty is deepening in developing countries, the gap between rich and poor is continuing to widen and financial and capital flows still remain unpredictable.
Moreover, in a world economy that is increasingly being shaped by the processes of globalization and liberalization, he said, the world's 48 least developed countries (LDCs), mostly in Africa, are being further marginalized from mainstream development.

"We are greatly concerned with the persistent critical economic situation in Africa, especially relating to official development assistance (ODA) flows, external debt and trade," he told the Committee.

"Over the last two years, the global economy has continued to grow slowly. Output growth improved slightly, reaching 2.8% in 1996 compared to 2.4% in 1995. It is projected that this slow growth will continue for the remainder of 1997," he added.
The G-77 chairman also said it is particularly noteworthy that slowdown in growth of world trade in 1996 was largely due to the weakening of commodity markets.

Income gaps between the developed and developing countries have continued to widen. While in 1965, the average per capita income of the G-7 industrial countries was 20 times that of the world?s poorest seven countries, by 1995 it was 39 times as much. For instance, in Africa, average per capita income is now only 7.0 per cent of that of developed countries, he added.

While admitting "some improvement in economic growth" in developing countries, he attributed this largely to the efforts of these countries through policy actions and initiatives they have undertaken in the macroeconomic framework and structural adjustment.

During 1996-97, he said, the international community witnessed some developments in the efforts of member states of the United Nations to strengthen and dynamize the global partnership for development through intergovernmental processes.

The conclusion of the negotiations on the Agenda for Development on 20 June 1997 was a very important positive development in the evolution of international development cooperation. The Agenda provides the most comprehensive and fundamental framework on principles, objectives, policy actions and institutional arrangements on international cooperation for development in the medium and long-term, he noted.

However, for this Agenda to be meaningful and credible, it is imperative that member states commit themselves to fully and effectively implement and operationalize it in the most expeditious manner. Indeed, to do this requires maximum political will of the member states.

The Special Session of the United Nations General Assembly in late June 1997 provided an opportunity to review and appraise the implementation of the decisions, recommendations and commitments made at the first United Nations Conference on Environment and Development in Rio de Janeiro five years ago.

"In the main, we note that the review of the Conference showed that there has been little progress in achieving the main goals set at the Earth Summit primarily due to the failure by the developed countries to fulfill their obligations with regard to the provision of new and additional financial resources and the transfer of technology," he added.

The G-77 chairman also expressed concern over the decline in ODA in recent years. "We speak of the need to honour the commitments because the performance of developed countries in channeling financial resources to developing countries has been extremely disquieting," he complained.

The share of total ODA in the Gross National Product of Development Assistance Committee (DAC) countries dropped sharply from 0.33% in 1992 to 0.25% in 1996, the lowest ratio recorded since the UN adopted in 1970 the overall target of 0.7% of donor GNP.

The share of aid to the LDCs in the combined GNP of the DAC donor countries has dropped from 0.09% in 1990 to 0.06% in 1995 as compared to the agreed target of 0.15%-0.2% by 2000.

"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. In particular, developed countries should comply with the internationally agreed targets of ODA and commitments for new and additional resources," he said.

He also said that external indebtedness has emerged as one of the major obstacles to the development efforts of developing countries. The development endeavours of developing countries, in particular towards the provision of social and economic services, including education, health and housing are severely hampered by the obligation to set aside a substantial portion of national budgets in the order of more than 30% for servicing external debt.

What is urgently needed is an effective, equitable, development-oriented and durable solution to the external debt and debt servicing problems of developing countries, he told the Committee.