1. Pursuant to the provisions of the Caracas Programme of Action, adopted in 1981, and of the San Jose Declaration adopted by the Group of 77 Conference on Trade, Investment and Finance held in San Jose, Costa Rica, from 13-15 January 1997, and endorsed by the 22nd Ministerial Meeting of Foreign Affairs held in New York on 25 September 1998, a High Level Conference on Regional and Subregional Economic Cooperation of the Developing Countries was held in Bali, Indonesia, from 2-5 December 1998.

2. The Conference was attended by high level participants from member countries of the Group of 77, the United Nations organs and bodies and regional and subregional economic groupings/communities. The Conference focused on identifying innovative strategies for the promotion cooperation between and among regional and subregional economic groupings/communities, and arrangements of the developing countries. The outcome of this Conference should also serve as a useful input for the South Summit to be held in Havana in the year 2000 which should provide a forum at the highest political level for reviewing progress made and identifying constraints so as to strengthen South South Cooperation.

3. The Conference took place at a time when the twin forces of globalization and liberalization of trade and capital flows are profoundly changing global economic processes and relations. It recognized that globalization and liberalization present challenges and opportunities as well as risks.

4. The Conference noted with deep concern that notwithstanding the promise of a new dawn of prosperity through the phenomenon of globalization and liberalization, the world economy is on the brink of recession and is characterized by with uncertainty and instability. Economic growth has slowed down for developed and developing countries alike. Growth in world trade has also suffered an acute setback. Developing countries, particularly the least developed among them, have been adversely affected by declining of Official Development Assistance (ODA), excruciating debt burdens and falling commodity prices. Foreign Direct Investment flows have concentrated in few countries and sectors and although FDI is no substitute for ODA, the Conference noted the potential that FDI offers for development. In this context, the Conference called for a more broad-based and enhanced flows of FDI so that all developing countries may benefit from it.

5. The financial crisis, which began in Asia, seriously undermining the development efforts of the developing countries, was a matter of concern to the Conference. The Conference was convinced that in addition to direct contagion and spillover effects from one economy to another, a generalized loss of confidence has exacerbated the crisis. As a result, many developing countries have suffered colossal losses of financial resources which affected production, export and economic growth. Unemployment has soared and the number of people living below the poverty line has tremendously increased. Food is in short supply while education and health services have been severely affected. The devastating social and economic costs wrought by the crisis, including slowdowns, outright economic collapse and the threat of a deep global recession are cause for serious alarm.

6. The Conference recalled the Ministerial Declaration of the Group of 77 and China of 25 September 1998 and noted in particular paragraphs 11, 12, 13, 62 and 63 of the Declaration and the adverse impact of the issues raised in this paragraph on regional and subregional economic cooperation.

7. The Conference noted that the economic and social setbacks have highlighted the need and urgency of strengthening South-South cooperation. The political and strategic importance of South-South cooperation lies in its ability to provide developing countries with appropriate stimuli to intensify and widen the scope of economic relations and tap the vast potential of intra-South cooperation, as well as ensuring an equitable North-South partnership in managing globalization. It stressed the critical need to promote truly meaningful and concrete forms of South-South cooperation to further enhance our collective self-reliance endeavors.

8. South-South cooperation is poised to play a more dynamic and critical role in the global economy and geopolitics of the 21st century. This cooperation over the years has progressed on its own; its successes and shortcomings have been amply identified and assessed. There are critical areas which require further strengthening of South-South cooperation, and there are cooperative endeavors which have been slow and sporadic in nature. In fact, there are possibilities and potentials that remain dormant and untapped.

9. The Conference underlined the important role of regional and subregional economic cooperation among developing countries in promoting South-South cooperation. For these cooperative endeavors to concretely bolster South-South cooperation, they must evolve into long-term sustainable undertakings, keep pace with global developments, and provide prospects for economic, social and institutional linkages among the countries of the South.

10. The Conference stressed the significant role of regional and subregional economic and technical cooperation in improving the welfare and standard of living of peoples in the developing countries and thus contribute to the effort of international community in eradicating poverty.

11. Regional and subregional economic cooperation through, inter alia, custom unions, free trade areas, common markets and other preferential arrangements which provide the raison d’etre of many subregional groupings/communities, should be seen as complementary and an important tool for global economic integration. They should constitute building blocks rather than stumbling blocks to multilateralism. At the same time, the international economic environment should be supportive of the full development of regional and subregional economic groupings/communities.

12. The Conference emphasized the relevance of Economic and Technical Cooperation among Developing Countries (ECDC/TCDC) in the context of globalization and interdependence. ECDC/TCDC can be a tool to maximize benefits that can be derived from economies of scale and complementarities which will enable countries of the South to participate more effectively in the global market. Various regional and subregional cooperation groupings/communities among the countries of the South are, by their very nature, ECDC/TCDC in its broadest sense.

13. In order to strengthen cooperation among regional and subregional groupings/communities of developing countries, the Member of Countries of the Group of 77 will undertake the following priority actions:

14. The Conference agreed on the need for a closer coordination between the Group of 77 and China and the Non-Aligned Movement through the Joint Coordination Committee in New York, including for the advancement and the implementation of the Bali Plan of Action on the Regional and Subregional Economic Cooperation of the Developing Countries and stressed the importance of this plan of action for the development of the economic agenda for the South.

15. The Conference underscored the importance of the Perez-Guerrero Trust Fund in enhancing concrete cooperation schemes among countries in the South, and in this regard, it encouraged contributions to the Perez-Guerrero Trust Fund to enable it to support more cooperative projects among developing countries.

16. The Conference therefore reaffirmed its commitments to promote and strengthen regional and subregional economic cooperation among developing countries and adopt the Bali Plan of Action for implementation, with a set of specific measures identified to strengthen and deepen the work ahead as well as to knit closer ties and cooperation among us, to provide further political, financial and institutional impetus to regional and subregional cooperation as we approach the new millennium.

17. The Conference also declared its collective appreciation of its very warm hospitality, excellent facilities and leadership provided for the meeting by the Government and people of the Republic of Indonesia.