SAN JOSE DECLARATION AND PLAN OF ACTION ON
SOUTH-SOUTH TRADE, INVESTMENT AND FINANCE
San José, Costa Rica, 13-15 January 1997
SAN JOSE DECLARATION
1. We, the Member States of the Group of 77 and China, have gathered in San Jose, Costa Rica from 13 to 15 January 1997, with the aim of starting the process of updating the Caracas Programme of Action adopted by the High-level Conference on Economic Cooperation among Developing Countries, held in Caracas from 13 to 19 May 1981, and devising new strategies to accelerate its implementation, in particular in the fields of trade, investment and finance.
2. The Caracas Programme of Action identified South-South cooperation as an integral part of the collective action of the Group of 77 and China to renew, accelerate and strengthen cooperative efforts and solidarity among developing countries.
3. The historical circumstances out of which the Caracas Programme of Action emerged have since changed considerably. Developments of significant importance have taken place in the last decades, introducing new trends and reshaping central aspects of the international agenda.
4. We reaffirm the goals of the Caracas Programme of Action as well as the continued relevance and increased importance of South-South cooperation in the current international situation. We also recognize the great potential for furthering this cooperation. In this context, we resolve to strengthen cooperation among the developing countries on the basis of equality, solidarity, mutual benefit, and complementarity with the common objective of development. We emphasize that more political will and dynamic economic cooperation will significantly contribute to the strengthening of South-South cooperation in other fields.
5. The goals and aspirations of South-South cooperation continue to be valid. While many countries and regions of the South have followed different patterns in terms of economic growth, we believe that the advantages of cooperation and economic integration among the countries of the South constitute a promising strategy to foster their development. Therefore, we reiterate that South-South cooperation constitutes an important element of international economic cooperation and a viable strategy for greater collective self-reliance and development of developing countries as a means for ensuring their full integration in the global economy.
6. There is a firm conviction that South-South cooperation should be actively pursued and vigorously strengthened based on the self-reliance of developing countries. At the same time we reaffirm the importance of the North-South dialogue through which the countries of the North are called upon to fulfill their international commitments.
7. The member countries of the Group of 77 and China recognize that no one will do for us what we are not prepared to do for ourselves. In this regard, we emphasize the need to further exploit the unexplored or unutilized capacities in the South for the promotion of our mutual cooperation.
8. The member countries of the Group of 77 and China also believe that the realization of the full potentials of and opportunities offered by South-South cooperation is inextricably linked to a favourable external economic environment which enables the developing countries to play a more active role in international policy and decision-making processes, improves their terms of trade and access to international markets, promotes their commercial and industrial competitiveness, provides a durable solution to their external debt problem, and supports their efforts in achieving sustained economic growth and sustainable development.
9. Globalization and liberalization have increased economic interdependence. These two factors are, among others, the phenomena which most deeply have characterized the economies of the world in the recent years. They are also forces that increasingly promote the liberalization of trade, finance, and investment flows, intensifying the competitive and efficiency demands on developing countries' economies. However, benefits in some countries contrast with instability and marginalization in others for which these processes should be managed on the basis of principles of non-discrimination and avoidance of protectionist measures, and on fair competitive advantages.
10. The diverse processes and development experiences among countries present opportunities that could be utilised in strengthening and enhancing South-South cooperation so as to accelerate development and enhance the capacities of developing countries to deal with the challenges posed by globalisation and liberlisation. In this regard, the peculiar challenges, uncertainties and risks of further marginalization posed for Africa and the least developed countries by the phenomena of globalization and liberalization need to be emphasized. It is therefore also necessary to incorporate in the future programmes of South-South cooperation such activities that address their critical situations, taking into account the internationally agreed programmes of action for Africa and the least developed countries and according special attention to these countries.
11. The revolutionary developments in informatics and information technology, and the freer access to information that they offer to developing countries, are a historic opportunity which must be seized and capitalized upon. Greater priority must be accorded in the South to maximizing the benefits inherent in this phenomenon.
12. The Governments, while strengthening their function as guiding agents of the economy and guarantors of the indispensable stability for such activity to take place in a conducive environment, have been exerting greater efforts in involving all actors, both public and private, in the development of the national economies.
13. The participation of the private sector in the development of the national economies in developing countries has been increasing substantially. This is a factor that should be duly taken into consideration in South-South cooperation to expand trade, foreign direct investment and the flow of capital among developing countries.
14. We recognize in this context the importance of the private and other entrepreneurial initiatives for the process of South-South cooperation and welcome the participation in this process of the Group of 77 Chambers of Commerce, the Agreement concluded between the Chambers and UNCTAD in San Jose, and the Meeting of Young Entrepreneurs held simultaneously with this conference.
15. From this perspective, it would be desirable to develop and strengthen a partnership among the different actors, including the public and private entrepreneurs sectors as well as NGOs, community-based organizations and civil society.
16. This partnership should optimize the economic capacity and the collective self-reliance of the countries of the South in the context of a globalized and increasingly interdependent world economy. It is also important to keep a proactive attitude towards the development and strengthening of initiatives and enterprises in those regions in which the development of the private sector is still nascent.
17. Subregional, regional and interregional institutions and organizations from developing countries, in the field of trade, investment and finance, should be invited and encouraged to actively participate in cooperative initiatives through networking, joint work programmes and other appropriate means and mechanisms with other developing countries institutions.
18. South-South cooperation deserves adequate international support so as to enable the developing countries to forge a genuine partnership with developed countries for the common purpose of fostering and strengthening the global economy. In this context, we call on the developed partners, as well as relevant international institutions, particularly international and regional financial and trade institutions, to provide concrete support to the efforts by the developing countries to strengthen South-South cooperation.
19. We note that triangular approaches, whose relevance has already been demonstrated, should be further explored and implemented, and that new and innovative approaches to facilitate South-South programmes and projects should be further promoted.
20. The United Nations must play an important role in expanding South-South cooperation as an important dimension of international development cooperation, and the United Nations can only be meaningful to all countries if it can equally be relevant on the issues of global peace and security and of the development of countries. In this regard, the member countries of the Group of 77 and China are convinced that the ongoing institutional reforms must produce results that will enhance the capacity of the United Nations to promote international development cooperation and increase the commitment of resources to the Organization for this purpose.
21. South-South cooperation is a priority for the developing countries and therefore should have the full support of UNDP, UNCTAD, UNIDO, FAO, regional commissions and other bodies and agencies of the UN system. It is therefore important to maintain the separate identity, and where applicable, the financial autonomy of units such as the Special Unit for TCDC of UNDP dedicated to supporting ECDC/TCDC. In this context, we welcome the initiative for the establishment of a UNDP-UNCTAD-UNIDO partnership to develop technical cooperation packages to assist the developing countries.
22. We underscore the importance of effective follow-up and implementation of the Caracas Programme of Action in the fields of trade, investment and finance, and in this context reaffirm the need to strengthen the Intergovernmental Follow-up and Coordination Committee (IFCC), sectoral review meetings, and other mechanisms for review, policy-making, implementation and general follow-up as specified in the Caracas Programme of Action. In this context, we strongly emphasize the need for regular and effective holding of the meetings of IFCC and request the Chairman to take appropriate and timely action in this regard.
23. There is a need for strengthening the G-77's institutional mechanism, inter alia, by the maximum utilization of the Core of Assistants in order to guarantee the continuity of the initiatives and implementation of the recommendations emanating from the Ministerial Meetings. There is also a need to make use, in a coordinated manner and to the maximum extent, the analytical capabilities of the South Centre, UNCTAD, UNIDO, UNDP, FAO and other bodies of the United Nations System.
24. We reaffirm the importance that we attach to the political will that must underlie all South-South cooperation, and in this regard we recommend that the proposal of a South Summit at an appropriate time should be explored.
SAN JOSE PLAN OF ACTION
1. The Caracas Programme of Action identified South-South Cooperation as an integral part of the collective action of the Group of 77 and China to renew, accelerate and strengthen cooperative efforts and solidarity among developing countries. Since then South-South Cooperation has been understood as a strategy aimed at a more rational and effective use of the human, material, financial, scientific and technical resources of developing countries, in order to promote their development and strengthen their economic independence. At the same time, this cooperation has been conceived of as a mechanism that offers the opportunity to take full advantage of existing and potential complementarities in their economies, to promote economic relations among developing countries based on equality and mutual interest as well as a means for building up the developing countries' self-reliance in negotiations vis-à-vis the developed countries.
PART I: TRADE
2. Globalization and liberalization have increased the potential for international trade to become an unprecedented engine of growth and an important mechanism for integrating countries into the global economy. Not all countries, however have been in a position to seize these new trading opportunities, specially the least developed among them.
3. Taking into account the Singapore Ministerial Conference and bearing in mind the principle of differential and more favourable treatment for developing countries, the developing countries will seek to promote the following:
4. With the aim of achieving the complete integration of the developing countries into the world economy and the international trading system, the countries members of the G-77 and China:
5. The continued marginalization of LDCs in the world economy is compounded by the process of rapid globalization and liberalization. Therefore:
6. The interaction of Southern firms among themselves is instrumental in order to capture a fair share in the income and profit accruing from the production and consumption of the South. The strategy should include:
7. The Global System of Trade Preferences (GSTP) among developing countries is a vital mechanism for the realization of increased trade among developing countries:
8. The GSTP Round at the Ministerial level should be reserved for the launching of the Third Round of Negotiations. In order for the next Round to achieve the objective of creating a framework to significantly increase trade among member countries of the G-77 and China, it might require:
a) improve preferential margins agreed in the linear reductions and
b) draw up a list of exceptions;
9. To provide analytical and institutional support to the GSTP process, UNCTAD is requested to undertake a study to assess:
10. With a view to augmenting trade and investment flows among G-77 countries, and to foster South-South cooperation, as well as to provide a concrete form and practical modality for bringing together business representatives from developing countries for displaying their products, technologies and capabilities that would result in actual match-making by way of trade tie-ups and industrial joint ventures, the Group supports the:
PART II: INVESTMENT
11. Investment is a key determinant of economic development and employment creation in developing countries. The existing shortage of private risk capital in most of the Southern countries limits the availability of domestic investment. Developing countries need to:
12. Intra-South investment is an important element of economic cooperation among developing countries. It must be developed and strengthened in a spirit of partnership among the different actors involved in the economic process in our countries, in which the role of the private entrepreneurial sector is fundamental. For this purpose, the member countries of the Group of 77 and China should:
13. To encourage such cross-investments, Southern Investment Banks and development finance companies need:
14. The current nascent capacity of Southern financial institutions to mobilise resources in external capital markets could be expanded:
15. The promotion and attraction of foreign direct investment is fundamental. For this purpose:
PART III: FINANCE
16. Development can only take place in a supportive international economic environment in which major developed countries shoulder a special responsibility. In the North-South context, the fact that the current international discussions on development are increasingly sidelining or ignoring the external dimensions, is the origin of serious concerns in the developing world. In the South-South context:
17. The Group of 77 and China has an important role to play in strengthening relations
between the United Nations System and the Bretton Woods Institutions. For that purpose:
PART IV: OTHER RELATED AREAS
18. Industrial development has an important role to play in the reduction of disparities that result from the unequal involvement of the developing countries in the processes of globalization and liberalization, as well as a dynamic instrument essential to the rapid economic and social development of developing countries. The members of the G-77 and China reaffirm that industrialization should be urgently promoted in order to contribute to the eradication of poverty and the creation of productive employment. As the central coordinating agency for industrial development in the UN system, the relevance and importance of UNIDO lies in the fact that it provides specialized services to developing countries which are essential to their economic and social development. Its recent successful major reform process has strengthened its role as a global forum on industrial policies and strategies and a provider of integrated technical cooperation services.
19. While industrialized countries are well equipped to reap the benefits of the globalization process, the situation remains unsatisfactory in many developing countries, particularly LDCs. In this context, the Group of 77 and China calls for:
20. Small and medium size enterprises (SMEs) are an essential component in the development strategies of most developing countries. They are significant agents of economic growth, employment creation and social progress. Their lean size enable modern SMEs to adapt relatively easily to the new conditions of increased competition which requires continuous innovation and fast response to changes in demand. In this context, the development of SMEs should be promoted by:
21. In order to improve product and process quality, industrial standards, quality control and metrology are of prime importance. In this context:
Technology and Information
22. Few developing countries have access to the new communication and information technology. Among the developments which were cited in this regard was the establishment of the South Investment Trade and Technology Data Exchange Centre (SITTDEC). In the light of this experience:
23. The experience of member countries of the Group of 77 and China that have implemented domestic reforms has in turn, created a favourable environment for the development of entrepreneurship and competitiveness, a valuable element for South-South cooperation that should be the subject of exchange with the least developed countries. To this end:
24. As international trade is increasingly determined by dynamic comparative advantages, based on technology, scientific and technological cooperation can be a viable avenue to upgrade the technological content of traditional exports of resource intensive and labour intensive goods and services. In this connection:
25. Special attention should be awarded to the promotion of enterprise-to-enterprise Science and Technology cooperation through industry and business associations, universities and Research and Development institutes by providing frameworks of incentives and facilities, including financing facilities.
26. Taking into account the important role played by the informal sector in the development of developing countries action must be taken to:
27. The competitiveness of enterprises depends to a large extent, among others, on the existence of infrastructure and trade-supporting services such as customs, transportation, banking and insurance, telecommunications and business information systems. Land-locked developing countries and small island developing countries require special attention in order to overcome their particular development constraints. For this purpose:
28. The interregional variable is one of the sources of South-South cooperation. For this purpose:
PART V: FOLLOW-UP OF THE SAN JOSE CONFERENCE
AND INSTITUTIONAL ASPECTS
29. The Group of 77 and China commits itself in San Jose, Costa Rica to pursue by all means at its disposal a new vision of South-South cooperation and to make this process a priority in the work of the United Nations and its agencies and bodies such as UNDP, UNCTAD, UNIDO and FAO, among others.
30. There is a need to coordinate common positions of the developing countries in the multilateral economic, trade, finance and other relevant fora, as well as interactions and coordination among them, with a view to enabling the countries of the South to take initiatives and to forge common positions in related negotiations, so as to better safeguard the vital and common interests of the developing countries.
31. A special report should be prepared annually by UNCTAD to analyze the trends in trade, investment, and interflows of technology from the viewpoint of developing countries aimed at stimulating South-South Cooperation in these fields.
32. The U.N. agencies dealing with development in general, and South-South cooperation in particular, should be provided with the necessary means to carry out their functions. For that purpose, the existing institutions and mechanisms should be better utilised and innovative initiatives should be launched.
33. In order to advance trade, investment, and financial flows among developing countries, the interaction of business people among them should be further intensified and facilitated.
34. In promoting effective South-South cooperation, it is important that the developing countries attach high priority to the social and human aspects of development and that they develop arrangements to benefit from sharing experience in this area.
35. Noting the important role of women in development and the necessity of engaging the participation of the various sectors of the civil society in South-South cooperation, there is a need to support the establishment of appropriate institutional mechanisms to enable women producers, women's micro-enterprises and women workers to benefit from the process of globalization by increasing their access to financing, markets, technology, education and training, and to encourage the networking of women's organizations in developing countries to contribute to the expansion South-South cooperation.
36. The transfer of technology is another key area in which the UN system can support South-South cooperation. To achieve this goal, the establishment by existing UN mechanisms including TCDC, ECDC and relevant sections of UNCTAD, UNIDO as well as Regional Economic Commissions of centers for information and technology transfer and their networking at various levels.
37. The active participation of regional financial institutions such as the African Development Bank (ADB), the Asian Development Bank (AsDB) and the Inter-American Development Bank (IDB), among others, should be encouraged in order to provide a financial base and a medium- and long-term perspective which is likewise indispensable.
38. The South Centre as an intergovernmental organization has provided and should continue to make substantive contributions to the activities of G-77 on a regular basis. The analytical capability of the South Centre remains of critical importance to the Group of 77 and China. Relations between both institutions need to be intensified for mutual benefit. In this context, members of G-77 and China should provide necessary resources to strengthen the capacity of the Centre. The Group of 77 should request the South Centre to prepare a report on the progress made in South-South cooperation.
39. The Group of 77 and China underscore the work that has been accomplished so far by the Perez-Guerrero Trust Fund (PGTF). In order to allow the Fund to achieve its objectives, efforts undertaken to increase its core capital should be continued.
40. The establishment by UNDP of a Trust Fund for South-South Cooperation in 1996, is an initiative of the greatest relevance that must be supported with financial resources from both countries of the North and the South.
41. The Member States who have not yet done so, should strive to develop national focal points so as to better facilitate South-South cooperation.
42. It is of vital importance to South-South cooperation that the separate identity and
financial stability of the Special Unit for TCDC be maintained within the structure of UNDP.
The Special Unit for TCDC has an important function in fostering South-South cooperation.
43. It would be desirable that the Bretton Woods institutions, the World Bank and the International Monetary Fund, participate actively and join efforts with regional financial institutions to support projects and initiatives furthering South-South cooperation. The Group of 77 and the Group of 24 in Washington, D.C. should intensify their interaction.