United Nations

E/1994/22


Economic and Social Council

 

 

 



                                UNITED NATIONS

                      COMMITTEE FOR DEVELOPMENT PLANNING

                      Report on the Twenty-Ninth Session
                               (12-14 January 1994)


                            Economic and Social Council
                               Official Records, 1994
                                   Supplement No.2


                                       CONTENTS
Chapter                                                Paragraphs  Page

  I.  INTRODUCTION ...................................    1 - 36     1

      A.  The development outlook ....................    6 - 18     2

      B.  Demographic expansion and mobility .........   19 - 26     4

      C.  Rethinking the framework for development
          cooperation ................................   27 - 36     5

 II.  THE WORLD ECONOMIC OUTLOOK, 1994-2002 ..........   37 - 78     8

      A.  Introduction ...............................   37 - 43     8

      B.  Short-term outlook:  1994 ..................   44 - 49     8

      C.  The role of asset price deflation ..........   50 - 53    11

      D.  Medium-term outlook, 1995-2002 .............   54 - 59    11

      E.  Policy concerns ............................   60 - 71    15

      F.  Policy issues relating to the globalization of 
          capital markets ............................   72 - 78    17

III.  POPULATION GROWTH AND MIGRATION IN RELATION TO NATURAL
      RESOURCES, ENVIRONMENT AND DEVELOPMENT .........   79 - 174   19

      A.  Introduction ...............................   79 - 81    19

      B.  World population trends ....................   82 - 123   19

      C.  Mobility and international migration .......  124 - 145   30

      D.  Poverty, environmental degradation and demographic
          trends .....................................  146 - 172   35

      E.  Population, environment and development
          policies ...................................  173 - 174   40

 IV.  TECHNICAL COOPERATION FOR DEVELOPMENT ..........  175 - 251   42

      A.  Overview ...................................  175 - 194   42

      B.  Introduction ...............................  195 - 196   44

      C.  Major trends in the structure of technical
          cooperation in recent years ................  197 - 200   45

      D.  Purposes of technical cooperation ..........  201 - 203   50

      E.  Conditions for success and perceived
          shortcomings ...............................  204 - 223   50

      F.  Methodological issues:  efficiency of technical
          cooperation personnel and effectiveness of
          technical cooperation ......................  224 - 226   55

      G.  Efforts to increase effectiveness ..........  227 - 242   56

      H.  Requirements of technical cooperation in the
          1990s ......................................  243 - 251   61

  V.  GENERAL REVIEW OF THE LIST OF THE LEAST DEVELOPED
      COUNTRIES ......................................  252 - 265   64

      A.  Introduction ...............................     252      64

      B.  Recommendations ............................  253 - 265   64

 VI.  ORGANIZATION OF THE SESSION ....................  266 - 271   70

                                      Annexes

  I.  Agenda .......................................................75 

 II.  List of the least developed among the developing countries ...76 
 
                                       Tables

  1.  World gross domestic product (1988 United States dollars) ..... 9

  2.  Unemployment rates in developed market economies ..............12

  3.  Per capita world gross domestic product (1988 United States
      dollars)  .....................................................13

  4.  Total population and average annual growth rates by decade,
         1960-2025 ..................................................21

  5.  Population as percentage of world total, 1960-2025 ............22

  6.  Share of technical cooperation (TC) in total and in grant and
      grant-like bilateral ODA of DAC member countries, 1990 ........46 
 
  7.  Distribution of net ODA and technical cooperation grants:  net 
      disbursements, 1987 and 1990 ..................................48 

  8.  Share of technical cooperation, food aid and energy aid in
      official development finance ..................................49 
 
  9.  Criteria for identifying least developed countries ............66  


                                I.  INTRODUCTION


1.      The ultimate objectives of development are easy to list.  We are
concerned to reduce global poverty and raise the standard of living of
millions of people whose material well-being is extraordinarily low; we are
interested in expanding the range of choice open to people so that they may
choose for themselves more satisfying lives; and we are concerned to enhance
the capabilities of people everywhere so that women and men may come closer to
fulfilling their potential.  Development is thus about putting people first: 
the ultimate focus of policy and initiative must be on human development.

2.      Development, however, is concerned with the long view, so that the
sustainability of the development process and the protection of the
environment are central issues.  There is no conflict between human
development and sustainable development.  Indeed, sustainable development is
essential if long-run human development is to occur.  The recent emphasis on
sustainability should therefore be seen as an enrichment and deepening of the
concept of development.

3.      Concerns with equity and with the distribution of income and wealth
have always been part of the debate on development policy.  The introduction
of the notion of sustainability, however, casts these old debates in a new
light. The need to ensure that the process of development can be continued
indefinitely has implications both for intra-generational equity, i.e., the
distribution of capabilities among the population alive today, and for
inter-generational equity, namely, the resources, opportunities and range of
choices that those living today pass on to our successors.

4.      The end of the cold war has created enormous opportunities and serious
problems.  New conflicts have emerged, often centred on ethnic differences,
which can be understood in part as a struggle of people to redefine their
identity and to discover new ways of relating to one another.  This has its
positive aspects, but the potential for violence is enlarged by the increased
military spending that has occurred in a number of developing countries,
supported by military assistance from developed countries and subsidies to
exports of armaments.  Global ideological conflict and a nuclear confrontation
between two super Powers have given way to the disintegration of States and
empires, civil war and localized international conflict.  A growing number of
emergencies and a consequent increase in the number of international
peace-keeping operations have become necessary to protect innocent human
beings and to encourage peaceful settlements.  It is true that those
activities divert resources in the short term from economic and social
development and in some cases subtract from human development; however, the
process of development will not be sustainable without new and reliable
security mechanisms.

5.      And yet there have also been encouraging changes.  The end of the cold
war has been accompanied by more open relationships among countries.  There is
always a danger that must be guarded against that progress towards greater
openness will come to a halt and even be reversed, but so far this has not
happened.  Commodity markets have become more open; capital markets have been
liberalized; global competition has increased and more countries have begun to
exploit the advantages that come from greater specialization.  The next step
in creating a genuinely open world economy is to liberalize international
labour markets.


                                          A.  The development outlook

6.      There is a potential in the world for accelerated economic growth. 
Usable technologies and knowledge have accumulated at an historically
unprecedented rate and yet there is a large gap between the knowledge
available and the knowledge that is actually used.  Closing that gap, creating
greater access worldwide to available useful knowledge, is one major source of
future growth.  Another source consists of the further exploitation of
possibilities for mutually advantageous global trade, possibilities which have
been enhanced by the recently concluded General Agreement on Tariffs and Trade
(GATT) agreements.  Still another source of accelerated growth arises from
greater use of market forces and a continuation of the trend towards lesser
use of administrative procedures to allocate resources.

7.      A large number of developing countries have undertaken major
adjustment programmes in recent years.  We have witnessed a greater
orientation toward the use of the market.  International trade has been
liberalized, quotas have been replaced by tariffs and tariff levels have been
reduced.  Production has been restructured and the composition of output
altered to increase efficiency in the overall use of resources.  State
enterprises have been privatized and the role of the State in promoting
development has been re-examined.

8.      More can and should be done.  People should be given a stronger voice
in affairs of greatest concern to them.  Governments should become more
accountable to those who are governed.  Corruption in the broadest sense and
the erosion of confidence in public institutions should be diminished, lest
the legitimacy of the State itself be called into question.  If the decline of
authoritarian regimes and the spread of democracy are to be more than
ephemeral phenomena, participation of people in public life must be
institutionalized and become a commonplace.  Development is partly about
choices, but not all choices are made in the market place; some are made in
the political arena.

9.      The developed countries, too, need to restructure their economies in
order to create conditions favourable to accelerated growth.  The GATT
agreement creates opportunities for further trade liberalization, but
agricultural protection in the developed countries remains high, to the
disadvantage of consumers in the developed countries themselves and of some
potential exporters in developing and developed countries.  There are worries
in some regions of the world, particularly in Asia, that if growth should
falter, protectionist attitudes could be strengthened and the European Union,
the North American Free Trade Agreement and possibly other regional groupings
could be transformed into trade restricting institutions.  The tension between
trade liberalization and protectionism is ever present and the international
community must be vigilant in protecting the gains from freer trade.  A
specific issue of vital importance to eastern and central Europe is access to
the markets of western Europe.  The developed countries need to restructure
their production in order to permit a substantial flow of exports from the
eastern and central European countries in transition to a more market-oriented
economy.  Aid is no substitute for trade; indeed, in the absence of more
liberal trade, foreign aid may do little more than perpetuate an inefficient
pattern of resource use.

10.     The developed countries also need to restructure their economies to
combat environmental degradation, which implies changes in relative prices,
the development of new technologies that economize on energy and raw
materials, and altered patterns of production and consumption, in short, the
adoption of a new style of life.

11.     Finally, the developed countries need to restructure their economies
to permit the emergence of more liberal international labour markets:  a
subject to which the report shall return.

12.     Despite many obvious problems in the world economy, the current growth
outlook can be seen as a glass half full.  There has been very rapid growth in
East Asia, notably in China with its huge population.  There has been rapid
growth in South-East Asia, including Indonesia and its large population. 
There has been an acceleration of growth in South Asia and most important in
the three populous countries of Bangladesh, India and Pakistan.  There has
also been a recovery of growth in Latin America.  Among the developing
regions, Africa is conspicuous for its continued slow growth.

13.     Indeed, the developing countries are today acting as the engine of
global growth.  Countries that account for about half the world's population
have experienced a significant improvement in their average standard of
living.  Moreover, those countries account for many of the poorest people in
the world.  As a result, the pattern of global growth, contrary to a widely
held belief, has helped to reduce inequality in the distribution of world
income.  For once, the proportionate gains of the poor exceed those of the
rich.  The narrowing of global income inequalities has been accompanied by a
narrowing of differentials in human development indicators and hence at the
world level, polarization among people has diminished.

14.     The marginalization of Africa and the unsatisfactory performance in
West Asia are two of the most disturbing features of the present decade.  Also
of great concern is the increasing internal inequalities in some developing
countries.  Notwithstanding those important qualifications, a majority of the
people of developing countries are experiencing increased prosperity.

15.     The developing countries, however, account for just over 34 per cent
of global output (in purchasing power parity terms).  That is, nearly two
thirds of the world's output and income are generated in the developed
countries and in the former socialist countries of the Soviet Union and
eastern and central Europe.  Seen from the perspective of global production,
the current growth outlook is a glass half empty.  Western Europe and Japan
are in the midst of recession.  There has been a sharp decline in output and
incomes in the Russian Federation and in parts of eastern and central Europe. 
The cyclical recovery in the United States of America is unusually slow by
historical standards.  Within the developed countries, incomes have become
polarized, unemployment (in Europe) has remained high and in the United States
of America employment creation (of full-time jobs at least) has been
disappointing.

16.     The main body of the report calls attention to three features that
distinguish the current phase of the cycle from previous downturns.  First, in
Japan and some other developed economies, the recession was accompanied by
asset price deflation.  The fall in the real price of assets reduced wealth,
depressed demand and contributed to prolonging the recession.  Second, the
recession occurred at a time when Governments in developed countries were
experiencing serious fiscal problems and had large budget deficits, thus
inhibiting Governments from adopting the usual counter-cyclical measures - tax
reductions and an expansion of public expenditure - and further prolonging the
recession.  Indeed, in countries where the Government responded to the budget
deficit by reducing public expenditure, the recession was exacerbated.  As a
result of asset price deflation and the fiscal crisis of the State, emphasis
was placed on monetary policy to stimulate economic expansion.  Low interest
rates did contribute to recovery, particularly in the United States of
America, but the response to low interest rates has occurred only after long
lags and the effect on the rate of growth has been modest.

17.     International flows of private capital in Latin America and parts of
Asia have been an important external influence on the economies of several
developing countries.  Capital flows to developing countries as a whole
collapsed during the period 1982-1990, but there has been a revival in the
last three years.  The flows have been concentrated in just a few countries
and they may prove to be volatile or highly unstable, but none the less they
have been significant.  For example, in countries that suffered from an acute
shortage of foreign exchange, capital inflows alleviated a bottleneck and
allowed growth to accelerate even when the contribution to overall investment
rates was relatively small.  In other countries, capital inflows helped to
create favourable expectations which, at least in the short run, were
self-fulfilling.

18.     Capital inflows do however pose a problem for exchange-rate policy. 
In the absence of government intervention, an inflow of foreign capital would
lead to an appreciation of the exchange rate and possibly to faster inflation,
i.e., a rise in the price of non-tradable goods and services.  But if
liberalization of the capital account were accompanied by tariff reductions
and trade liberalization, as often occurs, then the appropriate policy would
be to depreciate the exchange rate in order to ensure equilibrium in the
balance of payments.  It is not that foreign capital inflows are harmful but
that it is important for countries to get the long-term fundamentals right: 
exchange-rate policy should not be guided by short-term considerations;
measures should be in place to encourage local private investment and an
efficient allocation of public investment; weaknesses in the educational
system and in human capital formation generally should be addressed; and the
neglect of the 1980s should be corrected.


                                    B.  Demographic expansion and mobility

19.     Contrary to those who fear a Malthusian explosion, population growth
rates are falling.  Human capital is increasing, human development is
occurring, but the absolute number of human beings is still rising, albeit at
a declining rate.  The phenomenon is worldwide.  Perhaps more important for
future trends, fertility rates in developing countries have begun to fall in
virtually every region and in the developed countries, fertility rates are so
low that an era of zero population growth is over the horizon.

20.     The population issue should thus be seen as a development issue.  It
is closely linked with broad social trends and with the emancipation of women.
Human development and fertility rates are strongly and inversely correlated. 
In countries where infant mortality rates are low, families have less of an
incentive to have many children.  In countries where literacy rates are high,
where women are given equal opportunities to obtain an education and where
women are allowed to seek paid employment, the opportunity cost of child-
bearing is increased, the ability of women to earn higher incomes is raised
and the number of births per female is lower.  In countries where social
safety nets exist and provision is made for security in old age, parents are
less dependent on their children at the end of their life, and the average
size of family therefore tends to be smaller.
        
21.     Some critics argue that such a picture is far too optimistic.  They
point to the so-called environmental refugees flooding into cities and to the
danger, perhaps even the likelihood, that some of the mega-cities in
developing countries will collapse.  Rapid urbanization, in that view, far
from being a source of dynamism and expansion is a major demographic and
environmental catastrophe waiting to happen.

22.     In the developed countries, the most prominent demographic change in
recent decades is the change in the age structure.  Increased life expectancy
combined with low fertility rates is resulting gradually in an ageing of the
population and a rise in the ratio of retired persons to active workers.  That
is, labour of working age is becoming increasingly scarce relative to the
population as a whole.

23.     An obvious solution to that problem would be to import labour from
countries where it is abundant and it is here that liberalizing international
labour markets, structural change in developed countries and the ageing of the
population intersect.  The potential welfare gains from a freer international
labour market would in principle be at least as large (since the restrictions
are greater) as the gains from more liberal capital markets and markets for
goods and services.

24.     Greater international mobility of labour would raise the total output
in the developed countries and contribute to an increase in the efficiency in
the use of the world's resources; it would increase the supply of
entrepreneurship, stimulate small business and accelerate innovation; it would
raise savings and investment in the developed countries (after taking
remittances into account) and contribute to faster growth which, in turn,
would make it easier for the developed countries to restructure their
economies; and finally, by importing labour from countries where populations
are young, it would alleviate the problems associated with an ageing
population.

25.     There are undoubtedly greater limits to the international flows of
labour than to that of capital and goods, but the objective of public policy
should be to allow the levels of migration that people seek while improving
simultaneously the security and prosperity of labour and of human beings
generally in the developing countries themselves.  Similarly, a number of
problems attend the integration and assimilation of migrants into the
mainstream of the economy and society - problems for both the migrants
themselves and the host country - but such are issues to be addressed by
policy makers, not excuses for inaction.

26.     The benefits of labour market liberalization would of course be
greater in proportion as the rate of growth in the developed countries was
faster and the rate of unemployment was lower.  Stagnation and unemployment,
however, are  not arguments against liberalization; they are arguments in
favour of restructuring production, removing obstacles in rigid internal
labour markets and stimulating expansion.  Poor economic performance should
not be used as an  excuse to erect barriers to migration; it should instead be
seen as a signal of the need to adopt policies that permit liberalization and
the resulting economic expansion.


            C.  Rethinking the framework for development cooperation

27.     The end of the cold war has created an opportunity to rethink the
framework for development cooperation.  Foreign aid was once used, at least in
part, to support the strategic security of States, to achieve diplomatic
objectives and to promote particular ideologies.  That is no longer necessary,
if it ever was, and the focus of cooperation can now shift to promoting the
economic security of people, particularly the poorest people.  That is, the
thrust of a new framework for development cooperation should be to reduce
global poverty, promote human development and protect people from severe
hardship.

28.     Those objectives can be achieved in part by reforming foreign aid as
conventionally understood:  improving the allocation among recipient
countries, reducing the tied element, improving the accuracy of targeting etc.
But development cooperation should be seen in a much broader context,
including the access of developing countries to markets, improved mechanisms
for the transfer of technology, greater international mobility of labour and
cooperation on environmental issues.  In such a context, foreign aid, although
important, may play a less prominent role.

29.     The main body of the present report includes a chapter on technical
cooperation, a much neglected subject that nevertheless currently accounts for
about a third of all development aid.  In fact, analysis indicates that much
technical cooperation cannot accurately be described as aid at all, nor does
it contribute to development.  Technical cooperation is largely driven by the
objectives of donors; it is highly tied; and it is used, inter alia, to
promote exports, encourage the spread of certain languages and cultures,
provide employment for technicians and professionals from donor countries and
enable donors to supervise and monitor aid-financed projects.  If development
occurs as a result, it is largely an accidental by-product.

30.     Conditions are little better in the receiving countries.  Mechanisms
for ascertaining genuine needs for technical cooperation do not exist. 
Foreign experts are poorly used; technical cooperation is treated as a free
good; institutional capabilities are not increased and hence the apparent need
for technical cooperation continues indefinitely and even increases.  After 45
years of technical cooperation and annual expenditures of $12-15 billion,
there is no evidence that the original objectives as publicly stated have come
close to being met.

31.     In principle, technical cooperation should contribute to the transfer
of technology and to human capital formation.  In practice, it seems to have
done so only to a limited extent.  Although our intention is to analyse
technical cooperation rather than suggest policy reforms, several
possibilities emerge from the discussion.

32.     First, most technical cooperation experts are from developed
countries: less than 10 per cent are from the host country or from other
developing countries.  The latter percentage could be increased substantially,
the costs of technical cooperation could thereby be reduced and, most
important, national capabilities in developing countries could be enlarged.

33.     Second, foreign technical cooperation experts are paid on average 15
times as much as nationally recruited experts, even when the local experts
have the same qualifications.  That is both inequitable and inefficient and
suggests that considerable scope exists for doing more for less.

34.     Third, there is a proliferation of channels for providing technical
cooperation.  The task of providing multilateral technical cooperation was
originally assigned to the United Nations, yet today the United Nations
supplies only a quarter of all technical cooperation; the rest is supplied
through the World Bank, the regional development banks and, of course, the
bilateral aid agencies.  The proliferation of channels suggests that there may
be scope for specialization and division of labour.

35.     Finally, the need for technical cooperation apparently never ends. 
Few countries ever graduate from the list of the needy.  Since 1972, however,
the United Nations Development Programme (UNDP) has classified 21 developing
countries as net contributors based mainly on gross national product (GNP)
per capita.  Most of these countries have technical cooperation programmes
with UNDP but pay for the services they receive.  More recently, at its High-
Level Meeting held in December 1993, the Development Assistance Committee
(DAC) of the Organisation for Economic Cooperation and Development (OECD)
agreed that as of 1996, concessional assistance to 16 high-income developing
countries would no longer be accounted as official development assistance
(ODA) in monitoring financial flows to aid recipients.  DAC also agreed to
intensify the concentration of its aid in countries whose GNP per capita falls
within the World Bank lending threshold. 1/  Perhaps the time has come to
develop measures of progress, refine criteria for eligibility and improve
mechanisms for graduation.

36.     Failing piecemeal reforms, it might be better to assign to each
eligible country a lump sum budget to be used to purchase technical
cooperation services  thus shifting responsibility to the recipients,
providing them with an incentive to treat technical cooperation funds as a
scarce resource and encouraging them to formulate priorities for technical
cooperation by sector, donor and type of service.  The use of the resources
could then be monitored regularly by the contributing nations and agencies.


                       II.  THE WORLD ECONOMIC OUTLOOK, 1994-2002


                                      A.  Introduction

37.     World economic growth at present is concentrated in the developing
countries.  In particular, China, South and East Asia, which include over
50 per cent of the world population, continue to have very dynamic economies. 
Because of the concentration of world poverty in that region, its growth means
that poverty is probably decreasing more rapidly now than at any time in the
last three decades.

38.     The rapid growth in some developing countries has taken place in the
framework of slow growth in the industrial economies and a deep depression in
the economies in transition.

39.     World trade has increased more rapidly than world gross domestic
product (GDP), and intraregional trade among developing countries also has
shown even more dynamism than in the past.  The successful continuation of the
GATT negotiations should make possible the continued dynamism of trade.

40.     In contrast with those hopeful signs, the negative per capita growth
in Africa remains the major development challenge.

41.     The rapidly growing developing countries are now benefiting from the
structural reforms they have carried out, which have facilitated the massive
adoption of the stock of technology now available in the world.  That growth
can only be sustainable if the world trading system remains open, or becomes
even more open.

42.     To increase world growth, the industrial nations must accelerate and
in some cases start a process of structural reform and set in place policies
to make their economies more flexible.  That additional flexibility will
facilitate long-term growth with employment and the maintenance of an open
trading system.  Since the industrial economies are on the frontier of
technology, structural flexibility is a prerequisite for accelerating their
development.

43.     Structural adjustment and growth in the industrial economies will be
necessary to avoid continued low prices for commodities due to a weak demand,
a phenomenon that has hurt some of the poorest developing countries.


                                         B.  Short-term outlook:  1994

44.     The slow recovery in the United States of America and the recession in
other leading industrial economies has been more protracted than originally
envisioned, resulting in a low growth rate of about 0.4 per cent for the
developed market economies in 1993.

45.     The GDP growth of the developing world was higher in 1993 than in
1991-1992, largely due to high and accelerating growth rates in China (from
7 per cent in 1990 to 13.4 per cent in 1993) and among net energy-exporting
developing countries recovering from the Gulf War.  There is doubt, however,
whether China can continue to post such high rates of economic performance
over the medium term.

46.     China and East and South-East Asian countries continue to have very
dynamic economies.  Growth rates in the rest of the developing countries
generally remain unsatisfactory.  Output declines in the economies in
transition have continued to be deep, (see table 1).  Declines in industrial
output have been especially steep and much greater than originally estimated.

47.     In 1993, both through fiscal adjustment and lower growth in Germany,
German and European interest rates declined, which will slightly improve
economic growth in Europe in 1994.  The same is true for Japan.  The recovery
in the United States of America has continued to be slow but appears to be
sustainable.

48.     Those developments suggest a more hopeful outlook for 1994, although
the recovery in the industrial world will continue to be slow and depend on
continued structural change in the industrial markets, and prospects in Africa
remain far from satisfactory.

49.     The central European countries (the Czech Republic, Hungary, Poland
and Slovakia) appear to have reached the bottom of the depression caused by
the transition in 1993 and may post some growth in 1994 and the following
years.  Production declines were substantial in 1993 for the countries of the
former Soviet Union and it is unlikely that they will have positive per capita
growth in the near term.  


     Table 1.  World gross domestic product a/ (1988 United States dollars)

                                 (Percentage change)

------------------------------------------------------------------------------
Countries or areas                                 1993     1994     1995-2002
------------------------------------------------------------------------------
World total                                        1.0       2.3       3.1

Developed market economies                         1.0       2.3       2.6
   North America                                   2.9       3.6       2.8
      United States                                3.0       3.5       2.8
   Developed East                                  0.4       1.3       2.3
      Japan                                        0.1       1.0       2.3
   European Union                                 -0.4       1.7       2.6
      Germany                                     -1.2       1.3       2.2
      France                                      -0.8       1.4       2.7
      United Kingdom                               1.9       2.6       2.6
   Rest of industrialized countries               -1.4       1.8       2.6

Developing countries                               5.2       5.2       5.5
   Latin America and the Caribbean                 3.4       2.7       4.7
      Argentina                                    6.0       4.5       3.5
      Brazil                                       5.0       2.4       3.9
      Mexico                                       0.4       3.2       6.8
      Venezuela                                   -1.1      -2.2       5.4

   Africa                                          1.3       2.1       3.1
      North Africa                                 1.1       2.6       3.3
        Algeria                                    1.3       1.8       2.8
        Egypt                                      1.5       2.0       3.5
      Sub-Saharan Africa                           2.5       1.8       2.9
        Nigeria                                    4.0       1.9       2.6
   South and East Asia                             5.4       6.3       6.3
      Hong Kong                                    5.2       5.2       5.1
      India                                        3.5       5.1       5.3
      Indonesia                                    6.6       6.9       6.9
      Republic of Korea                            5.9       7.3       7.0
      Taiwan Province of China                     6.2       6.3       6.9
      Thailand                                     7.7       8.3       7.9
   China                                          13.4      10.3       8.1
   Western Asia                                    3.6       3.8       4.1
      Oil exporters                                3.8       3.7       4.3
      Oil importers                                2.4       2.4       2.4
   Mediterranean                                   0.0       3.9       4.7

Eastern Europe                                     0.6       2.4       3.2

Former Soviet Union                              -13.2      -9.3       3.7

Miscellaneous
   Eastern Europe and former USSR                 -9.4      -5.7       3.6
   Developing countries b/                         3.8       4.2       5.1
   South and East Asia, and China                  7.9       7.6       6.8
   Least developed countries                       4.2       3.6       4.2
   Net energy exporters                            6.7       6.1       6.0
   Net energy importers                            4.2       4.5       5.1
------------------------------------------------------------------------------

        Source:  Department for Economic and Social Information and Policy
Analysis of the United Nations Secretariat, Project Link forecast, 19 April
1994.

        a/    GNP for a few countries.

        b/    Excluding China.


                                     C.  The role of asset price deflation

50.     A unique feature of the recession and sluggish recovery in the
industrial countries was the role played by the efforts of households and
enterprises to improve balance sheets in the wake of sharp declines in the
market value of financial assets and real estate.

51.     Attempts by commercial banks to improve the quality of their assets
led to a lower volume of lending than would have normally been associated with
the declines in short-term interest rates in some major economies.  Households
responded to declines in the value of real estate and of equity shares by
slowing the rate of growth of consumer debt, which intensified as unemployment
rates increased.  Non-financial enterprises were burdened by debt acquired
during a period of widespread mergers and acquisitions, which led to efforts
to improve short-term cash flow by cutting costs through retrenchment in order
in some cases to make productivity-enhancing investments.

52.     Those balance-sheet adjustments, which were intended to reduce debt to
levels more closely in line with sharply reduced valuations of assets or
future income streams, appear to be well along in the United States of America
and the United Kingdom of Great Britain and Northern Ireland, but remain a
serious problem in Japan, suggesting continued slower growth for private
consumption, residential construction and business fixed investment than would
normally be expected if the recovery had spread in the industrial world.  The
continued efforts of most industrial countries to further reduce general
government deficits will reinforce those growth-dampening factors, and will
exert a fiscal drag on the recovery process.

53.     The view has now become widespread that the necessary financial
adjustments described above have been responsible for prolonging the trough of
the recession and can be expected to lead to only weak or moderate growth
rates during the recovery that is now under way in the industrial countries.


                                      D.  Medium-term outlook, 1995-2002

54.     Economic forecasts for 1995 and beyond suggest a rather fragile
recovery of growth.  World GNP growth might increase to 2.3 in 1994 and remain
above that rate until 2002, assuming that there is both a substantial recovery
in the United States of America and Japan, and continued fast growth in China,
East and South-East Asia.  Growth rates in Latin America are expected to
continue at more than 3 per cent, and in Africa are projected to remain at an
unsatisfactory level of about 3 per cent throughout the remainder of the
decade.  The medium-term projections examined by the Committee are not really
forecasts but are plausible future scenarios based on assumptions about
policies and the characteristic behaviour of economic agents.  They serve
mainly to organize discussions and to highlight potential areas of policy
concern.  Some positive trends are evident:  the policy reforms in developing
countries of the 1980s, the economic reforms in the economies in transition
more recently, the market unification effects of the European Union (EU) in
1992, complementary European economic cooperation negotiations and the
establishment of a North American free-trade area with the potential
participation of Mexico, and the culmination of the Uruguay Round, should lead
to an easier flow of goods, services, labour and capital, with concomitantly
rising economies of scale and greater competitiveness.  

55.     Assuming no major political upheavals, an underlying 2.6 per cent per
annum real average GDP growth rate appears to be achievable for the industrial
market economies in the remainder of the 1990s, without however allowing for a
cyclical downturn toward the end of the period.  On past indications, that
might be associated with an annual real average growth rate in trade of about
5.5 per cent.  Such trends in the international economy would permit
adjustments in production structures of goods and services, making room for
suppliers from both the better situated countries in eastern Europe and the
developing countries.  However, the relatively slow growth in the developed
market economies has given rise to the jobless growth phenomenon, which will
leave unemployment rates relatively high, improving by only about
1.5 percentage points between 1994 and 2002.  The unemployment rate
projections for the European Union in table 2 are probably not politically
sustainable and underline the need for structural reform in the industrialized
countries.

56.     Over the medium term, fiscal adjustment in Germany is expected to
permit some monetary easing, thus reducing the interest rate differential
vis-a`-vis the dollar which is expected to lead to some strengthening of the
dollar vis-a`-vis the deutsche mark.  Little change, however, is expected in
interest rate differentials between Japan and the United States of America and
thus little change in the dollar/yen exchange rate.  The relatively low
current value of the dollar is expected to persist, facilitating further
adjustment in trade balances.

57.     The outlook for output and trade for the medium and long terms in
central and eastern Europe is cause for guarded optimism, despite the poor
short-term prospects.  The time required for transition and reconstruction in
the four central European countries furthest along in the reform process (the
Czech Republic, Hungary, Poland and Slovakia) is generally taken to be 5-10
years.  That is, substantial changes in those countries should be evident by
the end of the 1990s.  But the restructuring process could take longer.  The
key issues are political, that is, whether and for how long the populations of
those four countries will be able to shoulder falling standards of living,
unemployment and other welfare costs of transition.  There is much that the
industrial market economies and multilateral organizations will be able to do
over the medium term to ease the difficulties of the transition process for
those countries, but providing access to markets for their exports will be by
far the most important.


              Table 2.  Unemployment rates in developed market economies

______________________________________________________________________________
                                    1993          1994          1995-2002
______________________________________________________________________________
Developed market economies          8.3            8.4             7.4

   North America                    7.2            6.7             6.4
   Developed East                   3.6            3.9             3.6
   Western Europe                  12.5           13.3            11.4
      European Union               12.8           13.6            11.6
      Other western Europe          9.6            9.9             9.2
______________________________________________________________________________

        Source:  Same as table 1.

58.     In the other countries of central and eastern Europe, the process of
change is less well advanced.  It is likely to take longer and the costs of
change are likely to be considerably higher.  For the area as a whole, the
requirements of increasing investment in agriculture, manufacturing,
infrastructure and housing to achieve living standards comparable to those of
industrial market economies are enormous.  Flows of capital and technology
from abroad will be helpful, but it is clear that the bulk of such investment,
as in successful developing countries, must come from domestic efforts,
particularly domestic savings.  The breakup of the former systems of planning,
payments and trade will take time to overcome.  Implementing a basic legal
structure, particularly with regard to land and other property ownership,
introducing the institutions that enable markets to operate, privatizing the
major productive State enterprises as well as the mass of small- and
medium-sized businesses, managing infrastructural facilities and building up
service enterprises such as banks, constitutes a large agenda.  Yet all those
steps are necessary for effective macro- and microeconomic management.

59.     The projections of growth prospects for developing countries seem
rather positive when contrasted with the decade of the 1980s.  They suggest
that the aggregate GDP growth rate, which increased from about 3 per cent in
1991 to about 5 per cent in 1992 and 1993, could average about 5.5 per cent
through 2002.  South, South-East and East Asian countries could continue to do
well, with continued rapid growth fluctuating within a range of from 5 to 8
per cent among the newly industrializing economies as well as in Indonesia,
Malaysia and Thailand, about 5 per cent in India, and about 8 per cent in
China.  The Latin American aggregate GDP growth could increase from 2 per cent
in 1992 to about 3 per cent in 1993-1994 and then average about 4.5 per cent
through 2002.  Those projections mainly reflect an acceleration of growth in
Brazil and Mexico, and the continuation of moderate growth in Chile, Colombia
and Venezuela.  In sub-Saharan Africa, GDP growth rates could reach about 3
per cent, which, unfortunately, would barely exceed population growth rates
(see table 3).


                Table 3.  Per capita world gross domestic product
                          (1988 United States dollars)

                               (Percentage change)

----------------------------------------------------------------------------
                                    1993         1994         1995-2002
----------------------------------------------------------------------------
World total                         -0.7          0.6            1.5

Developed market econom              0.4          1.7            2.0
   North America                     1.9          2.5            1.9
      United States                  2.0          2.5            1.9
   Developed East                   -0.1          0.8            1.8
      Japan                         -0.3          0.7            2.3
   European Union                   -0.7          1.4            1.9
      Germany                       -1.7          0.9            2.4
      France                        -1.2          1.0            2.4
      United Kingdom                 1.7          2.4            2.4
     Other industrialized
     countries                      -1.9          1.3            1.1

Developing countries                 3.2          3.2            3.6
   Latin America and the Caribbean   1.6          0.8            3.0
      Argentina                      4.8          3.3            2.4
      Brazil                         3.4          0.8            2.6
      Mexico                        -1.6          1.1            5.0
      Venezuela                     -3.2         -4.2            3.5
   Africa                           -1.6         -0.8            0.2
      North Africa                  -1.3          0.2            1.0
        Algeria                     -1.4         -0.8            0.1
        Egypt                       -0.7         -0.2            1.5
      Sub-Saharan Africa            -0.6         -1.2           -0.1
        Nigeria                      0.8         -1.2           -0.4
   South and East Asia               3.3          4.2            4.3
      Hong Kong                      4.4          4.4            4.5
      India                          1.5          3.2            3.5
      Indonesia                      4.7          5.1            5.3
      Republic of Korea              5.0          6.4            6.3
      Taiwan Province of China       4.9          5.0            5.7
      Thailand                       6.4          6.9            6.8
      China                         11.8          8.8            6.9
   West Asia                         0.5          0.7            1.0
      Oil exporters                  0.9          0.8            1.2
      Oil importers                 -1.0         -1.0           -1.0
   Mediterranean                    -1.5          2.3            3.2

Eastern Europe                       0.4          2.2            3.1

Former USSR                        -13.6         -9.7            3.1

Miscellaneous
   Eastern Europe and former USSR   -9.8         -6.1            3.1
   Developing countries a/           1.5          2.0            2.9
   South and East Asia, and China    4.1          3.7            6.8
   Least developed                   1.1          0.5            1.2
   Net energy exporters              4.9          4.3            4.4
   Net energy importers              2.0          2.3            3.0
-----------------------------------------------------------------------------

        Source:  Same as table 1.

        a/    Excluding China.


                                              E.  Policy concerns

60.     Most of the industrialized economies are functioning below their
growth potential and it would be possible to reinforce recovery in some
economies by increasing government expenditure in productivity-enhancing
investment and having all Governments commit themselves to a medium-term
programme of structural adjustment. 

61.     Fiscal adjustment in some developed market economies must continue. 
Clearly, fiscal deficits should be reduced over the medium term in several
developed market economies.  Without such adjustment, their long-term growth
rates may decrease.  In particular, without fiscal adjustment saving rates in
such economies will be insufficient to finance needed investments, and may
therefore hinder world growth either by lowering the future rate of growth of
their own economies, or by crowding out investment in the developing countries
and the economies in transition through higher interest rates.

62.     Both in developing countries and in the economies in transition, trade
liberalization policies will be increasing the proportion of trade in GNP,
which will make possible a continued higher growth of world trade than of
world production.  That increase in trade, through unilateral trade
liberalization in developing countries, will be a major source of productivity
growth caused by increased specialization and economies of scale in both
industrial and developing economies.  The changes in trade patterns in the
economies in transition of Europe and Asia may also be a source of
productivity growth in those economies.  For that to happen, however, it is
important that developed market economies make progress towards opening their
markets when the rest of the world is liberalizing.

63.     Industrial countries should not react to the jobless growth phenomenon
and their unemployment problem by protectionism.  Instead, they should
undertake the necessary structural changes in their economies, including those
in labour markets.  Policies must be put in place to stimulate investment.

64.     The culmination of the Uruguay Round GATT negotiations augurs well for
continued global integration of trade.  The Committee agreed, however, that
regional integration schemes that are not motivated by defensive
considerations and that are compatible with the multilateral trade rules may
also contribute to an increase in the trade/GNP ratios of some developing
countries, and that that should also be a source of more rapid growth. 
Caution was voiced, however, about the negative welfare effects that might
arise for the countries left out of regional trade arrangements, especially
those involving the three major industrial economic areas.  In particular,
there was concern that the costs would be high, especially for African and
South Asian countries, if European and North American-led regional trade
arrangements excluded the countries of those regions from preferential trade
treatment.  In summary, regional trade arrangements should function as
guarantees of access, and not as protectionist trade blocs.

65.     Some of the developing countries threatened by a proliferation of new
preferences have taken other steps to remain competitive.  They have come to
the fore of countries arguing for further trade liberalization, replacing the
industrial market economies as liberalization leaders.  The 1970s and 1980s
experience of leading exporters suggests that appropriate macroeconomic
policies and high productivity at the enterprise level are more effective in
vigorously expanding market penetration than privileged market access. 
Macroeconomic policy convergence among countries within regional trading
arrangements may result in reducing exchange rate volatility among countries
within the regional economic areas, and should thus improve the allocation of
resources.

66.     Capital flows to developing countries and the countries of central and
eastern Europe are small in relation to intra-industrial market economy
capital flows, yet fears that global savings will be insufficient to meet
developing and Eastern European requirements in the 1990s are growing.  It is
being argued that some groups of countries will be crowded out by the more
rapidly growing countries.  The resulting pressure on interest rates would
raise the cost of capital, particularly to poorer countries.  An assessment of
the prospects for net capital flows to developing countries must take into
account the determinants of their various official and private components. 
According to a recent assessment of the World Bank, official grants and
bilateral loans can be expected to increase at about the same rate as nominal
GNP in the developed market economy countries.  Substantial increases in those
growth rates or agreements to protect the global commons, which would add
significantly to the capital requirements, would, of course, require
additional financing.  For countries dependent on official development
assistance (ODA) for the bulk of their external development finance the poor
prospects for growth in ODA grants and loans are particularly serious.  For
those countries, it is especially important that disbursements of concessional
assistance to the countries in transition be financed from additions to aid
budgets in donor countries, which would raise their ODA/GNP ratios
substantially.  For countries financing the bulk of their external financial
requirements at commercial rates of interest, it is of some concern that
interest rates could rise as economic growth accelerates in the industrial
countries, which would affect not only the cost of borrowing on private
markets but also the interest rate charged on loans by the international
financial institutions.

67.     Although the economic outlook in the short term is not impressive, the
structural reforms carried out by the developing countries in the last 10
years, if maintained and completed, will have laid the groundwork for fast
growth in many countries in the second half of the decade.  In some cases,
high social costs have been incurred that would have been to no purpose if the
policies should be discontinued precisely at the moment that the benefits were
beginning to make themselves felt.  In other countries, the reforms have not
yet improved the conditions of the poor and diminished investment in
productivity and people have not led to improvements, and in some cases have
damaged equity as well as diminished efficiency. 

68.     As was discussed at length in a previous report of the Committee, 2/
there is a growing consensus concerning the type of policies that helps make
adjustment equitable.  Such policies combine macroeconomic adjustment policies
to promote both technological change and an increased and more targeted human
development.

69.     Developing economies did not seem to be as closely integrated to the
business cycles in the developed market economies as in the past.  During the
present recession, many developing countries have managed higher growth rates
than in the industrial economies.  However, macroeconomic policies in the
developed countries increasingly affect developing countries through the
medium of capital flows and interest rates.  Yet international coordination of
macroeconomic policy remains inadequate.

70.     The question of the timing and phasing of reforms in the developing
economies and economies in transition is crucial, as is a limit to the amount
of sudden change an economy can absorb.  Although there would seem to be a
good case for gradualism, in economies with little experience with functioning
markets the right economic incentives will not be in place unless a broad
system of reforms is announced at the same time.  Clearly, price reform and
the dismantling of non-tariff barriers must occur rapidly in order to set in
place the incentives for efficiency.  The rules on property right and
commercial law must also soon be in place.  It may be prudent, on the other
hand, to phase in aspects such as financial liberalization, privatization and
credit liberalization in a more gradual way. 3/

71.     The resumption of private capital flows to developing countries has
contributed to the recovery of output and investment in some countries. 
However, they pose some macroeconomic problems and they have flowed to a
limited number of nations.


      F.  Policy issues relating to the globalization of capital markets       
                       
72.     The literature on liberalization has concluded, more on the basis of
the study of failed liberalization efforts than on theory, that the freeing of
external capital flows should be the last stage of an adjustment and
liberalization strategy, reflecting the fact that in some failed
liberalization episodes, external capital flows were quite disruptive.  Such
capital movements tended to finance consumption more than investment and
frequently created financial crises that ended up in massive bank bail-outs. 
Those capital flows also generated strong pressures towards an excessive
appreciation of exchange rates that later paralysed efforts at trade
liberalizations by generating large and growing trade deficits.

73.     In the 1990s, some developing countries, particularly in Latin
America, are again experiencing capital inflows that make monetary policy
difficult to manage, and exert short-term pressure on real exchange rates. 
The literature on the phasing and timing of the elements of broad structural
adjustment programmes and the experience of countries that have successfully
liberalized suggest that there may be a place for capital controls in
adjusting developing countries, which will minimize disruptive capital flows
without discouraging the external financing of investment.

74.     However, the globalization of capital markets and the banking industry
has progressively made such controls less effective.  There is clear evidence
of massive capital flows in countries with apparently tight exchange controls.
It is especially difficult either to restrain capital flight or its return by
nationals.  However, it would still appear to be possible to discourage,
through appropriate measures, some important forms of short-term capital
inflows, especially bank deposits, when such capital inflows might contribute
to inflation or to an untimely exchange rate appreciation.

75.     In any case, there is a growing consensus concerning the importance of
prudential bank regulation during the process of liberalization - and its
careful phasing - in order to avoid the misallocation of external financial
flows, speculation and the dangers of financial crises.  It is important for
Governments and central banks not to guarantee, even implicitly,
indemnification for capital losses arising from the exchange-rate movements
caused by capital flows.

76.     Both in developed and developing countries there should be strict
rules that avoid the full distribution of unrealized capital gains by banks or
mutual funds.  Unrealized capital gains should not count fully as bank capital
for the purposes of calculating the required ratios between capital and
liabilities.  Such prudential regulation would help to diminish the danger of
financial crises being generated by capital flows.

77.     Less emphasis should be placed on monetary policy that places an
excessive reliance on money-supply targets in adjustment programmes.  It has
often been the case that liberalization-cum-adjustment has radically shifted
money demand schedules and also generated large non-inflationary money-supply
increases through capital inflows.  Tight monetary policy increases interest
rates, generating further capital inflows.  Since those short-term capital
inflows are hard to control and can be destabilizing and since high real
interest rates discourage fixed investment in any case, fiscal policy should
play a greater role in price stabilization and be supported by appropriate
monetary policy.  With a more balanced mix of fiscal and monetary policies, it
becomes feasible to avoid destabilizing capital flows.  

78.     Given both the disruptive impact on long-term export growth and the
diversification of instability in real exchange rates generated by capital
flows, there seems to be a good case for sterilizing intervention by central
banks to reduce the short-term variability of exchange rates.  Such
intervention, however, can only be effective in the short term and should not
persist when capital movements are signalling the existence of fundamental
disequilibriums.  It is difficult but not impossible for Governments and
central banks to tell when such fundamental disequilibriums are present and
that a realignment of exchange rates is required.


           III.  POPULATION GROWTH AND MIGRATION IN RELATION TO NATURAL
                 RESOURCES, ENVIRONMENT AND DEVELOPMENT


                                               A.  Introduction

79.     In looking at population growth and migration in relation to natural
resources, environment and development, the present chapter places special
emphasis on population movements, including international migration, and on
linkages between population dynamics and environmental considerations. 

80.     The most important point in examining population growth and migration
in relation to natural resources, environment and development is that
fertility rates are projected to decline between 1995 and 2025.  However, the
movement of people for economic, political or environmental reasons will
continue to be a significant social force.  That movement should not be a
surprise.  The emphasis on liberalizing trade and capital flows over the last
decade has been mirrored by individuals looking for the best place to earn
their living.  Upheavals and political instability in some countries have
added to the flows of labour.  As old regimes have crumbled, the ethnic
accommodations often arrived at by force have unravelled.  Political
disruptions, coupled with a lack of attention to environmental fragility, have
also contributed to movements of people.

81.     However, the developed countries' enthusiastic embrace of liberalized
trade and investment has not extended to liberalized movement of people,
particularly the unskilled.  Indeed, the high unemployment now experienced in
many developed countries, coupled with the uncertainties of the impact of
changed world economic patterns, encourages exactly the opposite response: 
strong pressure to staunch the inward flow of migrants and fear of an even
more racially and culturally diverse population.  Also, if unemployment
remains high, the further liberalization of trade to accommodate the growing
export capacity of developing countries and significant contributions from
developed countries to assist developing countries in averting environmental
damage will be very difficult policies to sell unless considerable political
effort is spent convincing voters in developed countries that it is in their
own interest.


                                          B.  World population trends

                                             1.  Population growth

82.     It is now expected that fertility will decline by 34 per cent over the
period 1995-2025, a considerable change from former trends.

83.     If the United Nations medium variant turns out to be correct, the
world population will reach 8.5 billion people by 2025, or about 3 billion
more than its current total.  In order to give a possible range of outcomes
the United Nations has also calculated a high variant based on a slower
fertility decline and a low variant based on a faster fertility decline. 
Under the high variant, the world population will reach 9.1 billion by 2025,
while under the low variant it would still exceed 7.9 billion.

84.     Despite declining fertility rates, the population momentum, or
demographic inertia, means that the annual increment to the world population
under the medium variant will reach a historic high of almost 100 million in
the last part of the present century and will only begin to decline in the
beginning of the next century, reaching 85 million between 2020 and 2025, or
about the same as that of the mid-1980s.  Most of that increase will occur in
cities in the developing countries.

85.     An important consequence of the demographic momentum in developing
countries is that more and more women are entering their reproductive years,
so that the need for family planning services in those countries will
therefore continue to increase rapidly.  During the 1990s, just to maintain
current levels of contraceptive use, approximately 100 million more couples
will need family planning services.  Thus, in order to validate the assumption
of declining fertility rates in the medium variant of the United Nations
population projections, a further 75 million couples will need access to
family planning information and services by the year 2000.

86.     In the 1960s, there was a clear dichotomy between the slow growth of
population in the developed countries (the average annual rate was 1.1 per
cent) and its rapid growth in the developing countries (the average annual
rate was about 2.5 per cent), with little diversity among the major developing
regions, ranging from 2.4 per cent in Asia to 2.7 per cent in Latin America
(see table 4).  Since the 1960s, however, the rates of population increase
have become more diverse among the developing regions and their constituent
countries, and the divergence is expected to increase in the 1990s. 
Population growth in Africa began to accelerate in the 1950s and continued to
do so through the 1980s, while in most of the other developing regions it
began to decelerate in the 1970s.  The drop in the growth rate was
particularly notable in China and the Asian planned economies; the drop is
expected to continue in the 1990s, falling to just over half the rate of the
1960s.  Presently projected population growth rates for the 1990s and for the
period 2000-2025 are about 3 and 2.7 per cent respectively in Africa and West
Asia, 2 and 1.3 per cent in South and South-East Asia, 1.7 and 1.2 per cent in
Latin America and 1.3 and 0.6 per cent in China.  The growth rate in the
developed countries as a whole fell to 0.7 per cent in the 1980s and is
projected to be only 0.4 per cent in the period 2000-2025.  Those differential
growth rates will result in quite different age structures that, in turn, will
affect many aspects of development. 4/

87.     In the least developed countries, population growth has accelerated
from an average rate of 2.5 per cent in the 1960s to 2.7 per cent in the
1980s, in contrast to a dramatic drop in China, from 2.4 per cent to 1.5 per
cent and a slight decline in the other developing countries as a whole.  The
difference is expected to be even greater in the 1990s - 2.8 per cent in the
least developed countries versus 1.5 per cent in China and 1.9 per cent in the
developing countries as a whole.  Even during the quarter century to 2025,
population growth in the least developed countries is projected to decline
only to 2.4 per cent compared to the developing country average of
1.4 per cent.

88.     The shift in the regional shares of global population is dominated by
the growth of developing Africa and West Asia.  Their combined share, which
was 10 per cent in 1960 and 12 per cent in 1980, is projected to reach
22 per cent in 2025.  In contrast, the proportion of world population
accounted for by the developed countries declined from 22 per cent in 1960 to
18 per cent in 1980 and is projected to be only 12 per cent by 2025.


   Table 4.  Total population and average annual growth rates by decade,
             1960-2025

-----------------------------------------------------------------------------
Countries or areas        1960 a/   1960-   1970 a/  1970-   1980 a/  1980-
                                     1970             1980             1990
                                      b/               b/               b/
-----------------------------------------------------------------------------
Developing countries         
  North Africa               54      2.5      69      2.6      89       2.6
  Sub-Saharan Africa        209      2.6     271      2.9     361       3.1
  South and East Asia and
  Oceania                   482      2.4   1 069      2.3   1 338       2.2
  China                     657      2.4     831      1.8     996       1.5
  Western Asia               47      3.0      63      3.5      89       3.8
  Mediterranean              47      1.9      57      1.8      68       1.8
  Latin America and the
  Caribbean                 217      2.7     283      2.4     359       2.1

     Subtotal             2 069      2.5   2 639      2.2   3 295       2.1

Developed market economies  650      1.1     722      0.9     786       0.7

Eastern Europe and
 former USSR                295      1.1     329      0.8     358       0.8

Least developed countries   238      2.5     304      2.6     392       2.7

     World total          3 019      2.0   3 697      1.9   4 447       1.8
-----------------------------------------------------------------------------


-----------------------------------------------------------------------------
Countries or areas        1990 a/   1990-     2000 a/    2000-      2025 a/
                                     2000                 2025
                                      b/                   b/     
-----------------------------------------------------------------------------
Developing countries
  North Africa              115      2.4        146        1.7         200
  Sub-Saharan Africa        489      3.1        663        2.7       1 290
  South and East Asia and
  Oceania                 1 657      2.0      2 012        1.3       2 814
  China                   1 153      1.3      1 310        0.6       1 540
  Western Asia              129      3.0        174        2.6         329
  Mediterranean              81      1.5         94        1.0         120
  Latin America and the
  Caribbean                 441      1.7        523        1.2         702

     Subtotal             4 059      1.9      4 914        1.4       7 003

Developed market
 economies                  839      0.7        898        0.4         993

Eastern Europe and
 former USSR                387      0.4        404        0.5         460

Least developed
 countries                  510      2.8        675        2.4       1 215

     World total          5 295      1.6      6 228        1.2       8 472
------------------------------------------------------------------------------

     Source:  Department for Policy Coordination and Sustainable Development
of the United Nations Secretariat, calculated from country data in World
Population Prospects:  The 1992 Revision, Statistical Papers, Series A, No.
135 (United Nations publication, sales No. E.93.XIII.7); projections based on
the medium variant projection for each country.

     a/   Population in millions.

     b/   Percentage charge in average annual growth rate.


         Table 5.  Population as percentage of world total, 1960-2025

-----------------------------------------------------------------------------
Countries or areas  Number of
                    countries     1960   1970   1980   1990   2000   2025
-----------------------------------------------------------------------------
Developing countries
  North Africa            6       1.8    1.9     2.0    2.2    2.3     2.6
  Sub-Saharan Africa     49       6.9    7.3     8.1    9.2   10.6    15.2
  South and East Asia
  and Oceania            46      27.9   28.9    30.1   31.3   32.3    33.2
  China                   1      21.8   22.5    22.4   21.8   21.0    18.2
  Western Asia           12       1.6    1.7     2.0    2.4    2.8     3.9
  Mediterranean           4       1.6    1.5     1.5    1.5    1.5     1.4
  Latin America and the
  Caribbean              49       7.2    7.7     8.3    8.3    8.4     8.3


     Subtotal           167      68.5   71.4    74.1   76.7   78.9    82.7

Developed market
economies                34      21.5   19.5    17.7   15.8   14.4    11.7

Eastern Europe and
 former USSR             10       9.8    8.9     8.1    7.3    6.5     5.4

Least developed
 countries               47       7.9    8.2     8.8    9.6   10.8    14.3

     World total a/     211     100.0  100.0   100.0  100.0  100.0   100.0
-----------------------------------------------------------------------------

     Source:  Based on table 4.

     a/   Country group shares may not add to 100 per cent because of
rounding.


89.     Particularly worrisome are the population projections for Sub-Saharan
Africa set against that regions' lagging agricultural production and current
food deficit.  In 1990, Sub-Saharan Africa's 489 million people produced about
90 million metric tons of food (maize equivalent).  With consumption of
100 million tons, there was a gap of 10 million tons, which was met by
imports.  

                                       2.  Mortality and life expectancy

90.     Population growth rates are affected by trends in mortality and
fertility.  Mortality has declined in most countries during recent decades,
although unevenly.  Although it remains high in most developing countries, the
mortality rate has declined very rapidly in some countries and has reached
levels as low, or nearly as low, as those in developed countries.  In the past
decade, there have been decreases in infant mortality rates in nearly all
countries, but more than one quarter, representing 29 per cent of world
population, still have rates above 100 per 1,000 live births.  Between 1985
and 1990, the rate in the least developed countries was estimated at 120 per
1,000, and in Africa as a whole, it is 103, while the average in the developed
countries (excluding South Africa) is about 15.

91.     Mortality levels and trends are influenced by many social, economic
and cultural factors, including policies and programmes outside the health
sector. Economic development is usually associated with mortality decline,
since improved economic conditions imply higher living standards and increased
financial resources for health services.  But low mortality levels have also
been achieved in some low-income countries where Governments are committed to
reducing mortality; China, Sri Lanka and the state of Kerala in India are
well-known examples, as well as Cuba and Costa Rica among middle-income
countries.

92.     In developing countries, the deaths of young children constitute a
large share of all deaths and children are considered the major target in
efforts to reduce overall mortality.  The factors having the greatest effect
on the mortality of children are those related to parental education,
especially that of mothers.  Analysis of data from the World Fertility Surveys
show that infant and child mortality generally decreases as the average number
of years of education of the mother increases. 5/  Survey results suggest that
the impact of parental education may be greater than that of income-related
factors and access to health facilities combined. 6/

93.     Maternal mortality rates are a good indicator of the health situation
and status of women.  Maternal mortality is the largest cause of death among
women of reproductive age in most developing countries. 7/  In less developed
regions, there were on average 450 deaths for 100,000 live births between 1980
and 1985 against 30 in the developed countries. 8/  Since those rates are
higher in countries with high crude mortality rates, they should follow the
general trends of mortality and improve by the year 2000.  But the wide
disparities among countries are not likely to disappear, especially as the
increase of life expectancy is expected to be slower in Africa, for example,
which accounts for 30 per cent of maternal deaths as against 18 per cent of
births.

94.     Among the factors that contribute to the high levels of maternal
mortality in the developing countries are pregnancies in the youngest and
oldest ages of the reproductive period, maternal depletion through pregnancies
that are too closely spaced, high-parity births (i.e., births to women who
have already had a high number of pregnancies), lack of access to health
services and lack of trained birth attendants, especially where contraceptive
method failure has led to unplanned pregnancies.  Inadequate nutrition is an
important contributing cause of maternal deaths.  A number of studies have
shown that deaths resulting from the complications of poorly performed
abortions contribute a significant proportion of total maternal deaths. 
Family planning and good primary health care before and during pregnancy could
greatly reduce the number of potentially fatal complications.  However, as a
significant proportion of complications cannot be predicted or prevented,
speedy access to emergency care is also of utmost importance.  Inadequate
health service facilities and poor transportation networks are major factors
in maternal deaths among rural women in developing countries. 9/

95.     One of the most important findings from world fertility surveys
concerns the exceptionally high mortality among children born after a short
birth interval, 10/ suggesting that family planning programmes aimed at
spacing births and avoiding high-risk pregnancies could help to reduce infant,
child and also maternal mortality.  Other interventions that can lower
mortality in developing countries include efforts to improve the nutritional
level of the population, immunization programmes and other health measures.

96.     The mortality assumptions underlying population projections are given
in the form of life expectancy at birth, and age and sex patterns of survival
probabilities.  Changes in life expectancy at birth are affected more by
changes in mortality rates of infants and children than anything else, but
changes in mortality rates for older cohorts of the population are not
unimportant.  In the population projections in general, mortality trends
followed the assumption of a quinquennial gain of 2.5 years in the expectation
of life at birth until life expectancy reaches 62.5 years, followed by a
slow-down in the gain thereafter.  However, for some developing countries for
which recent evidence has indicated a retardation or an acceleration in the
improvement of mortality levels, the assumed future quinquennial gains were
adjusted accordingly.  For example, the anticipated quinquennial gain in life
expectancy was lowered from 2.5 years to two years or less for some
sub-Saharan African countries.  For those countries in which life expectancy
at birth has already reached a high level, the maximum level of expectancy at
birth was assumed to be 82.5 years for males and 87.5 years for females. 4/ 
Mortality may be significantly increased in the future by the increasing
incidence of acquired immunodeficiency syndrome (AIDS), and this has been
factored into the projections for the countries with the highest prevalence of
human immunodeficiency virus (HIV).

97.     In the developed countries, life expectancy at birth has increased
from 66 years in the early 1950s to 74 years in the late 1980s, while in the
developing countries as a whole (including China), it has increased from 41 to
60.  There was a dramatic increase in China, from 41 years in the early 1950s
to 61 in the late 1980s; in Africa, it increased from 38 years to 52.  The
average life expectancy in the least developed countries in the period from
1985 to 1990 is about 49 years.  

98.     Life expectancy at birth is generally several years longer for women
than for men, especially in the developed countries:  77 years for women
versus 70 years for men in the late 1980s; in the developing countries
(including China), it is about 62 years for women and 60 years for men.  The
region where average expectancy for women is the same as for men is South
Asia, although improvements in female life expectancy in Sri Lanka in the past
two decades have resulted in a more normal pattern in that country.  By the
year 2000, the difference is projected to increase to three years in the
developing countries as a whole, and to remain constant in the developed
countries.


                                    3.  Factors affecting fertility trends

99.     In the 1950s and 1960s, the level of fertility provided a generally
reliable means of distinguishing the developed from the developing countries,
but in the last two or three decades the distribution has become less
prominently bimodal.  With substantial fertility declines in a number of
developing countries of Latin America and Asia and persisting high fertility
in most of Africa and West Asia, the fertility differentials currently
observed within the developing world are now as wide as those formerly found
between the developing and the developed countries. 9/

100.    The most rapid fertility declines have occurred in developing
countries with a combination of profound improvements in child survival,
increases in educational levels and strong family planning programmes.  Since
the late 1950s, total fertility rates have declined by 2 to 3 children per
woman in China, the Republic of Korea, Thailand, Malaysia, Sri Lanka, Brazil,
Mexico and Colombia.  In all those countries, the proportion of married women
of child-bearing age currently using contraception grew rapidly since at least
the mid-1960s, gaining 2 to 3 percentage points a year and, in the 1980s,
reached levels of 50 to 70 per cent.  Simultaneously, under-five mortality
(i.e., the combined mortality of infants and children under age 5) declined in
China from 240 per thousand to 55, and from a range of 120 to 190 per thousand
in the other seven countries, to a range of 40 to 90.  Gross enrolment ratios
of females for the second level of education rose from less than 15 per cent
in all those countries to between 30 and 35 per cent in Thailand, Brazil and
China, to about 50 per cent in Sri Lanka, Malaysia, Mexico and Colombia, and
to 90 per cent in the Republic of Korea.

101.    Conversely, low rates of child survival, low levels of education and
insufficient access to birth control methods impede the transformation to
lower fertility in most countries of sub-Saharan Africa, as well as in such
Asian countries as Pakistan, Bangladesh, Nepal and Afghanistan.  In many of
those countries, total fertility rates average 6 or 7 children per woman and
show few signs of decline, 9/ despite significant government initiatives in
immunization and family planning.  Under-five mortality is still well above
150 per 1,000 in most of them and often exceeds 250; the female gross
enrolment ratio for the second level of education and the proportion of
married women currently using contraception are typically below 10 per cent
and rarely above 20 per cent.

102.    Recent studies confirm the strong negative relationship between
development and fertility but they also show that, within groups of countries
at similar levels of development, fertility decline generally has been
greatest in countries with strong family planning programmes. 11/  Without
strong national family planning programmes, the diffusion of development is
likely to induce fertility decline first among the more economically advanced
population groups; at a later stage, declines are observed across all groups. 
Variations among countries at similar levels of development are also likely to
be related to differences between social settings in household organization
and institutional arrangements for the rearing of children.

103.    The current policy stance on population of developing countries is
shown by a recent survey done by the United Nations.  That survey indicates
that 74 developing countries, or more than 50 percent of the developing
countries surveyed, considered their rate of fertility to be too high.  Out of
a total of 131 developing countries, 10 have policies in place to raise
fertility, 12 intervene to maintain the rate, 64 have policies to lower the
rate and 45 do not intervene.  In countries that have policies in place to
lower fertility rate, the implementation of policies is hampered by various
cultural, financial and administrative constraints.  Those constraints are the
most severe in the poorest countries, obviously on account of the lack of
financial resources to launch and staff the institutional arrangements
required for effective population activities. 

104.    Improvements in child survival increase the predictability of the
family's life cycle and thus create an appropriate environment for the
adoption of family planning practices. 12/  The so-called insurance effect
operates at a later point in the demographic transition, when family size
desires are clearly formulated.  Since, in many countries, family planning
methods other than sterilization are not yet widely accessible, there is still
considerable potential for large reductions in fertility. 13/

105.    Education may affect fertility through acquired skills and knowledge,
including the ability to provide safe child care and to use contraception
effectively.  Advanced education usually delays marriage and thus reduces the
length of the child-bearing life-span.  In the developing countries, women
with seven or more years of schooling marry, on average, nearly four years
later than women with no education.  Education may also convey the influence
of residence, income or socio-economic status, or be jointly determined with
such variables.  In addition, women's education is often positively associated
with the opportunity costs of child-bearing, which can be increased by making
primary education compulsory for all children regardless of gender, since
there is a need to purchase shoes, appropriate clothing, and school supplies
as well as a loss of unpaid labour in household economic activities.

106.    Although fertility decline may be assisted by changes in marriage
patterns or by the maintenance of lengthy breast-feeding, the efficient
practice of birth control is essential to achieve and sustain low levels of
reproduction.  Most of the intercountry variation in current national
fertility levels is explained by differences in contraceptive use.  Though
contraceptive use varies according to the level of development, health and
population policies have a strong independent effect, as seen in the high
levels of contraceptive use achieved by some poor countries with strong family
planning programmes once health policies have succeeded in greatly reducing
infant mortality. 14/  There is an urgent need for research to improve
contraceptive efficiency, reduce the adverse side-effects of contraceptive
use, and lower cost.

107.    In preparing the population projections shown in table 4, past and
current fertility trends for each country are evaluated and placed within the
social, economic and political context of each country.  Trends and
anticipated changes in the socio-economic structure and cultural values of the
society, as well as policies and programmes directed towards family planning,
are considered vis-a`-vis expected trends in fertility.  For many
low-fertility countries, fertility levels are assumed to decline or to remain
below replacement level for some decades into the future.  For high-fertility
and moderate-fertility countries, the level is expected to decline as
countries advance in their social and economic development, which is generally
assumed to progress as time passes.  It is also assumed, for those countries,
that existing or anticipated governmental policies and programmes for family
planning and related-governmental activities would accelerate or expedite the
process of fertility decline. 4/


                                 4.  Dependency ratios and labour force growth

108.    In the medium variant of population prospects for 2025 prepared by the
Population Division of the United Nations Secretariat, in which world
population would increase by 60 per cent and most of the increase would occur
in the developing countries, where total population would increase by
73 per cent, trends in dependency ratios (the ratio of non-earners to earners)
are very different between developed and developing countries.  In the
developed market economy regions, dependency ratios, which fell from
55 per cent to 50 per cent between 1975 and 1990, are expected to increase to
58 percent by 2025, thus reversing a long-lived historical trend.  Even more
significant, however, is that earlier declines in dependency ratios were
either associated with declining proportions of children who were either
moving into the labour force or resulted from fertility declines, their rate
of decline exceeding the rate of increase of the elderly.  In the next 25
years, whereas the proportion of dependent children will continue to decrease
albeit at a slow rate, the dependent elderly population will increase by more
than 50 per cent.  Since, as is noted below, labour-force growth is expected
to be very low, even higher proportions of current output will be required to
support an increasingly elderly population.

109.    In the developing countries, the situation is expected to be very
different.  There the very high dependency rates for children, which in 1990
were about 60, are expected to fall to about 40, mainly due to various cohorts
of children entering the labour force and, to a much lesser extent, to
declines in fertility.  At the same time, the dependency rates for the elderly
will increase just as in the developed countries but will reach only 12 by
2025.  Those trends will result in a major decline in the overall dependency
ratio in developing countries from about 67 per cent in 1990 to 52 per cent in
2025.

110.    Clearly, the ageing of population in developing countries in terms of
the increasing numbers of elderly is a secondary issue compared to the high
levels of entrants into the labour market.  Even with an improving dependency
ratio, the result is ambiguous because although a large labour force is
available there is more unemployment as well.  Also, with fertility declining
labour-force growth will continue due to lags, so that no immediate benefits
to the labour market situation result from fertility declines.  Once the rate
of increase of infants and dependent children begins to fall, pressure on
public finances arising from expenditures on education and health could be
somewhat alleviated.

111.    For the developed market economy countries, increasing dependency
ratios may adversely affect national and therefore global savings.  At the
micro-economic level, the life-cycle hypothesis emphasizes the declining need
for further savings with increasing ageing.  Accordingly, in an ageing
population consumption can be expected to rise faster than current income. 
Increases in the dependency ratio may also mean a smaller labour force and
thus a lower potential output.  In addition, there will be obvious changes in
the composition of government expenditures (as well as in its total share of
GDP) with respect to education, retraining and medical care, as well as
changes in the extent of transfer payments such as pensions.  Since a
country's current account position can be expressed as the difference between
national saving and national investment, it is likely that countries where
population ageing is most pronounced will tend to run current-account
deficits.  In that event, the difference in the increase in the dependency
ratio among the major industrial countries in the years to come could have
important implications for global payments balance. 15/

112.    Trends in labour-force growth are determined by changes in population
structure and participation rates.  The growth of the labour force in the
1990s is projected to slow significantly in the developed regions and China
but to remain fairly stable in the developing regions.  For the world as a
whole, the average annual rate of labour force increase will decline
dramatically to 1.5 per cent during the period from 1990 to 2000, compared
with 2.1 per cent during the period from 1970 to 1980 and 1.9 per cent between
1980 and 1990.  In developing countries other than China, the labour force is
projected to grow at about 2.3 per cent in the 1990s.  Whether or not growth
in the demand for labour will be able to absorb that increasing supply will be
an important policy question for the 1990s.

113.    In 1980, about 58 per cent of the world's population aged 10 and over
were members of the labour force, including those without jobs who were
looking for employment; overall, the participation rate was 73 per cent among
males and 43 per cent among females.  Rates varied significantly among
regions, especially for females, ranging from about 60 per cent in the
centrally planned economies to about 10 per cent in North Africa and West
Asia.  The apparent diversity between the high female participation rate in
sub-Saharan Africa (51 per cent) and the lower rates in Latin America and
South Asia (25 per cent) may reflect cultural differences in the definition of
female work.

114.    Persons aged 25 to 59 comprised 65 per cent of the world labour force
in 1985 and will account for virtually all of the labour force increase in the
1990s.  That group is projected to increase in the 1990s at the same rate as
in the 1980s or higher in most regions, except for Latin America, where the
annual growth rate is projected to decline from 3.2 to 2.9 per cent.  The
projected annual rates of increase for other regions are between 2.7 for the
developing countries in Asia and 3.0 per cent for Africa.  The increased
concentration of the labour force in the group will tend to increase overall
labour productivity, as this group is more experienced, on average, than the
labour force under 25 years of age.

115.    The proportion of the labour force in the 10 to 14 age group is
negligible for the developed regions but averages 5 per cent in the developing
regions, reaching 7.9 per cent in Africa.  That proportion is in sharp decline
in every region of the world except for Africa, and that trend is projected to
continue through the 1990s.

116.    Decelerating growth of the number of youth (aged 15 to 24) in the
labour force will be a new phenomenon in the 1990s in several regions of the
world and there will be absolute declines in some countries.  Those changes
will be caused primarily by declines in the size of the youth population and
also by its declining rate of labour-force participation.  Based on the
projections of labour-force participation made by the International Labour
Office, 16/ the number of youth in the labour force in East Asia (including
Japan and China) will decline at an annual rate of 3 per cent in the 1990s,
compared with a positive growth rate of 2.3 per cent in the 1980s.  In
southern Asia (including West Asia and South-East Asia), the annual growth
rate will fall from 2 per cent in the 1980s to 1.1 per cent in the 1990s.  In
the more developed regions, the youth labour force will decline 0.2 per cent
per year in the 1990s, compared with an annual increase of 1.0 per cent in the
1980s. Overall, the total number of youth in the world labour force will grow
much more slowly in the 1990s (at an average rate of 0.5 per cent) than the
1.1 per cent rate of the 1980s.

117.    A rapidly ageing population in developed market economy countries and
rising proportions of unemployed youth in developed and developing countries
alike are likely to cause heightened concern for personal security issues in
both groups of countries.


                                     5.  Conceptual and analytical issues

118.    The relative impacts on resource depletion and environmental
degradation of the growth, size and spatial distribution of population, as
well as consumption patterns, and the potential for reversing environmental
damage, are subjects of much debate.  Even the more narrowly defined issue of
the interrelationship between population growth and development is hotly
debated.  Much of the debate stems from uncertainty over which are the right
questions to ask and which are the right indicators to analyse.

119.    Several recent surveys, including one prepared by the Consultative
Meeting of Economists of the United Nations Population Fund (UNFPA) in 1992,
have summarized the history of the academic debate over the past three decades
concerning the economic consequences of rapid population growth in developing
countries.  The principal findings are the following:

        (a)   Nothing in economic-demographic research contradicts the
proposition that in low-income countries with considerable backlogs in human
development, living standards and infrastructure, population growth in excess
of 2 per cent per year is among the structural factors inhibiting the
achievement of a wide range of development objectives;

        (b)   In many countries, the longer-run implications of rapid
population growth, particularly pressure on renewable resources, are severe. 
Environmental pressures vary in the extent to which they are driven by
population growth as opposed to other factors such as technology, income
growth, policies etc.  But the food-soil-water relationship is strongly
related to population and individual countries that face imbalances in those
areas already are likely to be acutely affected in the future.  In such
circumstances, a difference of a decade in the onset of the transition to
lower population growth can make a considerable, even essential difference;

        (c)   Rapid growth in labour-force entrants is a source of stress in
capital-poor economies; in countries where rapid growth of the school-age
population has also contributed to the erosion of investments in human
resources, the potential gains that might have accrued from having a rapidly
growing stock of younger workers are offset by the lower productivity of
workers and reduced competitiveness in a global economy where gains from trade
depend primarily on productivity.  When low productivity is coupled with low
earnings, efforts to alleviate poverty are undercut.  It is easy to recommend
more investment in social sectors as a remedy to poverty but difficult to
accomplish if productivity is so low that neither workers nor Governments are
likely to accumulate the surpluses required to make such investments;

        (d)   Recognition of the adverse effects of rapid population growth
does not mean that acceleration of the transition to lower growth will by
itself solve all developmental problems; at best it may buy time to deal with
those problems or keep them from getting even worse.  Most of the immediate
benefits of slowing population growth through increasing access to family
planning accrue to individuals by enabling them to time and space births more
effectively and with less risk to health.  Subsidized family planning services
may also help to bring the individual costs of an added birth better into line
with societal costs, thus reducing externalities (costs of children borne by
society at large but not by individual families).  When interventions are
motivated by both individual and societal objectives, respect for the
reproductive rights and health of individuals should be an added focus of
attention. 17/

120.    Another view of the relationship between population growth and
development, known among demographers as transition theory 18/ posits a causal
relationship running from development to population growth:  as economic
development takes place, mortality rates fall, which initially results in an
increase in population growth.  In response to the decline in infant mortality
rates accompanied by urbanization, education, changes in the division of
labour and increases in income, fertility rates fall, often with a substantial
lag, leading to an eventual decline in overall population growth.

121.    Those apparently differing views on the direction of causality have
led to different policy presumptions.  Some have advocated strong family
planning programmes independently of the overall thrust of economic and social
policy, in particular developing countries.  Others have promoted broad-based
development strategies tending to attach less importance to family planning
programmes per se.  That would seem to be a false dichotomy.  A more useful
approach could be to distinguish between factors that lead households to
desire smaller families, on the one hand, and factors affecting the
availability of low-cost means of actually reducing fertility, on the other.

122.    Many of the socio-economic and institutional changes that often
accompany economic and social development tend to reduce desired family size
and thus increase the demand for family planning services.  The list is fairly
long, beginning with reductions in infant mortality, as was mentioned above,
but also includes those policies that tend to improve the status of women
generally, including their access to health services and education, removing
legal barriers etc.  Policies that improve the status of women while
simultaneously increasing significantly the opportunity costs of raising
children are especially effective in reducing fertility rates, e.g., access by
women to opportunities for earning cash income in labour markets and access to
credit for establishing small businesses, compulsory education and changes in
land tenure systems.  Certain elements in family planning programmes can
reinforce the impact of the factors mentioned above by, for example,
accelerating awareness by both men and women of the high and probably
increasing opportunity costs of having large families.

123.    Family planning programmes are primarily aimed at increasing the
supply and lowering the cost, of family planning services.  It should be clear
from the considerations advanced above that family planning programmes alone
should not be viewed as the principal measure for accelerating growth and
development.  They should, however, be considered as a cost-effective and
essential component in a much broader policy package to improve the status of
women, especially as regards access to health services and education.  Family
planning programmes tend to be most successful where social and economic
conditions encourage the adoption of small family norms.  Recent experience
has, however, demonstrated that even in poor socio-economic conditions the
desire to regulate family size exists and fertility has fallen in countries
with well-organized programmes.


                                   C.  Mobility and international migration

                                               1.  Recent trends

124.    The economic motivation for internal movements of people and
international migration are broadly similar, if not identical, as was noted
earlier.  Quantitatively, internal migration is far more important than
international migration.  Since there is not much data systematically
available on movements from one rural area to another within developing
countries, one indicator of relevance is the trend towards increasing
urbanization.  In the period 1985-1990, the estimated annual increase in urban
population in developing countries was about 39 million, reflecting a growth
rate of 3.4 per cent.  Compared to that average, urban population growth in
various regions ranged from 4.9 per cent in Africa, 3.8 per cent in Asia
(excluding China), 3 per cent in Latin America and about 2 per cent in China
itself.  Allowing for natural population increase in urban areas, the movement
from rural to urban areas in developing countries probably accounts for close
to 40 per cent of the increase, representing about 15 million per year.

125.    Compared to that order of magnitude, flows of international migrants
from developing to developed market economies and more recently from countries
in eastern Europe and the former Soviet Union are rather small.

126.    Following a decade of intensification and diversification of flows,
the 1975-1985 period witnessed a radical change with a significant decrease in
the numbers of international migrants, suggesting that the era of large
migration had come to an end.  The closing of the borders in western Europe
(Germany in November 1973, France in July 1974 and Belgium in August 1974),
the decrease in the demand for foreign labour in the Gulf States (in the years
1983-1984) and the passing of the Immigration Reform and Control Act (IRCA) in
the United States of America in 1986, appeared to signal a turning point. 
However, it was not long before it was realized that, in fact, a new era of
increased international migration was under way.  In Europe, immigration into
traditional receiving countries has remained important, despite the legal
closing of the borders; traditional countries of emigration of southern Europe
(Italy, Spain, Greece and Portugal), after having experienced net return
migration in the late 1970s, are now attracting emigrants from both outside
and within Europe; significant East-West flows preceded the opening of the
borders of the former eastern Europe bloc and German reunification.  In the
major traditional settlement countries, the United States of America, Canada
and Australia, flows are also increasing.  In the United States, contrary to
public opinion and discussion on migration issues, the 1990 Immigration Act,
which replaced the 1965 Act, sets the numbers at a high and increasing level. 
In Canada, the new law, which replaces the 1976 Immigration Act and reinforced
the point system, confirms and somehow increases the already high level of
entries, making Canada rank first among immigration countries, when
considering the ratio of immigrants to the receiving population. 19/

127.    Even more significant is the shift in the channels of entry. 
Particularly noteworthy is the sharp increase in asylum seekers, especially in
Europe, where applications have increased dramatically, as well as in illegal
migration, although difficult to measure yet abundantly documented in many
countries in all continents.  Indeed, in situations where legal inflows are
restricted (barring family reunion), entries and settlement by means of the
refugee procedure have become the main channel of immigration.  That also
holds for illegal migration, which is due to discrepancies between market
forces (supply and demand) and legal restrictions to entry.  Thus, the
restatement by major immigration countries of their control policy either to
accept only legal entries as in the United States IRCA, or to stop labour
migration altogether as in Europe following the 1974 ban, has greatly enhanced
illegal flows, particularly under conditions of increased political
instability and income differentials.  The amnesty programmes, the 1986 IRCA,
the regularizations in France (1982), Spain, the Netherlands and Italy
underline the dual facet of illegal migration.  By definition, the
implementation of those programmes is a recognition of the fact that entries
have gone out of control but at the same time, they try to send the message
that from now on the control will be effectively implemented and further
spontaneous entries will not be accepted. 20/

128.    During the period 1985-1989, the average annual number of admission of
permanent immigrants from developing countries to the main receiving countries
was about 2.2 million.  Another indicator is that of the numbers of asylum
seekers for which statistics are available for selected European countries. 
Those averaged less than 200,000 per year during the period 1983-1989, of
which 130,000 were from developing countries.  However, from 1989 to 1992 the
total number of asylum seekers increased rapidly, more than doubling from
about 310,000 in 1989 to about 686,000 in 1992. 21/  Allowing for outward
immigration from developed market economies, the Population Division of the
United Nations Secretariat has estimated net migration from developing
countries, eastern Europe and the former Soviet Union to the developed market
economies during the period 1985-1990 at about 1.5 million per year. 4/

129.    A disturbing trend is that even while donor countries are cutting back
on ODA flows in the context of efforts to reduce fiscal deficits, some ODA is
being used for the settlement of refugees from developing countries.  Compared
with current ODA flows of approximately $55 billion per year, current refugee
settlement costs to developed donor countries are running at about $9 billion
per year.  An important positive development is the policy decision taken by
countries involved in the Intergovernmental Consultations on Asylum, Refugee
and Migration Policies in Europe, North America and Australia to make use of
the country assessment approach (CAA).  The purpose of CAA is to allow for a
joint effort in selected countries of origin of asylum-seekers or migrants,
with the aim of exploring the possibilities for dialogue and action together
with those countries on various development measures that might provide an
alternative to emigration or facilitate repatriation. 22/ 

130.    Predicting likely trends in international migration is a precarious
task, because international migration is greatly affected by unpredictable
political, economic and social circumstances in the countries of origin as
well as of destination.  International migration can change dramatically, even
reversing direction, in comparatively short spans of time.  For some
countries, net migration is relatively small and consequently in the
preparation of estimates and projections at the national level no migration
was assumed.  For those countries that have a long history of international
migration, a simple constant net migration flow was assumed.  For other
countries, it was generally assumed that the current migration flows would
decline and reach zero at about 2005.  For countries in which migration has
been of a temporary nature resulting from either civil conflicts, sudden
change in the national economy or specific governmental policies, migration
was assumed to be a one-time phenomenon and no future migration is assumed. 4/
Thus, compared to the figure mentioned above of 1.5 million per year, net
migration into developed market economies is assumed to decline to 1.1 million
by 2025.

131.    Refugee movements form a most dramatic type of international
migration.  Conventional refugees are those who have crossed an international
border to avoid being persecuted or to escape warlike conditions in their home
countries.  De facto refugees include those who have left their country under
normal departure procedures but are prohibited from returning home without
risking their lives owing to intervening events there.

132.    The current global refugee population is estimated to be around
19 million. 23/  Some four-fifths are found in developing countries, including
somewhat less than one third in Africa.  During the past few years, some
western countries have tended to restrict the granting of asylum and there is
reason to believe that the proportion of refugees accommodated in the
developing countries will be increased in coming years, even though developing
countries have experienced serious socio-economic problems with hosting large
refugee populations.

133.    Approximately half of the global refugee population is presently
assisted through official schemes, such as reception centres, holding centres,
camps or designated land settlements and villages.  The remainder have found a
place to stay on their own, sometimes illegally or in consultation with local
people and authorities, often in areas bordering their home countries.  In
addition to relief supplies, those schemes to aid refugees often include
social infrastructure, such as schools and health centres, to which local
people may also have access.  But the distribution of food and other relief
items is limited to refugees, even in areas with groups of destitute local
people.  With the exception of land settlements, where refugees are given
plots to cultivate, income-generating activities have only been developed for
a small percentage of refugees in most official schemes.  In some cases,
refugees in official schemes do not always receive their entitlements;
distributions are irregular and they must find supplementary sources of
income.  They thus often provide labour and services for surrounding host
populations.  Barter systems involving the exchange of donated relief items
for items of local production between refugees and their hosts have developed
in some areas.  A recent large-scale survey of the socio-economic conditions
of refugees in Pakistan, which hosts about one fifth of the estimated global
refugee population, found that new arrivals have less means at their disposal
per household member than those who arrived earlier and are most frequently
subject to irregular food distributions.  Some refugees have experienced
conflict with local citizens when seeking employment or agricultural land, or
when collecting firewood and other natural resources. 24/  Similar friction
has been reported in other countries as well.

134.    In areas with relatively abundant resources and a buoyant local
economy, refugees are well received by many.  They are willing to engage in
menial tasks despised by others, including unskilled manual work for local
farmers.  Refugees will search for vacant land and develop their own
agriculture, or supply unskilled and semi-skilled labour to local building
contractors and manufacturers.  Some take up crafts and trade and increase the
varieties and quantity of locally available goods.  But because more of the
casual and unskilled work is undertaken by the refugees, their activities may
indirectly worsen the conditions of some members of local vulnerable groups,
such as female heads of households, the disabled and the elderly, who depend
on that work for their incomes.  Over time, friction between refugees and
those groups may materialize and some refugees or local destitute groups may
leave the area.  The refugee inflow on balance, however, contributes
positively to the general development of areas with adequate resources and
economic growth.

135.    In poorer areas, refugees are resented by many.  As they flood the
labour market, wages drop for casual labour and even for semi-skilled and
skilled jobs.  Local prices for food, fuel, medical supplies and commodities
may rise.  Refugees may collect firewood for fuel in neighbouring areas and
further afield, contribute to deforestation in some areas and impede the
access of local people to common property resources.  Although employers
benefit from the ready labour supply provided by refugees, many workers and
destitute groups do not.  The resentment may lead to violence, with the result
that a part of the refugee population may be relocated and have to start again
in a new setting.

136.    It is, of course, impossible to predict whether or not the size of the
refugee population will tend to increase over time, because of the
unpredictability of conflicts that give rise to them and of solutions to
ongoing ones.  None the less, in countries that presently host large numbers
of refugees, budgetary provisions will have to be made to provide assistance
during the foreseeable future.


                                     2.  Conceptual and analytical issues

137.    Both movements of people within countries and international migration
are part of the development process.  Since opportunities for improving
individual or family welfare do not expand everywhere within a country or
among countries at the same rate, incentives for relocating are always present
once substantial income differentials emerge.  Moreover, relative incentives
may be increased rapidly when living conditions in a destination improve
rapidly or when living conditions in a sending region stagnate or even
deteriorate as a consequence of natural disasters, civil strife or major
economic reversal.  Were migration to be large enough, it would raise wages in
sending areas and lower them in receiving areas.  By reducing differences in
income, migration would thus remove in the long term the very causes that led
to it in the first place.

138.    One of the processes that can reinforce the incentive to migrate is
the early phase of the demographic transition itself.  When the local
population increases at a persistently high rate due to past reductions in
mortality, individuals will react in various ways in order to attempt to
reestablish the initial per capita welfare levels.  One of the adjustment
responses is a decrease in fertility accomplished by whatever means:  increase
in celibacy, postponement of marriage, abstinence, contraception,
sterilization and abortion.  Another adjustment response is that of migration,
whether temporary or permanent. 25/  Obviously, those are not necessarily
mutually exclusive responses, since individuals choosing to migrate will also
tend to have lower fertility rates than their contemporaries who choose to
stay at home.  The important point to note is that decisions to migrate
represent an efficient strategy at the individual or household level to
improve well-being. 

139.    Economic policies can also have unintended effects on the rate of
internal migration.  During the 1970s, for example, there was an acceleration
of rural-to-urban migration because of the urban bias of economic policy in
many countries.  This took the form of high levels of protection for
urban-based manufacturing and a bias against exports of agricultural
commodities (for example, in the form of high export taxes and currency
overvaluation).

140.    Some structural adjustment policies might have been expected to reduce
the extent of urban-bias since if protection and export taxes are
simultaneously reduced, the rural/urban domestic terms of trade will change in
favour of rural producers.  However, during the past decade, such reforms may
have been entirely offset by the dramatic decline in the external commodity
terms of trade.

141.    Fiscal policies are also important.  Increases in the level of
taxation in the modern sector tend to reduce urban bias.  A decrease in the
number of civil servants and productivity improvements in parastatal firms
would work in the same direction.  Changes in the level and structure of
public expenditures can also be important.

142.    When migration flows are large, their macroeconomic effects on both
receiving and sending areas may be significant.  Emigrants may reduce the
labour force by enough to increase the marginal productivity of the remaining
workers.  Their remittances may increase directly and dramatically the income
of the family members in the sending area and indirectly the income of other
area residents through multiplier effects.  Migrants may also invest in
directly productive activities in their countries of origin, thus increasing
capital formation.  For those who choose to return, their acquired experience
and skills increase the stock of human capital and their contacts established
abroad may help in facilitating technology transfer and marketing channels for
exports.  The magnitude of the effects to which such factors give rise is
heavily dependent upon the adequacy of markets for goods, labour and finance,
the regulatory environment and other socio-economic factors affecting the ease
of entry of new firms into various lines of production.  Where serious market
failures and other barriers to enterprise are pervasive and may have been the
principal reasons for emigration in the first place, it is highly unlikely
that a strongly positive development feedback effect induced by the emigration
will be realized.

143.    In the receiving countries, immigration in recent times has been
welcomed primarily by business enterprises where rising labour costs for low
skilled labour or sheer shortages of skilled labour in specific specialization
threaten to put them increasingly at a competitive disadvantage.  The effects
of immigration on unit labour costs is almost always beneficial to the
receiving country.  However, the effect on public finance may be negative,
especially at the local level, and the social and ethnic tensions that often
accompany immigration increasingly tend to be viewed as large costs which
explains the increasingly restrictive attitudes towards immigration in many
developed market economy countries.

144.    Measures to reduce immigration flows directly have had very little
impact.  One reason is that they did not, indeed cannot, affect very much the
basic causes that create or strengthen the incentives to migrate as perceived
at the micro level.  Added to that is the difficulty of making effective
distinctions among categories of immigrants, especially as between political
refugees and economic refugees.  For example, when immigration policies are
tightened, the number of asylum seekers increases, often dramatically.  Thus,
where the volume of legal and illegal immigration is a complex political issue
in developed market economy countries, that should be perceived as a strong
additional argument for increasing market access to imports, especially of
manufactured goods, from developing countries and economies in transition, and
increasing aid and other capital flows to them so as to accelerate the
reduction in current and expected differentials in living standards that
drives the process.

145.    In so far as immigration flows will continue to be large and often
temporarily swollen by political refugees or victims of civil strife and
natural disasters, including environmentally displaced persons, greater
efforts need to be made to deal with the problems of integrating immigrants
into the broader society in the receiving areas.


         D.  Poverty, environmental degradation and demographic trends

146.    Rural poverty and environmental degradation have become closely
interlinked as a high proportion of the rural poor live in areas with low
agricultural potential, where through sheer necessity they deplete soil
nutrients, cultivate steep slopes where erosion is unavoidable and overgraze
rangelands.  

147.    It is worthy of note that some 60 per cent of the developing world's
poorest people, or some 470 million, live in highly vulnerable areas - arid
and semi-arid lands, steep slopes and poorly serviced urban lands.  At the
regional level, 80 per cent of Latin America's poorest people or some 63
million, 60 per cent of Asia's poor or some 327 million, and 51 per cent of
Africa's poor or some 80 million live in areas that are highly susceptible to
soil erosion, soil infertility, floods and other ecological disasters. 26/ 
The retreat of the poor to fragile lands with low agricultural potential is
the result of a combination of factors:  the development of areas of high
agricultural potential characterized by land consolidation; privatization and
the commercialization of previously common lands; the modernization of
agriculture, which has reduced labour requirements; population pressure in
areas that were previously sparsely populated; and wrong macroeconomic
policies, which have distorted relative prices against labour-intensive
technologies and crops.

148.    Land productivity has declined over vast expanses in many developing
countries on account of extensive desertification, waterlogging and
salinization.  Desertification is attributable largely to inappropriate
agricultural practices, including the overgrazing and overcultivation of
marginal land by the poor.  Waterlogging and salinization have resulted from
the lack of adequate drainage provisions in large irrigation schemes and the
excessive use of water for irrigation.

149.    Even more relevant as a measure of the impact of desertification is
its human dimension.  It is estimated that worldwide, out of 850 million
people who live in dry areas some 300 million people have been directly
affected by desertification, i.e., they currently occupy desertified land, the
largest number, some 150 million, in the region of the Economic and Social
Commission for Asia and the Pacific (ESCAP). 27/  That correlates highly with
the number of the poorest people who have become increasingly concentrated in
fragile lands.

150.    What is of greater cause for concern is that the rate of
desertification continues to accelerate in parts of the Sahelo-Sudanian
Africa, the Near East, Iran, Pakistan and North-East India.  The semi-arid
area of north-east Brazil and parts of Argentina are subject to similar
conditions.  In Africa, parts of Morocco, Tunisia and the Libyan Arab
Jamahiriya are losing some 100,000 hectares of rangeland and cropland each
year through desertification. 28/  Worldwide, it is estimated that
irreversible desertification is claiming 6 million hectares of land each year.
29/

151.    In many developing countries, deforestation has been increasing due to
the expansion of cropland for agricultural production.  Much deforested land
has, however, been put to unsustainable use, which has exacerbated the process
of desertification through soil erosion.  In addition, growing deforestation
has had the effect of altering the hydrological cycle and increasing the
severity of floods in many parts of the developing world.

152.    Another cause for concern with deforestation is the increasing
scarcity of energy supplies for the poor.  Fuelwood and charcoal supplies over
75 per cent of the total energy use in several developing countries such as
Bangladesh, Ethiopia and even oil producing Nigeria.  In Central America, it
supplies over 50 per cent of total household energy consumption and exceeds 72
per cent in the rural areas.  In the early 1980s, the wood share of total
energy consumption was 74 per cent in Sudan, 92 per cent in Tanzania and
96 per cent in Burkina Faso.  In terms of people involved, over 2,000 million
use wood for domestic heating and cooking.  Projections for the year 2000
suggest that without remedial action, 2,400 million people will be unable to
meet their basic energy requirements (A/CONF.151/PC.64, p. 23).  While there
may be room for increasing efficiency of use, the problem is obviously
daunting.  Alternative sources of cheap fuel for the poor, such as dung and
other forms of biomass, are not in plentiful supply either and their use has
the effect of depriving agricultural land of vital nutrients.  Other
alternative sources, such as solar and wind energy and biogas, are technology-
intensive and offer little hope of coming within the reach of the rural poor
in the foreseeable future.

153.    According to the Food and Agricultural Organization of the United
Nations (FAO), the annual rate of deforestation in 90 developing countries,
including all the medium and large countries, in the period 1981-1990 was 15.4
million hectares:  7.4 million hectares in Latin America; 4.1 million hectares
in Africa and 3.9 million hectares in Asia. 30/  A comparison of those
assessments with those of an FAO/United Nations Environment Programme (UNEP)
assessment done in 1980 shows an acceleration of deforestation in the 76
countries common to both assessments in the period 1981-1990 over the period
1976-1980, when the annual rate of deforestation was estimated at 11.3 million
hectares. 30/  Part of the difference in the rate of deforestation between the
two periods is attributed, however, to more complete coverage at the country
level and to more accurate data available in the latter period.

154.    Tropical forests are being cleared for their lumber, which results in
the extension of roads into previously impenetrable forests, and to make way
for plantations, pastures and crops.  In some developing countries,
transmigration programmes have encouraged resettlement in tropical areas but
settled agriculture has left the soil severely depleted after only a few
harvests.

155.    Tropical deforestation has received a great deal of international
attention in recent years, mainly in connection with the loss of biodiversity
and reductions of the size of carbon sinks.  The absolute number of people who
live in the world's tropical forests areas has been on the rise.  Estimates
put the current number at 200 million. 31/  Tropical forests have become
safety valves for countries facing a rising tide of landlessness because of
population pressure in good agricultural areas, combined with a grossly
inequitable distribution of existing agricultural land.  Some 80 per cent of
the annual deforestation of tropical forests is attributed to slash-and-burn
agriculture practised by poor settlers. 32/

156.    Water scarcity is increasing rapidly in most of the developing
countries, chiefly on account of the increasing water demand of growing
populations, the expansion of irrigation and reduced run-off as a result of
deforestation.  The number of countries facing problems of severe water
scarcity is already large and will increase.

157.    Many areas in the developing world are arid and semi-arid, with a
climate whose rainfall variability is devastatingly high and where droughts
are a recurrent feature.  Rainfall variability is over 40 per cent in the
largest contiguous region, consisting of North and Sub-Saharan Africa, the
Arabian peninsula, southern Iran, Pakistan and western India.  Similar high
variability is characteristic of northern Mexico, south-western Africa,
eastern Brazil and Chile, and large parts of tropical and sub-tropical Africa.
In the Sahel, rainfall is not only unreliable but has been on the decline. 
There is much less rainfall today than 50 or even 30 years ago. 33/

158.    Another major driving force causing more and more countries to
experience water shortages is rapid population growth, since the overall flow
supply of water is more or less constant, though with changing local
availability.  Anywhere from 15 to 25 northern African and sub-Saharan African
countries may face serious problems of water shortages by the year 2025. 
Altogether, some 53 developing countries could face severe water scarcity by
the year 2025, 19 of which are already in that situation. 34/  Most of those
countries are also countries whose agricultural sectors need higher than
average inputs of water for increased food production.  In such cases,
industrial and household demand for water will strongly compete with the
agricultural sector for the limited water available, making increasing
agricultural productivity and poverty eradication an elusive goal.

159.    While water scarcity is increasing throughout the developing world,
the problem is even worse in the arid and semi-arid regions of the world,
where as seen above, the bulk of the poorest people in the developing world
have become concentrated.  In those already low agricultural potential areas,
the prospect for increasing food production will recede further as the soil
undergoes further degradation and water availability becomes scarcer.  Green
revolution technologies, particularly the use of higher yielding varieties of
seeds and fertilizers, are not likely to help unless adequate water supplies
are available.

160.    The rural poor generally suffer from ill-health of account of
undernutrition and/or malnutrition.  Their health is further affected by
various forms of pollution and agricultural hazards, most importantly by water
pollution, indoor air pollution and direct exposure to pesticides and
herbicides.

161.    Water pollution poses the greatest threat to the health of rural
dwellers.  In spite of progress made during the International Drinking Water
and Sanitation Decade in the 1980s, high proportions of the rural poor are
still without safe drinking water and sanitation facilities.  They depend for
household water supplies and for drinking water on inland water bodies that
are polluted by various pollutants.  Diseases caused by the microbial
pollution of water supplies, transmitted by water-associated vectors and
related to inadequate sanitation and absence of clean water are widespread
throughout the developing world.  

162.    New agricultural developments have also contributed to the impairment
of the health of the rural poor.  The most serious adverse health impacts of
new agricultural developments are linked to irrigation schemes.  Bilharzia,
malaria and yellow fever sap rural health in many irrigated areas in the
developing world.

163.    While air pollution is a growing problem in urban areas, the rural
poor also suffer from it.  Most people in the rural areas in developing
countries rely heavily or exclusively on biomass fuels for their daily energy
needs.  Coal is also used in many developing countries.  The combination of
the inefficient stoves in which those fuels are burned and poor ventilation
leads to severe indoor air pollution, with severe deleterious effects on
health, particularly of women but also of small children.

164.    The problem of direct poisoning of agricultural workers by pesticides
seems to be serious in the developing world, although quantitative assessments
are fragmentary.

165.    Urbanization has proceeded apace in the developing world in the post-
World War II period and is expected to continue for decades to come.  The
growth of urbanization has been accompanied by an increase in the size of the
urban poor, who have been increasingly forced to settle in the urban
periphery, due either to absolute shortages of land or high rents on serviced
lands.  They live and work in hazardous exposure situations.

166.    The health of the urban poor is affected by water pollution,
inadequate sanitation facilities, inadequate facilities for the collection and
disposal of industrial solid and toxic wastes, and indoor and outdoor air
pollution.

167.    The urban poor depend for household water supplies on inland water
bodies that are contaminated by human excreta and industrial toxic wastes. 
Large numbers of the urban poor depend for subsistence on urban waste,
gathering materials from dumps and the streets.  In so doing, they expose
themselves to a variety of hazards:  bacteria, diseases and, most importantly,
toxic wastes from industries.  While by and large the quality of urban cooking
fuels is better than that used in rural households, poor urban households
still depend on traditional biomass fuels that they burn in unventilated
shelters and they suffer from the same problems of indoor air pollution as the
rural poor.  In the urban areas of many developing countries increasing
numbers of people, both poor and non-poor, are increasingly being exposed to
outdoor air pollution caused by automotive and industrial emissions.

168.    The major international issue related to the global commons is global
warming.  The problem, which is attributable to the emission of greenhouse
gases such as carbon dioxide (CO2), chloro-fluorocarbons (CFCs), methane,
nitrous oxide and ozone, has been created primarily by the industrial
countries through the burning of massive amounts of fossil fuels and the
extensive use of CFCs.  Existing estimates of two of the most nefarious gases,
CO2 and CFCs, indicate that in the 1980s the developed countries were
responsible for some 75 per cent of the emission of the former and more than
90 per cent of the latter. 35/  Unless preventive measures are taken, however,
the contribution of the developing countries to the global warming problem
will increase.

169.    A high proportion of the emission of CO2, the major greenhouse gas, in
the developing countries, is the result of deforestation and the burning of
biomass fuels.  Carbon dioxide emissions related to deforestation is a
short-to-medium term problem, for deforestation cannot continue indefinitely. 
Most of the CO2 emitted in the developed countries is the result of the
burning of large amounts of fossil fuels to meet the energy needs of
manufacturing industries, transportation and households, so that the emission
of CO2 in the developing countries is a matter of poverty and necessity,
whereas in the developed world it is the result of economic growth and
prosperity.

170.    At the international level, concern about deforestation in the
developing countries has centred around two main issues, the loss of
biological diversity and the reduction of the size of carbon sinks.  Natural
forests contain a wide variety of plant and animal species, including
micro-organisms and wild relatives of important varieties of crops.  It is
believed that those genetic species may be potentially beneficial to mankind,
although at present the benefits of the conservation of biological diversity
are not clear.  The benefits of an adequate biodiversity are seen in its
potential to enable mankind to respond to problems caused by new pests and
plant diseases, and in the possible need to develop new plant varieties
resulting from the deterioration in growing conditions and from climatic and
other environmental changes.  The preservation of biodiversity has assumed
increased importance in the light of recent advances in biotechnology. 
Although so far it has proved difficult to apply to plants, it is hoped that
biotechnology might help develop improved varieties of cultivars eventually, a
prerequisite for which is the existence of adequate natural genetic diversity.
Forests also contribute to the slowing down of the rate of climate change by
serving as carbon sinks.  Current international efforts at preserving tropical
forests and at afforestation and reforestation in developing countries, have
centred largely on that role of forests.

171.    The interaction of population, consumption patterns and technology in
producing adverse environmental impacts may be expressed in the equation:

        I = PAT,

where I is environmental impact, P is population, A is per capita consumption,
and T is a measure of environmental damage caused by the technology employed
in producing each unit of consumption.  The equation may also be interpreted
as conveying the notion that consumption and production patterns are proximate
factors of environmental deterioration, channelling the underlying impacts of
ultimate causes, which are the number of consumers and their effective demand
for goods and services.

172.    For constant income levels and production methods, the larger the
population, the larger the annual share of pollutants and other negative
environmental impacts generated.  The combination of income growth and high
rates of population growth in developing countries will account for
approximately 83 per cent of pollutants generated during the period 1985-2025
as opposed to about 25 per cent in 1985. 36/  To be sure, higher income levels
will make it possible to reduce the unit impact of environmental damage.  In
the long run, the developed regions, with their low population growth rates
and high income levels, will have a smaller impact on pollution and
subsequently on the environment.  In the developing regions, low rates of
income growth and high population growth rates also affect the environment
through increasing the incidence of poverty and its subsequent adverse impact
on the environment.


              E.  Population, environment and development policies

173.    In anticipation of the forthcoming International Conference on
Population and Development, there have been a number of policy proposals
produced by numerous seminars, expert groups and intergovernmental bodies.

174.    However, in exploring the relationship between population, migration,
environment and development, the fundamental objective of public policies
ought to be to improve people's ability to live longer, healthier lives
without destroying the environment.  With that objective in mind, as well as
the generally accepted conclusion that poverty and lack of access to health
facilities and other social services are joint determinants of high fertility
and poor health and nutrition of women and children, the Committee recommends
that especially high priority should be given to the following:

        (a)   Judging the effectiveness of development (economic and social)
policy by the extent to which it leads to improvement in peoples' health,
education and income (human development).  In that regard, women's continuing
lack of power in personal relationships in many parts of the world, their lack
of control over their own lives and their consequent poverty will require
special efforts to change, such as increased investment in education, health,
and the elimination of legal inequality;

        (b)   Governments should take active steps to implement, as a matter
of urgency, measures to ensure that women and men have the same right to
decide freely and responsibly on the number and spacing of their children, as
well as to have access to the information, education and means to enable them
to exercise that right in keeping with their freedom, dignity and personally
held values;

        (c)   In view of the hazards of some pregnancies and the high level of
observed maternal mortality from unsafe illegal abortion, Governments
everywhere should remove legal restrictions on the availability of freely
chosen abortion services;

        (d)   Governments, funding agencies and research organizations are
urged to give priority to research on the linkages between women's roles and
status and demographic processes.  Among the vital areas for research are
changing family systems and the interaction between women's, men's and
children's diverse roles, including their use of time, access to and control
over resources, decision-making and associated norms, laws, values and
beliefs.  Of particular concern is the impact of gender inequalities on those
interactions and the associated economic and demographic outcomes;

        (e)   Increasing understanding of the environmental impact of people
living and earning their livelihood in particular places with different levels
of environmental fragility;

        (f)   Governments are urged to review existing barriers to
international labour mobility, given the liberalization of capital and
increasingly open trade flows;

        (g)   The United Nations system and other appropriate organizations
should support and promote research on population distribution, international
and internal migration, and urbanization in order to provide a sounder basis
for the formulation of environmental development and population distribution
policies.


                                  IV.  TECHNICAL COOPERATION FOR DEVELOPMENT


                                                 A.  Overview

175.    In the wake of political and economic reforms in central and eastern
Europe and many other countries around the world, including many developing
countries, technical cooperation has further expanded its scope in recent
years; in fact, technical cooperation accounts for about one third of all
bilateral Official Development Finance (ODF).  The relevance and efficiency of
those flows are therefore critical for the overall effectiveness of
international development cooperation.

176.    While technical cooperation is generally provided on grant terms, it
is in practice a resource transfer very strongly tied to expertise from the
respective donors and used for strengthening developing country capacity in
areas of donor concerns.  It is also often directed to meet short-term needs
and for stopgap purposes, while basic requirements for national capacity-
building are relatively neglected.

177.    There are indeed important exceptions to such generalizations, but the
overall picture of technical cooperation is one of a supply- or donor-driven
resource flow, which from the perspective of sustained development in the
receiving countries is costly, ineffective and sometimes even counter-
productive.  Enhancing effectiveness and efficiency will call for fundamental
changes in both the management of technical cooperation resources by the
recipient countries and the modalities of supply of technical cooperation.

178.    As part of ODA, technical cooperation is meant to make up for
inadequacies in the levels and range of technical capacity available in the
recipient country.  As short-term or ad hoc assistance in the design,
planning, implementation, monitoring or evaluation of specific projects, it
enables the recipient country either to undertake projects otherwise beyond
its technical capacity or to do so more effectively than would otherwise be
the case.  In many cases, that enhancement of capacity increases the
efficiency of the use of financial and other resources in the development
process.

179.    Given the very high costs of technical cooperation from developed to
developing countries, the best long-term answer to the question of enhanced
technical efficiency of the development process lies in the removal of the
inadequacies in technical capacity that call for technical cooperation in the
first place.  That involves the strengthening of the capacity of local experts
and institutions in the developing countries to provide the technical support
required to sustain the development process.  Technical cooperation from the
developed countries can play a critical role in the process of local
capacity-building not only by directly transferring expertise from foreign
experts to local counterparts but also by supporting local institutions in the
training of specialists and delivery of specialist services.

180.    By helping to raise the general level of technical capacity in a
developing country, technical cooperation for capacity-building will tend to
reduce certain kinds of dependence on technical cooperation for production or
service delivery.  But as the economy of the country develops, more
sophisticated forms of technical cooperation are likely to be called for.

181.    Two implications of that analysis call for further comment.  The first
is that the effectiveness and success of technical cooperation programmes need
to be assessed not only in relation to getting specific jobs done or even of
helping the development process but, more significantly, in relation to
success in reducing the need for more assistance with the discharge of basic
developmental tasks.  Thus, continued technical cooperation over a period of
decades must be adjudged a failure unless it reflects cooperation at
progressively higher levels of sophistication.

182.    A second major implication of the analysis is the crucial importance
of a careful study of the conditions that make technical cooperation necessary
in order to identify the specific gaps in local capacity at any particular
time as well as the most effective means of closing the gaps, short-term as
well as long-term.

183.    Little research has been undertaken in developing countries on
development cooperation, particularly on technical cooperation, for budgetary
and technical reasons.  Therefore, both bilateral and multilateral technical
cooperation has tended in practice to be either donor-driven or identified and
proposed by Governments of recipient countries without the research and
analysis necessary to support it.

184.    Support for research capacity and for independent research
institutions in the developing countries should be a particular focus of
technical cooperation.

185.    Furthermore, technical cooperation has in the past concentrated on
Governments, with little involvement of non-governmental institutions in the
identification, formulation or implementation processes.  There is a need for
technical cooperation to involve a much broader range of institutions of civil
society, for example non-governmental organizations, private sector
institutions and research institutions.

186.    Two major preconditions are necessary for the effective management of
technical cooperation.  First, the political climate in the recipient
countries must be favourable.  Political stability, an open political
environment and a responsive Government are necessary in order to motivate
citizens to invest in human resources development and encourage trained people
to remain in the country.  Second, economic stability must obtain.  Economic
stability, particularly macroeconomic balance, is important to enable
Governments to provide the requisite inputs, human and material, in a
consistent manner so as to ensure the sustainability of activities in human
resources development and institution-building.

187.    Given political and economic stability, the effective management of
technical cooperation by recipient countries will call for efforts at two
levels.  First, the demand for technical cooperation must derive from national
processes of programme formulation, with technical cooperation integrated into
national activities.  Technical cooperation should be designed to meet felt
needs or to overcome critical bottlenecks in human resources and
socio-economic institutions and not to obtain additional financial resources
or imported equipment.  Second, in many recipient countries a crucial
requirement will be civil service reform generally, particularly where the
public sector is overstaffed while salaries and wages are too low.

188.    The supply modalities of technical cooperation also call for
fundamental reorientation.  Technical cooperation should be based on the
programme approach rather than the project-by-project approach.  Programmes,
unlike projects, have the long-term perspective required for
capacity-building.  They enable the targeting and concentration of technical
cooperation inputs in a coherent manner in priority areas.  That will require
better coordination of technical cooperation requests by ministries and
agencies in the receiving countries.

189.    A crucial requirement for enhancing the effectiveness of technical
cooperation on the supply side is donor coordination.  Close coordination
among donors will enable the focusing of technical cooperation on priority
areas in a concerted manner, which is necessary to ensure the maximum impact
in critical areas in the shortest possible time.

190.    Another crucial need on the supply side is to maximize the use of
national professionals in technical cooperation activities, which will make
for greater cost effectiveness of technical cooperation resources and increase
the internalization of the skills transmitted through technical cooperation. 
It will also require greater reliance on South-South technical cooperation.

191.    Pursuant to General Assembly resolution 44/211, efforts are under way
in the United Nations system to revamp technical cooperation practices.  Those
efforts that focus on national capacity-building through national ownership
and execution of operational activities of the system, as well as the
programme approach and various institutional reform measures aimed at
enhancing coordination and execution, such as internal coordination,
coordination at the field level and decentralization of authority by United
Nations agencies to the field level, are a step in the right direction.  Since
technical cooperation practices have become entrenched, it is expected that in
the beginning there will be several problems to overcome.

192.    There are some encouraging signs in the agreement reached on
principles for new orientations in technical cooperation by DAC members, which
is significant because bilateral technical cooperation accounts for the bulk
of technical cooperation.  However, the DAC principles have not been
implemented.

193.    The importance of the idea of national ownership and execution of
technical cooperation cannot be overemphasized.  In the case of countries
where civil order has broken down or that have suffered substantial losses of
qualified people in the course of prolonged civil unrest, however, there may
be a short-to-medium term need for a quasi supra-national body, a
recipient/donor commission under the auspices of the United Nations with full
responsibility for determining critical technical cooperation needs and for
channelling technical cooperation resources from all sources, both bilateral
and multilateral, to meet those needs in a concerted manner.

194.    More serious efforts are needed to evaluate both the effectiveness of
technical cooperation in achieving desired objectives and the cost-
effectiveness of technical cooperation.


                                        B.  Introduction

                       1.  The Committee's interest in technical cooperation

195.    At its twenty-eighth session, in April 1992, the Committee decided to
examine the contribution of technical cooperation mounted by the United
Nations system and bilateral donor agencies to the economic development of
developing countries and the economies in transition (see E/1992/27).  The
Committee has expressed concern for some time about the quality of ODA and its
effectiveness in contributing to development.  That concern has been
heightened in recent years by the unlikelihood that the total volume of
assistance will grow in the 1990s commensurate with the evolving needs of
developing countries.  The Committee's interest in technical cooperation, in
particular, stems from the fact that since such assistance constitutes a very
high proportion of both multilateral and bilateral assistance, enhancing its
effectiveness is necessary for increasing the effectiveness of total
assistance.  Quite apart from that consideration and more importantly, the
Committee's interest in the effectiveness of technical cooperation is related
to the Committee's concern for human resources development, a major stated
objective of technical cooperation.  The Committee, it will be recalled, has
identified human resources development as a priority area for the
International Development Strategy for the 1990s.


             2.  Difficulties involved in assessing effectiveness of
                 technical cooperation

196.    The Committee agreed that the systematic evaluation of the
effectiveness of technical cooperation is a difficult task.  Very often,
technical cooperation constitutes only one element of a package of support
measures, as for instance in capital development projects, and its
contribution is not easy to identify and isolate.  Difficulties also arise
when assessing the relative effectiveness of technical cooperation through the
effectiveness of projects in attaining stated objectives because many
apparently similar projects have different objectives.  The Committee also
agreed that the effectiveness of technical cooperation in realizing project
implementation goals is affected by an array of circumstances, the most
important being political stability, the political commitments of Governments
to projects, the personal security of technical staff in emergency situations,
the extent of prior human resources development, the capacity of the civil
service, the prevailing macroeconomic conditions in a country and the
modalities and quality of technical cooperation.  It stands to reason that any
factor that hampers the implementation of projects reduces the effectiveness
of the associated technical cooperation.  Therefore, technical cooperation
must be tailored to the prevailing social and economic conditions.  Bearing
those problems in mind, the Committee explored the possibilities of enhancing
the effectiveness of technical cooperation and discussed some approaches to
appraising its efficiency and effectiveness.


           C.  Major trends in the structure of technical cooperation
               in recent years

197.    Available data indicates that in recent years, technical cooperation
as statistically measured has exceeded 30 per cent of the bilateral ODA of DAC
member countries.  In 1990, it ranged from 13 to 48 per cent of net
disbursements by source.  In the same year, the share of technical cooperation
in grant and grant-like bilateral ODA, which accounted for some 85 per cent of
the bilateral ODA of DAC member countries, exceeded 38 per cent, ranging from
13 per cent to 58 per cent of net disbursements (see table 6).


       Table 6.  Share of technical cooperation (TC) in total
                 and in grant and grant-like bilateral ODA of
                 DAC member countries, 1990

                           (Net disbursements)

---------------------------------------------------------------------
                      Share of                 Share of TC
           Bilateral  TC in         Grant and  in grant &
               ODA    bilateral    grant-like  grant-like   Multila-
              ($      ODA          bilateral   bilateral    teral ODA
           million)   (percent-    ODA         ODA          ($ 
                      age)         ($million)  (percent.)   million)
---------------------------------------------------------------------
Australia      753       31.2         753        31.2         202
Austria        299       22.1         161        41.0          94
Belgium        548       38.0         519        40.1         342
Canada       1 690       19.9       2 250 a/     15.0         780
Denmark        695       15.7         708 a/     15.4         476
Finland        498       20.5         456        22.4         348
France       7 829       44.0       5 946        57.9       1 551
Germany      4 479       40.3       4 525 a/     39.9       1 841
Ireland         23       47.8          23        47.8          34
Italy        2 112       18.8       1 298        30.6       1 283
Japan        6 786       19.7       3 014        44.3       2 282
Netherlands  1 901       41.0       1 775        43.9         691
New Zealand     82       35.4          82        35.4          11
Norway         756       13.0         758 a/     12.9         449
Sweden       1 384       12.9       1 384        12.9         628
Switzerland    551        -           533         -           199
United
 Kingdom     1 483       47.8       1 567 a/     45.2       1 164
United
 States      8 370       32.5       8 520 a/     31.9       2 996

   Total
   DAC b/   38 705       32.4      32 736        38.4      15 372
---------------------------------------------------------------------

        Source:  Adapted from Organisation for Economic Cooperation and
Development, 1991 Development Cooperation Report (Paris, 1992), table
48, p. 232.

        a/            Apparent gross disbursement total.

        b/            Excluding debt forgiveness of non-ODA claims in 1990.


198.    An overview of the distribution of ODA and technical cooperation
grants by source is provided in table 7.  In 1990, total net disbursements
from all the major sources amounted to some 60 billion dollars; 46.4 billion
of which, or some 77.5 per cent, came from bilateral sources and 13.5 billion,
or about 22.5 per cent, from multilateral sources.  While the total net
disbursements of ODA in 1990 represented a substantial increase over 1987 in
nominal terms, the multilateral/bilateral distribution remained unchanged.  Of
the total, technical cooperation grants accounted for 16.2 billion, of which,
12.6 billion or 78 per cent came from bilateral sources and 3.6 billion, or
22 per cent, from multilateral sources.  Again, there was a sizeable nominal
increase in technical cooperation grants in 1990 over 1987 but no change in
the multilateral/bilateral distribution.

199.    Regarding the distribution of technical cooperation grants among
developing countries and ignoring a sizeable unallocated portion (see note to
table 7), the share of the low-income countries including the least developed
countries in 1990 was higher than for the other developing countries in both
bilateral and multilateral ODA, with a relatively higher percentage going to
the least developed countries.  On a per capita basis, the major beneficiaries
of both bilateral and multilateral technical cooperation grants were the least
developed countries.  The distributions were nearly the same in 1990 and 1987
(see table 7).  A clearer picture emerges from the distribution of technical
cooperation grants in total bilateral and multilateral technical cooperation
grants.  The share of the low-income countries including the least developed
countries is markedly higher in both bilateral and multilateral grants but
much higher in the latter, although out of a smaller absolute amount.  Again,
the main beneficiaries among the developing countries were the least developed
countries, with no significant change in distribution between 1987 and 1990.

200.    The share of technical cooperation in ODF, which includes ODA as well
as less concessional multilateral flows, and certain bilateral flows, was
17 per cent in 1990, nearly the same as in 1987.  While the share of technical
cooperation was only slightly biased in favour of the low-income countries as
a group, it was markedly biased towards the least developed countries.  For
all groups of countries, the share of technical cooperation in ODF has
overshadowed those for food aid and emergency aid (see table 8).


      Table 7.  Distribution of net ODA and technical cooperation grants:
                net disbursements, 1987 and 1990

-----------------------------------------------------------------------------
                                                         Percentage
                Percentage of       Percentage of        of TC grants
                a/ total            b/ total multi-      in bilateral
                bilateral ODA       lateral ODA             ODA
             ----------------------------------------------------------------
Country groups    1987    1990      1987     1990        1987      1990
-----------------------------------------------------------------------------
LLDCs c/          21.5    17.1      37.9     39.5         5.1      4.1
OLDCs d/          26.5    33.9      38.5     33.5         7.4      7.0
LMICs e/          14.6    15.4       6.7      7.5         3.5      3.5
UMICs f/          17.8    16.7       4.3      4.0         6.0      6.4
Unallocated g/    19.6    16.9      12.6     15.5         6.6      6.1

   Total         100.0   100.0     100.0    100.0        28.7     27.1

   Total
   (billions
   of US$)        32.9    46.4      10.1     13.5         9.4     12.6
-----------------------------------------------------------------------------


-----------------------------------------------------------------------------
                   Percentage of     Percentage of        Percentage of
                   TC grants in      TC grants in         TC grants in
                   multilateral      total bilateral      total multila-
                       ODA           TC grants            teral TC grants
               -------------------------------------------------------------
Country groups      1987    1990       1987    1990        1987     1990
----------------------------------------------------------------------------
LLDCs c/             7.6     7.4       17.8     15.3       28.0     27.9
OLDCs d/             6.0     5.9       25.8     25.6       22.2     22.2
LMICs e/             2.2     1.9       12.5     12.9        8.1      7.2
UMICs f/             2.2     2.2       20.9     23.6        8.0      8.3
Unallocated g/       9.1     9.2       23.0     22.6       33.7     34.4

   Total            27.1    26.4      100.0    100.0      100.0    100.0

   Total
   (billions
   of US$)           2.7     3.6        9.4     12.6        2.7      3.6
----------------------------------------------------------------------------

        Note:  For ODA and official sector transactions by DAC members and
multilateral organizations, geographically unallocated amounts are too small
in aggregate to cause a substantial understatement of the figure for a given
recipient country.  In the case of Arab bilateral agencies, however,
approximately 35 to 40 per cent is geographically unallocated,
depending on the year.

        a/            DAC member countries and Arab countries.

        b/            United Nations agencies, including regional development
banks and Arab agencies.

        c/            United Nations list of least developed among the
developing countries.

        d/            Other low-income countries with a per capita GNP of less
than $750 in 1989.

        e/            Lower middle-income countries with a per capita GNP
between $750 and $1,500 in 1989.

        f/            Upper middle-income countries with a per capita GNP
exceeding $1,500.

        g/            Including such items as (i) administrative costs, mainly
incurred on the territory of the donor country; (ii) amounts spent in the
donor country on research performed for the benefit of developing countries
(e.g., tropical diseases); and (iii) amounts reflecting defective
data-collection procedures, or the effect of confidentiality restrictions
requiring the non-disclosure of the identity of a particular country.
 

         Table 8.  Share of technical cooperation, food aid and energy
                   aid in official development finance                
               
                             (Commitments, percentage)

-----------------------------------------------------------------------------
                       Technical
                      cooperation        Food aid        Emergency aid

                -------------------------------------------------------------
Country groups      1987     1990      1987    1990       1987     1990
-----------------------------------------------------------------------------
LLDCs a/            20.0     22.0       5.0     3.0        1.0      1.0
OLDCs b/            12.0     11.0       2.0     1.0        1.0      0.0
LMICs c/            15.0     16.0       3.0     2.0        2.0      1.0
UMICs d/            15.0     12.0       1.0     0.0        0.0      0.0
Unallocated e/      53.0     52.0       1.0     2.0        2.0      2.0
Overall total       18.0     17.0       2.0     2.0        1.0      1.0
-----------------------------------------------------------------------------

        Source:  Organisation for Economic Cooperation and Development,
Geographical Distribution of Financial Flows to Developing Countries (Paris,
1992), pp. 304-315.

        Note:  For ODA and official sector transactions by DAC members and
multilateral organizations, geographically unallocated amounts are too small
in aggregate to cause a substantial understatement of the figure for a given
recipient country.  In the case of Arab bilateral agencies, however,
approximately 35 to 40 per cent is geographically unallocated, depending on
the year.

        a/    United Nations list of least developed among the developing
countries.

        b/    Other low-income countries with a per capita GNP of less than
$750 in 1989.

        c/    Lower middle-income countries with a per capita GNP between $750
and $1,500 in 1989.

        d/    Upper middle-income countries with a per capita GNP exceeding
$1,500.

        e/    Including such items as (i) administrative costs, which are
mainly incurred on the territory of the donor country; (ii) amounts spent in
the donor country on research performed for the benefit of developing
countries (e.g., tropical diseases); and (iii) amounts reflecting defective
data-collection procedures, or the effect of confidentiality restrictions
requiring the non-disclosure of the identity of a particular country.


                                     D.  Purposes of technical cooperation

201.    Technical cooperation may constitute an important contribution to
enhancing human resources and strengthening institutional and other
complementary inputs to investment projects in order to speed up the process
of self-reliant economic modernization.  OECD has defined technical
cooperation activities whose primary purpose is to augment the level of
knowledge, skills, technical know-how or productive aptitudes of the
population of developing countries, i.e., to increase their stock of human
intellectual capital or their capacity for more effective use of their factor
endowment. 37/

202.    In a similar vein, the General Assembly, in its resolution 44/211,
stresses that in order to attain the goal of self-reliance in the developing
countries through the strengthening of national capacities, the operational
activities of the United Nations system should emphasize the human dimension
of development, in particular through education, training and the development
of human resources (para. 3).

203.    Technical cooperation for human resources and institutional capacity-
building needs to be designed with a long-term perspective and is meant
primarily to serve the long-term objectives of enabling developing countries
to mobilize and manage development resources on their own.  Technical
cooperation is also needed, however, for short- and medium-term purposes. 
Investment in physical productive capacity is important for growth.  But the
implementation of such investments requires skills and know-how, much of which
may not be available in developing countries.  Short-term technical
cooperation can help to overcome such bottlenecks.  The same is true to
varying degrees in the areas of economic policy formulation and administration
and management.  In many low-income countries, there also exists a medium-term
need for what is referred to as substitution technical cooperation or gap
filling, on account of a severe shortage of government officials with
appropriate skills in public administration and management in those countries.
In developing countries generally, the direct transfer of new technologies or
management information systems that constitute an important element of
institutional building may be speeded up through technical cooperation.  All
forms of technical cooperation, whether short-term or long-term, if properly
designed and implemented can contribute to human capacity-building under the
right circumstances, which is also true for substitution technical
cooperation. 


         E.  Conditions for success and perceived shortcomings

         1.  Basic conditions for success at the country level

204.    The general perception on the part of both multilateral and bilateral
donor agencies and recipients is that technical cooperation has generally been
fairly effective in terms of realizing specific project goals but largely
ineffective in terms of national capacity-building in developing
countries. 38/

205.    The failure of technical cooperation in achieving capacity-building
objectives may reflect the absence of the minimum necessary political and
economic conditions for success.  Political stability and a friendly political
environment are necessary to motivate citizens to invest in human resources
development and to encourage trained people to remain in the country. 
Economic stability, particularly macroeconomic balance, is important in order
to enable Governments to provide the requisite inputs, human or material, in
the consistent manner necessary to ensure the sustainability of activities in
human resources development and institution-building.  Macroeconomic
instability, which makes for the stop-go provision of resources, is not
conducive to sustainability.  The two ingredients have often been lacking for
prolonged periods of time in many developing countries.

206.    Political and economic stability are necessary but not sufficient
conditions for the successful achievement of technical cooperation objectives.
What is also important is full government commitment to deriving the maximum
benefits from technical cooperation resources.  In addition, successful
technical cooperation calls for a careful assessment of needs so that
programmes and projects may be designed to overcome critical bottlenecks in
human resources and institutions crucial for development.  Likewise, it is
important to make sure that the objectives established are consistent with
national absorptive capacity so that the technical know-how transmitted
through technical cooperation can be fully assimilated and take root in the
recipient country.  Success also requires that technical cooperation resources
be utilized with maximum efficiency.  That calls for rigorous monitoring of
project and programme implementation and evaluation of outputs against the
objectives set in national programmes.  Past experience shows, however, that
frequently those conditions have not been met.


                                       2.  General supply-side problems

207.    There have been serious shortcomings on the part of donors.  In the
past, although technical cooperation has been supply-driven to a considerable
extent, the donor community has not developed a coherent strategy to channel
technical cooperation more effectively towards capacity-building.  The
unsystematic approach to supplying technical cooperation has been, by
definition, a project-by-project approach, which has precluded capacity-
building at the sector and subsector levels, on account of the lack of
complementarities among projects.  The problem has been further compounded by
a lack of coordination among donors and between donors and recipients, which
has resulted in considerable duplication among donors and possibly a waste of
donor resources.  More importantly, it has caused much confusion in the
recipient countries and waste of their counterpart resources.  In that regard,
it may be noted that the large number of visiting missions and expatriate
experts have often exerted considerable pressure on the civil service of many
developing countries and therefore on government resources.  Technical
cooperation, even when financed by grants from donors, is not totally free.  A
considerable amount of recipient government resources is involved in terms of
civil service staff, housing and transport for expatriates, and counterpart
resources.  Very often the quality of experts provided by both multilateral
and bilateral aid agencies has fallen below par, which has led to an erosion
of the quality of project execution, 39/ a consequence of either
over-eagerness on the part of both bilateral and multilateral aid agencies in
taking on projects regardless of the availability of in-house expertise, or
the selection of experts on the basis of dubious criteria.

208.    Recipient government officials perceive the United Nations system as
having distinct potential advantages compared to bilateral donor agencies. 
They see the United Nations system as consisting of a vast network of
resources and information that the system can make available for development
work without direct political or commercial vested interests.  However, in the
case of multilateral financial institutions, notably the World Bank, elements
of conditionality are seen to mar neutrality.  The recipient Governments feel
that in practice, the United Nations system fails to exploit its advantages. 
They see United Nations assistance efforts as being bogged down by narrow
vested interests of the various parts of the system, which results in
salesmanship and turf squabbles and very standard types of projects that other
organizations are more efficient in delivering.  They feel that while in
theory the United Nations system could ensure that the best possible and most
relevant expertise is made available for development work, in practice
reliance is placed on old-boy networks, depriving developing countries of the
best and most dedicated persons available for development work. 40/


         3.  Factors undermining human resources development objectives

209.    Human resources development has been undermined for various reasons. 
Even under the best circumstances, human resources development calls for the
long-term commitment of sizeable amounts of resources.  In the past, however,
only a relatively small share of technical cooperation resources - about
15-20 per cent - has been devoted to education and training. 41/  A recent
Nordic study found that 65 per cent of technical cooperation personnel have
been engaged in implementing other project goals and only some 11 per cent and
7 per cent could be defined as trainers and institution-builders. 42/

210.    Human resources development, however, is expected to take place not
only through direct formal education and training but also through the
involvement of national personnel in technical cooperation activities.  That
avenue of developing human resources has failed for two main reasons:  low
levels of absorptive capacity of the civil service of many low-income
countries and the preponderant role of expatriate experts in the design and
implementation of projects even when local expertise has been available.

211.    Low absorptive capacity of a number of low-income countries has
resulted either from inadequate investment in education in the past and/or
constraints on recruitment of qualified staff in the public sector due to
budgetary problems.  A major reason for the shortage of qualified personnel in
the civil service of many countries is the prevalence of low salary levels,
which has driven competent staff to the private sector or to positions abroad. 
Since the mid-1970s, the purchasing power of the public service basic pay has
fallen continuously throughout the developing world, most notoriously in
sub-Saharan Africa but also in Latin America and some countries of Asia.  In
addition, the overall salary scales for public service employees have become
increasingly compressed either for egalitarian reasons or for the sake of
maintaining the standards of living of employees at the lower grades against
the ravages of prolonged inflation in situations of severe budgetary
constraints.  In any case, the compression has occurred in many countries at
the expense of senior public servants and has serious implications for their
morale and performance as well as for the performance of the individuals they
supervise. 43/  Low salary levels in combination with inimical political
situations has also deprived several countries of their most talented citizens
through large-scale brain-drain.  For instance 50,000 to 60,000 middle- and
high-level African managers are estimated to have emigrated between 1986 and
1990. 44/

212.    In response to the low levels of civil service pay in many countries,
donors have often responded by providing implicit or explicit salary
supplements.  Those have been provided on a piecemeal and project-by-project
basis and have therefore created a distorted salary structure, as well as
reducing the pressure for civil service reform by enabling main functions to
continue to be performed.

213.    The modalities of supplying technical cooperation have also been
important in hampering human resources development.  Project design and
implementation have relied excessively on expatriate experts even where local
expertise has been available.  While the shortages of and/or quality of local
professionals may be a reason for the low utilization of national
professionals in technical cooperation projects in some areas and some
countries, that is not the case generally for all developing countries.  The
low utilization of national professionals is the result of supply-driven
technical cooperation.  Donors decide on the use of expatriates for various
reasons of their own regardless of the availability of local experts. 
Available information indicates that the number of national professional staff
recruited by United Nations agencies has increased in recent years for
technical cooperation projects financed by UNDP (see A/47/419/Add.2).  There
has also been a decline in the use of long-term advisers in favour of
short-term consultants.  Comprehensive data on the use of national project
personnel (NPP) is not available.  By and large, however, the United Nations
specialized agencies whose UNDP contributions constitute a relatively small
part of their total expenditure on technical cooperation use less NPPs than
the others and are less interested in the collection of detailed information
on their use.  In 1988, only 25 per cent of the total technical cooperation
staff recruited by the United Nations agencies were national staff, with more
than half of them concentrated in six countries:  five Latin American
countries and China.  There is no indication of a change towards hiring more
national professionals by the bilateral aid agencies, which provide the bulk
of ODA and technical cooperation resources.  A recent study found that the
majority of technical cooperation experts tend to consist of long-term
resident advisers.  A change seems to be taking place towards greater use of
short-term experts, but the use of local experts by bilateral agencies remains
very limited. 45/  The low utilization of national professionals in countries
where qualified professionals are available has undermined the use of local
capacity and therefore the internalization of skills as well as the
cost-effectiveness of projects.

214.    The limited pursuit of South-South cooperation has been a further
factor constraining the effectiveness of technical cooperation resources. 
There is growing evidence of the greater potential for developing countries to
learn from each other and to utilize experts from other developing countries
whose experience may be more relevant and applicable than those whose
experience is largely acquired in developed countries.

215.    Another major hindrance to human resources development through
technical cooperation has been the ineffectiveness of the traditional
expert-counterpart modality of technical cooperation.  For one thing,
project-related experts have generally tended to be better technicians than
trainers.  For another, expatriate experts have generally assumed an
all-embracing local operating role, thus suffocating counterpart involvement. 
Very often, the huge differentials between the salaries of expatriates and
their local counterparts have served as a disincentive for the full
involvement of local counterparts.


                4.  Factors undermining institutional development

216.    Institutional development is a highly complex process and like human
development requires a long-term perspective.  In many low-income countries,
in the absence of adequate human resources the project approach to technical
cooperation may have precluded institutional development, because there is an
inherent conflict between the short time-frame of many projects and the long
time-frame required for institutional development.  Where targeted
institutions have very little absorptive capacity, it is not easy to achieve
the needed degree of internalization of know-how by the local staff within the
time-span of a project.

217.    The shortcomings of the project approach aside, institutional
development has suffered on account of the fact that aid agencies, both
bilateral and multilateral, have tended to assume far too great a role in the
design and implementation of institutional projects.  As a result,
institutions have sometimes been transplanted from the home countries of
donors and experts but have failed to adapt to the existing institutional
structures of recipient countries.

218.    A more fundamental handicap to institutional development through
technical cooperation has been the fact that many aid agencies themselves lack
the institutional capacity to come to grips with the complexities of
institutional development, which is an area lacking a clear conceptual
framework and associated instruments.  For instance, a self-evaluation of the
effectiveness of technical cooperation personnel by the Nordic countries
concluded that few of the technical cooperation personnel from the Nordic
countries have relevant knowledge and skills in designing and implementing
programmes for on-the-job training and institution-building, even if they are
otherwise professionally well qualified. 46/  Consequently, inconsistent
"quick-fix" approaches have predominated with little or no impact on the
strengthening of sectoral or subsectoral institutions.  In many cases
institutions have actually been developed but have subsequently collapsed due
to a lack of demand for their services, a result of faulty project design
associated with donor-driven supply of technical cooperation resources, with
little or no involvement of recipients at the design stage of projects.


         5.  Constraints on changing technical cooperation practices

219.    Two major factors may militate against meaningful changes in bilateral
technical cooperation.  First is the open secret that donor countries pursue
various political, economic and cultural goals in recipient countries and use
technical cooperation as an instrument to achieve those goals.  Donor
countries' self-interests are often felt to be best served by their continuous
presence in the recipient countries through their nationals as experts and
advisors to recipient countries' Governments.  That factor is likely to
militate against moving in the direction of relinquishing the management of
technical cooperation resources to recipient Governments and the increased use
of recipient countries' nationals at all stages of technical cooperation
projects.  Second, over the years a wide array of consultancy firms, other
business interests and research institutes have emerged in the donor
countries.  Those institutions have become dependent on technical cooperation
for their survival and are backed up by powerful lobbies to safeguard their
interests, which are best served by the traditional modalities of technical
cooperation through expatriate experts.  Even from a strictly financial point
of view, national political processes in donor countries would be disposed to
support such vested interests.

220.    At the multilateral level, the United Nations specialized agencies
that have become increasingly reliant on extrabudgetary funding, reflecting
their growing role in project-related technical cooperation, may continue to
emphasize their independent character and resist attempts at system-wide
reforms for fear of losing part of their extrabudgetary resources that have
become important for covering the cost of their bureaucracies.  They may also
resist reforms that will reduce their leverage in dealing directly with
individual developing countries.

221.    To the extent that the agencies rely on funding from UNDP, the new
UNDP agency support cost arrangements may force them to comply with reform
measures proposed in the United Nations. 47/  The new support cost measures
are meant to create incentives to encourage specialized agencies to provide
technical support services (TSS-2); to give increased importance to agency
involvement in upstream stages of programmes/project cycles through the
provision of sectoral policy advice and the formulation of subsectoral and
cross-sectoral strategies (TSS-1); and to minimize the resources allocated to
administrative and operational services (AOS), 48/ i.e., for the procurement
of UNDP-financed programme/project inputs.

222.    The new support cost arrangements went into effect in July 1992 but
have yet to become established.  Thus far, very few projects relating to TSS-2
and AOS services have been approved by UNDP.  It is not clear to what extent
that related to the decline in resources available to UNDP.  At any rate, the
agencies are concerned that new support measures may transform the old
tripartite relationship among UNDP, the agencies and the recipient countries
into an essentially bilateral relationship between UNDP and the recipient
countries.

223.    A related problem is the limited commitment even on the part of
recipients to translate long-standing policy recommendations into practice. 
Although both donors and recipients formally agree on the need for the
rationalization of technical cooperation, there exist many stubborn built-in
political, institutional and individual resistances to change among those that
have vested interests in old arrangements.  While that has been a general
problem, it has been particularly severe in the least developed countries and
the countries of sub-Saharan Africa generally.  In several developing
countries that have relatively more developed national capacities, Governments
have gradually been able to improve the use of technical cooperation by more
carefully defining their needs, properly managing the resources involved and
insisting on greater use of local expertise, suggesting that countries that
have more developed national capacities can make better use of technical
cooperation than those that do not.


      F.  Methodological issues:  efficiency of technical cooperation
          personnel and effectiveness of technical cooperation       

224.    Questions relating to the efficiency of technical cooperation
personnel continue to be raised, but systematic studies of efficiency have
been eschewed on account of the lack of data on the benefits of technical
cooperation.  Even the direct benefits of technical cooperation are not
quantifiable because technical cooperation is only one of many inputs to a
project.  It is agreed, however, that the opportunity cost of an expatriate
technical cooperation expert, where local experts that could perform a
particular function equally well are available, is very high since local
experts can generally be hired at much lower costs.  Over-reliance on
expatriate experts under such circumstances, particularly from high income
countries, is therefore clearly inefficient.

225.    The effectiveness of technical cooperation is often assessed in terms
of the delivery of inputs rather than the achievement of objectives, but there
is an emerging consensus that efforts need to be made to move in the direction
of the assessment of outputs.  It is sometimes argued that the effectiveness
of technical cooperation should be judged by the criterion of sustainability
of the activities after the withdrawal of technical cooperation personnel. 
The sustainability of an activity or an institution can be undermined if the
demand side of the services offered is neglected at the design stage of the
project.  That may often be due to the non-involvement of local beneficiaries
at that stage, a problem associated with donor-driven technical cooperation. 
It is well to bear in mind, however, that an institution can fail for other
reasons as well, such as a lack of funds for recurrent costs.

226.    For the purposes of evaluation, it would help to divide technical
cooperation into two categories - hard and soft.  Soft technical cooperation
refers to activities such as institutional development, manpower training,
civil service reforms and policy advice.  Hard technical cooperation refers to
activities related to investment support and the implementation of capital
projects such as feasibility studies, engineering, technical operations,
supervision of construction, project management and other engineering
services.  The effectiveness of hard technical cooperation could be evaluated
in terms of successful project completion within a given time-frame and the
subsequent replication of projects by the nationals of a country.  The
cost-effectiveness of hard technical cooperation might be evaluated at the
appraisal stage of a project with a view to minimizing costs by an effective
mix of expatriate and local personnel.  The effectiveness of soft technical
cooperation is much more difficult to assess but could be done in terms of the
achievement of project objectives, the sustainability of projects and their
subsequent replication or an evaluation of their spread effects.


                        G.  Efforts to increase effectiveness

                      1.  Efforts needed at the national level

227.    The effective utilization of technical cooperation resources depends
upon their integration into national development efforts.  Technical
cooperation needs must emerge from a thorough analysis of the gaps that exist
in human and institutional terms and the reasons for those gaps.  The need for
technical cooperation should emerge from that analysis.  Furthermore, a
crucial requirement in many developing countries is civil service reform,
particularly where the public sector is overstaffed, while salaries and wages
are too low.  In many countries, higher salaries seem to be necessary to both
recruit and retain qualified staff.  The level of salaries would be expected
to vary from country to country but they should be high enough to serve as an
incentive for qualified people to join the civil service and make a career in
it, which may well call for appropriate short-term budgetary adjustments. 
From the longer-term point of view it will be necessary to emphasize the local
training of professionals in areas in which large numbers of professionals are
needed instead of placing too much reliance on overseas training.  Developing
countries, particularly the poorer ones, may not be able to remunerate large
numbers of professionals with overseas training adequately to retain them in
government service or even in the country.  Furthermore, raising the salaries
of professionals to levels comparable in real terms to those prevailing in the
industrial world would increase the salary differential in the civil service
excessively and would give rise to demands for salary increases by other
categories of employees.  Along with adequate salaries and systems of
promotion based on merit, there is a need in many countries to create a more
attractive political and intellectual climate, i.e., an environment in which
professionals can express criticisms of programmes and policies without fear
of harassment or penalty.  There is a strong case for a proportion of
technical cooperation allocations to be channelled towards budgetary support
in the poorer countries, especially the least developed countries, for the
specific purpose of building absorptive capacity at the sectoral and subsector
levels.  A number of initiatives have already been taken in that direction by
United Nations agencies, but it seems that the current efforts are not yet
fully commensurate to the needs.


               2.  Improving multilateral technical cooperation

228.    Traditional technical cooperation practices have become
institutionalized and entrenched but recent policy initiatives at the
international level offer some hope for change in the direction of greater
efficiency and effectiveness.  Pursuant to General Assembly resolution 44/211,
efforts are under way in the United Nations system to revamp technical
cooperation practices.  A review of steps taken thus far to implement the
proposed reforms is contained in the report of the Secretary-General on
operational activities for development (A/47/419).  The major objective of the
reform effort is to speed up national capacity-building in developing
countries.  The major emphases are on national ownership and execution of
operational activities, the programme approach instead of the project approach
and various institutional reform measures aimed at enhancing coordination and
execution, such as internal coordination, coordination at the field level, the
harmonization of programme cycles of lending agencies of the United Nations
system with those of national Governments, and the decentralization of
authority of United Nations agencies to the field level.

229.    Underlying national ownership and execution is the central principle
that all programmes and related projects be formulated and carried out by
recipient Governments.  National execution requires that, rather than United
Nations agencies, the recipient countries should have the central
responsibility for executing programmes and coordinating the activities of
donors, with the United Nations agencies supplying assistance when and where
requested.  That approach offers several advantages.  If implemented as
envisaged, it will make technical cooperation more demand-driven, which will
make for a better fit between resources and genuine needs.  National execution
can serve as a useful instrument for handing over managerial responsibility to
recipient countries' nationals, which will help maximize the utilization of
local expertise and strengthen national capacity.  The greater use of
qualified nationals in all aspects of technical cooperation will also improve
the cost-effectiveness of technical cooperation activities.

230.    Another consequence of national execution is expected to be increased
competition by the agencies of the United Nations system both among themselves
and with private consulting firms.  Over time that should lead to greater
specialization among the agencies and the emergence of comparative advantages
in supplying technical cooperation services building on the expertise acquired
by some of them in their information gathering and analytical research
activities.

231.    The programme approach calls for the articulation by recipient
Governments of complete sector or subsector multi-year programmes consistent
with their development plans and priorities.  It is envisaged that the
programmes will specify policies, strategies and component elements, including
technical cooperation needs.  They are then to be presented to the donor
community for globally coordinated financing.  The programme approach has a
number of advantages.  Programmes, unlike projects, may have the long-term
perspective required for capacity-building.  They enable the targeting and
concentration of technical cooperation inputs in a coherent manner in priority
areas.  Since recipient Governments are to articulate the programmes, the
approach may lead to a broader utilization of national skills both at the
design and execution levels.  Programmes could also serve as a useful
instrument in coordinating donor efforts in capacity-building.

232.    The reform proposals also aim at achieving a unified response of the
United Nations system to the needs of developing countries.  It is envisaged
to achieve a unified response through four measures:  (a) establishing the
common goals and strategies of the United Nations system on specific
programmes formulated by developing countries through internal coordination
among United Nations agencies (in the past, a number of United Nations
agencies had their own particular goals and strategies on specific themes such
as maternal health, family planning, safe drinking water etc., which made a
unified response impossible); (b) harmonizing programming cycles of lending
agencies of the United Nations system with those of national Governments;
(c) improving coordination of the activities of the United Nations system at
the country level by strengthening the role of United Nations resident
coordinators, who are to be vested with adequate authority to provide
leadership and coordinate the activities of the entire United Nations system
at the country level; and (d) housing of all United Nations organizations in
common premises at the country level in order to facilitate inter-agency 
consultations and coordination.

233.    In addition, the reform proposals aim at achieving a country-focused
response through decentralization.  Decentralization calls for the
decentralization of capacity and resources and the delegation of the maximum
possible authority by United Nations agencies to their country offices to make
decisions on programmes and projects formulation and their subsequent approval
and implementation.  The aim is to ensure cultural, social and economic
specificity in the operational activities of the United Nations system with
developing countries; to bring the decision-making process close to those who
benefit from the services offered; to enhance the effectiveness of
collaboration among the agencies; to ensure closer cooperation of the United
Nations agencies with the resident coordinators; and to improve the speed,
quality and efficiency of implementation.

234.    The reform proposals appropriately feature the needs for greater
accountability and simplification of accountability procedures relating to
technical cooperation.  A project currently under way in the United Nations
aims at accomplishing these objectives in three stages:  (a) the collection
and assessment of data for donor aid accountability profiles, (b) test cases
in developing countries to determine capacity and level of compliance in
fulfilling various accountability obligations, and (c) proposals for new
accountability methods and standards, reflecting the interests and
collaboration of donors and recipients.

235.    While the reform initiatives taken in the United Nations system are a
step in the right direction and it is still too early to evaluate their
effectiveness and to look into the need for better alternatives, several
problems are foreseen.  The major short-to-medium term constraint to the
programme approach and the principle of national ownership and execution in
many developing countries is the shortage of personnel qualified to formulate
coherent programmes and related projects and to oversee their implementation. 
That obstacle could be overcome with the help of expatriate experts working
under the direction of nationals during a transition period, during which an
adequate number of nationals could be trained to meet foreseen needs.  To
ensure that technical cooperation requirements reflect genuine demand,
however, the use of expatriates in programme/project formulation should be
quickly phased out.  As mentioned above, the training of national
professionals to overcome bottlenecks would be facilitated if a larger portion
of technical cooperation resources available to the United Nations agencies
could be allocated to meet the training needs of individual countries. 
Moreover, for the programme approach to be effective, care should be taken to
formulate consistent programmes at the sector and subsector levels and to
guard against programmes deteriorating into mere compilations of inconsistent
projects.  The recent UNDP initiative of assisting developing countries in
developing technical cooperation programmes through its National Technical
Cooperation Assessment and Programmes (NaTCAPs) facility might serve as a
viable short-to-medium term measure, but should not be seen as a substitute
for training nationals in formulating and executing technical cooperation
programmes.  

236.    The NaTCAPs aim at improving the management of technical cooperation
by Governments through obtaining systematic and comprehensive information on
the technical cooperation resources being provided by the donor community;
developing and issuing policy statements and guidelines on the priorities,
purposes and uses of technical cooperation; and developing comprehensive
technical cooperation programmes as complements to Governments' public
investment programmes and annual budgets.  The exercise, however, remains a
supply-driven exercise.  It assumes the existence of appropriate institutions
and is far too dependent on external support to evolve into a major tool for
the effective management of human and institutional capacities.  Furthermore,
it is an extremely complex exercise since it aims at integrating technical
cooperation into national budgets involving hundreds of projects under
different financing and management systems, which makes it extremely intensive
in time and resources. 

237.    The establishment of common goals and strategies by United Nations
organizations on specific themes through internal coordination should be
feasible.  In point of fact, efforts are already under way to achieve that
objective.  Appropriate modalities need to be adopted, however, to ensure that
internal coordination is done speedily and efficiently and to guard against
the process falling under the domination of the larger funding agencies. 
Coordination at the field level may pose bigger problems since it involves
coordination of the activities of staff members of various organizations,
whose allegiance will be primarily to their own organizations, which may
assume conflicting positions on particular activities.  The task of external
coordination would be greatly eased if at the stage of internal coordination
all the differences among the agencies were ironed out.  At any rate, it
remains to be seen whether the envisaged independent coordinators with the
rank of ambassador can do the job effectively.  Decentralization, which along
with decentralization of staff resources to the field involves the delegation
of authority by the agencies to their country offices and field staff, is also
likely to pose some problems.  To start with, it is not clear whether it will
be possible to locate the wide range of technical sectors and subsectors at
the country level, nor is it clear how to achieve the participation at the
country level of organizations that do not have a field presence or are
decentralized only at the regional or subregional level.  From the point of
view of individual organizations, there is the question of whether the
decentralization of authority will impair the accountability of agencies to
their governing bodies.  At any rate, efforts are needed by way of appropriate
restructuring of donor agencies to achieve maximum decentralization.


       3.  Some recent multilateral initiatives towards approaches
           to capacity-building                                   

238.    Several initiatives have been taken in recent years by United Nations
agencies, singly and in collaboration, to meet the long-term institutional
needs of developing countries. 49/  The efforts are directed to a considerable
extent to the poorer countries, in particular countries of sub-Saharan Africa.

239.    The World Bank Sectoral Development Loans Programme, which has been in
existence for some time, offers possibilities for long-term capacity-building
at the sectoral level as it provides a national multi-year sector development
strategy.  The African Capacity-Building Initiative of the World Bank, UNDP
and many bilateral donors, aims at building a critical mass of professional
African policy analysts and economic managers with a view to putting Africa
more in control of its own development progress and to reduce dependence on
foreign expertise.  The UNEDIL, (UNDP, Economic Development Institute of the
World Bank (EDI), and the International Labour Organization (ILO)) an
inter-agency programme, has been set up with the aim of building indigenous
competence in 16 African management institutions and three regional
organizations in order to avoid traditional reliance on expatriates.  The
programme is focused on civil service improvements, State enterprise reform
and private sector development.  The Special Programme for Administration and
Management, an inter-agency programme under the leadership of UNDP, has been
created to provide technical cooperation to improve administration and
management capability in Sub-Saharan Africa.  The Management Development
Programme of UNDP is focused on improving the efficiency and productivity of
the public and parastatal sectors, the capacity of the Government to formulate
and implement long-term reform policies and to reorganize the civil service in
poor countries, particularly the least developed.  The Agricultural Management
and Training for Africa Programme (AMTA) is an inter-agency programme with the
objective of training project managers in agriculture to develop curricula and
training materials and to improve regional and vocational institutions.  The
Agriculture and Rural Development Network is a facility set up to improve the
capacities for sector planning and management development in the African
region, as a complement to AMTA.  The Special Programme for African
Agricultural Research of the World Bank focuses on building and strengthening
Africa's institutional capacity needs in the agricultural sciences.  The
African Economic Research Consortium has been set up to strengthen Africa's
capacity in the area of economic policy formulation.  Although it is not a new
initiative, mention needs to be made of the ILO training centre in Turin,
which has been in existence for over a quarter century.  The centre provides
technical and vocational training to selected in-service civil service staff
of developing countries in a number of fields.  The Lome' IV Convention has
worked out several mechanisms to encourage cooperation between national and
foreign consultancy firms through what is referred to as twinning
arrangements.  Such arrangements can play a very important role in building-up
expertise in the private sector that can be utilized throughout the economy. 
The latter are all institutions with long-term objectives and their
effectiveness can be assessed only over the long term, but they need to be
carefully nurtured and adequately funded in order to enhance the quality of
their output and the extent of their coverages.


                  4.  Reform of bilateral technical cooperation

240.    In view of the fact that the bulk of aid originates from bilateral
sources, it is absolutely crucial that the effectiveness of bilateral
technical cooperation also be improved.  Questions arise regarding the extent
to which bilateral aid agencies will agree to national ownership and execution
and the programme approach to technical cooperation and whether they are
amenable to establishing common goals and strategies on specific themes or
programmes for individual countries consistent with country programmes
formulated by recipient countries as United Nations agencies are required to
do under the current reform efforts.  Likewise, there is the question whether
they will agree to coordinate their activities at the field level.  In other
words, will the reform measures being taken in the United Nations system be
adopted by bilateral programmes?

241.    There are some encouraging signs that bilateral technical cooperation
practices are also poised to undergo changes in the future.  The DAC of OECD
took the initiative to issue a call for new orientations in technical
cooperation, which it was hoped would have a significant impact on bilateral
technical cooperation practices.  In the resulting principles, it is agreed
that technical cooperation should emphasize long-term capacity-building in
developing countries rather than immediate short-term performance improvement
and that donors should assign to developing countries the central role in the
planning, design and management of technical cooperation; adopt a programme
rather than the project-by-project approach; encourage involvement in
technical cooperation programmes and projects at all stages by the intended
beneficiaries through participatory approaches; emphasize sustainable
development of long-term institution-building that will make for
self-reliance; recognize the needs of the private sector for technical
cooperation; define all objectives in terms of outcomes to be achieved rather
than inputs to be provided; and pay greater attention to the costs and
cost-effectiveness of technical cooperation activities.  Adoption of those
principles by DAC member countries in 1991 in practice constitutes a welcome
and fundamental reorientation of bilateral technical cooperation practices,
very much in line with the reform efforts under way in the United Nations.  

242.    Although the principles were adopted by DAC members in 1991, they have
not been implemented.  Experience indicates that bilateral donors are
reluctant to undertake reforms in technical cooperation practices, for various
reasons.


              H.  Requirements of technical cooperation in the 1990s

              1.  The context of technical cooperation in the 1990s

243.    The current decade will mark a new era in ODA and the technical
cooperation associated with it.  Recent political developments, particularly
in central and eastern Europe, have brought about a major change in the
international context for development cooperation.  The political
configuration of countries has changed; the number of nation States has
increased.  Many of those countries are grappling with the problems of a new
political and economic ethos that calls for the establishment of democratic
and market-based institutions with which they are largely unfamiliar.  Those
countries expect to draw on considerable assistance from the international
community in order to put their political and economic systems on a new
footing.  In the context of new areas of technical cooperation activity and
the dim overall prospects for ODA flows, the importance of enhancing the
effectiveness of technical cooperation cannot be overemphasized.


              2.  Areas requiring enhanced emphasis in the 1990s

244.    The traditional preoccupation of technical cooperation in the
developing countries will continue, with an emphasis on institutional and
human resources development.  Developing countries need to make greater
efforts to better manage their development resources, including technical
cooperation, starting in many countries with appropriate civil service
reforms.  With the changing configuration of political and economic forces in
the developing world, new actors have emerged with a bigger role in economic
and social development, most importantly non-governmental organizations and
the private sector.  There is therefore a need for changing the modalities of
technical cooperation to support civil society more broadly.  So far,
technical cooperation has been too narrowly restricted to the government
sector.  Given the enhanced role of the private sector, it is high time to
adapt the supply of technical cooperation to meet the latent demands of the
private sector, if necessary by appropriate modifications of the mandates of
donor agencies. 

245.    The current decade has ushered in new areas of concern in the
developing world that also call for enhanced technical and financial
cooperation from the international community.  Many of those concerns will
also be at the top of the international development agenda.  Among the more
important of such concerns are the maintenance of environmental integrity in
its various facets in the course of economic development; the formulation and
implementation of effective population policies in many parts of the
developing world; the promotion of social development in all its aspects,
particularly in the areas of education, nutrition, primary health care, child
and maternal welfare, safe drinking water and sanitation, the social
empowerment of women, and the full participation of all groups in society in
economic and social activities; the promotion of wholesome urban development;
and safeguarding human rights.  While most of those concerns are basically the
responsibilities of individual countries, implementing them will entail
considerable amounts of financial and technical resources beyond the means of
many developing countries.


                 3.  Changing modalities of technical cooperation

246.    As discussed above, active efforts are under way to change the
modalities of technical cooperation at the multilateral level.  There are also
some signs that bilateral technical cooperation will undergo changes in the
present decade.  All efforts that aim at placing decision-making processes
under recipient control and making technical cooperation more demand-driven
need to be encouraged.  

247.    A few points need particular mention.  No effort should be spared to
ensure a better integration of the mandates of the United Nations actors in
the area of technical cooperation.  Closer coordination is a necessary
condition for the effective delivery and the effectiveness of technical
cooperation.  It is also absolutely necessary for United Nations agencies to
build a symbiotic relationship between research and technical cooperation. 
Technical cooperation capabilities should actually emerge from research work
in order to ensure that technical cooperation personnel will operate on the
frontiers of knowledge.  The practice of career technical cooperation has too
often resulted in the provision of stale advice and the indiscriminate
replication of experiences from one country to another.

248.    Furthermore, technical cooperation should aim at overcoming critical
bottlenecks in institutions and human resources, identified at the country
level.  Since critical needs will vary from country to country, technical
cooperation activities should vary accordingly.  In some countries, the need
for substitution of technical cooperation will persist for some time; in
others the preoccupation will be with longer-term human resources and
institutional needs.  Donor agencies need to evolve a concerted long-term
strategy for institution-building based on needs.  A concerted strategy is
necessary to ensure that new institutions compatible with one another are
created to overcome sectoral and subsectoral bottlenecks.  A concerted
strategy is also needed to make the provision of technical cooperation in
emergencies timely and effective.  In connection with institution building,
modern techniques need to be emphasized.  For instance, the establishment of
management information systems may be a priority in many countries.  The
establishment of such systems should take into account the full potential of
informatics technology whenever it can raise productivity.

249.    A crucial requirement for increasing the effectiveness of the supply
of technical cooperation will be the decentralization of multilateral and
bilateral technical cooperation staff to the country level, the only way to
acquire a thorough familiarity with the specific problems, bottlenecks and
needs of individual countries.  Determining the assistance needs of individual
countries from the headquarters of donor agencies is a hopeless endeavour and
makes for a considerable waste of resources.  Decentralization is already
being implemented in the United Nations but is currently facing considerable
resistance.  A restructuring of donor agencies' bureaucracies may well be
necessary to achieve the goals of decentralization. 

250.    The importance of the idea of national ownership and execution of
technical cooperation cannot be overemphasized.  In the cases of countries
where civil order has broken down or which have suffered substantial losses of
qualified people in the course of prolonged civil unrest, however, there may
be a short-to-medium term need for a quasi supra-national body - a
recipient/donor commission under the auspices of the United Nations with full
responsibility for determining critical technical cooperation needs and for
channelling technical cooperation resources from all sources, both bilateral
and multilateral, to meet those needs in a concerted manner.  With impartial
staffing, such a body might prove to be more efficient in putting such
countries back on their feet than the normal modalities of technical
cooperation.

251.    As already discussed above, more serious efforts are needed to
evaluate both the effectiveness of technical cooperation in achieving desired
objectives and the cost-effectiveness of technical cooperation, which is
absolutely crucial regardless of whether ODA and its technical cooperation
component increase adequately or not in the decade.  If technical cooperation
is not effective, it is useless; if it is not cost-effective it is wasteful.


       V.  GENERAL REVIEW OF THE LIST OF THE LEAST DEVELOPED COUNTRIES


                               A.  Introduction

252.    At its forty-sixth session, the General Assembly requested the
Committee for Development Planning to undertake every three years a general
review of the list of low-income countries with a view to identifying which of
those countries should qualify for inclusion in, or graduation from, the list
of least developed countries and to present that review to the Assembly,
through the Economic and Social Council.  In response to that request, the
Committee carried out a general review at its current session on the basis of
the criteria adopted by the General Assembly at its forty-sixth session. 50/ 
The per capita GDP criterion was updated on the basis of the new upper limit
set for low-income countries by the World Bank in 1991 and according to the
procedures adopted by the General Assembly in 1991.  The cut-off points on the
criteria used for the review were $699 for per capita GDP, 26 for economic
diversification index (EDI) and 47 for augmented physical quality of life
index (APQLI).


                                              B.  Recommendations

253.    On the basis of the criteria and their application, the Committee has
assessed the eligibility of countries as described below.  At the first stage,
countries were considered on the basis of population size, per capita GDP,
APQLI and EDI.  The following 35 countries shown in group I (see table 1) meet
all four criteria:  Afghanistan, Angola, Benin, Bhutan, Burkina Faso, Burundi,
Cambodia, the Central African Republic, Chad, the Comoros, Equatorial Guinea,
Eritrea, Ethiopia, the Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Malawi,
Mali, Mauritania, Nepal, Niger, Rwanda, Sao Tome and Principe, Sierra Leone,
Solomon Islands, Somalia, Sudan, Togo, Uganda, the United Republic of
Tanzania, Yemen, Zaire and Zambia.

254.    Of this total of 35 countries, three - Angola, Eritrea and Ghana - are
not currently on the list of least developed countries.  However, among those
countries, Ghana has made substantial progress since the Committee conducted
its review in 1991 and its EDI is now at the cut-off value for that index. 
Moreover, the Government of Ghana expects that a continuation of its current
economic policies will soon result in further improvement.  Accordingly, the
Committee recommends against the inclusion of Ghana.  In the case of Eritrea,
a new State formerly part of Ethiopia which is on the list of the least
developed countries and all three of whose indicators are well below the
respective cut-off points, the Committee recommends that the country be added
to the list, pending the development of an adequate statistical database.

255.    The second stage of assessment was based on the APQLI and the other
indicators relevant for countries in group II.  Haiti and Mozambique meet the
per capita GDP criterion and the APQLI but not the EDI.  Those countries are
already on the list and the Committee recommends that they be retained since
they do not meet the graduation rule.  Kenya meets the per capita GDP
criterion and is on the borderline with respect to the APQLI and above the
cut-off point for the EDI.  The Committee recommends against the inclusion of
Kenya on the list.

256.    The third stage of assessment was based on the EDI and the other
indicators relevant for countries in group III.  Four countries - Kiribati,
the Lao People's Democratic Republic, Lesotho and Madagascar - all meet the
per capita GDP and the EDI but not the APQLI criteria.  Since they are already
on the list, the Committee recommends that they be retained since they do not
meet the graduation rule.

257.    Five countries - Guyana, Nicaragua, Sri Lanka, Viet Nam and Zimbabwe
(group IV) - have a per capita GDP below the cut-off point on the per capita
GDP criterion but do not meet either the APQLI or the EDI.  The Committee does
not recommend any of them for inclusion.

258.    The foregoing assessment was made for low-income countries, defined
for present purposes as those whose per capita GDP fell below the cut-off
point on the per capita GDP criterion.  The per capita GDP of nine countries
currently on the list of least developed countries (group VI) - Afghanistan,
Botswana, Cape Verde, Djibouti, Maldives, Myanmar, Samoa, Tuvalu and Vanuatu -
exceeded the cut-off point on the per capita GDP criterion and have been
assessed separately in the light of the graduation rules.

259.    Botswana continues to meet the graduation criteria.  Accordingly, the
Committee reaffirms its recommendation for graduation from the list, now that
three years have elapsed since it first recommended graduation in 1991.

260.    Djibouti, Samoa and Tuvalu do not meet the graduation rule.  In the
case of Djibouti, the APQLI and the EDI are extremely low.  In the cases of
Maldives, Myanmar, Samoa and Tuvalu, while the APQLI is above the level needed
for graduation, GDP per capita does not yet appear to exceed the required
level ($699 plus $100).

261.    Cape Verde would appear to satisfy the graduation rules.  However,
between the third quarter of 1992 and the third quarter of 1993 its exchange
rate depreciated against the dollar by 31 per cent with an underlying
inflation rate of about 8 per cent.  Thus, GDP per capita could easily be
substantially overestimated.  The Committee recommends that Cape Verde be
retained on the list.

262.    The remaining country, Vanuatu, satisfies the graduation rule and the
Committee recommends its graduation from the list, provided that this finding
is confirmed at the time of the 1997 review.

263.    The Committee also considered the cases of economies in transition
that have the lowest per capita GDP among the group of countries in eastern
Europe and in the territory of the former Soviet Union.  Sufficient data are
not available to compute the composite indices for those countries.  The two
indicators that are available, life expectancy at birth and adult literacy,
suggest an APQLI higher than the cut-off point for least-developed country
designation but that cannot yet be verified.  The Committee suggests that the
relevant information be collected on the countries in the group that qualify
as low income by World Bank criteria.

264.    In conclusion, the Committee recommends (a) that two new countries -
Angola and Eritrea - be added to the list; (b) that Botswana be graduated from
the list immediately; and (c) that Vanuatu be graduated from the list in 1997,
conditional upon a review in that year.


          Table 9.  Criteria for identifying least developed countries

-----------------------------------------------------------------------------
Country                    Per capita GDP a/         APQLI b/         EDI c/
-----------------------------------------------------------------------------
        Group I.  Per capita GDP of $699 or less, population of 75 million
                  or less, APQLI of 47 or less, EDI of 26 or less

Afghanistan d/                  253                   12               20
Angola e/                       591                   28                9
Benin                           415                   25               17
Bhutan                          164                   29               22
Burkina Faso                    249                   20               24
Burundi                         199                   23               10
Cambodia                        101                   33               21
Central African Republic        496                   26               15
Chad                            230                   18               13
Comoros                         450                   35               13
Equatorial Guinea               474                   35               16
Eritrea e/                       --                   --               --
Ethiopia                        108                   23               23
Gambia                          355                   25               22
Ghana e/                        409                   40               26
Guinea                          493                   19                8
Guinea-Bissau                   210                   24               13
Liberia                         392                   29               23
Malawi                          209                   35               15
Mali                            271                   16               15
Mauritania                      573                   29               15
Nepal                           147                   34               13
Niger                           321                   17                8
Rwanda                          261                   30               17
Sao Tome and Principe           340                   46               10
Sierra Leone                    140                   17               20
Solomon Islands                 583                   27               24
Somalia                          51                   14               18
Sudan d/                        400                   24               22
Togo                            503                   41               20
Uganda                          159                   35                6
United Republic of Tanzania     104                   45               25
Yemen                           677                   36               13
Zaire                            95                   42               15
Zambia                          412                   45               16

        Group II.  Per capita GDP of $699 or less, population of 75 million
                   or less, APQLI of 47 or less, EDI above 26

Haiti                           308                   36               31
Kenya e/                        346                   47               28
Mozambique                       77                   20               29

       Group III.  Per capital GDP of $699 or less, population of 75 million
                   or less, APQLI above 47, EDI of 26 or less

Kiribati                        529                   68               17
Lao People's Democratic
  Republic                      238                   52               23
Lesotho                         358                   52               21
Madagascar                      238                   48               24

        Group IV.  Per capita GDP of $699 or less, population of 75 million
                   or less, APQLI above 47, EDI above 26

Guyana e/                       297                   75               28
Nicaragua e/                    377                   59               30
Sri Lanka e/                    505                   70               30
Viet Nam e/                     121                   58               27
Zimbabwe e/                     584                   56               38

           Group V.  Per capita GDP of $699 or less, population greater
                     than 75 million

Bangladesh                      211                   31               21
China e/                        345                   70               38
India e/                        325                   47               36
Indonesia e/                    624                   63               31
Nigeria e/                      282                   35                7
Pakistan e/                     422                   34               33

                Group VI.  Currently classified as least developed,
                           per capita GDP above $699

Botswana                      2 795                   55               19
Cape Verde                      940                   63               17
Djibouti                      1 238                   23               19
Maldives                        721                   53               11
Myanmar                         701                   57               26
Samoa                           750                   73               26
Tuvalu                          712                   65               21
Vanuatu                       1 115                   53               20
------------------------------------------------------------------------------

       Note:  1. Inclusion rule.  A country will qualify for inclusion if it
meets all four formal criteria, namely, population size, per capita income,
the APQLI and the EDI, subject to the judgement of the Committee on the
natural endowment index and its component indicators, exports of petroleum as
a percentage of total exports and ODA; or if it meets the population and per
capita income criteria, and the APQLI or the EDI, and is land-locked, is a
small country with a population of 1 million or less, or suffers from frequent
severe climatic risks, such as drought, floods and cyclones.  Inclusions will
be subject to the judgement of the Committee or other considerations.

       2.     Graduation rule.  A country will be graduated from the list if
it has exceeded the cut-off point on the per capita income criterion relevant
at the time a review is carried out and the cut-off point on either the APQLI
or the EDI for three years, or if it has exceeded the cut-off points on both
the APQLI and the EDI, even if its per capita income remained below the
cut-off point on the per capita income criterion.  The margins by which the
cut-off points need to be exceeded are set at $100 for per capita income, 5
points for the APQLI and 3 points for the EDI.

(Footnotes to table 9)

       a/     United States dollars, annual average, 1990-1992.

       b/     Augmented physical quality of life index, comprising life
expectancy at birth, per capita calorie supply, combined primary and secondary
school enrolment, and adult literacy rate.

       c/     Economic diversification index, comprising share of
manufacturing in GDP, export concentration ratio, per capita consumption of
electricity and the share of the labour force in industry.

       d/     Due to extremely high rates of inflation coinciding with fixed
official exchange rates, proxy exchange rates calculated by the Statistical
Division of the United Nations Secretariat were used to improve comparability
of per capita GDP.

       e/     Not on the current list.


265.   If these recommendations are approved by the General Assembly, there
will be 48 countries on the list of the least developed countries.  The
Committee wishes to point out that the recommended changes to the list will
have implications for the Programme of Action for the Least Developed
Countries in the 1990s in general and for the ODA targets agreed therein.


                       VI.  ORGANIZATION OF THE SESSION

266.   The twenty-ninth session of the Committee for Development Planning was
held at United Nations Headquarters in New York, 12-14 January 1994. 
Seventeen members for the Committee attended:  Abdlatif Y. AL-HAMAD, Just
FAALAND, Ricardo FFRENCH-DAVIS, Tchaboure Ayme GOGUE, Keith GRIFFIN, Patrick
GUILLAUMONT, Mahbub UL HAQ, Ryokichi HIRONO, Nicolai LIVENTSEV, Solita Collas
MONSOD, Henry NAU, Maureen O'NEIL, Ademola OYEJIDE, PU Shan, Akilagpa SAWYERR,
Udo Ernst SIMONIS and Miguel URRUTIA.  Seven members were unable to attend: 
Gerassimos ARSENIS, Edmar BACHA, P. N. DHAR, Karel DYBA, Helen HUGHES,
George SURANYI and Ferdinand VAN DAM.

267.   The officers elected at the twenty-ninth session for a term ending on
31 March 1994 were:

       Chairman:  Abdlatif Y. AL-HAMAD

       Rapporteur:  Keith GRIFFIN

268.   The session was opened by its outgoing Chairman, Abdlatif Y. AL-HAMAD. 
Following the election of officers and the adoption of the agenda, the
Under-Secretary-General for Policy Coordination and Sustainable Development
addressed the Committee.  He expressed his appreciation to the Committee for
the excellent quality of their work over the years and for the time and effort
each member had devoted to the Committee's work.  He informed the Committee of
deliberations under way within the Economic and Social Council on new
modalities for discharging the mandates entrusted to the Committee over the
years.  He expressed the hope that such changes as might be agreed would lead
to greater use by intergovernmental bodies and by the Secretary-General of the
collective expertise on development issues shared by the members of the
Committee.

269.   Preparations for the session had been carried out by three working
groups of the Committee.  The working group on the world economic outlook
(Geneva, 29 September-2 October 1992) consisted of Gerassimos ARSENIS
(Chairman), Miguel URRUTIA (Rapporteur), Edmar BACHA, and co-opted experts
Iwan AZIS, Muchkund DUBEY, Jan KREGEL and Peter PAULY.  The working group on
population, growth and migration in relation to natural resources, environment
and development (Geneva, 10-13 January 1993) consisted of Solita C. MONSOD
(Chairman), Maureen O'NEIL (Rapporteur), Patrick GUILLAUMONT, Nicolai
LIVENTSEV and co-opted expert George TAPINOS.  The working group on technical
assistance in the context of the role of the United Nations in international
economic cooperation (New York, 10-13 November 1992) consisted of Akilagpa
SAWYERR (Chairman), Just FAALAND (Rapporteur), P. N. DHAR and Ademola OYEJIDE.

270.   An intrasessional working group on the identification of the least
developed among the developing countries consisted of Patrick GUILLAUMONT
(Rapporteur), Nicolai LIVENTSEV and Tchaboure GOGUE.

271.   Substantive services for the session were provided by the Department
for Policy Coordination and Sustainable Development of the United Nations
Secretariat.  The following bodies were represented at the session: 
Department for Economic and Social Information and Policy Analysis, and
Department for Development Support and Management Services of the United
Nations Secretariat; United Nations Development Programme; United Nations
Population Fund; United Nations University/WIDER; World Food Programme;
Economic Commission for Latin America and the Caribbean; Economic and Social
Commission for Asia and the Pacific; United Nations Conference on Trade and
Development; Food and Agriculture Organization of the United Nations; World
Bank; and International Monetary Fund; United Nations Industrial Development
Organization; and United Nations Educational, Scientific and Cultural
Organization.


                                                     Notes

        1/    "DAC:  Stocktaking and updating international aid", Organisation
for Economic Cooperation and Development (Paris), 19 December 1993
(SG/PRESS(93)77).

        2/    Report of the Committee for Development Planning on its
twenty-eighth session (Official Records of the Economic and Social Council,
1992, Supplement No. 7), chap. V.

        3/    For an extensive discussion of the problems of designing
economic policy for economies in transition, see report of the Committee for
Development Planning on its twenty-seventh session (Report of the Economic and
Social Council, 1991, Supplement No. 11), chap. III.

        4/    World Population Prospects:  The 1992 Revision, Statistical
Papers, Series A, No. 135 (United Nations publications, Sales No.
E.93.XIII.7).

        5/    Hobcraft, J., J. McDonald and S. Rutstein, "Socio-economic
factors in infant and child mortality:  a cross-national comparison",
Population Studies, vol. 38 (1984), No. 2.

        6/    Based on multivariate analysis of an index of child mortality
(ratio of the number of child deaths to the "expected" number of dead
children), as reported in Caldwell, J. C. and P. F. McDonald, "Influence of
maternal education on infant and child mortality:  levels and causes", in
International Population Conference, Manila, 1981:  Solicited Papers (Lie`ge,
International Union for the Scientific Study of Population, 1981, vol. 2, pp.
79-96, and in Socio-Economic Differentials in Child Mortality in Developing
Countries (United Nations publication, Sales No. E.85.XIII.7).

        7/    World Health Organization, Maternal Mortality Rates:  A
Tabulation of Available Information.

        8/    World Health Organization, Maternal Mortality Rates:  A Global
Factbook (Geneva, 1991).

        9/    World Population Monitoring 1989, Statistical Papers, Series A,
No. 113 (United Nations publication, Sales No. E.89.XIII.12).

       10/    Hobcraft, I., J. McDonald and S. Rutstein, "Child-spacing
effects on infant and early child mortality", in Population Index, vol. 49
(1983), No. 4.

       11/    Fertility Behaviour in the Context of Development:  Evidence
from the World Fertility Survey (United Nations publication, Sales No.
E.86.XIII.5).

       12/    Improvements in child survival generate various distinct but
closely interdependent types of changes in patterns of reproduction, which
typically result in lower fertility levels.  Several of these, in particular
"the physiological effect", which links a child's death with a shortening of
birth intervals through its effect on lactational amenorrhoea and the
"replacement effect", which links a child's death to birth spacing and
fertility through the interruption of family planning, are rather modest in
magnitude, resulting in a maximum in 300 to 500 fewer births for every 1,000
fewer child deaths.

       13/    Family Building by Fate of Design:  a Study of Relationships
between Child Survival and Fertility, Statistical Papers, Series R, No. 74
(ST/ESA/SER.R/74).

       14/    See, for example, Amartya Sen, "The economics of life and
death", Scientific American (May 1993), pp. 40-47.

       15/    United Nations Conference on Trade and Development, Trade and
Development Report, 1992, pp. 36-37.

       16/    International Labour Office, Economically Active Population
1950-2025 (Geneva, 1986), vol. V.

       17/    United Nations Population Fund, Consultative Meeting of
Economists, "Statement on population growth and economic development" (29
September 1992).  See also World Bank, World Development Report 1984, p. 79;
National Research Council, Population Growth and Economic Development:  Policy
Questions (1986); and Allen C. Kelley, "Economic consequences of population
change in the third world", Journal of Economic Literature (December 1988),
pp. 1685-1728.

       18/    As a description of demographic trends, demographic transition
refers to the pattern of changes in mortality and fertility levels from an
initial situation with high mortality and high fertility to an ultimate state
characterized by low mortality and low fertility.

       19/    Tapinos, George P., "Migration and development", mimeographed
report prepared for the United Nations Committee for Development Planning
(January 1993), p. 2.

       20/    Ibid., pp. 2-3.

       21/    Zlotnik, H., "South-North migration since 1960:  the view from
the North", in United Nations Population Bulletin, 31/32 (1991) and
unpublished calculations by the author for more recent years.

       22/    Secretariat of the Inter-Governmental Consultations on Asylum,
Refugee and Migration Policies, North America and Australia, "The country
assessment approach and beyond" (Geneva), mimeograph (N-05/92).

       23/    As of 17 December 1993; the estimated number of the global
refugee population is based on figures provided by Governments according to
their own records and methods of estimation and is monitored by the Office of
the United Nations High Commissioner for Refugees, Geneva.

       24/    United Nations Research Institute for Social Development,
"Survey of the social and economic conditions of Afghan refugees in Pakistan",
working paper (Geneva, 1987).

       25/    K. Davis, "The theory of change and response in modern
demographic history", Population Index, vol. 29, No. 4 (1963), pp. 345-365.

       26/    Leonard, H. J., ed., Environment and the Poor:  Development
Strategies for a Common Agenda (1989), p. 19.

       27/    United Nations Environment Programme, General Assessment of the
Progress in the Implementation of the Plan of Action to Combat Desertification
1978-1984 (1984), and Economic and Social Commission for Asia and the Pacific,
State of the Environment (1990), p. 19.

       28/    Food and Agriculture Organization of the United Nations,
Sustainable Development and Natural Resource Management (1990), p. 13.

       29/    Postel, S., "Halting land degradation", in Economic and Social
Commission for Asia and the Pacific, op. cit., p. 32.

       30/    Food and Agriculture Organization of the United Nations, "Report
on forest resources assessment, 1990 Project, final report", March 1993.

       31/    International Task Force on Forestry Research, A Global Strategy
for Tropical Forests (1988), p. 29.

       32/    Leonard, op. cit., p. 23.

       33/    Oodit, D. and U. Simonis, Water and Development (Berlin, WZB,
1989), p. 11.

       34/    Ibid., pp. 12-13.

       35/    A. A. Churchill, and R. J. Saunders, "Global warming and the
developing world", Finance and Development, June 1991.

       36/    "Population, Development and the Environment:  An Overview",
January 1992, mimeograph.

       37/    Organisation for Economic Cooperation and Development,
Geographical Distribution of Financial Flows to Developing Countries, 1992,
p.9.

       38/    Developing countries have chosen not to express negative views
on technical cooperation in a formal manner.  Their views by way of informal
remarks are to be found scattered in many documents.  UNDP has reported the
consensus views of African Ministers of Planning in its report, Cluster
Meetings of African Ministers of Planning, November/December 1988.  The views
of donor agencies are expressed in a large number of documents published in
recent years, some of which are:  OECD/DAC, Principles for New Orientations in
Technical Cooperation, 1991; UNDP, Capacity-Building for Aid Coordination in
the Least Developed Countries; The Nordic United Nations Project, Perspectives
on Multilateral Assistance, 1990; and World Bank, The African Capacity-
Building Initiative, 1991.

       39/    With regard to the quality of project execution by United
Nations specialized agencies, see "The United Nations:  issues and options",
Studies financed by the Nordic United Nations Project (1991), pp. 154-155 and
Nordic Project, Perspectives on Multilateral Assistance, p. 21.

       40/    Nordic United Nations Project, Perspectives of Multilateral
Assistance (1990), pp. 12-22.

       41/    J. Bossuyt et al., New Avenues for Technical Cooperation in
Africa (1992), p. 17.

       42/    Forss, K. et al., Effectiveness of Technical Assistance
Personnel (1990), p. 37.  The figures cited in this paragraph provide broad
orders of magnitude but because of a lack of consistency in the definition of
education and training they must be interpreted with caution.  Some elements
of project-related training, for instance, are not consistently classified as
training.

       43/    See International Labour Organization, World Labour Report,
1989.  In some countries, salary compression may well have been offset, in
part or in full, by various kinds of allowances to senior public officials.

       44/    J. Bossuyt, op. cit, p. 16.

       45/    J. Bossuyt, op. cit, p. 10.

       46/    K. Forss, op. cit., p. 159.

       47/    For details on the new UNDP agency support cost arrangements,
also referred to as the successor arrangements, see UNDP, Guidelines for
Determination of Execution and Implementation Arrangements and Successor
Arrangements for Agency Support Costs, Rev.1, October 1992.

       48/    TSS stands for Technical Support Services.  TSS-1 refers to
technical support services at the programme level.  TSS-2 refers to technical
support services at the project level.  AOS stands for Administrative and
Operational Services.

       49/    See World Bank, The African Capacity-Building Initiative, 1991.

       50/    The Committee made one technical refinement to the criteria in
order to improve the contribution of the indicator, per capita consumption of
electricity, to the economic diversification index (EDI).  The maximum value
of the indicator was restricted to 8,000 kwh.  The indicator values were then
put on a square-root scale and the cut-off point on the resulting EDI was set
at 26 because this change resulted in an increase in the mean value of the EDI
of about 4 points.


                                                    Annex I

                                                    AGENDA


1.     Adoption of agenda and organization of work.

2.     Election of officers.

3.     The world economic outlook, 1993-2001:  report of Working Group I.

4.     Population growth and migration in relation to natural resources,
       environment and development:  report of Working Group II.

5.     Technical cooperation for development:  report of Working Group III.

6.     Identification of the least developed among the developing countries.

7.     Other business.

8.     Adoption of the report of the Committee on its twenty-ninth session.


                                                   Annex II

           LIST OF THE LEAST DEVELOPED AMONG THE DEVELOPING COUNTRIES

------------------------------------------------------------------------------
       Country                                Date of inclusion on the list
-----------------------------------------------------------------------------
 1.    Afghanistan                                        1971
 2.    Benin                                                "
 3.    Bhutan                                               "
 4.    Botswana a/                                          "
 5.    Burkina Faso                                         "
 6.    Burundi                                              "
 7.    Chad                                                 "
 8.    Ethiopia                                             "
 9.    Guinea                                               "
10.    Haiti                                                "
11.    Lao People's Democratic Republic                     "
12.    Lesotho                                              "
13.    Malawi                                               "
14.    Maldives                                             "
15.    Mali                                                 "
16.    Nepal                                                "
17.    Niger                                                "
18.    Rwanda                                               "
19.    Samoa                                                "
20.    Somalia                                              "
21.    Sudan                                                "
22.    Uganda                                               "
23.    United Republic of Tanzania                          "
24.    Yemen                                                "
25.    Bangladesh                                         1975
26.    Central African Republic                             "
27.    Gambia                                               "
28.    Cape Verde                                         1977
29.    Comoros                                              "
30.    Guinea-Bissau                                      1981
31.    Djibouti                                           1982
32.    Equatorial Guinea                                    "
33.    Sao Tome and Principe                                "
34.    Sierra Leone                                         "
35.    Togo                                                 "
36.    Vanuatu                                            1985
37.    Tuvalu                                             1986
38.    Kiribati                                             "
39.    Mauritania                                           "
40.    Myanmar                                            1987
41.    Mozambique                                         1988
42.    Liberia                                            1990
43.    Cambodia                                           1991
44.    Madagascar                                           "
45.    Solomon Islands                                      "
46.    Zaire                                                "
47.    Zambia                                               "

________________________

       a/     To be removed from the list on 31 December 1994, subject to the
approval of the General Assembly.

 


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