United Nations

A/50/745


General Assembly

Distr. GENERAL  

10 November 1995

ORIGINAL:
ENGLISH


Fiftieth session
Agenda item 95 (e)


          SUSTAINABLE DEVELOPMENT AND INTERNATIONAL ECONOMIC COOPERATION:
          IMPLEMENTATION OF THE PROGRAMME OF ACTION FOR THE LEAST
DEVELOPED COUNTRIES FOR THE 1990s

      High-level Intergovernmental Meeting on the Mid-term Global
      Review of the Implementation of the Programme of Action for
the Least Developed Countries for the 1990s

Note by the Secretary-General


1.   In  its  resolution  49/98 of  19 December  1994, the  General Assembly
decided to convene  a High-level  Intergovernmental Meeting on the  Mid-term
Global  Review of  the  Implementation of  the Programme  of Action  for the
Least Developed  Countries for the  1990s to  carry out the  mid-term global
review,  consider  new measures  as  necessary  and  report  to the  General
Assembly on progress made in the implementation of the  Programme of Action.
It  requested  the Secretary-General  to  submit  a  report  to the  General
Assembly at  its fiftieth session  on the Meeting and  on the implementation
of the resolution.  The present note has  been prepared in implementation of
the decision  of the Meeting  to submit the  outcome of  the Meeting  to the
General  Assembly for its  appropriate consideration  and action.   A report
(A/50/746) is  being  issued in  response  to  the requests  in  resolutions
48/171  of 21 December  1993 and 49/98 that  the Secretary-General report to
theGeneral Assemblyonthe Meetingand ontheimplementation ofthoseresolutions.

2.   The  High-level Intergovernmental  Meeting  met  in  New York  from  26
September to 6 October 1995.  It adopted:   (a) an assessment of progress in
the implementation  of the Programme  of Action at  the national level,  and
progress  in   international  support  measures;   and  (b)  recommendations
covering  a number of  key areas  of concern for  least developed countries.
It  also  adopted  a  Declaration  on  the  Mid-term  Global  Review of  the
Programme of Action.   These texts are reproduced  in the present  document,
together with the statements made on their adoption.



95-35175 (E)   271195/...
*9535175*
MID-TERM GLOBAL REVIEW OF PROGRESS TOWARDS THE IMPLEMENTATION OF THE
PROGRAMME OF ACTION FOR THE LEAST DEVELOPED COUNTRIES FOR THE 1990s

Part One

      DECLARATION OF THE HIGH-LEVEL INTERGOVERNMENTAL MEETING ON THE
      MID-TERM GLOBAL REVIEW ON THE PROGRAMME OF ACTION FOR THE
LEAST DEVELOPED COUNTRIES FOR THE 1990s

(a)    The  participants  in  the  High-level  Meeting  have  undertaken  an
assessment of progress in the implementation of  the Programme of Action and
agreed on  concrete recommendations  to ensure  that the  Programme is  more
effectively implemented throughout the remaining part of the decade.

(b)    They  reaffirmed  their  commitment  to  work  cooperatively  towards
achieving the prime objective  of the Programme of Action which is to arrest
the  further deterioration  in the  socio-economic  situation of  the  least
developed countries,  to reactivate and accelerate growth and development in
these countries and,  in the  process, to set them  on the path of  economic
growth  and  sustainable development  based  on  shared  responsibility  and
strengthened partnership.

(c)   The least  developed countries as a  group have not been  able to meet
many of the objectives of the Programme of  Action and their overall  socio-
economic situation has continued to deteriorate.   This deeply concerned the
participants  at the  Meeting.    At the  domestic level,  civil  strife and
recurrent  natural disasters in  some of  the least  developed countries and
the resulting  social economic  burdens, macroeconomic  imbalances and  poor
performance  of the  productive sectors,  inter  alia  the lack  of adequate
physical  and   institutional  infrastructures,  have  contributed  to  this
deterioration.   Persistent and  serious debt  and debt-servicing  problems,
very low levels  of exports,  and a declining share  in world trade and  the
insufficiency of  external finance,  have had  unfavourable consequences  on
their growth and development.

(d)   However, the  least developed  countries have  continued to implement,
under many  difficulties, wide-ranging  and far-reaching  reforms.   In some
countries  these efforts,  complemented by  a favourable  external  climate,
have shown  encouraging results.   Many development  partners have  provided
increased  support to least  developed countries, although the commitment to
provide them  with a significant and  substantial increase  in the aggregate
level of external support has not happened.

(e)  The  participants are determined to  pursue their efforts  to implement
the  measures and recommendations agreed  at the present Meeting.   They are
confident that  the success of  these efforts would  lead to a  reactivation
and  acceleration  of  growth  and  development   in  the  least   developed
countries, and enable them  to participate in and benefit from the processes
of globalization and liberalization.

(f)   They call upon  all Governments, the  United Nations system,  regional
and  subregional   organizations,   and   the   competent   non-governmental
organizations, to  combine their  efforts in implementing  the measures  and
recommendations  agreed upon  by the  present  Meeting so  as to  ensure the
success of the Programme of Action.

(g)   They firmly  believe that, given  political will  on the  part of  the
least  developed countries, which  have the primary responsibility for their
development, and  the  support  of the  international community,  the  least
developed countries  will be  able to  enter  the next  century with  better
prospects for their peoples.


Part Two

         ASSESSMENT OF PROGRESS IN THE IMPLEMENTATION OF THE PROGRAMME OF
         ACTION FOR THE LEAST DEVELOPED COUNTRIES FOR THE 1990s AT THE
NATIONAL LEVEL, AND PROGRESS IN INTERNATIONAL SUPPORT MEASURES

INTRODUCTION

1.   The Second United Nations Conference on  the Least Developed Countries,
held in Paris in  1990, adopted the  Paris Declaration and the Programme  of
Action  for  the  Least  Developed Countries  for  the  1990s.    The  basic
principles and aims of the  Programme of Action  are as valid today as  when
they  were drawn up.  The  prime objective of  the Programme of Action is to
arrest the further  deterioration in the  socio-economic situation  of LDCs,
to reactivate and accelerate growth and  development in these countries and,
in  the  process,  to   set  them  on  the  path  of  sustained  growth  and
development.   The policies and measures  in support of these objectives set
out  in the Programme  of Action  revolve around the  following major areas:
establishment of  a macroeconomic  policy framework  conducive to  sustained
economic growth and  long-term development; development and mobilization  of
human resources; development, expansion and modernization of the  productive
base; reversing  the trend towards  environmental degradation; promotion  of
an  integrated  policy  of  rural  development   aimed  at  increasing  food
production,  enhancing  rural income  and enhancing  non-agricultural sector
activities; and the provision of adequate external support.

2.   It was noted  with great concern that only  one country, i.e. Botswana,
has graduated  from the group of  LDCs since the early  1970s.   At the same
time the  number of  LDCs has increased  from 41  at the time  of the  Paris
Conference  in  September  1990  to  48  countries  at  present,  without  a
proportionate   increase   in   support  measures   despite   national   and
international efforts.


I.  MAIN DEVELOPMENTS DURING THE EARLY 1990s

3.   Despite  vigorous  efforts by  LDCs to  implement  economic  reforms as
envisaged by the  Programme of  Action, the  LDCs as a  group have not  been
able to meet  many of the objectives  of the Programme  of Action  and their
overall  socio-economic situation  has continued  to deteriorate.    Several
factors, both domestic and external, have  contributed to the overall socio-
economic deterioration in the  LDCs.  The domestic  factors include:   civil
strife and  recurrent  natural disasters  in  some  LDCs and  the  resulting
social   and   economic  burdens,   political   instability,   macroeconomic
imbalances, manifested in  large fiscal and balanceof-payments deficits,  in
many  cases  the unfavourable  short-term  impact  of  macroeconomic  policy
adjustments  on specific  areas, in  particular the  most disadvantaged  and
vulnerable  sections   of  the  population,  and  poor  performance  of  the
productive sectors including lack  of adequate physical infrastructure.  The
external factors include:  persistent debt  and debt-servicing problems; the
decline  in  the  share   of  LDCs  in  world   trade  and  their  continued
marginalization;  the inadequacy  of external finance; and  the emergence of
new claimants for aid.

4.   According to UNCTAD statistics,  the real GDP growth  rate of the  LDCs
averaged only  1.7 per  cent per  annum during the  first four years  of the
1990s, having declined from the growth rate of  2.3 per cent achieved during
the 1980s. Despite the  recovery in the world  economy, the situation in the
LDCs  continues  to be  precarious,  although a  few  of  them  made limited
progress.  With  population growing at  an average  annual rate  of 2.9  per
cent,  GDP  per  capita  suffered  an annual  1.1  per  cent  decline,  thus
threatening to worsen  the already precarious income and consumption levels,
as well as to widen the savings-investment gap in these countries.

5.  While the slow-down  in economic growth rates was  common to both  Asian
and  African  LDCs,  the  former,  which   benefited,  inter  alia,  from  a
relatively favourable regional  environment, attained an average per  capita
output growth of 1.4 per cent  in the 1990s, as compared with a 2.1 per cent
per annum  fall suffered by  the latter.   There have  also been significant
inter-country variations in growth performance.   Thus, it is encouraging to
note that,  despite the poor performance  for the group  as a whole,  nearly
one quarter of LDCs were able  to attain positive per capita income gains in

the early  1990s.  A strong  expansion of  agricultural production, internal
stability, strong government  commitments, a sound political and  regulatory
framework for  development, complemented  by  significant external  support,
among other factors, have contributed to raising economic growth rates.

6.   The worsening of  socio-economic conditions in  many LDCs  in the 1990s
has increasingly  been  translated  into  a marked  deterioration  in  human
welfare  as reflected in  reduced caloric  intakes, increased  mortality and
morbidity, the re-emergence and spread of diseases, lower school  enrolment,
further  marginalization  of  the  weakest members  of  society,  and  other
signals of acute social distress, as further reviewed below in chapter V.

7.   Overall, the external environment  facing LDCs  has remained difficult.
As these countries moved  into the 1990s, despite an increase in exports  of
manufactured goods, their  share in world exports  and imports fell by  more
than  three eighths  and one  third from the  already low levels  of 0.7 per
cent and  1.0 per cent respectively  in 1980.   Despite vigorous efforts  to
diversify  the largely  commodity-based composition  of their  exports,  the
LDCs'  economies continued to  be vulnerable to vicissitudes and instability
in commodity markets.  Official development assistance  (ODA), on which LDCs
depend principally for their external  financing, registered a  decline over
the early 1990s, and  the aid outlook  remains uncertain.  Although a  large
number  of LDCs  have adopted  national regulatory  frameworks conducive  to
foreign investment,  they have not  yet attracted significant foreign direct
investment (FDI).   Despite  measures  adopted to  alleviate their  external
debt burden, this  burden continued to be  unsustainably high for many  LDCs
and seriously compromises their adjustment and development efforts.

8.   Some developing  countries are  also important  development partners of
LDCs. They have technical assistance and  training programmes from which the
latter have  benefited.  The potential  for expanded  economic and technical
cooperation  between LDCs  and  other developing  countries  merits  further
exploration and  support by the  international community, especially in view
of the new opportunities  emerging with the  dynamic growth experience of  a
number of those  other developing countries.  As  a means of maximizing  the
potential for such  South-South cooperation, triangular funding arrangements
which  include the  active contribution of developed  countries and relevant
international organizations can be initiated.

9.   Several LDCs  have been  taking a  number of measures  to promote trade
with  neighbouring  countries.   For  example,  a  number  of African  LDCs,
especially land-locked  ones, have  sought to  establish some  form of  free
trade  area  or customs  union  at  the subregional  level.    However,  the
establishment of such subregional arrangements has  encountered a number  of
obstacles which have limited their effectiveness.

10.   In sum,  therefore, the requisite progress  has not been made  in most
LDCs during the first half of the 1990s  in realizing the overall  objective
of the Programme of  Action, although some  progress has been recorded in  a
number of LDCs  as a result  of the implementation of  appropriate policies.
Furthermore,   the  ongoing   processes   of  economic   globalization   and
liberalization  are likely  to  have  profound consequences  for the  future
development of the LDCs.  These  processes, which offer great  opportunities
for  growth   and  development,  also  entail   risks  of  instability   and
marginalization.   LDCs as a whole  have made limited progress in overcoming
structural  constraints,  infrastructural  insufficiencies,  debt  overhang,
promoting and  diversifying the  enterprise and  export sectors,  attracting
foreign investment  and creating a sufficient  technological base.   In this
context, most  of the LDCs will  face globalization  and liberalization from
the situation of a constrained environment.


II.  THE POLICY REFORM PROCESS

11.   In  recent years, most LDCs  have embarked on a  process of structural
adjustment  and wide-ranging  reforms,  often  under internationally  agreed

frameworks  for  structural and  sectoral adjustment.    Important areas  of
policy focus have  been towards  coping with fiscal and  balance-of-payments
deficits, improved mobilization and use  of domestic resources,  through tax
reforms,  improving the  effectiveness of  the public  sector  and providing
greater opportunities  for the  private sector.   LDCs  have also  initiated
reforms  in  critical  areas such  as  population,  education, health,  food
security and trade policy.

12.   There  are, however,  some cases  where  the pace  and scope  of these
reforms  contrast  with  the  limited progress  achieved.    In  particular,
despite  success  in securing  short-term  macroeconomic stability,  certain
situations  sometimes existed  where  the  reforms  appear neither  to  have
helped in  lifting structural constraints facing  the economies  of LDCs nor
to have  improved supply capacity and  export diversification.   Thus, while
it was  recognized that  the reform  process sometimes  could not  guarantee
immediate  results, it  was emphasized that  the efforts of  LDCs provided a
context  in   which,   over  the   longer   term,   growth  and   structural
transformation   could   reinforce   each  other   under   more   favourable
circumstances.

13.   The experience  of  LDCs points  towards  a  number of  factors  which
determined the  success or otherwise  of reform measures.   Prime among them
has been government  commitment to reforms, the appropriateness of  national
policy contents, sequencing of reforms and  the level of external  financial
support  to underpin reform  efforts.   Problems inherent  in policy design,
particularly  the  neglect of  structural  conditions  and endowment-related
considerations,  retarded  and  even  reversed  the  momentum  of   reforms.
Inadequate  domestic   and  external  resource   mobilization  has  been   a
particularly critical constraint for development in the LDCs.

14.    The  socio-economic  difficulties  of  most  LDCs  have  been further
exacerbated by  a  specific set  of  environmental  problems, such  as  land
degradation  and  erosion,   drought  and   desertification,  which   impair
prospects for  their development.   These  environmental problems  have been
aggravated in  LDCs by a number  of complex and  interrelated factors, which
include  poverty and  poverty-linked  population pressures  and cross-border
refugee  movements  resulting  from  man-made  and  natural  disasters.    A
noteworthy  development  has  been  that  LDCs  have  demonstrated   growing
awareness of environmental  issues and  problems and  many have  implemented
policies, strategies  and institutional mechanisms to  deal with  them.  The
special situation and  needs of the LDCs  should be given  special priority.
International   cooperation    for   sustainable   development   should   be
strengthened in  order to support  and complement the  efforts of the  LDCs.
In particular,  new and  additional financial  resources  from all  sources,
both  public  and  private,  that  are  both  adequate  and  predictable are
necessary  for  environmentally sound  development programmes  and projects.
However,  adequate  international  support  is  needed  to  facilitate   the
transition from emergency relief to  rehabilitation and development,  and in
particular in the context of activities  under the International Decade  for
Natural Disaster Reduction  and the promotion of national  capacity-building
to help prevent and mitigate future emergencies.

15.   In many LDCs, it  is encouraging to  note that far-reaching changes in
the  system  of  governance,  ranging  from  free  elections  to  democratic
constitutional reforms, have  ushered in new possibilities for  establishing
more participatory and  transparent systems of  government.  Generally, LDCs
which  achieved  a revival  of  economic  growth  were  those where  greater
progress has  been made  in securing  popular participation  and respect  of
human rights.   In a number of LDCs, the consequences  of man-made and other
disasters have  continued to  drain resources,  hampering overall  long-term
development.  In some  of these LDCs,  armed conflict has often resulted  in
large-scale displacement of population, food emergencies and the  unleashing
of  other destabilizing forces.   The  developmental task  of Governments in
meeting the socio-economic challenges posed became highly constrained  under
these circumstances.   Besides destabilization caused  by the  presence of a
large number  of refugees,  some LDCs have  been obliged to  provide asylum,

with  far-reaching implications  for the  budget, the  environment  impacts,
other  resource needs  and  related security  problems which  require urgent
concrete international  support for  those countries  hosting the  refugees.
The   LDCS   undergoing   fundamental   political,   economic   and   social
transformation, in the process of consolidating peace and democracy  require
the support of the international community.


III.  DEVELOPMENTS IN THE PRODUCTIVE SECTORS

16.     During  the  early   1990s,  agriculture  in  most   LDCs  has  been
characterized  by  lags  in  production  growth  relative  to  that  of  the
population, continued declines in terms of  trade and loss of  market shares
for traditional agricultural  commodities.  Agricultural production in  LDCs
fell  by 1.1 per cent per annum in per capita  terms during the period 1990-
1993.    Several LDCs  responded to  the continued  poor performance  of the
sector  by  introducing  reform  measures,  particularly  reforming producer
price  incentives and  marketing  systems  and the  provision  of  essential
agricultural inputs.   While the overall thrust  of these measures  has been
the removal  of barriers to  the private  sector in  agriculture, they  have
been unable to provide support services.   A particularly disquieting  trend
in many  LDCs is  the growing  incidence of man-made  and recurrent  natural
disasters such  as drought, flood, and  devastating cyclones,  which are the
most  important  causes  of  food  insecurity  in  many  African  LDCs.  The
situation has  been  further exacerbated  by  declines  in food  output  and
limited capacity to offset shortfalls through imports.

17.    Notwithstanding the  wide variations  in  manufacturing growth  rates
among LDCs,  the performance of  the manufacturing  sector on the  whole has
weakened in recent years, manufacturing activities have remained  relatively
undiversified, and the utilization of capacity  and resources has been  low.
The sector  growth rate  decelerated to 1.4  per cent per  annum during  the
early 1990s,  from 2.1 per  cent per  annum in the  1980s.   While some  one
third of  LDCs maintained  a positive  growth of  manufacturing value  added
(MVA) in the  1980s and early  1990s, most  LDCs experienced stagnation  and
even  declines  in  manufacturing output.    The  response  of  the  LDCs to
deteriorating  manufacturing performance  has  been through  adjustments  of
macroeconomic policies  and instruments,  and sectoral  measures to  augment
manufacturing output and  efficiency.  At the  sectoral level, the LDCs have
reoriented   their   incentive   structure   and   introduced   changes   in
institutional policies and  regulatory arrangements in order to improve  the
macroeconomic environment for manufacturing production.

18.   The  LDCs  have made  major efforts  to  improve their  transport  and
transit  infrastructure systems  during  the  last decade.    The  budgetary
constraints  faced by LDCs have, however, gradually undermined the financial
capabilities of  Governments  to  maintain the  momentum of  these  efforts.
These  constraints are  particularly felt  in  land-locked and  island LDCs,
where   inadequate  physical   infrastructure  poses   major  obstacles   to
structural transformation and economic development.


IV.  LAND-LOCKED AND ISLAND LEAST DEVELOPED COUNTRIES

19.  Sixteen  of the 48 least developed countries are also land-locked.  The
high  transport  costs  which  result  from  their  particular  geographical
handicaps  continue   to  have  a   significant  adverse   impact  on  their
international trade performance and overall economic development.   In order
to alleviate the particular problems which  these countries face, the  land-
locked  and transit developing  countries, as  well as  the donor community,
adopted  a  Global Framework  for  Transport  Cooperation (TD/B/LDC/AC.1/6),
which contains a  comprehensive set of  recommendations for  concrete action
at the  national and subregional levels  designed to  improve the efficiency
of transit  transport  systems.   The  Framework  underscores the  need  for
extensive  financial and  technical support  by  the  donor community.   The
donor  community recognizes  this.   Furthermore,  the Framework  calls upon

UNCTAD and  the regional  economic  commissions to  play a  leading role  in
promoting the implementation of the agreed actions.

20.  Island least developed countries  continue to face particular  problems
resulting from  their smallness,  insularity and remoteness  from the  major
economic  centres.   They  are vulnerable  to a  number of  adverse factors,
including environmental degradation.   Poor internal and external  transport
links to  world markets  negatively compound  their  ability to  participate
effectively  in world  trade.   The  Programme of  Action  for  Small Island
Developing  States (A/CONF.167/9), adopted in Barbados in May 1994, outlines
a  range of measures  that need  to be undertaken in  order to alleviate the
particular  problems which these  countries face.   The  Programme calls for
increased  support  by  the  international  community  to  ensure  effective
implementation of  these measures in conjunction  with national measures  in
support of sustainable development.


V.  HUMAN RESOURCES DEVELOPMENT

21.    LDCs  have  adopted  and  are  implementing  policies,  measures  and
programmes to tackle key problems in  human resources development.  However,
the  expansion  of   national  population  programmes  within  the   overall
framework of human resources  development has been difficult for a number of
reasons, such as funding constraints, among  others.  These programmes  have
been  complemented  by   strong  efforts  to  change  attitudes,   including
persuasion  and campaigns  relying  on traditional  and  modern  information
techniques.

22.   Despite major difficulties, there  have been  some encouraging results
achieved by some  LDCs, particularly in the  areas of health  and education.
However, in many LDCs,  mortality rates continue to  be high.  The situation
is exacerbated by  poor sanitation and hygienic  conditions and the lack  of
safe drinking  water  supplies.   AIDS  and  tropical epidemic  and  endemic
diseases have  become a major  cause of death in recent  years in some LDCs,
as these  countries have  limited resources  to deal  effectively with  such
endemics and  epidemics.  The economic  crisis  faced  by LDCs  has  further
undermined  health  conditions in  many countries  as living  standards have
fallen,  health services have been cut owing to budgetary pressures, and the
availability of imported medicines and  other medical supplies has dwindled.
Education  services  continue  to  be  affected  by  deteriorating  economic
conditions,  in particular  by  budgetary  constraints. There  is  need  for
investment  in  the   development  of  human  capacities,  particularly   in
programmes  of health,  nutrition,  education and  training  and  population
activities.

23.   Although women  constitute half  of human resources in  the LDCs, they
have continued to be hampered by their marginal  position from playing their
full role  in socio-economic development.   Despite measures  being taken to
enhance their role in  development, women in the LDCs still lag behind their
male counterparts as  well as women  from other developing countries  in all
areas  of social and  economic development.   They  face particular problems
related  to gender  discrimination,  such  as limited  access to  productive
resources,  restricted  education and  training  opportunities, poor  health
status, low representation  in strategic decision-making positions, as  well
as  having to  bear a  high dependency  burden:   the more so,  as deepening
poverty  is felt  more acutely  by  women-headed  households.   In addition,
prevalent  attitudes regarding  women's abilities  and their  proper  socio-
economic role, and women's  own lack of knowledge  about their rights,  have
kept  them away  from mainstream  development.   The  lack of  follow-up  of
decisions   and  internationally   agreed  recommendations  aiming   at  the
advancement of the  status of women has also been a major cause  of the poor
prevailing situation.


                    VI.  EXTERNAL TRADE AND THE IMPLICATIONS OF
                         THE FINAL ACT OF THE URUGUAY ROUND

24.   The  Programme  of  Action underlined  that it  is essential  that all
countries  contribute  to  developing  a  more  open, credible  and  durable
multilateral trading  system, recognizing that  the results  of this process
could  be a  reflection, inter  alia, of  their respective  weight in  world
trade.   It is encouraging to  note that the LDCs  have contributed to  this
process  by  implementing important  trade  liberalization  measures.    The
Programme of Action also called  for important support measures in favour of
LDCs in such areas as duty-free treatment  of their exports, exemptions from
quotas and ceilings and the use of simplified  and flexible rules of origin.
Progress  made in the  provision of  such support has been  important in the
case of  a number of countries.   While a  number of LDCs have  been able to
increase  their  exports,  the  overall  trade  situation  of  the  LDCs has
deteriorated, in that their share in  global trade has continued to decline.
Although  globalization  and liberalization  offer  opportunities  to  LDCs,
these processes  also pose  major challenges,  particularly in  the form  of
increased global competition.  Despite recent improvements, world  commodity
markets have  remained volatile and depressed.   As a  result the LDCs  have
become further marginalized and this trend needs to be reversed.

25.   The extremely low export capacity of most LDCs has continued to be one
of the major obstacles to growth  and a source of the high dependence on ODA
for financing the necessary  investment, imports and  technical support  for
development.  Difficulties have persisted in expanding the external  trading
opportunities  of LDCs,  as commodity  and market  diversification  measures
have been rendered difficult  principally by lack  of investment, technology
and skills to augment levels of production and efficiency.

26.  LDCs  have been  granted special tariff  preferences under various  GSP
schemes and other  preferential arrangements.   Following the conclusion  of
the Uruguay Round, a number of countries have  taken steps to improve  their
GSP  schemes in  favour  of  LDCs.   However, some  schemes still  exclude a
number of  products of  export interest  to LDCs  (e.g. textiles,  clothing,
carpets, footwear, leather goods etc.) and have rigid  rules of origin.   As
the  ability of many  LDCs to  utilize such  facilities remains constrained,
only  a part  of GSP-covered  imports  from  LDCs has  received preferential
treatment.  Thus the use of GSP schemes, in particular by African LDCs,  has
remained limited.

27.    The  adoption of  the  Final  Act  of the  Uruguay  Round  will  have
significant consequences for the  trading prospects of  LDCs, in  particular
as regards  preferences and the competitiveness  of LDC  exports.  Increased
transparency  of   trade  regimes  and  the  reduction  of  trade  barriers,
particularly  tariff-binding  on  agricultural  products  and  reduction  in
tariff escalation, as foreseen in the  Marrakesh arrangements, provide  LDCs
with increased opportunities in the long run.   On the other hand,  concerns
have been expressed that LDCs may  suffer erosion of preferential margins in
relation  to  many  of  their  exports  to  major  markets  and  a  possible
consequential  loss  in  export  market  shares  and  export  earnings.   In
addition,  the net  food-importing LDCs  may  face  higher import  bills, at
least in the short run, resulting from the agreement on agriculture. In  the
long run,  the Final  Act  poses to  LDCs  the  twin challenges  of,  first,
developing  and   strengthening  institutional   and  human   capacities  to
formulate and manage legislation implementing the  complex set of agreements
of   the  Round,   and   secondly,  building   capacities   for   maximizing
opportunities   arising  from  these   agreements.    In  this  regard,  the
provisions  of the  Marrakesh Declaration  and the  ministerial decisions in
favour of LDCs should be fully implemented.

28.   A number of  developed countries have  set up  in their  own countries
import promotion agencies in  order to promote more  trade with LDCs.   Such
agencies have played  a helpful  role in providing  support services and  in
acting as contact points for business/trade  missions from LDCs, undertaking
market research and giving publicity to LDC products.

29.  Trade among the LDCs,  on the one hand, and that between LDCs and other
developing  countries  within the  same  subregional  or  regional  economic

groupings,  on  the  other  hand,  remains   insignificant  as  a  share  of
international  trade.  Only  a  few  LDCs  at present  receive  preferential
treatment  for their exports  under the  Global System  of Trade Preferences
among Developing Countries (GSTP) on a non-reciprocal  basis.  Additionally,
subregional and  regional trade  is constrained  by a  number of  obstacles,
such as the  fact that most countries  produce similar export products, that
subregional  transport infrastructure  is  geared to  trade  with  developed
countries, that  progress  in tariff  reduction  is  limited due  to  fiscal
revenue   implications    for   preference-giving    countries,   and   that
international support remains limited.


VII.  EXTERNAL FINANCE

30.   It was noted with  concern that ODA remains the  single most important
source  of  external financing  for  LDCs.    While  welcoming improved  aid
performance by some donors, at the same time  it was noted that overall  aid
performance by  donors  fell short  of  the  commitments undertaken  in  the
Programme  of  Action.   ODA flows  (actual disbursements)  from Development
Assistance  Committee  (DAC)  countries,  and multilateral  agencies  mainly
financed by  them, to the LDCs declined sharply in 1993.  In absolute terms,
ODA  flows fell by $1.5 billion. Almost $1 billion of this was due to a drop
in  multilateral aid  flows  to  LDCs. In  view  of the  important  role  of
multilateral  funding  in  meeting  the  financial  needs  of  LDCs  and the
uncertain resource  outlook for  some  of the  major multilateral  financial
institutions and  grant-based programmes,  this is  a particularly  worrying
development.  The ODA/GNP ratio for  DAC donors as a whole  declined to 0.08
per cent in  1993 as compared  with 0.09 per  cent in  1990. Moreover,  this
shortfall has  to be  seen against  the agreed  menu of  aid targets  and/or
commitments as set  out in paragraph 23 of  the Programme of  Action for the
LDCs which  call for a significant and substantial increase  in resources to
LDCs and include,  inter alia,  the targets  of 0.15 per  cent and 0.20  per
cent of donor GNP as ODA.

31.  Donors have  modified and improved  their policies  in the area of  aid
modalities.  Most DAC donors have now shifted to a  grant basis in their aid
programmes for LDCs,  resulting in a further  increase in the grant  element
of bilateral ODA  (which averaged 97 per cent  in 1993).  Most  multilateral
funding to LDCs  is also on highly concessional terms.  Multilateral funding
constitutes an important complement  to bilateral ODA for the LDCs and it is
crucial  that  the  base  of  this  multilateral  funding  be   sufficiently
broadened.   International efforts should  continue to mobilize resources to
LDCs implementing structural adjustment  programmes, such as the World Bank-
led Special  Programme of Assistance (SPA) process, which in some cases have
resulted in limited progress.


VIII.  EXTERNAL DEBT AND RELIEF MEASURES

32.  The external  debt and its servicing burden remains a crucial issue for
the majority  of LDCs.  According  to Organisation  for Economic Cooperation
and  Development/Development  Assistance Committee  (OECD/DAC)  information,
LDC total debt stock  amounted to $127 billion in 1993, corresponding to  76
per  cent  of  their combined  GDP.    It appears  that  for  half  of these
countries, their  external debt is equal to or exceeds their respective GDP.
The difficulties  many LDCs have in  meeting their  external obligations, in
the context  of  the critical  current  economic  situation and  their  poor
export performance,  is  reflected in  the  relatively  low levels  of  debt
service paid in relation  to scheduled payments.  The share of  multilateral
debt  in  total long-term  debt,  as well  as  debt service,  has  increased
considerably  in  recent  years.    Thus,  in  1993  the  multilateral  debt
constituted around  36 per cent of  total debt of LDCs  as compared with  27
per cent in  1984.  The  corresponding share  in total  debt service  during
this period  increased even more, from  less than 30  per cent  to almost 50
per  cent.   This  increase  partly  reflects the  "lender  of  last  resort
function" of the international financial institutions  and the fact that  an

increasing  number of  bilateral creditors  are relinquishing many  of their
ODA  claims to LDCs and have  shifted from credit lending to  grants.  Debt-
relief measures taken so  far have not yet  fully provided an  effective and
durable solution to the outstanding debt  and debt-servicing burden of LDCs,
although important  relief measures  have been  taken to  reduce their  debt
stock and  debtservice obligations.   In particular, following  the adoption
of the  Toronto terms  in 1988  (and enhanced  Toronto terms in  1991), from
which 19 LDCs benefited, the Paris Club in 1994 improved the debt  treatment
of the  poorest  countries  by adopting  the  "Naples  terms".    These  may
constitute  a step  forward  for  the LDCs  but might  not be  sufficient by
themselves to  resolve their external debt problem.  Eight LDCs have already
benefited from  these provisions, which  notably offer  the possibilities to
reduce the eligible debt  of the poorest  and most indebted countries by  50
to 67 per cent.


                IX.  ARRANGEMENTS FOR IMPLEMENTATION, FOLLOW-UP AND
                     MONITORING OF THE PROGRAMME OF ACTION

A.  The national level

33.  At the  national level, review  arrangements, including  UNDP-sponsored
round tables  and the  World  Bank consultative  and aid  groups, have  been
further  consolidated during  the  early 1990s,  with  additional  countries
joining or rejoining the process and  meetings taking place more  frequently
and on  a more  regular basis.   A strengthened country  review process  was
considered the principal means of policy  dialogue, and for coordinating the
aid efforts of development partners with  the development programmes of LDCs
as well as mobilizing the  required resources for their  implementation.  In
all, over 60 full-scale consultative aid groups  and round table or  similar
meetings were  organized from the adoption of the Programme  of Action until
early 1995.   While results  in terms of  resource mobilization have  varied
between countries,  these meetings no  doubt have an important  role to play
in  improving aid  flows  to  LDCs and  in aid  coordination.   An important
aspect of the  country review process in recent  years has been the  attempt
to  link these  arrangements  more  closely to  national  policy-making  and
programming.


B.  The regional level

34.  At the  regional level, the Programme  of Action called  for monitoring
progress  in  economic   cooperation  between  LDCs  and  other   developing
countries,  particularly  those  in the  same region.    It also  called for
organizing cluster meetings  to improve and strengthen existing  cooperation
arrangements  at the regional  and subregional  levels.   The United Nations
regional  commissions have,  as part  of  their  ongoing work,  continued to
follow up and monitor the implementation of the  Programme of Action in LDCs
in  their respective regions. ESCAP  has established a Special Body on Least
Developed  and Land-locked  Developing  Countries.   ECA  has  continued  to
consider progress  in  the implementation  of  the  Programme of  Action  in
African LDCs during the annual meetings of  the Commission.  However,  owing
to resource  constraints in the United  Nations the  cluster meeting process
has not been initiated.


C.  The global level

35.   At the global level, UNCTAD has responsibility as  the focal point for
the monitoring, follow-up and review of  the implementation of the Programme
of Action.  In  addition to the regular  follow-up, monitoring and review of
progress  in the  implementation of  the Programme  of Action  at the global
level by the  UNCTAD Trade  and Development  Board, efforts  have also  been
made to  promote  the full  mobilization  and  coordination of  all  organs,
organizations and  bodies of the  United Nations system  for the purpose  of
the implementation  and  follow-up of  the  Programme  of Action,  but  more

remains to  be done.    Individual agencies  have continued  to develop  and
implement assistance programmes for the LDCs  and pursued their advocacy and
policy advisory missions with regard to these countries.   There is need for
regular reporting of progress made by various agencies.


Part Three

RECOMMENDATIONS

36.  The present recommendations are based on the assessment of progress  in
the implementation  of  the Programme  of  Action  for the  Least  Developed
Countries  for  the  1990s  presented  above,  as  well  as  on  information
contained in The Least Developed Countries 1995 Report, and  recommendations
made by the expert groups convened by the UNCTAD secretariat as  part of the
preparations for  the High-level Intergovernmental  Meeting on the  Mid-term
Global  Review on  the  Implementation of  the Programme  of Action  for the
Least Developed  Countries for  the 1990s.   These  recommendations cover  a
number of key areas of concern for the LDCs.


I.  MAJOR CHALLENGES

37.   The challenges  facing LDCs  in the  second half of  the 1990s  are to
reverse  the  decline  in   economic  and  social   conditions,  to  promote
sustainable  economic growth, development and  structural transformation and
to  avoid becoming further  marginalized in  the international  economy.  An
intensified  policy commitment by both LDC Governments and the international
community will  be  required to  meet  these  challenges.   In  implementing
domestic  policies, LDCs should  endeavour to  focus on  measures to restore
and   maintain  macroeconomic   stability;  to   promote  the   growth   and
diversification  of  exports; to  strengthen  an  enabling  environment  for
private sector investment  and entrepreneurship; to enhance human  resources
development; to continue to implement population and development  programmes
with full respect for the various  religious and ethical values and cultural
background  of  each country's  people;  to  adhere  to  basic human  rights
recognized  by the  international community which strike  an optimal balance
in the  interrelationship between their  population, their natural  resource
base  and  the environment,  taking  into  account economic  imperatives; to
strengthen the infrastructure; to  promote good governance  as mentioned  in
the  Programme   of  Action;  to  broaden   popular  participation  in   the
development process; and to ensure the  full utilization of human  resources
along with democratization, promotion  of good governance, observance of the
rule  of  law  and peaceful  resolution of  any  civil conflicts  where such
conditions  exist.    The  broad  outlines  of  a  domestic  economic policy
framework   conducive  to  meeting   the  challenges  facing  the  LDCs  are
delineated below.

II.  THE ECONOMIC POLICY FRAMEWORK

38.   (a)  Macroeconomic stability  would require  rationalization and sound
management  of public  expenditure,  properly planned  monetary  growth  and
maintenance  of appropriate  exchange  rates commensurate  with  ensuring  a
sustainable external balance;

  (b)  Policies  to increase export earnings, including appropriate exchange
rate and trade policy reforms  to reverse the decline in the share of  world
trade  of the LDCs, diversify the composition of  their export structure and
to facilitate their ability to exploit  opportunities arising from the Final
Act of the Uruguay Round, are essential;

  (c)  This will entail  strengthening of existing policies and measures for
the  promotion and support  of the  private sector  complemented with public
investment,  including  policy-based  incentives  or  the  adoption  of  new
policies and measures where necessary;

  (d)   The potential  for economic  and technical  cooperation between LDCs
and   other  developing   countries  merits   further  exploration.      The
international  community should  help LDCs  promote  trade links  and should
take  appropriate  measures  to  support  such  trade  links,   particularly
subregional  and  regional  trade.    Such   trade  could  be  promoted   by
identifying  complementarities  in  production  structures among  countries,
strengthening  the institutional and  human capacities  for the operation of
subregional    trading   arrangements,    establishing   subregional   trade
information networks, and  associating the private sector more closely  with
the  integration  process.   There  are  potential gains  for  the  LDCs  in
participating  in the  Global System  of Trade  Preferences among Developing
Countries  (GSTP).   LDCs should  be encouraged  to  accede  to GSTP  and be
provided with  appropriate technical assistance  to enable  them to  benefit
fully  from  the  system.    Least  developed  countries  should  strengthen
subregional,  regional and  interregional cooperation  in order  to  benefit
from economies  of  scale and  to  attract  foreign direct  investment  more
easily  from  developed and  other  developing  countries.   More  attention
should  be   given  to  promoting   triangular  cooperation  and   technical
cooperation  among developing countries  (TCDC) as well as South-South joint
ventures  and   economic  cooperation  among   developing  countries  (ECDC)
investment in these countries;

  (e)   The  growth  of  a dynamic  private  enterprise sector  requires  an
appropriate economic,  fiscal and  legal framework.   Essential features  of
this framework are stable and predictable  policies, tax, monetary and trade
policies  which  ensure adequate  incentives  for  investment,  and a  legal
system  which protects  property rights  and  commercial contracts.    These
features  are also  needed to  tap into  international capital flows  in the
form of direct and portfolio investments;

  (f)   Enhancing human resources  development is imperative if  LDCs are to
raise productivity, output  and living standards.   With the support of  the
international community, LDC  Governments should intensify their efforts  to
raise education and training standards, promote life-long learning,  improve
the health status of their populations,  and strengthen the status of women,
by implementing  appropriate policies in accordance  with the provisions  of
the  International Conference  on Population and Development  and the Fourth
World Conference on Women;

  (g)   To enable  women in  LDCs to  play their  full role  in development,
efforts  should focus  on legislative  and  administrative reforms  to  give
women  full and equal access  to economic resources, including  the right to
inheritance  and to ownership  of land  and other  property, credit, natural
resources  and appropriate technologies,  and to  involve women  directly in
planning, decisionmaking,  implementation and  development of  macroeconomic
and  social  policies, programmes  and projects.    Special initiatives  and
innovative  schemes  which  can  give  women  increased  access  to  credit,
training,  information on  marketing  channels,  as  well as  other  support
services,  to alleviate the burden  of their role as mothers and housewives,
should be adopted;

  (h)    The economic  policy  strategies  adopted  by  the  LDCs should  be
consistent  with  the  need  to  eradicate  the  chronic  levels  of poverty
afflicting these  countries, in particular by  promoting the development  of
the private  sector and entrepreneurship, by  ensuring that  all people have
access  to productive resources,  and benefit  from a  policy and regulatory
environment  that enhances  their overall  capacities  and empowers  them to
benefit from expanding employment and economic opportunities;

  (i)   LDC Governments are attempting to implement comprehensive structural
adjustment  reforms in very  difficult circumstances,  often in  the face of
severe administrative and  financial constraints.   Many of  the constraints
that they  face are structural, deep-seated  and not  amenable to short-term
solutions. Consequently, successful  structural adjustment reforms require a
government commitment to  reform, and a medium-term to long-term perspective
for implementation;

  (j)   In order  to ensure  that structural  adjustment programmes  include
social  development goals,  in  particular the  eradication of  poverty, the
generation  of   productive  employment  and   the  enhancement  of   social
integration,   LDC  Governments,  in   cooperation  with  the  international
financial institutions and other international organizations, should:

  (i)Protect basic  social programmes and  expenditure, in particular  those
affecting  the  poor  and  vulnerable  segments   of  society,  from  budget
reductions;

    (ii)Review  the impact  of structural  adjustment programmes  on  social
development by  means  of  gender-sensitive  social-impact  assessments  and
other  relevant  methods,  and develop  policies  to  reduce  their negative
effects and improve their positive impact;

   (iii)Further promote  policies enabling  small enterprises,  cooperatives
and other forms of micro-enterprises to  develop their capacities for income
generation and employment creation;

  (k)   Agreeing on  a mutual  commitment between  interested developed  and
developing country partners to allocate, on average, 20  per cent of ODA and
20  per  cent  of  the  national   budget,  respectively,  to  basic  social
programmes, and in this  context, the proposal  of the Government of  Norway
to host a meeting in 1996  among interested countries and representatives of
relevant international  institutions, with  a  view to  considering how  the
20/20 initiative can be applied operationally, is welcomed;

  (l)   Commitment  of  the LDCs  and the  assistance  of the  international
community are essential  components for the success of structural adjustment
programmes.    Without  such  support,  the  long-term  objectives  and  the
sustainability  of the  programmes will  be  jeopardized.   In  this regard,
therefore, renewed commitments by the international community as defined  by
the Paris  Programme of Action and other relevant instruments to support the
efforts of the LDCs with adequate resources is vital.


III.  EXTERNAL TRADE AND INVESTMENT

39.   The  extremely low export  capacity of LDCs,  their very low  level of
export receipts, and the fluctuation and  the resulting sharp limitation  on
their  capacity  to   import,  are  the  major  structural  constraints   to
developing LDC trade.   This  situation is more acute  in the case of  land-
locked and  island least  developed countries,  as their  external trade  is
further impeded by high transportation costs.

40.   Action  by the international community,  including increased technical
assistance as foreseen in the Marrakesh  Ministerial Decision on Measures in
Favour  of LDCs, complemented  by adequate  financial support,  can help LDC
efforts to  increase export earnings  through increased  production in  both
the   traditional  and   the  modern   sectors  of   the  economy,   through
diversification of  the commodity structure  and export markets, and thereby
help to  obtain better  prices for  their export  commodities.  It  can also
help  LDCs to  mitigate any  adverse effects  of the  implementation  of the
Uruguay  Round  agreements  and to  integrate  themselves  better  into  the
international trading  system.  The  interest of LDCs regarding  the idea of
considering the setting  up of a  "safety net"  to help  them cope with  any
such effects in the immediate  and short term was noted.   The Final  Act of
the Uruguay Round of multilateral trade negotiations,  including the special
clauses  providing  differential and  more  favourable  treatment,  and  the
decision  on measures in  favour of  least developed  countries, provide the
institutional framework for these matters.


A

41.   All  provisions of  the  Final  Act of  the  Uruguay Round  should  be

effectively  applied.   In  this regard,  concrete  action, as  appropriate,
should be taken, consistent with the  Final Act, to fully  and expeditiously
implement  the  Marrakesh  Declaration  as  it  relates  to  LDCs,  and  the
Ministerial Decision on Measures  in Favour of  LDCs, and to give effect  to
the  Ministerial  Decision on  Measures  Concerning  the  Possible  Negative
Effects of  the Reform Programme on  Least Developed  and Net Food-importing
Countries, with  a view to enhancing  LDC participation  in the multilateral
trading system, taking into account the  impact of trade liberalization, and
the  relatively weak capacities  of LDCs  to participate  in an increasingly
competitive global market in goods and services.
  42.   Consideration shall  be given to  further improving GSP  schemes and
other schemes   for  products of  particular export  interest to LDCs,  e.g.
agricultural products,  fish and fish  products, leather  and footwear,  and
textiles  and clothing,  through, where  possible, the  widening of  product
coverage; the  reduction of  procedural complexities,  and the avoidance  of
frequent changes in the  schemes.  Consideration  should also be given to  a
significant reduction in tariff escalation.

43.   The rules set  out in  the various agreements and  instruments and the
transitional provisions of  the Uruguay  Round, including those relating  to
anti-dumping,  countervailing  duties,  safeguards,  and  rules  of  origin,
should  be  applied  in  a flexible  and  supportive  manner for  the  least
developed countries.

44.   As for  textiles and  clothing, consideration should be  given, to the
extent possible, to permitting meaningful increases  in the possibilities of
access for exports from LDCs.

45.  In  the area  of services, efforts should  be directed at building  and
strengthening  the  efficiency and  competitiveness  of  the  weak  domestic
service  sectors of  the LDCs.   Their  participation in  trade  in services
could be  enhanced by  effective application of  article IV  of the  General
Agreement on  Trade in Services (GATS)  with special priority given to LDCs.
Furthermore,   ways  should  be   explored  to   facilitate  LDC  access  to
information technology and networks and distribution  channels, and to  give
easy access to information to LDC  service suppliers through contact  points
to be established, in  accordance with GATS.  It was noted that the movement
of labour  for the provision of  services to other  countries is  an area of
interest to LDCs.

46.    Care should  be  taken  so  that domestic  laws  and  regulations  of
importing  countries in  areas such  as labour  and the  environment  do not
constrain  the export opportunities  of LDCs  in a  manner inconsistent with
the Final Act of the Uruguay Round.

47.    The home  countries  of  foreign  investment are  urged  to encourage
investment in LDCs by taking appropriate supportive action.

48.  South-South cooperation at the  subregional and regional levels  should
be promoted  to enhance regional and  subregional trade  by providing market
access for LDCs by neighbouring countries.   Appropriate measures should  be
taken to  promote,  support and  strengthen  trade  initiatives of  LDCs  in
subregional and regional groupings.  Efforts of the LDCs  to diversify their
exports need  to be supported  so that their  trading prospects become  more
viable.   Such cooperation can be  critical in complementing actions by LDCs
and  their  development  partners  to attract  foreign  investment  to LDCs.
Measures should  be taken  to grant  preferential access  to the  exports of
LDCs  on a non-reciprocal basis by developing countries  under the GSTP, and
also to  augment resources, where appropriate,  for promoting  ECDC and TCDC
through  multilateral  and  bilateral institutions.    Developing  countries
should, inter alia, introduce preferential schemes for LDCs under the GSTP.

B

49.    Technical  assistance  should  be  refocused and  wherever  necessary
intensified to help  LDCs adapt to  and take  advantage of  the new  trading

environment created by the  conclusion of the Uruguay Round.  Common efforts
of donors,  international organizations as well  as the  LDCs themselves are
needed  in  the  implementation  of   the  commitments  undertaken  and  for
maximizing  the opportunities  arising from  the Uruguay  Round  agreements.
Main areas of technical assistance in this regard should include:

  (a)  Enhancing institutional and  human capacities to comply  with the new
obligations arising from  membership of the  World Trade  Organization (WTO)
or to assist  LDCs to accede to WTO, as  well as to formulate and  implement
future trade policy;

  (b)    Developing and  strengthening  supply  capabilities in  relation to
tradeable goods and services, and the competitiveness of enterprises;

  (c)   Improving the  microeconomic trading  environment and expanding  the
use  of new communications technologies  in the service of trade through the
UNCTAD Trade Efficiency Programme;

  (d)  Enhancing the capability to make full use of GSP schemes;

  (e)  Supporting commodity diversification and marketing efforts;

  (f)   Expanding  the trading  and  investment  opportunities of  LDCs,  in
particular, by  identifying new trading opportunities which could be carried
out, inter  alia, through import promotion  agencies by  developed and other
countries,  developing  an  environment  conducive   to  attracting  foreign
investment, and through advice and technical support.

50.   With  a view  to achieving  these aims,  it is essential  to eliminate
duplication  and   strengthen  cooperation  between  relevant  international
organizations, in particular UNCTAD, WTO and the  International Trade Centre
UNCTAD/GATT, in order to conserve scarce resources and make full use of  the
existing  and  potential  synergies among  these organizations.    Among the
measures  that should  be considered  is  the  establishment of  a technical
assistance fund  administered  by WTO  in  order  to help  LDCs  participate
actively in WTO.


IV.  EXTERNAL FINANCE

51.   The  overwhelming dependence  of LDCs  on ODA  is likely  to  continue
during the rest  of the present decade and  beyond.  The basic policy issues
that the  international  community faces  in  this  respect in  the  current
climate of budgetary stringency  and ODA scarcity, are:  (a) how to  improve
aid  allocations to  the  LDCs; and  (b)  how  to  enhance the  quality  and
effectiveness   of  assistance   to  these   countries.    Donors   need  to
expeditiously implement the  agreed menu  of aid targets and/or  commitments
as set out  in paragraph  23 of  the Programme  of Action  and fulfil  their
commitments  to provide  a  significant  and  substantial  increase  in  the
aggregate level of  external support to LDCs,  keeping in mind the increased
needs of these countries, as well as the  requirements of the new  countries
included in the list  of LDCs following  the Paris Conference.  The  various
provisions of  the relevant resolutions adopted  in the  General Assembly in
recent years, as well  as the various relevant provisions adopted by  recent
major United Nations conferences, in particular  the World Summit for Social
Development, should also be taken into account, as adopted.

52.    In  view  of  the  enhanced  assistance  capacities of  a  number  of
developing countries  over the  last few years,  they should  be invited  to
join the traditional donor countries in providing assistance to the LDCs.

53.  The following measures and actions by donors can be highlighted:

  (a)   Specific  measures to  incorporate the  agreed menu  of  aid targets
and/or commitments  as set out in  paragraph 23 of  the Programme of  Action
more  explicitly into  the national  aid  strategies and  budgetary planning

mechanisms of donors;

  (b)    Ensure  adequate  funding  of  the  multilateral  institutions  and
programmes which  are  major sources  of  financing  for LDCs.    Particular
attention  will  have to  be  paid  to  replenishment  of the  International
Development Association  (IDA)  and the  soft-term windows  of the  regional
development  banks, and  other  grant-based multilateral  programmes.    The
relevant multilateral  financial institutions  are also  invited to  explore
the possibility  of  tapping  new sources  of  funds  to  help  support  LDC
development efforts;

  (c)    Support   United  Nations  development  efforts  by   substantially
increasing  the  resources for  operational  activities  on  a  predictable,
continuous  and assured  basis commensurate  with  the increasing  needs  of
developing countries  as stated  in General Assembly resolutions  47/199 and
48/162, while giving particular consideration to  the special needs of  LDCs
as  underlined  in  the  programmes  of   action  of  major  United  Nations
conferences organized since 1990;

  (d)  Continue to give high priority to LDCs in the operational  activities
of all parts of the United Nations system  for development, bearing in  mind
UNDP Executive Board decision 95/23, in which  it is stated that 60 per cent
of UNDP programme resources in its  future programming arrangement should be
allocated to LDCs;

  (e)   Continue to  provide financial  support to  adjustment programmes in
LDCs  on a  timely basis  and  on  terms adapted  to the  special needs  and
circumstances  of LDCs, adequate  external financing for the development and
diversification of the productive sector, as  well as additional support for
poverty eradication, environmental conservation and social programmes;

  (f)   An increased  level of technical  assistance should  be provided  to
LDCs  and priority  should  be given  to  skill  transfer,  with a  view  to
developing national capacity;

  (g)  Ensure the maintenance of  mutual transparency and accountability  in
the management  of aid resources  by the aid  officials of donor  countries/
organizations  and managers in  recipient countries,  as well  as ensure the
active support  of the donor  countries/organizations towards the  promotion
of ownership of development programmes by the recipient countries;

  (h)  The international community should  support the measures being  taken
in the LDCs towards the eradication of poverty.  Increased resources  should
be made  available from  all possible sources,  public and private,  in this
regard.


V.  EXTERNAL DEBT

54.  Many LDCs  face serious debt problems and more than half are considered
debt-distressed.    The  serious  debt  problem  of  the  LDCs  necessitates
strengthened efforts  on the  international  debt strategy.   This  strategy
should include concrete measures to alleviate  the debt burden and increased
concessional financing, in support of appropriate economic policy  measures,
which will  be critical  to the  revitalization of  growth and  development.
Debt-distressed LDCs should benefit from substantial debt-relief schemes.


A.  Official bilateral debt

55.   (a)   All donors that have not already  done so are urged to implement
Trade  and  Development  Board  resolution  165   (S-IX)  by  cancelling  or
providing equivalent relief for  ODA debt as a matter  of priority in such a
way  that the  net  flows of  ODA are  improved  for  the recipient.   Those
creditors  still holding  such  claims, including  non-OECD  creditors,  are
urged to take similar measures;

  (b)   Adopt measures  to substantially  reduce the  bilateral debt of  the
LDCs, in particular the countries of Africa, as soon as possible;

  (c)    Paris  Club  creditors  are   invited  to  continue  to   implement
expeditiously  and in  a flexible  manner  the very  concessional  treatment
under the Naples terms;

  (d)   Other  non-Paris Club  creditors are  also  invited to  take similar
measures in  order to  alleviate the  debt burden  of debt-distressed  LDCs,
including by  setting up special  debt-reduction programmes and  debt-relief
mechanisms.


B.  Multilateral debt

56.   In  order  to  address the  multilateral  debt problems  of LDCs,  the
Bretton  Woods  institutions  are  encouraged  to  develop  a  comprehensive
approach to  assist countries with multilateral  debt problems, through  the
flexible implementation  of existing  instruments and  new mechanisms  where
necessary.   In this respect the  Bretton Woods  institutions are encouraged
to  expedite the  ongoing consideration  of  ways to  address the  issue  of
multilateral debt.   Other international financial institutions are  invited
to consider, within the  scope of their mandates, appropriate efforts with a
view to assisting LDCs with multilateral debt problems.

  C.  Commercial debt

57.    (a)   Invites  creditor  countries,  private  banks and  multilateral
financial  institutions, within  their prerogatives,  to consider continuing
the initiatives and efforts to address the  commercial debt problems of  the
LDCs;

  (b)    Mobilize  the  resources of  the  Debt  Reduction Facility  of  the
International  Development  Association in  order  to  help  eligible  least
developed   countries  to   reduce   their  commercial   debt,   considering
alternative mechanisms to complement that Facility.

58.   In accordance  with the  Declaration of  the World  Summit for  Social
Development, techniques  of debt  conversion applied  to social  development
programmes and projects should be developed and implemented.


VI.  ARRANGEMENTS FOR IMPLEMENTATION, FOLLOW-UP AND MONITORING

59.  It is  important that  UNCTAD, which is the  focal point at the  global
level for the monitoring, follow-up and  review of the implementation of the
Programme of Action, has sufficient capacity and resources  to follow up the
outcome of the mid-term global review.   In this regard, it is recalled that
the General Assembly, in resolution 49/98, invited  the Secretary-General to
make recommendations to  the General Assembly at its fiftieth session with a
view to  ensuring that  the UNCTAD  secretariat has  sufficient capacity  to
undertake an effective  follow-up of the outcome  of the mid-term  review as
well  as the follow-up  of the  conclusions and  recommendations relating to
LDCs adopted by major global conferences, as appropriate.


Part Four

STATEMENTS MADE ON THE ADOPTION OF THE MID-TERM REVIEW

1.   The representative of  the United  States of  America said that  at the
Conferences held at Rio de Janeiro,  Vienna, Cairo, Copenhagen and  Beijing,
Member  States had  been developing  a  blueprint  for economic,  social and
environmental  action  that recognized  the  important  linkages  among  the
various issues considered.   Her country had been an active player in  those
conferences  and was committed  to being  an active  initiator of programmes

and activities to fulfil  the commitments made.   Her delegation had come to
the Meeting  prepared to affirm the  commitment by all  to promote the  full
incorporation  into  the world  economy  of  the least  developed countries.
Unfortunately,  fulfilling that commitment  became impossible when countries
were constantly  forced to  redefine their  commitments before  the ink  had
dried on the  most recent agreements.   Both  the initial  document and  the
process by which countries were asked  to redefine commitments recently made
called  into question the  validity of  those international  conferences and
summits.

2.   With those  concerns  in mind,  her delegation  must make  a number  of
reservations.   The  United  States  considered the  Uruguay Round  to  be a
historic  achievement which  had generated  and would  continue  to generate
global economic  growth and lead to  more trade,  investment, employment and
sustainable development  in all  countries, including  the least  developed.
It  was carrying out its obligations under the Uruguay Round agreements, and
expected others  to do  the same.   With  that  in mind,  the United  States
entered a reservation on the  recommendation in paragraph 41,  as it carried
the clear  implication  that the  United  States  was not  implementing  its
commitments regarding the  least developed countries.   Moreover, the United
States  felt  that  the UNCTAD  analysis  of  the  Uruguay  Round  was  both
incomplete  and inadequate.    United  Nations  secretariats  that  did  not
provide value  added to the work  of the membership  should be examined  for
their  usefulness.    Furthermore,  the  paragraph   could  be  seen  as  an
elaboration or  expansion of  Uruguay Round  commitments, which  her country
could not  support.  The Uruguay  Round decisions,  including those relating
to   least  developed  countries,  stood  on  their  own  with  no  need  of
elaboration or expansion.   The only forum in  which the United States could
consider discussing those issues would be the World Trade Organization.

3.  The United  States must also enter  a reservation on the recommendations
in paragraphs 42  and 44.   It  attached the utmost  importance to GSP,  and
considered  it to  be  a key  element  in  its  commitment to  assist  least
developed  countries in  fulfilling their  responsibility to  formulate  and
effectively implement  appropriate policies and  priorities that would  lead
to  sustained growth.  Similarly, implementation  of  the WTO  agreement  on
textiles and  clothing had created  a process which  would expand access  to
her  country's  vast   markets.    That  would  largely  benefit  developing
countries, including least developed countries.  Making the decision to open
that  sensitive  domestic  sector  to  increased  competition   had  been  a
difficult  one.  However,  the decision  highlighted the  firm conviction of
the  United States  that a  more open trading  system was a  benefit to all,
including least developed countries.  The  paragraphs in question called for
consideration of  increasing access  further to  her  country's textile  and
clothing  markets for the  least developed  countries, beyond  what had been
agreed  in the Uruguay  Round, as  well as for widening  product coverage of
GSP to  include agricultural products, fish  and fish  products, leather and
footwear and  textiles and  clothing, modifying  the way  the United  States
implemented its GSP programme, and also  called for a significant  reduction
in tariff escalation.  The United States could not agree to those paragraphs
because   it   could   not  undertake   a  commitment   to   extend  further
liberalization to the  products in question beyond  what had been  agreed in
the Uruguay Round, or to alter the way its GSP programme was conducted.

4.  The representative  of the Philippines, speaking  on behalf of the Group
of   77   and   China,   expressed   satisfaction   that   the    High-level
Intergovernmental Meeting had come to a  very fruitful conclusion.  The text
adopted  represented  a  candid   statement  of  the   performance  of   the
international community  in carrying out the  Paris Programme  of Action for
the Least  Developed Countries.   It  had been  well known to  all that  the
Paris  Programme of Action  for the  Least Developed  Countries remained not
only valid today, but just as valid as it had been in 1990.

5.   The text  of the Mid-term  Review just  adopted had  enriched the Paris
Programme of Action.  It only remained for the international community,  and
particularly   the   donor   community   and   the   various   international

organizations,  to  ensure  that  the  Programme  of  Action  for  the Least
Developed Countries,  and the reflections made  in the text  of the Mid-term
Review  would  find  complete  expression  in  fulfilling  the  targets  and
commitments embodied  in that  text. Equally, it  was necessary  to have  an
appropriate monitoring and follow-up mechanism, if  only to refresh the mind
on  where matters  stood  in implementing  the Programme  of Action  and the
agreements  adopted  today.   The  decision  to  make  reference to  General
Assembly  resolution 49/98, and  for UNCTAD  to have  sufficient capacity to
undertake effective  follow-up of  the outcome  of the  Mid-term Review  was
sowing a  seed for  the immediate  future that  should make  it possible  to
craft appropriate language concerning an effective mechanism.

6.  The representative  of Spain, speaking on  behalf of the European Union,
commended the fact that the Meeting  had been able to reach  a conclusion of
the negotiations with a consensus from all delegations.

7.   The representative  of Cape  Verde, speaking  also on  behalf of  small
island  least  developed  countries,  said  that  the  fruitful  conclusions
achieved  by  the Meeting  would not  have  been  possible without  the good
working relationship that had been present among delegations.   On behalf of
small  island  least  developed  countries,   he  expressed  thanks  to  the
developed countries for the  political commitment and  willingness they  had
demonstrated during the Meeting.


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Date last posted: 18 December 1999 16:30:10
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