United Nations

A/50/746


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

Mid-term global review of the implementation of the Programme
of Action for the Least Developed Countries for the 1990s

Report of the Secretary-General


CONTENTS

  Paragraphs  Page

I.  INTRODUCTION ..........................................1 - 33

II.  OUTCOME OF THE 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 .........................................4 - 313

    A.  Economic policy framework .........................10 - 235

  B.  External support ..................................24 - 318

III.  PREPARATORY PROCESS FOR THE MID-TERM GLOBAL REVIEW ....32 -5310

  A.  Action by the Trade and Development Board .........33 - 3410

    B.  Preparatory expert group meetings .................35 - 3811

  C.  Preparations at the regional level ................39 - 4112

  D.  Donor-Recipient Meeting ...........................42 - 4313



95-35181 (E)   271195/...
*9535181*
CONTENTS (continued)

  Paragraphs  Page

  E.  Mobilization and coordination of organs,
    organizations and bodies of the United Nations
    system ............................................44 - 4914

  F.  Participation of the least developed countries in
    the preparatory process ...........................50 - 5316

I.  INTRODUCTION


1.   The  Paris  Declaration  and the  Programme  of  Action for  the  Least
Developed Countries  for the  1990s 1/  were adopted  by  the Second  United
Nations Conference  on  the Least  Developed  Countries,  held in  Paris  in
September 1990.  In  its resolution 48/171 of  21 December 1993, the General
Assembly decided to conduct a mid-term  global review of the  implementation
of the  Programme  of  Action,  in  accordance  with paragraph  140  of  the
Programme and paragraph 7  (a) of its resolution 45/206 of 21 December 1990.
In  its  resolution 49/98  of  19 December  1994,  the  Assembly  decided to
convene  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 in  New York  from  25 September  to  6
October  1995  to  carry  out  the  review,  to  consider  new  measures  as
necessary,  and  to  report  to  the  Assembly  on   progress  made  in  the
implementation of the Programme of Action.

2.   The present  report is in  response to  the requests  addressed to  the
Secretary-General in resolutions 48/171 and 49/98  to report to the  General
Assembly at its fiftieth session on  the implementation of these resolutions
as  well  as  to   submit  at  the  session   a  report  on  the  High-level
Intergovernmental Meeting.  Section II of  the report contains an assessment
of the outcome of the High-level  Intergovernmental Meeting, and section III
an account of the preparatory process for the mid-term global review.

3.  The  High-level Intergovernmental Meeting adopted a decision  requesting
its  Chairperson  to submit  the  outcome  of the  meeting  to  the  General
Assembly  for  its  appropriate  consideration and  action  at  its fiftieth
session.   The  report  of the  meeting,  including  the  full text  of  the
Declaration,  an  assessment  of  progress  in  the  implementation  of  the
Programme of  Action at  the national  level and  progress in  international
support   measures   and   recommendations   adopted   by   the   High-level
Intergovernmental  Meeting,  are  being  submitted  separately  in  document
A/50/745.


             II.  OUTCOME OF THE 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

4.   The High-level  Intergovernmental Meeting  was held  at United  Nations
Headquarters in  New York  from 26  September  to 6  October 1995.   It  was
preceded by  a one-day  meeting of senior  officials on  25 September  1995,
which addressed  outstanding issues related to  the organization  of work of
the High-level Intergovernmental Meeting.

5.  Over the early years of the 1990s, it became clear that the  performance
of the least developed  countries as a group, fell  far short of many of the
objectives  of the Programme of Action for the Least Developed Countries for
the  1990s.   Against  this  background,  the  High-level  Intergovernmental
Meeting adopted  a  Declaration and  agreed  on  national and  international
policies and measures in  a number of key areas  with a view to accelerating
the  implementation of the Programme  of Action during the  remainder of the
decade.

6.  Besides making  an assessment of  the socio-economic performance of  the
least developed  countries in the early  1990s, the  High-level Meeting also
identified the salient constraints affecting socio-economic progress in  the
least  developed   countries.    At   the  domestic  level,   policy-related
constraints included macroeconomic  imbalances, manifested  in large  fiscal
and balance  of payments deficits and,  in many  instances, the unfavourable
short-term impact  of macroeconomic  policy adjustments  on specific  areas;
structural  or  endowmentrelated   constraints  included  lack  of  adequate
physical infrastructure and  poor performance of the productive sector;  and
country-specific constraints  included civil  strifes and  recurrent natural
disasters  in some least  developed countries  and the  resulting social and
economic burdens.  A number of external constraints  were faced by the least
developed countries,  such as  persistent debt  and debtservicing  problems,
the decline of the least developed countries share in world trade and  their
continued marginalization and the inadequacy of external finance.

7.  The High-level  Meeting also took note of the fact that despite the poor
performance of the least developed  countries as a group, nearly one quarter
of least developed countries were able to  attain positive per capita income
gains  in  the  early  1990s.    Factors  such  as  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  and have  helped these  countries to address
some of the constraints facing their economies.

8.  In the light of  the recent performance of the least developed countries
in the early  1990s and the factors  determining such performance, the High-
level  Meeting defined  the threefold  challenge facing  the least developed
countries in the second half of the 1990s in terms of  the need:  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  world  economy.   The  policy agenda
agreed at  the meeting  had a strong accent  on the following areas:   (a) a
greater external  orientation of the  least developed countries'  economies;
(b) development of a dynamic private  enterprise sector; (c) human resources
development;  (d) eradication of  poverty; and  (e) a  renewed commitment to
provide external support.

9.  The mid-term  review also stressed the  importance of the ongoing policy
reform process in least developed countries.   While these reforms could not
guarantee immediate  results in  lifting the major constraints  facing their
socio-economic development,  nevertheless they provided  a context in  which
growth and structural transformation could, in  the long run, reinforce each
other. Such symbiosis would require the  establishment of a more  favourable
domestic  and external  policy environment.   The domestic  policy framework
and  the external  support  measures agreed  at  the  meeting  are aimed  at
creating such conditions.



 A.  Economic policy framework

1.  Greater external orientation

10.  A  major thrust of the policy  framework is imparting greater  external
orientation to  the economies of the  least developed countries.   The Final
Act  Embodying  the Results  of  the  Uruguay  Round  of Multilateral  Trade
Negotiations   2/  and   the   ongoing  processes   of   globalization   and
liberalization  have given further  impetus to  the evolvement  of more open
and liberal trading regimes.

11.  High priority has been accorded within  the overall policy framework to
national  policies and measures  aiming:   (a) to  increase export earnings,
including appropriate fiscal,  exchange rate  and trade policy reforms;  (b)
to diversify  the composition  of exports  and facilitate  their ability  to

exploit opportunities arising from  the Final Act of  the Uruguay Round; and
(c)   to  strengthen   supply  capacities   to  adapt   their  economies  to
international   competition    in   consequence    of   globalization    and
liberalization.

12.  While the national policies of the  least developed countries will bear
by far the greatest burden  of restructuring their economies,  it is equally
clear that they  cannot meet these challenges alone.   A series of  external
support  measures have  been agreed  upon  to complement  national  efforts.
Such  support  relates primarily  to  the  implementation of  Uruguay  Round
agreements  as they concern  the least  developed countries,  viz., full and
expeditious implementation of  the Marrakesh  Declaration as  it relates  to
the least  developed countries and the  Ministerial Decision  on Measures in
favour  of least  developed  countries, as  well  as  giving  effect to  the
Ministerial Decision  on measures concerning  the possible negative  effects
of  the  reform programme  on the  least  developed countries  and net  food
importing  countries.   The set  of agreed  measures at the  mid-term review
further spells  out and, in  some cases, goes  beyond the  provisions of the
Final  Act  of  the  Uruguay  Round.     These  include  for  example:   (a)
identification of the areas in which  the Generalized System of  Preferences
(GSP) schemes needed improvement; (b)  enumeration of particular  rule areas
of concern  to the  least developed  countries that  should be applied  in a
flexible and supportive  way; (c) a more explicit  provision in the area  of
textiles  and  clothing;  (d)  a  provision   in  the  areas  of  trade  and
environment and trade and labour standards  (these areas were not considered
during the Uruguay  Round); (e) elaboration of  the main areas of  technical
assistance  to the least  developed countries;  and (f)  introduction of the
notion  of providing  adequate  financial support  to  complement  technical
assistance.

13.   In addition, the outcome  of the mid-term global  review took note  of
two  important concerns  of the  least  developed  countries:   firstly, the
setting  up of  a "safety net"  to help  them cope  with any  adverse effect
arising from the implementation  of the Final Act in the immediate and short
term,  and secondly,  in the  area of  trade in  services, the  movement  of
labour for providing services to other countries.   The question of possible
components of  a  "safety net"  was  subsequently  considered at  the  first
session of the United Nations Conference  on Trade and Development  (UNCTAD)
Ad Hoc Working Group  on Trading Opportunities in  October 1995, and  it was
noted  that the elements of agreements  in the area  of trade reached at the
mid-term review  could be  of relevance to  the future work  of the  Working
Group.
  14.  The assessment  by the mid-term review  as regards the external trade
situation of  the least developed countries and the policy actions agreed at
the  meeting  reflect   the  overriding  concern  of  the  least   developed
countries,  on  the one  hand, to  operationalize  transitional measures  in
consequence  of  trade policy  adjustments  warranted  in  the  wake of  the
Uruguay Round  Agreements, to  tide over  possible negative  effects of  the
Final  Act,  benefit  from  its provisions  and,  on  the  other  hand,  the
willingness of  the international  community to assist  the least  developed
countries in  this regard.   It should  be pointed  out that  to succeed  in
implementing this  outward looking approach,  the least developed  countries
and  donors will not  only need  to give  effect to the  agreed national and
external  actions in the area of  trade, but would also have  to look beyond
the confines  of commercial  policy.   For example,  various UNCTAD  studies
have  pointed  out  that  the  sustainable  export  diversification,   which
involves  not only  greater  earnings  stability  but also  increased  trade
competitiveness, poses complex  challenges besides the problem of  low-level
exports.   Policy  actions  would have  to deal  with  a number  of  related
concerns,  including those  pertaining  to market,  policy,  structural  and
endowment-related constraints that affect  the export supply capacity of the
least developed countries.  Similarly, in  implementing support measures  in
the area of external  trade, the development partners  would need to  take a
broader  look,   going  beyond  specific   trade-related  actions.     Thus,
development finance, adjustment support, investment promotion and  technical
assistance  should play important  roles in  addition to  measures to expand

market access.

15.  Moreover, increased South-South  cooperation can help  enhance regional
and  subregional trade  and investment  by  providing  market access  to the
least  developed countries by neighbouring  countries as well as in terms of
attracting  foreign  investment.     The  mid-term  review  recognized   the
importance of  such cooperation,  and  recommended that  measures should  be
taken  to  grant preferential  access  to  the  exports  of least  developed
countries  on a  non-reciprocal  basis  by developing  countries  under  the
Global System  of Trade  Preferences and  also to  augment resources,  where
appropriate,  for promoting economic  cooperation among developing countries
and technical cooperation  among developing  countries through  multilateral
and bilateral institutions.


2.  Fostering a dynamic enterprise sector

16.  High on the  policy agenda set out at the  mid-term review is  the need
for strengthening  existing policies  and measures,  including policy  based
incentives and new policies where necessary,  for the promotion and  support
of  the private sector,  to be  complemented with  public sector investment.
The growth  of a dynamic private  enterprise sector should be underpinned by
an  appropriate economic,  fiscal and  legal  framework with  the  following
essential  features: stable  and  predictable policies;  tax,  monetary  and
trade policies that ensure adequate incentives  for investment; and a  legal
system which protects property rights and commercial contracts.

17.  These  policies and measures should  help the least developed countries
tap  international  capital  flows  in  the  form  of  direct  and portfolio
investment. However, as the mid-term review  meeting noted, although a large
number  of  least  developed  countries  have  adopted  national  regulatory
frameworks  conducive to  foreign investment,  they have  not yet  attracted
such investment  on a significant scale.   To complement national efforts in
this  area, the meeting  urged the  home countries of  foreign investment to
take  appropriate supportive measures  to encourage  such investment  in the
least developed countries.

18.   It  would be  important to elaborate  further and  operationalize such
support  measures.    The  mid-term  review  already  agreed  that technical
assistance would be provided to help  developing an environment conducive to
attract  foreign investment.   Other possible areas  of support  by the home
countries  could relate  to supporting  and improving  investment  guarantee
schemes in order to  underwrite some of the financial risks associated  with
investing in  least developed  countries, as  well as  providing fiscal  and
other incentives for investing in least  developed countries.  Flexible  and
supportive application  of the various  instruments and facilities  promoted
by multilateral financial institutions - such  as World Bank's Expanded  Co-
financing Operations and  the Multilateral Investment Guarantee Agency  -can
offer important scope for  least developed countries  in augmenting  foreign
investment flows.


3.  Human resources development and eradication of poverty

19.   Improving  productivity, output  and  living  standards in  the  least
developed   countries   greatly  depends   on   enhancing   human   resource
development.  The  efforts of the  least developed  countries to tackle  key
problems in human resources development have  been well recognized, as  also
the  difficulties encountered  by  them,  particularly funding  constraints.
Broad  guidelines  of  measures  recommended  in  this  area  include:   (a)
intensifying  efforts  to  raise  education  and  training  standards;   (b)
promoting life-long  learning;  (c)  improving  the  health  status  of  the
population; and (d) strengthening the status of women.

20.   As regards the role  of women in  development, policy measures  should
focus on  enabling women  to play  their full  role in  development.   These

efforts  should give  greater attention  to legislative  and  administrative
reforms:   (a) 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  (b)
to involve women  directly in planning, decision-making, implementation  and
evolution of  macroeconomic and  social policies,  programmes and  projects.
Moreover,  national policies  on  women in  development  should  incorporate
special incentives  and innovative  schemes that  can  give women  increased
access to credit, training, information on marketing channels etc.

21.  While the  Programme of Action placed emphasis on poverty reduction  as
an element  of the policy  framework, the mid-term  review accorded  to it a
greater salience.   Thus, the least  developed countries are  called upon to
ensure  that their  economic policies  and strategies  should be  consistent
with the  need to  eradicate  the chronic  levels  of  poverty.   The  broad
elements  of an  approach in this  regard includes the  promotion of private
entrepreneurship such that  all people have  access to  productive resources
and  benefit from a  policy and  regulatory environment  that enhances their
overall capacity and empowers them to  benefit from expanding employment and
economic opportunities.

 22.   At the same time, the structural adjustment programmes should include
social  development goals,  in particular  the eradication  of poverty,  the
generation  of   productive  employment  and   the  enhancement  of   social
integration.  In specific terms, it has been agreed  that Governments of the
least developed countries,  in cooperation with the international  financial
institutions and  other international  organizations, should:   (a)  protect
basic  social programmes and  expenditure, in particular those affecting the
poor  and vulnerable segments  of the  society, from  budget reductions; and
(b) further  promote policies enabling  small enterprises, cooperatives  and
other  forms of  micro-enterprises to  develop their  capacities  for income
generation and employment creation.

23.  The mid-term  review meeting called upon the interested donor countries
and  least developed  countries to  allocate,  on  average, 20  per cent  of
official development  assistance and  20 per  cent of  the national  budget,
respectively, to basic social programmes.   In this connection, the  meeting
welcomed the  proposal by Norway to  convene a meeting  in 1996 to  consider
how to apply the 20/20 initiative operationally.


B.  External support

24.   International solidarity in favour  of the  least developed countries,
based  on   the  principles  of   shared  responsibility  and   strengthened
partnership, was seen by the Second  United Nations Conference on  the Least
Developed Countries,  held  in  Paris  from  3  to  14  September  1990,  as
indispensable  to  the  success  of  national  policies  of  least developed
countries.   The mid-term review  reaffirmed these  principles and  stressed
that   without  external   support   the  long-term   objectives   and   the
sustainability of  national  efforts would  be  jeopardized.   A  number  of
specific  external  measures  were  agreed  upon  in  the  following  areas:
external trade (discussed above); external finance; and external debt.


1.  External finance

25.  The overall donors'  aid performance in  the early 1990s fell short  of
the commitments  undertaken in  the Programme of  Action.  In  the light  of
this  and  against  the  backdrop  of   the  current  climate  of  budgetary
stringency  and  scarcity of  official  development  assistance,  two  major
policy issues have been  identified:  (a) how to improve aid allocations  to
the  least  developed countries;  and (b)  how  to  enhance the  quality and
effectiveness of assistance.

26.   Two salient  considerations in regard  to external financing  are that

the  least  developed countries  are almost  totally  dependent on  official
development   assistance,  and   that   their  overall   external   resource
requirements  have grown significantly  with the  increase in  the number of
least developed countries since  the adoption of the Programme of Action  in
1990.   It was  already pointed out  in The Least  Developed Countries  1990
report 3/ that the  volume of aid resulting  from the implementation  of the
menu  of official  development  assistance  targets and  commitments in  the
Programme of Action would not be sufficient  to meet fully the  requirements
of the then 41 least developed countries.  It is now all the more  important
that this menu be expeditiously implemented and, simultaneously,  additional
measures be taken to augment the level of external resources to the  current
group  of least developed  countries.   From that  standpoint, high priority
should be given to implementation of  actions such as explicit incorporation
of  the aid  targets  and commitments  of the  Programme  of Action  in  the
donors' aid  budgets,  increase in  the level  of concessional  multilateral
assistance,  operationalization  of  additional  flows  to  social   sector,
environmental conservation  and eradication  of poverty  and enhancement  of
the value of aid through improving aid quality.


2.  External debt

27.  External  debt and debt servicing is  a crucial issue for the  majority
of least developed countries.  That  this serious problem should necessitate
strengthened efforts on the  international debt strategy was acknowledged at
the  mid-term review, and a number  of actions were agreed upon in the areas
of official bilateral debt, multilateral debt, and commercial debt.

28.   As regards  bilateral debt, actions  by creditor countries  are to  be
carried  out  along  four  principal  axes:    (a)  cancelling  or providing
equivalent  relief for  official  development  assistance  as  a  matter  of
priority  through  the   implementation  of  Trade  and  Development   Board
resolution 165  (IX) by  creditors (including  creditors non-members of  the
Organisation for Economic Cooperation  and Development (OECD)), who have not
already  done  so;  (b)  adopting  measures   to  reduce  substantially  the
bilateral debt; (c) continuing to implement  expeditiously and in a flexible
manner the very concessional  treatment under the Naples terms by the  Paris
Club  creditors;  and  (d)  adopting  similar  measures  by  non-Paris  Club
creditors, including  by setting  up special  debt-reduction programmes  and
debt relief mechanisms.

29.  Comprehensive consideration of all aspects of multilateral  debt of the
least  developed countries was  facilitated by  progressive evolution in the
international community's thinking  regarding this component of their  debt.
Analysis undertaken in international organizations and elsewhere suggests  a
variety  of  innovative approaches  for dealing  with multilateral  debt. 4/
The mid-term review emphasized that the share of such debt in the  long-term
debt  owed  by least  developed  countries,  as  well  as multilateral  debt
service, has  increased  considerably in  recent  years.   To  address  this
problem,  the  Bretton  Woods  institutions  are  encouraged  to  develop  a
comprehensive  approach  through the  flexible  implementation  of  existing
instruments and new mechanisms where necessary.   A particular reference has
been  made to the ongoing  considerations of ways to  deal with multilateral
debt, and the  Bretton Woods institutions are  called upon to expedite  such
work.

30.  As regards commercial debt,  the creditor countries, private  banks and
multilateral   financial  institutions   have  been   invited  to   consider
continuing  the  initiatives and  efforts  to  address  this  problem.   One
specific  action agreed  at the meeting  is mobilizing the  resources of the
Debt Reduction Facility  of the International Development Association  (IDA)
in  order  to  help  eligible  least  developed  countries  to  reduce their
commercial  debt,   as  well  as   considering  alternative  mechanisms   to
complement  this facility.   Moreover, techniques of debt conversion applied
to  social  development  programmes  and projects  should  be  developed and
implemented  in  accordance  with  the  Copenhagen  Declaration  on   Social

Development of the World Summit for Social Development. 5/

31.  Overall,  the impact  of these measures would  depend, in the main,  on
the  benefit that  can be  derived  from the  implementation of  the  Naples
Terms,  and  the  level  of debt  reduction  that  can  be  granted  by  new
mechanisms   being    considered   within    the   international   financial
institutions.  While the  Naples Terms are a  welcome step forward, they can
have a significant  role in providing debt relief  only if they are  applied
to a sizeable  part of  the total  outstanding debt  and if  the debt  stock
reduction is  extended  to a  large  number  of least  developed  countries.
Moreover, as  UNCTAD  analyses  indicate, even  full implementation  of  the
Naples Terms would not  in itself be sufficient  to bring down  debt service
ratios for many least  developed countries.   At the Halifax summit in  June
1995  the  Group  of  Seven  countries   signalled  to  the  Bretton   Woods
institutions  to develop  a comprehensive  approach to  assisting  countries
with  multilateral debt problems,  and this point has  been reflected in the
outcome  of  the  mid-term  review on  multilateral  debt.   Given  that the
multilateral  debt  burden  of  least  developed  countries  has   increased
considerably  and that little  assistance has  been available  to help debt-
distressed  least   developed  countries   in  meeting  their   multilateral
obligations,  it is  important to  ensure that  the  scale  of relief  to be
provided by  the new mechanisms under  consideration leads  to a substantial
reduction of such debt.


III.  PREPARATORY PROCESS FOR THE MID-TERM GLOBAL REVIEW

32.  The  elaboration of the preparatory  activities for the mid-term global
review,  including  intergovernmental,  expert,  sectoral  and  inter-agency
preparatory meetings  and the  substantive documentation,  was initiated  by
the  UNCTAD Trade and  Development Board  at its spring session  in 1994, in
accordance  with  paragraph  18  of  General  Assembly  resolution   48/171.
Subsequently  the General Assembly  in its  resolution 49/98  decided on the
preparatory process, notably to  convene the Meeting of Governmental Experts
of Donor Countries  and Multilateral and  Bilateral Financial  and Technical
Assistance  Institutions  with   Representatives  of  the   Least  Developed
Countries   (Donor-Recipient  Meeting)   to  prepare   for  the   High-level
Intergovernmental Meeting.  Main responsibility for the preparatory  process
was assumed by UNCTAD in its capacity as  the focal point for the review and
appraisal of the implementation of  the Programme of Action  and its follow-
up at the  global level.  Substantive  preparations were also  undertaken at
the  regional level, and other  parts of the United  Nations system likewise
contributed to the process, as described below.


A.  Action by the Trade and Development Board

33.   The fourth  annual review  of progress  in the  implementation of  the
Programme  of Action was conducted by the Trade and Development Board during
the second part of  its fortieth session in April 1994, and the fifth annual
review  similarly during the second  part of the  forty-first session of the
Board in March 1995.  Background for  the Board's deliberations was provided
by the  1993-1994 6/  and 1995 4/  issues of The  Least Developed  Countries
report prepared  by the UNCTAD  secretariat.  In  addition to analysing  the
socio-economic performance  of the least  developed countries, their  policy
reform  efforts,  and  trends  in  trade  and  external  support  for  these
countries, the 1993-1994  report reviewed  the special  issues of  education
and health  care  in the  least developed  countries,  and  the 1995  report
reviewed,  performance  in  the productive  sectors.  The  1995  report  was
prepared with a view  to serving also as  the basic background  document for
the  High-level Intergovernmental  Meeting on  the mid-term  global  review.
Consequently,  it took  a retrospective  look  at the  progress made  in the
implementation of  the  Programme of  Action  since  its adoption  in  1990,
analysing  the difficulties  encountered in  sustaining development  in  the
least developed  countries.  Upon  the Board's request,  an addendum to  the
1995 report was subsequently prepared, containing  an update to that  report

notably on external support  measures, as well as  further analysis of least
developed countries' growth  experience undertaken in  response to a request
by participants during the Donor-Recipient Meeting. 7/   The 1995 report was
further  complemented by  a  statistical  profile  on  the  least  developed
countries. 8/

34.   At its  April 1994  session, the  Trade and Development  Board adopted
decision 412  (XL) on the High-level  Intergovernmental Meeting  on the mid-
term global  review, inter alia, submitting  a series  of recommendations to
the General Assembly on  the preparations for the  meeting.  It also adopted
agreed conclusions  413 (XL) on the review of progress in the implementation
of  the Programme of Action.  At its March  1995 session, the Board reviewed
the status  of preparations  for the  High-level Intergovernmental  Meeting,
besides undertaking the annual review of  progress in the implementation  of
the Programme of Action.  The Board adopted  agreed conclusions 423 (XLI) on
these  two agenda items.   It recommended making available to the High-level
Intergovernmental Meeting a comprehensive assessment of  the progress in the
implementation of the Programme of Action, and set  out a number of elements
and priority  issues to be  taken into  account in such an  assessment.  The
Board, moreover,  in an  annex to  agreed conclusions  423 (XLI),  submitted
recommendations to  the High-level Intergovernmental  Meeting on the  agenda
and organization of work for the meeting.


B.  Preparatory expert group meetings

35.  As part of the  preparations for the mid-term global review, the UNCTAD
secretariat  organized a  series of  issue-oriented expert  group  meetings.
The first such  meeting was held  at Niamey in January 1995  and was devoted
to the role of  women in the development  of the least  developed countries.
The  meeting was organized with  the financial support of  the Government of
Norway,  the United  Nations Development  Fund  for  Women (UNIFEM)  and the
United Nations  Population Fund (UNFPA).   It adopted a Declaration to bring
to the attention of the international  community the special problems  faced
by women in least developed countries and the need to adopt urgent  measures
to enhance  their full  participation in  the development  process of  least
developed  countries,   both  as   agents  and   beneficiaries.     Detailed
recommendations  for  priority  action  to this  end  focused  on education,
health,  participation  of women  in  the  productive  sector  in the  least
developed countries and the incorporation of women's  concerns in mainstream
development. 9/

 36.  A second expert group meeting, on  fiscal policy reforms in the  least
developed countries,  was convened  at Geneva in  March 1995.   This meeting
was  organized  with  the  financial  support   of  the  Government  of  the
Netherlands.  The expert group discussed  different options available in the
field  of  tax  reforms and  explored  ways  for  raising  revenue  in these
countries.  The  report of the  meeting sets  out the  main conclusions  and
policy implications emerging  from the deliberations, including with  regard
to  the general  context for  fiscal policy  action of Governments  of least
developed countries  and  the implementation  of tax  reforms and  capacity-
building. 10/

37.   Moreover,  an expert  group meeting  on trade  diversification in  the
least developed  countries was organized  at Geneva in April  1995, with the
financial support of the  Government of Italy.  The experts at this  meeting
examined  the  potential  for  trade  diversification  in  least   developed
countries,  constraints to  diversification and  the required  national  and
international support  measures. They  adopted a number  of conclusions  and
policy   recommendations,  which,  inter  alia,  stressed  that  sustainable
diversification in  the least  developed countries  pose complex  challenges
that went beyond the domain of commercial policy.  The achievement of  trade
diversification in  the least  developed countries  would require  concerted
multilateral  and  national effort,  designed  in  particular  to  alleviate
supply-side constraints;  in the  absence of  that, the  trade position  and
economic weight of least developed countries would remain marginal. 11/

38.   Issues of  external finance,  debt  and trade  were the  subject of  a
special   high-level  panel,   with  the   participation  of   distinguished
specialists in  these fields, organized  during the Donor-Recipient  Meeting
in  May 1995.  The  objective of the  panel was  to provide innovative ideas
and  recommendations  for  the  consideration  of  the  Meeting.    Specific
proposals were put  forward notably concerning a debt strategy for the least
developed  countries.   The new  opportunities for  South-South  cooperation
emerging with  the  dynamic growth  experience  of  a number  of  developing
countries, were also emphasized.


C.  Preparations at the regional level

39.   Regional  meetings to  prepare for  the  mid-term  global review  were
organized by  the relevant United Nations regional commissions in accordance
with  paragraph  4  (c)  of  General  Assembly  resolution  49/98,  and  the
substantive inputs provided  through the preparatory  process at  this level
were transmitted to the Donor-Recipient  Meeting in May-June 1995 and to the
High-level Intergovernmental Meeting itself.

40.   A mid-term review of the  implementation of the Programme of Action in
the  Asian and Pacific  region was  undertaken by the Special  Body on Least
Developed and  Land-locked Developing Countries of  the Economic and  Social
Commission for Asia and  the Pacific (ESCAP) at  its second session  held at
Bangkok in April 1995.   The recommendations of the Special Body on measures
to strengthen the implementation  of the Programme of Action as well as  the
substantive  issues to  be addressed in  the regional input  to the mid-term
global  review were subsequently  endorsed by  the Commission  at its fifty-
first session through resolution 51/9.   This resolution, the  report of the
Special Body and  an overview of economic  growth and social  development of
the least developed countries  in the Asian and  Pacific region in the early
1990s were  made available as ESCAP's  input to  the Donor-Recipient Meeting
in May-June  1995.  A subsequently  revised contribution  was transmitted to
the High-level Intergovernmental Meeting. 12/

41.   Progress achieved  by the  African least  developed  countries in  the
implementation of the Programme of Action was reviewed by the Conference  of
Ministers  responsible for  Economic and  Social Development  and  Planning,
which convened  for the  thirtieth session  of the  Economic Commission  for
Africa (ECA) and the twenty-first  meeting of the Conference of Ministers in
Addis Ababa  in May  1995.  The  Conference of Ministers  adopted a  special
memorandum on  the mid-term  global review, reflecting the  African position
on  the   issues  before  the   High-level  Intergovernmental  Meeting   and
containing,  inter  alia,  a  number  of   proposals  on  measures  for  the
accelerated implementation  of the Programme of  Action.   The Conference of
Ministers   also  adopted   resolution   797  (XXX)   on   the   accelerated
implementation  of  the  Programme  of  Action  in African  least  developed
countries during the  second half of  the 1990s.   In  accordance with  this
resolution,  the Special  Memorandum as well  as the report  prepared by ECA
reviewing the economic and social situation  of the African least  developed
countries during the first phase  of the implementation of  the Programme of
Action,  1990-1994, were transmitted  as ECA's  contribution to the mid-term
global review.   As  further input,  ECA also  contributed a  review of  the
external resources situation and debt of African least developed  countries.
13/


D.  Donor-Recipient Meeting

42.     The  Meeting  of  Governmental   Experts  of   Donor  Countries  and
Multilateral  and Bilateral Financial and  Technical Assistance Institutions
with  representatives  of  the  least developed  countries  (Donor-Recipient
Meeting), which was held  at Geneva from 29 May  to 2 June 1995, constituted
the main event in  the preparatory process leading up to the mid-term global
review.   The Donor-Recipient Meeting examined  a number  of priority issues
as set out  by the Trade  and Development  Board at its March  1995 session,

notably developments in the  world economy since  1990 as they affected  the
growth and  development performance  of least  developed countries;  lessons
learned  from   adjustment  and  macroeconomic   and  policy  reforms;   the
challenges  posed  by  globalization  and  liberalization  as  well  as  the
implications  of the Uruguay  Round for  the least  developed countries; and
the provision of official development assistance  and debt relief during the
early  1990s and the  implications of  the enlargement of the  list of least
developed countries for international support measures.

43.  The Donor-Recipient  Meeting had before it  two papers submitted by the
Acting  Chairman  of the  Special  Sessional  Committee  of  the March  1995
session  of  the  Trade  and   Development  Board,  prepared  to  facilitate
consultations at the Meeting pursuant to  paragraph 7 of agreed  conclusions
423 (XLI).   The first of  these documents contained  a draft assessment  of
progress in the  implementation of the Programme  of Action at the  national
level  and of progress  in international  support measures,  and the second,
possible recommendations covering  a number of key  areas of concern for the
least developed countries. The documents were  considered by a Working Group
set up by the  Meeting.  The Donor-Recipient  Meeting agreed to transmit the
text subsequently  elaborated by the Working Group as a  contribution to the
High-level Intergovernmental Meeting. 14/


E.  Mobilization and coordination of organs, organizations
    and bodies of the United Nations system              

44.    As requested  by  the  General  Assembly,  the Secretary-General  has
continued  to take requisite  steps to  mobilize and  coordinate the organs,
organizations and bodies of the  United Nations in the implementation of and
follow-up  to the  Programme of  Action, as  well  as to  ensure appropriate
preparations  for  the  mid-term global  review.    Moreover,  agencies have
responded to the  specific requests for preparatory activities addressed  to
them by the General Assembly, e.g.,  by undertaking sectoral appraisals  and
submitting special reports as inputs to the mid-term global review.

45.   The  Consultative Committee  on  Programme and  Operational  Questions
reporting  to  the  Administrative  Committee  on  Coordination,   regularly
reviewed the implementation of the Programme  of Action and, in  particular,
the preparations for the mid-term  global review.   Substantive inter-agency
consultations were held in response  to the request by  the General Assembly
in  paragraph 4  (e) of  its  resolution 49/98,  on the  basis  of  a report
prepared by  the UNCTAD  secretariat, during the inter-sessional  meeting of
the Consultative  Committee on  Programme and  Operational Questions  (sixth
session) in New York in May 1995.  At this occasion, Consultative  Committee
on Programme  and Operational  Questions member  organizations, inter  alia,
reiterated  that the least developed countries remained a priority objective
for supportive action by the United Nations system.  It was also  emphasized
that  the  system,  in  its  programmes  and  operational  activities,  must
maintain  a  strong international  advocacy  role  in  favour  of the  least
developed countries,  including in  resource mobilization,  and must  assist
Governments of  least developed  countries in the strengthening  of national
administration,  management capacity  and  infrastructural  development. The
views  expressed  by  participants  on  the  issues  before  the  High-level
Intergovernmental Meeting were communicated to  the Donor-Recipient Meeting,
which was simultaneously in session in Geneva. 15/

46.    Agencies have  reported  regularly  on  their  implementation of  the
Programme  of Action,  notably in  response  to  an annual  questionnaire on
follow-up  to the  Programme issued  by  UNCTAD.   They have  also  provided
specific  inputs to the  annual review of progress  in the implementation of
the Programme of Action, e.g., collaborating  with the UNCTAD secretariat in
analysis  of  key  sectors  and  special  topics  for  the  Least  Developed
Countries  Report.   Some of  them  have  undertaken sectoral  appraisals of
their own in accordance  with paragraph 140  of the Programme of Action  and
General Assembly  resolutions 45/206  and 49/98.   Such  appraisal has  been
undertaken on  a regular  basis, notably  by the  United Nations  Industrial

Development  Organization   (UNIDO),  which  has   organized  a  series   of
ministerial-level symposia on  the industrialization of the least  developed
countries.  The  first two were  held in  November 1991  and December  1993,
with  a third symposium  scheduled for  November-December 1995.   The United
Nations Educational, Scientific  and Cultural Organization (UNESCO) for  its
part prepared a  review of the  least developed countries and  the challenge
to  social development  as a  contribution  to the  World Summit  for Social
Development at Copenhagen in March 1995.

47.    A  number  of  agencies   submitted  special  reports  reviewing  the
implementation of the Programme of Action  within their respective fields of
competence,  in  response to  paragraph  20  of General  Assembly resolution
48/171  and paragraph  9 of  Assembly  resolution  49/98.   These were  made
available   to  the   Donor-Recipient   Meeting  and   to   the   High-level
Intergovernmental Meeting together with the contributions from the  regional
commissions. 16/  Agencies also contributed  to the preparatory process  for
the mid-term global  review in  other ways, e.g.,  by providing support  for
and participating actively in expert groups and other preparatory meetings.

48.   The UNCTAD  secretariat collaborated  closely with  other agencies  to
ensure  appropriate preparations  for an  in-depth mid-term  global  review,
undertaking  intensive  consultations   notably  with  the   United  Nations
Development Programme  (UNDP) and the  relevant regional commissions  during
the  preparatory process  leading  up to  the  High-level  Intergovernmental
Meeting.   As  regards  UNDP, its  Executive  Board  at  its second  regular
session of 1995 in April considered matters relating to the least  developed
countries.    The Administrator  of UNDP  in  this context  reported on  the
efforts made  to  address  the special  needs and  priorities  of the  least
developed countries.   In  its decision  95/12, the  Executive Board,  inter
alia,  requested UNDP to  assist in providing  the necessary  support to the
preparations  for  the mid-term  review  of  the  Programme  of Action  (see
below).    Another  important  provision  concerning  the  least   developed
countries  is  contained  in decision  95/23 by  the  annual session  of the
Executive  Board  in  June  1995  on  successor  arrangements  to  the fifth
programming cycle. The  Executive Board, recognizing the continued  priority
given to  the least developed countries  in resource  allocation, decided to
allocate 60 per  cent of UNDP's programme  resources to the least  developed
countries. 17/

49.   Pursuant to paragraph  14 of  General Assembly resolution  48/171, the
particular  needs and  requirements of  the least  developed countries  have
also been taken  into account by  recent major meetings  and conferences  of
the United Nations system.   Principle 7 of  the Programme of Action adopted
by the International Conference on Population  and Development held at Cairo
from 5 to 13 September  1994 18/ thus states that  the special situation and
needs  of  developing   countries,  particularly  of  the  least   developed
countries,  shall  be given  special  priority.    The  Programme points  to
funding and capacity-building as two key  areas to be addressed specifically
with  regard to the  least developed countries.   The Declaration adopted by
the World Summit  for Social  Development held at  Copenhagen in March  1995
acknowledges the  critical situation  particularly of  Africa and the  least
developed countries, and in  Commitment 7 sets  out a number of measures  to
accelerate the  economic, social  and human  resource  development of  these
countries.  The  Fourth World Conference on Women held at Beijing  from 4 to
15 September  1995 19/ for its part stated that adequate financial resources
should  be committed at  the international  level for  the implementation of
its Platform of Action in the  developing countries, particularly in  Africa
and the least developed countries.  Issues relating  to human settlements in
the  least developed  countries will  be  addressed in  the context  of  the
Second United  Nations Conference  on Human Settlements (Habitat  II), which
is to take place in Istanbul in June 1996. 20/
                  F.  Participation of the least developed countries
                    in the preparatory process

50.  The least developed countries  participated actively in the preparatory
process for the  mid-term global  review, notably  through participation  in

expert group  meetings, preparations  at the  regional level  and taking  an
active  part  in  the  Donor-Recipient  Meeting  in  May-June  1995.   Least
developed  country  participants, inter  alia,  prepared  a number  of case-
studies, which  formed part of the  background documentation  for the expert
groups.   Substantive preparation of and  the attendance  of least developed
country participants at expert group meetings  was made possible through the
financial support of bilateral  donors and multilateral  funding sources, as
indicated above.   Following decision 93/18  of the  UNDP Governing Council,
in which the  Council requested UNDP  to assist in  providing the  necessary
support  to  the preparations  of  the  mid-term  review  and in  mobilizing
funding  for  the   participation  of  least  developed  countries,  and  in
accordance with decision 95/12 of its  Executive Board, UNDP made  available
a  contribution  of  $160,000,  which  was  used  notably  for  enabling the
participation of  representatives of  the least developed  countries in  the
Donor-Recipient  Meeting.     The  participation  of  the  least   developed
countries in  the High-level  Intergovernmental Meeting  itself was  covered
under the arrangements  decided upon by the  General Assembly in paragraph 5
of its resolution 49/98.

51.  The possibility of the least developed countries to participate in  the
annual review of progress  in the implementation of the Programme of  Action
undertaken by the Trade  and Development Board have  been limited by lack of
funding.  In the  absence of regular funding  arrangements for this purpose,
least  developed countries' attendance  has so  far largely  depended on the
provision of  extrabudgetary  resources, which  have  tended  to dry  up  in
recent  years.   A few  donor countries  did however  provide such  support,
enabling  in particular an informal  exchange of views held during the April
1994   session   of  the   Board  on   country-level  experience   with  the
implementation  of the  Programme of  Action,  with  the participation  of a
number  of ministers  and  high-ranking  officials  and experts  from  least
developed  countries.   This  significantly contributed  to  a  constructive
dialogue  with  development  partners and  a  strengthening  of  the  review
exercise.

52.  The least developed countries  continued to consult among themselves on
the implementation of and  follow-up to the Programme  of Action and  on the
preparations  for the  mid-term global  review.   A  meeting was  thus  held
between  ministers and  heads  of delegations  of least  developed countries
participating in  the Trade  and Development  Board session  in April  1994;
they issued a statement on  progress in the implementation of the Programme,
underscoring the importance of the High-level Intergovernmental Meeting  and
adequate  preparatory  activities. The  ministers  of  the  least  developed
countries meeting in New  York later in 1994 during the forty-ninth  session
of the General Assembly considered in depth the preparations for as well  as
the substantive issues before the High-level Intergovernmental Meeting,  and
on 4  October 1994 adopted a declaration on these issues.  21/  Ministers of
least developed countries  also undertook missions  to donor capitals during
the months  preceding the High-level  Intergovernmental Meeting  in order to
sensitize  the donor  community at  the  highest  political level  about the
needs and problems of the least developed countries.

 53.   At the national level, the consultative and aid group and round table
processes have provided the backbone for  implementation of and follow-up to
the Programme of Action, as well as important  inputs for the global  review
process. The  World Bank and  UNDP acted as lead  agencies providing support
for these country review meetings.  During 1994  and the first 10 months  of
1995,  14 consultative  and  aid  groups  and  14  round table  and  similar
meetings were convened by  24 least developed countries,  while a number  of
others  were in the  process of  preparing such  consultations.  Altogether,
close  to 70 country review meetings for least developed countries have been
organized  since  the  adoption  of  the  Programme of  Action.    This  has
represented a major substantial effort by  the least developed countries  to
implement policies in line with the Programme of  Action and to improve  the
effectiveness of external resource use.

Notes

  1/  Report of the Second United Nations  Conference on the Least Developed
Countries, Paris, 3-14 September 1990 (A/CONF.147/18), part one.

  2/  See Legal  Instruments Embodying the Results  of the Uruguay  Round of
Multilateral Trade  Negotiations, done at Marrakesh  on 15  April 1994 (GATT
secretariat, Sales No. GATT/1994-7), vol. 1.

  3/  TD/B/1289 (United Nations publication, Sales No. 91.II.D.3).

  4/    See,  for  instance,  The  Least  Developed  Countries  1995  report
(TD/B/41(2)/4  and   Add.1,  UNCTAD/LDC(1995)  and   Add.1  (United  Nations
publication, Sales No.  95.II.D.2)), and Trade and Development Report,  1995
(TD/B/42(1)/15).

  5/  A/CONF.166/9, chap. I, resolution 1, annex I.

  6/   TD/B/40(2)/11,  UNCTAD/LDC(1993) (United  Nations  publication, Sales
No. 94.II.D.4).

  7/  TD/B/41(2)/4/Add.1, UNCTAD/LDC(1995)/Add.1.

  8/  TD/B/LDC/GR/6.

  9/  TD/B/LDC/GR/2.

  10/  TD/B/LDC/GR/1.

  11/  TD/B/LDC/GR/3.

  12/  TD/B/LDC/GR/Misc.1/Add.4/Rev.1.

  13/  TD/B/LDC/GR/Misc.1/Add.5, parts I to III.

  14/  TD/B/42(1)/9, TD/B/LDC/GR/5 and TD/B/LDC/AC.2/2.

  15/  ACC/1995/11, paras. 12-17.

   16/  Issued as  addenda to TD/B/LDC/GR/Misc.1.  Apart from ECA and ESCAP,
the  following  agencies submitted  reports:    Department  of  Humanitarian
Affairs  of the Secretariat,  ILO, IMF,  ITC, ITU,  UNCHS (Habitat), UNESCO,
UNFPA, UNIDO, UPU, WHO and WFP.

  17/   Earmarkings for  the 48  countries currently  on the  list of  least
developed  countries  amounted  to  58  per   cent  during  the  fifth  UNDP
programming cycle.  Over  the period from 1990 to 1993, the least  developed
countries' share in total UNDP  expenditure recorded as official development
assistance amounted to some 37 per cent.

  18/  A/CONF.171/13 and Add.1.

  19/  See A/CONF.177/20.

  20/  See further  "Compendium on special  measures in favour of the  least
developed countries adopted  since the  Second United Nations Conference  on
the  Least  Developed  Countries"  (TD/B/LDC/GR/7),  prepared as  background
document  for the High-level Intergovernmental Meeting, which  also sets out
special  provisions on  least developed  countries  adopted by  other  major
meetings  and  conferences  of  the  United   Nations  system.    See   also
TD/B/LDC/GR/Misc.1/Add.8 and  TD/B/LDC/GR/Misc.1/Add.9.   Special events  on
least developed  country issues  were arranged  in connection  with some  of
these meetings, e.g., at the World Summit for Social Development.

  21/   The least developed countries  have also  consulted among themselves
on  issues   of  special  concern  to  them  at  other  major  meetings  and

conferences of the United Nations system.


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