United Nations

A/52/279


General Assembly

Distr. GENERAL  

13 August 1997

ORIGINAL:
ENGLISH


                                                        A/52/279
                                                              

General Assembly
Fifty-second session
Item 99 (b) of the provisional agenda*

     * A/52/150 and Corr.1.


        SUSTAINABLE DEVELOPMENT AND INTERNATIONAL ECONOMIC COOPERATION:
           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 - 2      3

II.   RECENT ECONOMIC PERFORMANCE AND POLICY DEVELOPMENTS
      IN THE LEAST DEVELOPED COUNTRIES .....................  3 - 7      3

III.  ARRANGEMENTS FOR THE IMPLEMENTATION, FOLLOW-UP AND
      MONITORING, AND REVIEW OF THE PROGRAMME OF ACTION ....  8 - 31     5

      A. Follow-up at the national level ..................   9 - 10     5

      B. Follow-up at the regional level ..................  11 - 18     5

      C. Follow-up at the global level ....................  19 - 26     8

      D. Other follow-up action ...........................  27 - 31     9

IV.   ACTION BY ORGANS, ORGANIZATIONS AND BODIES OF THE
      UNITED NATIONS SYSTEM ................................ 32 - 58    11

      A. United Nations ...................................  33 - 40    11

      B. Specialized agencies and related organizations ...  41 - 58    13

 V.   INTERNATIONAL SUPPORT MEASURES ....................... 59 - 87    18

      A. External resources ...............................  59 - 64    18

      B. External debt and debt relief ....................  65 - 72    20

      C. External trade ...................................  73 - 87    21

VI.   CONCLUSIONS AND RECOMMENDATIONS ...................... 88 - 94    24


                               I.  INTRODUCTION


1.   The present report has been prepared in response to General Assembly
resolution 50/103 of 20 December 1995, in which the Assembly requested the
Secretary-General to submit to it at its fifty-second session a report on the
implementation of that resolution.  By that resolution the Assembly reaffirmed
the Programme of Action for the Least Developed Countries for the 1990s as the
basis for continuing cooperation between the least developed countries and
their development partners 1/ and endorsed the measures and recommendations
agreed upon at the High-level Intergovernmental Meeting on the Mid-term Global
Review of the Programme of Action. 2/  The Assembly also called upon all
Governments, international and multilateral organizations, financial
institutions and development funds, the organs, organizations and programmes
of the United Nations system, and all other organizations concerned to take
immediate, concrete and adequate steps to implement the Programme of Action,
taking full account of the measures and recommendations of the mid-term global
review.  In the same resolution, the Assembly emphasized the need for national
policies and measures aimed at establishing macroeconomic stability by
rationalizing public expenditure and adopting sound monetary and fiscal
policies so as to ensure a dynamic private sector by such means as providing a
sound legal framework and improving human resources development, living
standards, health and the status of women, and called upon the international
community to provide adequate support thereto.  Further, the Assembly strongly
urged all donor countries to implement fully and expeditiously their
commitments in all relevant areas, including the agreed menu of aid targets
and commitments as set out in the Programme of Action and support to reinforce
structural adjustment reform, as well as the measures agreed upon at the
mid-term global review so as to provide a significant and substantial increase
in the aggregate level of external support for the least developed
countries.3/

2.   In the light of the above, section II below gives an overview of the
recent economic performance of the least developed countries, and the policies
and measures adopted by them in line with the provisions of the Programme of
Action.  Section III sets out the overall arrangements made for the
implementation, follow-up and monitoring, and review of the Programme of
Action; section IV describes in more detail the measures taken by the organs,
organizations and bodies of the United Nations system; and section V presents
available information on international support measures in the fields of
external resources, debt and trade.


            II.  RECENT ECONOMIC PERFORMANCE AND POLICY DEVELOPMENTS
                 IN THE LEAST DEVELOPED COUNTRIES

3.   Over the past several years, many of the least developed countries have
undertaken wide-ranging reform policies and measures, often under
internationally agreed frameworks, for structural and sectoral adjustment.  As
they moved along the path of reform, their objectives became more complex and
ambitious, shifting from the limited concerns of macroeconomic imbalances and
stabilization to the promotion of development by a plethora of market-oriented
reforms, including the improvement of economic efficiency, curbing of public
sector intervention, encouragement of the private sector and liberalization of
the external trade sector.  The resulting improved and sustained macroeconomic
stability in several least developed countries and the good weather conditions
and strength in the international demand for the exports of African least
developed countries are the main reasons for the third year of relatively
strong growth and rising per capita output in the least developed countries.

4.   Preliminary estimates indicate that the growth rates of gross domestic
product (GDP) in the least developed countries for which data are available
averaged 4.7 per cent in 1996. 4/  The growth rate of the African least
developed countries in 1996 was estimated at 4.6 per cent, which implies that
per capita output rose for the second consecutive year, after a very long
period in which per capita output levels declined.  Eleven African least
developed countries achieved growth rates equal to or exceeding 6 per cent,
the target set in the United Nations new Agenda for the Development of Africa
in the 1990s, 5/ while the number of countries whose growth rate was negative
had significantly diminished from seven in 1995 to two in 1996.  There were,
however, significant disparities in performance among individual African least
developed countries.  A number of African least developed countries, which
have consistently implemented economic reforms and have avoided or could
overcome serious political instability and civil strife, have begun to
generate growth rates of 4.5 per cent or more which enabled significant
increases in per capita income to be attained; this group includes Cape Verde,
Lesotho, Malawi, Mauritania, the United Republic of Tanzania and Uganda. In
contrast, least developed countries which have been unable to resolve serious
internal conflicts, maintain political stability or consistently implement the
necessary economic reforms have experienced, at best, continued economic
stagnation and, at worst, economic collapse.

5.   The average growth rate of the Asian least developed countries rose
slightly in 1996 but remained significantly lower than the regional average
for developing countries.  Buoyed by strong growth in agriculture, the economy
of Bangladesh grew at 4.7 per cent in 1996, compared to 4.5 per cent in 1995. 
In the Lao People's Democratic Republic, the economy grew by 6.9 per cent in
1996 compared to 7.2 per cent in 1995.  The economies of Cambodia and Myanmar
grew by 6 per cent in 1996 compared to 7.6 per cent and 9.8 per cent,
respectively, in 1995.  Good weather for agriculture facilitated a marked
acceleration in economic growth in Nepal, from 3.4 per cent in 1995 to 6.1 per
cent in 1996.

6.   Among the Pacific and Indian Ocean island least developed countries,
there was robust growth of over 6 per cent in Maldives, and 4 per cent in
Solomon Islands in 1996.  Haiti, the only least developed country in the
Western hemisphere, experienced an economic slowdown in 1996, with growth in
GDP falling to 2 per cent from 4 per cent in the previous year.

7.   While the overall economic performance in the least developed countries
has improved, poverty remains pervasive and the majority of the population in
the least developed countries suffers from reduced caloric intakes, increased
mortality and morbidity, the re-emergence and spread of disease and lower
school enrolment.


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

8.   The Programme of Action emphasized the importance of effective follow-up
and monitoring mechanisms to support the development efforts of the least
developed countries as crucial to the successful implementation of the
Programme during the 1990s.  Arrangements for the implementation, follow-up
and monitoring, and review of the Programme were built on a three-tier
structure of national, regional and global levels.


                      A.  Follow-up at the national level

9.   At the national level, review arrangements, such as the United Nations
Development Programme (UNDP)-sponsored round-table meetings and the World Bank
consultative and aid groups, organized by the least developed countries with
the support of the respective organizations, 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 least developed countries, as well as for
mobilizing the required resources for their implementation.  In all, about 90
consultative aid groups and round tables or similar meetings were organized
between the adoption of the Programme of Action and early 1997.  While results
in terms of resource mobilization have varied between countries, those
meetings have played an important role in improving aid flows to the least
developed countries and in aid coordination.  An important aspect of the
country review process in recent years has been the attempt to link those
arrangements more closely to national policy-making and programming.

10.  Nineteen of the least developed countries (typically among those with
large populations) had or are having consultative or aid group arrangements
co-sponsored by the World Bank, while most others have had recourse to UNDP-
supported round-table meetings since that aid coordination process was set up
on a broader scale after the first United Nations Conference on the least
developed countries in 1981.  In 1995-1996, consultative or aid groups were
convened for 10 of the least developed countries, while round-table meetings
were held for 7 least developed countries.  Country review activities also
included special meetings of donors and sectoral meetings held in the
recipient countries.


                      B.  Follow-up at the regional level

11.  The Programme of Action for the Least Developed Countries for the 1990s
called upon the regional commissions to contribute to the follow-up process by
addressing, as part of their ongoing work, the needs and problems of the least
developed countries.  Moreover, the regional commissions were asked to
monitor, in coordination with the United Nations Conference on Trade and
Development (UNCTAD), the progress made in economic cooperation among the
least developed countries and other developing countries, particularly those
in the same region, and to organize, on a regular basis, cluster meetings with
all countries concerned in order to improve and strengthen existing
cooperation arrangements at the regional and subregional levels.

12.  From 1997, the activities of the Economic Commission for Africa (ECA) in
favour of the African least developed countries will be carried out in the
context of the new programme orientation, known as "Serving Africa better: 
strategic direction for the Economic Commission for Africa".  Under the
strategic direction, the focus will be on facilitating economic and social
policy analysis, enhancing food security and sustainable development,
strengthening development management, harnessing information for development,
and promoting regional cooperation and integration.  Two issues, relating to
the promotion of women in development and capacity-building, will underpin the
five areas of focus.  Since 33 of the 53 States members of ECA are least
developed countries, special emphasis will be placed on problems of particular
concern to them, such as social development issues, and on strategies to
alleviate poverty.

13.  The following activities were carried out by ECA in each of the above-
mentioned areas:  in collaboration with the World Bank, a forum on
cost-sharing in the social sectors of sub-Saharan Africa was held at Addis
Ababa, from 18 to 20 June 1997, at which most of the Government delegations
were from least developed countries; a regional workshop on poverty
monitoring, measurement and public expenditure in sub-Saharan Africa, held at
Addis Ababa, from 24 to 27 June 1997, at which 4 of the 13 Government
delegations were from least developed countries, namely Ethiopia, Lesotho,
Malawi and Uganda; and, together with the World Bank, a road management
initiative seminar for countries members of the Economic Community of West
African States (ECOWAS) was convened at Abidjan, in June 1997.

14.  Several activities are in preparation:  a study on the problem of
inter-country cooperation in the Zambesi area; a study on the magnitude of
physical impediments (tariff and non-tariff barriers) and their impact on
intra-African trade, and trade and production factors, mobility and regional
development patterns; an evaluation report on the projects of least developed
countries during the Second United Nations Transport and Communications Decade
for Africa, which will be submitted to the Ministerial Conference on Transport
and Communications to be held in November 1997; and a study of the dynamics of
food security, population and environmental conservation, which will focus on
the least developed countries and whose objective is to determine the
interlinkages between population growth and environmental conservation on the
one hand and food security on the other.

15.  The Economic and Social Commission for Asia and the Pacific (ESCAP)
continues to give priority to assisting the 13 least developed countries in
the ESCAP region, in particular, in areas emphasized in the Programme of
Action and the mid-term global review.  An analysis of macroeconomic
performance in these countries appears every year in the Economic and Social
Survey of Asia and the Pacific.  These countries are also given priority in
accessing the United Nations regular programme of technical cooperation and in
benefiting from economic and technical activities offered by other developing
countries of the region.  The Special Body on Least Developed and Land-locked
Developing Countries, established in 1992, is an intergovernmental body which
meets every two years to review and monitor economic and social progress in
the least developed countries and to identify and recommend new policy
measures.  At its fifty-third session, the Commission, in a resolution on the
restructuring of ESCAP, recommended that the Special Body on Least Developed
and Land-locked Developing Countries should meet in 1999 to conduct a final
review of the implementation of the Programme of Action in the Asian and
Pacific region.  In addition, the terms of reference of the five committees of
the Commission require that the special concerns of the least developed,
land-locked and Pacific island developing countries be adequately addressed.

16.  The ESCAP secretariat is executing several projects for least developed
countries in the area of exchange of experience among policy makers in the
least developed countries and with their counterparts from the more advanced
developing countries in the region.  This activity directly responds to the
concerns and recommendations contained in the Programme of Action and the
recommendations of the High-level Intergovernmental Meeting on the Mid-term
Global Review of the Implementation of the Programme of Action.  In addition,
during the period January 1996-March 1997, ESCAP undertook a number of other
activities in favour of the least developed countries, such as meetings,
training courses and fellowships, in areas related to export promotion and
trade facilitation, infrastructure, energy and water, transport facilities,
development of strategies for sustainable agriculture, youth participation in
development and drug demand reduction.  Advisory services were also provided
under the United Nations regular programme of technical cooperation to 11
least developed countries during 1996.

17.  The Economic and Social Commission for Western Asia (ESCWA) has carried
out several studies and reports with respect to the economic and social
situation in Yemen.  The country has also been regularly covered in the annual
survey of economic and social developments in the ESCWA region.  Moreover, it
has been given priority in the area of technical assistance in various
economic and social fields.  During the past four years, a number of research
activities have been undertaken in different socio-economic areas.  During
1996-1997, ESCWA provided technical assistance to Yemen in the preparation of
several technical documents, and in the strengthening of planning and
programming capabilities of relevant ministries, women organizations and
non-governmental organizations.

18.  Action undertaken by the Economic Commission for Latin America and the
Caribbean (ECLAC) has been focused on the systematic analysis of factors
influencing the economic performance of Haiti, with a view to making policy
recommendations and the formulation of projects in priority areas.  As a
result of the restoration of the constitutional civil regime in October 1994,
this work is being followed up in the field by means of periodic mission
contacts with the Haitian authorities, private institutions and bilateral and
multilateral organizations in the country.  Interaction with various
institutions, as well as a regular update of economic performance and
dissemination of its results, have facilitated the formulation of projects by
the Government and several United Nations and inter-American organizations and
agencies.


                       C.  Follow-up at the global level

19.  The Programme of Action and the General Assembly entrusted UNCTAD with
the focal role, at the global level, for the monitoring, follow-up and review
of the implementation of the Programme of Action.  The document adopted by the
United Nations Conference on Trade and Development at its ninth session,
entitled "A Partnership for Growth and Development", 6/ reaffirmed that
mandate.

20.  Issues pertaining to the least developed countries were considered by
the United Nations Conference on Trade and Development at its ninth session. 
The Conference recognized the plight of the least developed countries and the
need to ensure their effective participation in the world trading system.  In
the Midrand Declaration, 7/ member States of the Conference stated that it
should be recognized that countries entered the new rules-based system of the
World Trade Organization (WTO) from very different starting points; that,
accordingly, the impact of globalization and liberalization was uneven; and
that the least developed countries, particularly those in Africa, remained
constrained by weak supply capabilities and were unable to benefit from trade.
It was also stressed in the Declaration that special attention should be paid
to creating an overall enabling environment at a policy and institutional
level for the least developed countries.

21.  The Conference called for action to be taken, as appropriate, to
maximize the opportunities and to minimize the difficulties of the least
developed countries in adjusting to the changes introduced by the Uruguay
Round of multilateral trade negotiations agreements. 8/  Governments were
urged to implement fully and expeditiously the Marrakesh Ministerial Decision
on Measures in Favour of Least Developed Countries.  The Conference also
called for the effective application of the Marrakesh Ministerial Decision on
Measures Concerning the Possible Negative Effects of the Reform Programme on
Least Developed and Net Food-Importing Developing Countries. 9/

22.  The Conference decided that issues relating to the least developed
countries would be considered throughout the intergovernmental machinery of
UNCTAD.  Furthermore, it decided that the responsible entity in the
secretariat of UNCTAD for the least developed, land-locked and small island
developing countries should coordinate the sectoral work, monitor the
implementation of the Programme of Action for the Least Developed Countries
for the 1990s and other relevant United Nations programmes of action and
provide input for review by the Trade and Development Board.  To give
operational content to those decisions, the Secretary-General of UNCTAD
launched a special initiative on the least developed countries comprising both
substantive and operational activities on a cross-sectoral basis throughout
the UNCTAD programme.  The substantive activities include policy research and
analytical work, and are aimed at assisting the least developed countries to
formulate national policies and actions in a changing world, and at
contributing to the policy dialogue between the least developed countries and
their partners in different forums.  The operational activities seek to
provide practical assistance to the least developed countries.  An important
aim of the activities is to strengthen the supply capacities of the least
developed countries in tradeable goods and services.  The Secretary-General of
UNCTAD has established the Office of the Special Coordinator for Least
Developed Countries and the Steering Committee on Least Developed Countries. 
The Steering Committee, which is chaired by the Secretary-General and meets on
a regular basis, is the highest level planning body for the major analytical
and substantive work of UNCTAD on the least developed countries.  Its
objective is to promote, at the policy level, coordination and coherence of
action related to the least developed countries.

23.  In accordance with General Assembly resolution 45/206 of 21 December
1990 and the outcome of the ninth session of the Conference, the Trade and
Development Board conducted, at its forty-third session, the sixth annual
review of the progress made in the implementation of the Programme of Action
for the Least Developed Countries for the 1990s.  As a background document for
the discussion, it had before it The Least Developed Countries 1996 Report. 4/
The Board reaffirmed the outcome of the High-level Intergovernmental Meeting
on the Mid-term Global Review of the Programme of Action and the outcome of
the ninth session of the Conference, as they related to the trade of the least
developed countries and trade-related issues.

24.  The Board emphasized the importance of strengthening the supply capacity
of the least developed countries to produce exportable goods and services on a
competitive basis in order to reap the potential benefits from the Uruguay
Round of multilateral trade negotiations agreements.  It encouraged the
Secretary-General of UNCTAD to elaborate throughout UNCTAD integrated
country-level programmes for selected least developed countries by pooling the
contributions of its Divisions, in accordance with the priorities identified
by the least developed countries concerned.

25.  The Board also called upon UNCTAD to closely collaborate and coordinate
with the organizations concerned, such as WTO, the International Trade Centre
(UNCTAD/WTO) (ITC), the World Bank, UNDP, the United Nations Industrial
Development Organization (UNIDO) and other development organizations, in the
design and implementation of the above activities in order to ensure coherence
in policy advice and support.  In pursuance of that decision, the UNCTAD
secretariat has initiated in Bangladesh, Cambodia, the Gambia and Madagascar
integrated country programmes for strengthening the export supply capacities
of the least developed countries.

26.  The Board requested the UNCTAD secretariat and the three UNCTAD
intergovernmental commissions, in carrying out their tasks, to pay particular
attention to the special needs of the least developed countries.  It also
decided that, in presenting their reports to the Board, the commissions
should, wherever possible, seek to highlight the results of particular
relevance to the least developed countries.


                          D.  Other follow-up action

27.  As the focal point in the United Nations system for monitoring the
implementation of the Programme of Action at the global level, UNCTAD
coordinates and programmes its work with regional commissions and other
organizations within and outside the United Nations system and draws upon the
substantial research and analytical capacity existing in the system on the
social and economic situation of the least developed countries.  It provides
substantive services to the machinery of the Administrative Committee on
Coordination (ACC) on issues relating to the least developed countries,
participates in UNDP round-table meetings and consultative group processes of
the World Bank, and the Paris Club meetings on debt related to the least
developed countries.  It also assists the least developed countries to
undertake consultations among themselves on matters of common interest to them
in the context of the implementation of the Programme of Action, and it
contributes to the work of the Committee for Development Planning related to
criteria used for the identification of the least developed countries.

28.  In setting out the overall arrangements for the review and monitoring of
the progress made in the implementation of the Programme of Action at various
levels, the General Assembly, by resolution 45/206, also decided that the
organizations of the United Nations system should undertake sectoral
appraisals at regular intervals.  A number of organizations have continued to
make arrangements for the required follow-up to the Programme of Action and
the conclusions and recommendations arising from its mid-term review.

29.  By the same resolution, the Assembly recommended that necessary links
should be established between the follow-up to the Programme of Action at the
national, regional and global levels and decided that the Conference, apart
from serving as the focal point for follow-up at the global level, should
continue to provide support at the national and regional levels.  In the
context of establishing the necessary links between follow-up at the national
and global levels in particular, the UNCTAD secretariat has been requested to
participate in and contribute to the country-review process mentioned in
paragraph 141 of the Programme of Action.  In response to those provisions,
UNCTAD participated in round-table meetings held in 1996 and 1997.  It also
participated in the fifty-third session of ESCAP, the fourth session of the
ESCAP Special Body on Least Developed and Land-locked Developing Countries,
and in the thirty-second session of ECA.  Participation in those meetings
provided an opportunity to brief the ECA and ESCAP secretariats on various
activities undertaken by UNCTAD, in particular the integrated country
programmes in Asian and African least developed countries.  They were also
briefed on arrangements for the high-level meeting on the integrated
initiatives for the trade development of the least developed countries, which
is scheduled to be held on 27 and 28 October 1997.  It was agreed that UNCTAD
would convene a meeting with representatives of ECA and ESCAP after the
adjournment of the forty-fourth session of the Trade and Development Board in
October 1997 in order to discuss matters of mutual cooperation in preparing
for the third global review of the Programme of Action.

30.  In accordance with the recommendation of the ninth session of the
Conference, the Secretary-General of UNCTAD established the Trust Fund for the
Least Developed Countries.  The Trust Fund, which came into operation in early
1997, will facilitate new activities in the four main areas of work of UNCTAD,
namely:  globalization and development; international trade in goods and
services, and commodity issues; investment, enterprise development and
technology; and services infrastructure for development and trade efficiency. 
The Governments of France, India, the Republic of Korea, the Netherlands and
Switzerland have made contributions or pledges to the Trust Fund.

31.  In cooperation with UNIDO, UNCTAD organized a pilot seminar on the
mobilization of the private sector in order to encourage foreign investment
flows towards the least developed countries.  The Seminar, which was held at
Geneva from 23 to 25 June 1997, discussed policy issues related to the
establishment of foreign equity funds in the least developed countries and
recommended that the Trade and Development Board consider, as a follow-up, the
convening of regional expert seminars on issues identified during the pilot
seminar, such as the flow of information on investment opportunities and
improvement of financial infrastructure.


            IV.  ACTION BY ORGANS, ORGANIZATIONS AND BODIES OF THE
                 UNITED NATIONS SYSTEM                            

32.  In its resolution 50/103, the General Assembly, inter alia, called upon
international and multilateral organizations, financial institutions and
development funds, the organs, organizations and programmes of the United
Nations system, and all other organizations concerned to take immediate,
concrete and adequate steps to implement the Programme of Action, taking full
account of the measures and recommendations of the mid-term global review so
as to ensure sustained economic growth and sustainable development in the
least developed countries and to enable them to participate in and benefit
from the process of globalization and liberalization.


                              A.  United Nations

33.  United Nations technical cooperation activities undertaken through the
Department for Development Support and Management Services of the United
Nations Secretariat were focused heavily on support to the least developed
countries.  The Department has taken steps, within the framework of the
Programme of Action and the measures and recommendations of the mid-term
global review, to assist the least developed countries in achieving
sustainable economic development and growth and to assist them to participate
in and benefit from the process of globalization and liberalization.  More
than two thirds of the total of expenditures of the Department were in
relation to programmes and projects in the least developed countries.  The
Department provided technical support to the least developed countries in
economic and social areas, and executed a number of regional projects on
peace, reconciliation and the rehabilitation of African least developed
countries.  It has also provided technical assistance to a number of least
developed countries in areas such as the management of water resources,
minerals, energy financial management, public enterprises, privatization and
environmental issues.

34.  The Disaster Reduction Division of the Department of Humanitarian
Affairs of the United Nations Secretariat organized, financed and conducted
subregional workshops on natural disaster reduction in 1994 and 1995, with
participants from 48 African States drawn from Governments, non-governmental
organizations, university research entities and specialized agencies of the
United Nations system.  They examined strategies to manage the prevailing
natural hazards and thereby ensure food security and social stability, by
arresting land degradation, minimizing the effects of drought and insect
infestations, desertification control, better food and epidemic management.

35.  Progress has been made with regard to the exchange of information,
raising awareness and the general recognition of needs in the fields of
natural hazard assessment, vulnerability analysis, and the formulation of
reduction strategies.  A crucial gap remains with regard to the effective
integration of disaster reduction into national development planning,
bilateral or multilateral development strategies, and programmes and projects
at all levels, and - most importantly - with regard to the availability of
adequate financial support for the least developed countries for those
purposes within the context of official development assistance (ODA).

36.  There are strong similarities in the priorities identified in the United
Nations New Agenda for the Development of Africa in the 1990s and the Programm
of Action for the Least Developed Countries for the 1990s and the
recommendations made in their respective mid-term reviews, particularly as
they relate to creating a positive external environment for development.  In
view of the above, the Special Coordinator for Africa and Least Developed
Countries, Department of Economic and Social Affairs of the United Nations
Secretariat, has been very proactive in numerous forums in raising issues
related to the need for the international community to assist in easing the
debt burden faced by African countries, encourages foreign investment in
Africa, expand market access and assist countries to diversify their export
base.  The Special Coordinator has also jointly organized a number of
symposiums, workshops, expert group meetings and meetings in areas such as
peace and development, the role of the informal sector in Africa, recovery and
development, indicators of sustainable development and evaluation of special
measures in favour of the least developed countries in Agenda 21. 10/

37.  The United Nations Centre for Human Settlements (Habitat) is currently
undertaking operational activities at the country level in 28 least developed
countries, which contribute, both directly and indirectly, to socio-economic
recovery and sustainable human development.  The activities are mainly
concerned with capacity-building programmes to address the increasing problems
of urban poverty and the consequent deterioration of the living environment
experienced by most least developed countries.  In least developed countries
affected by conflict, Habitat's major rehabilitation programmes provide direct
support to affected communities and promote the indigenous capacity to develop
longer-term support to human settlements development.  Capacity-building
programmes at the local government and community level in Bangladesh,
Cambodia, Djibouti, Eritrea, Haiti, Madagascar, the Lao People's Democratic
Republic, Myanmar and Somalia are directly concerned with strengthening the
ability of local governments to work in partnership with communities in order
to improve living conditions and create job opportunities through the
construction and maintenance of urban basic services.  Support provided by
Habitat to the Governments of Bhutan, Burkina Faso and Nepal, is focused on
maximizing the potential advantages for rural development of a reciprocal
relationship between urban centres and their rural hinterlands.  Habitat
supported 34 least developed countries in their efforts to prepare national
plans of action for the United Nations Conference on Human Settlements
(Habitat II), and is currently formulating the Habitat Special Programme for
Africa which will focus on capacity-building in African countries and in
particular for implementing national plans of action.

38.  The United Nations Environment Programme (UNEP) has provided technical
and capacity-building assistance in state-of-the-environment assessment
reporting and associated data and database management to a number of the least
developed countries.  Since 1993, the environmental and natural resources
information networking (ENRIN) project has assisted a number of developing
countries, including least developed countries, in the definition of
assessment, reporting and data and database management needs, the formulation
of projects to meet those needs, and technical assistance in project
implementation funding where funding has been secured.  It has also promoted
the strengthening of subregional intergovernmental organizational networks to
exchange information for environmental management purposes.

39.  Since 1990, UNEP has assisted many least developed countries throughout
the world in the development and implementation of environmental legislation,
and has provided training in environmental policy and law.  The continuing
work of UNEP at the global and regional levels relating to building an
intergovernmental consensus on environmental issues and the action required to
deal with them effectively, as well as promoting the implementation of
environmental agreements and conventions, is of great relevance for better
environmental management and promoting sustainable development in the least
developed countries.

40.  The United Nations Children's Fund (UNICEF) is currently in the process
of modifying its system for the allocation of general resources to country
programmes.  Under the proposed system, the share of general resources for
programmes allocated to the least developed countries would increase
significantly from its current level of 44 per cent.  Most of the benefits
would accrue to the countries in sub-Saharan Africa.  The proposal is expected
to come into effect in 1999.  The Fund is a strong advocate of the 20/20
initiative, which is aimed at mobilizing the additional resources needed from
the national budget and official development assistance to achieve the
internationally agreed social goals adopted at the World Summit for Social
Development and other international conferences convened during the first half
of the 1990s.  The Fund supports the follow-up to the 1996 Oslo Conference on
the implementation of the initiative by supporting several country studies on
the 20/20 initiative, mainly in the least developed countries.  The Fund has
facilitated initiatives to alleviate the debt burden by introducing
debt-for-development swaps in several least developed countries, including
Madagascar, the Sudan and Zambia.  It has also supported innovative schemes
which can give women increased access to credit.  Further, UNICEF is
envisaging a number of country studies, including studies in the least
developed countries, to assess the impact of globalization on the social
sectors, in particular on the well-being and rights of children and women.


              B.  Specialized agencies and related organizations

41.  The World Bank, the lead agency for consultative group meetings, is a
major source of multilateral assistance to the least developed countries. 
Almost all of the least developed countries fall into the Bank's category of
low-income countries and are thus eligible for financing on the highly
concessional terms of the International Development Association (IDA).  Total
IDA lending to the least developed countries amounted to about US$ 1.8 billion
in 1995.  Agreement was reached in March 1996 on the eleventh replenishment of
IDA, amounting to US$ 22 billion.  Donor countries will provide US$ 11
billion, while the balance would come from repayments of IDA credits, past
contributions and income from the operations of the World Bank.  The special
commitment of IDA to Africa, including the 33 African least developed
countries, within its overarching objective of poverty reduction was
reaffirmed.  Private sector growth and social and environmental sustainability
were emphasized as the foundations of effective poverty reduction, and
recipient countries were called upon to improve governance and to broaden
participation by the poor in development.  Access to primary education, clean
water, health services and basic infrastructure were stressed as vital to the
emergence of families from poverty.

42.  The four main areas of action by the World Intellectual Property
Organization (WIPO) with regard to the implementation of the Programme of
Action for the Least Developed Countries for the 1990s are:  reducing the
financial burden; development of human resources; enhancement of cooperation
between the least developed countries and other developing nations; and
facilitating the transfer of technology.  During 1994 and 1995, WIPO officials
or consultants provided technical assistance to the majority of the least
developed countries, and more than 180 officials from 35 least developed
countries benefited from the WIPO training programme.  During the biennium
1996-1997, particular emphasis is being placed on long-term training,
automation of intellectual property administration and enhancing the role of
the intellectual property system in technological, economic, cultural and
environmental development.  Accordingly, special attention is increasingly
being given to the development of human resources, facilitating the creation
or improvement of national or regional legislation, institution-building, and
developing capacities and infrastructure for the management and exploitation
of intellectual property rights.

43.  The International Trade Centre UNCTAD/WTO has assigned top priority to
the trade promotion needs of the least developed countries within the
framework of the globalization of the market and the new international trading
environment created by the Uruguay Round of multilateral trade negotiations
agreements.  Programmes for the least developed countries have focused on
business enterprises and institutions and their adjustment to the new system,
and on national capacity-building to take advantage of new market
opportunities.  In that regard, technical cooperation programmes with the
least developed countries were designed to address those critical needs.  The
Centre has so far organized 15 seminars and workshops on the Uruguay Round
agreements for least developed countries, and more events are planned for 1997
and 1998.  It also continues to pursue integrated trade promotion programmes
for the least developed countries, in close collaboration with other relevant
agencies, notably UNCTAD and WTO.

44.  The activities of the World Meteorological Organization (WMO) are
closely related to the component of the Programme of Action for the Least
Developed Countries on development, particularly expansion and modernization
of the economic base.  Under that activity, action for the environment and
disaster mitigation, preparedness and prevention is directly in line with the
technical cooperation programme of WMO.  This programme comprises, mainly, the
organized transfer of meteorological and hydrological knowledge and proven
methodology among the members of the organization, with the overall objective
of enabling the national meteorological and hydrological services of members
States, especially the least developed and other developing countries, to
provide the best possible level of services so as to ensure public safety,
management of water resources, support sustainable socio-economic development
and safeguard the environment.  The programme also provides equipment and
spare parts, expert services, long-term and short-term fellowships, training
and seminars.  Each year about 130 countries, including the least developed
countries, benefit from the programme.

45.  Most of the least developed countries, being low-income food-deficit
countries, benefit directly and indirectly from the wide range of technical
activities of the Food and Agriculture Organization of the United Nations
(FAO) in the areas of agriculture, fishery and forestry.  Of the 30 crop and
food supply assessment missions carried out in 1996 within the framework of
the FAO Global Information and Early Warning System, 21 were fielded to the
least developed countries.  Many least developed countries also benefit from
FAO work on the agro-econological zone (AEZ) database and Geographic
Information System (GIS).  Through its Special Relief Operation Service, FAO
responds to requests for emergency assistance in agriculture, forestry,
fisheries and animal production and health submitted by countries affected by
natural or man-made disasters.  In 1996, 57 requests for humanitarian
emergency assistance were approved, with a total budget of US$ 26.3 million,
of which US$ 7.5 million was for 15 least developed countries.  The pilot
phase of the Special Programme for Food Security (SPFS), which came into
operation in 1994, and which is aimed at helping low-income food-deficit
countries, covers 13 least developed countries.  Programmes in four least
developed countries have either been formulated or are under preparation.  The
plan is to extend the coverage, upon request, to all 87 low-income food-
deficit countries, which include all of the least developed countries.

46.  During the period January 1996-May 1997, 14 agriculture projects in the
least developed countries, prepared with substantial input from the FAO
Investment Centre, were approved for financing, mainly by the International
Fund for Agricultural Development (IFAD), IDA and the African Development
Bank.  The Investment Centre also assisted least developed countries in
completing the preparation of a further five projects for eventual approval
and funding by financing institutions.

47.  Many least developed countries have benefited from the FAO programme
directed at improving nutrition and food quality and safety, including for
export.  After the conclusion of the Uruguay Round of multilateral trade
negotiations, the FAO programme of work on policy assistance on the impact of
changes in the external trading environment for agricultural commodity markets
and implications for individual countries, in particular the least developed
countries, was intensified and, in that connection it offers, in collaboration
with the World Bank and WTO, sponsored regional workshops to review the basic
provisions of the Uruguay Round of multilateral trade negotiations agreements
and to consider specific issues of interest, such as commodities of export
interest, the relationship of food security concerns to structural adjustment
programmes, and the impact on small farmers.  By early 1997, a total of 19
least developed countries had benefited from technical assistance of this
nature.

48.  In the fisheries sector, FAO has provided direct technical assistance to
almost two thirds of the least developed countries.  This activity has been
intensified, particularly since the adoption of the Programme of Action for
the Least Developed Countries for the 1990s.  In the area of forestry,
activities in institution-building and capacity-building, planning and
programming have been carried out in several least developed countries.

49.  The International Civil Aviation Organization (ICAO) has provided, in
the 1990s, assistance in relation to the various aspects of civil aviation to
22 least developed countries in Africa and Asia, with due emphasis on air
transport safety and sustainable human resource development.  In addition,
ICAO has prepared many project documents for future assistance to the least
developed countries and is seeking the financial resources to implement them.

50.  The Administrative Board of the Universal Postal Union (UPU) adopted, in
October 1996, the Programme of Action in favour of the least developed
countries for 1996-1999.  This Programme of Action comprises a number of
workshops and consultancy missions to the least developed countries in the
areas of postal development, postal security and international postal
accounting.  In 1996, a number of technical assistance activities were
provided by UPU to these countries within the framework of this Programme of
Action.  Moreover, UPU also implemented a number of projects financed by UNDP
in Cambodia, Haiti, Kiribati, the Lao People's Democratic Republic, Nepal, Sao
Tome and Principe, the United Republic of Tanzania and Yemen.  Training
activities organized or envisaged in 1997 by UPU, from which the least
developed countries will also benefit, are in the areas of postal development,
postal security, service quality, and planning of human resources.  Moreover,
within its programme of technical cooperation for 1996-2000, UPU is
implementing 25 multi-year projects in favour of the least developed
countries.

51.  The financial resources of the International Monetary Fund (IMF) are
made available to member countries through various facilities.  During 1996,
gross disbursements of concessional resources from IMF to the least developed
countries totalled SDR 240 million, and net disbursements SDR 14 million.  As
at end-April 1997, the outstanding use of IMF resources under all facilities
by the least developed countries, including non-concessional resources,
totalled SDR 4.2 billion.  The Fund has provided its member countries,
including the least developed countries, with technical assistance and
training in the following areas:  (a) advice on the design and implementation
of macroeconomic policy measures; (b) support for institution-building; (c)
improvement of the quality and timeliness of statistical information; and (d)
training of officials.

52.  In addition to providing policy advice, financial and technical
assistance, IMF has been catalysing additional financial and technical
assistance, including debt relief, from other donors since the successful
implementation of adjustment programmes is dependent on the timely
availability of external financing in an appropriate amount and form. 
Adjustment programmes under the Enhanced Structural Adjustment Facility (ESAF)
have been supported by increasing the disbursement of aid from multilateral
and bilateral donors.  In addition, further progress has been made in recent
years in debt rescheduling on concessional terms and debt forgiveness.  The
Fund and the World Bank have initiated the heavily indebted poor countries
(HIPC) initiative 11/ which was first implemented in April 1997, and which
envisages exceptional assistance to a qualifying country from all its
bilateral and multilateral creditors to reduce the current value of the
country's debt to a sustainable level.

53.  Of particular relevance to the least developed countries is the
increasing attention that has been paid in recent years to the social impact
of adjustment programmes.  Policy framework papers associated with ESAF-
supported programmes have included a discussion of the social impact of
adjustment and in many cases mitigating social measures.  Social policies are
also increasingly incorporated as an integral part in the design of programmes
supported by IMF, and targets for spending on basic social services,
particularly in primary health and education, are specified.  Under the HIPC
initiative, programmes supported by IMF and the World Bank for countries
qualifying for assistance are expected to emphasize social policies, including
the improvement of the quality of social expenditure, strengthening of
institutional capacity and the delivery of basic social services.

54.  The intensified cooperation with countries in greatest need (IWC)
initiative of the World Health Organization (WHO) was launched in five
countries in 1990.  Since then, there has been a slow but steady expansion in
the number of countries participating.  The IWC initiative is country-specific
and is multisectoral and capacity-building in approach.  It is aimed at
ensuring the most effective use of all three levels of WHO support (country,
regional and global) in each country, by assisting in the creation of
comprehensive country strategies and plans, promoting intersectoral action in
support of health sector development, and addressing specific country
problems, especially those related to poverty alleviation and the protection
of disadvantaged groups.

55.  By 1996, IWC comprised more than 30 of the world's poorest countries,
mostly least developed countries.  Pursuant to the resolution in 1996 by the
governing bodies of WHO to expand the initiative to embrace at least
40 countries, there has been many requests for participation.  This expansion
has, however, been limited by lack of funds.  Up to 1997, 35 least developed
countries had taken part in the initiative.

56.  In accordance with its medium-term strategies for the period 1996-2001,
the United Nations Educational, Scientific and Cultural Organization (UNESCO)
has assigned the least developed countries priority as beneficiaries of its
activities and will allocate to them an important part of its resources. 
Since 1996, all UNESCO programmes have important activities of direct interest
to the least developed countries.  Furthermore, specific programmes in favour
of the least developed countries are being implemented in the major areas of
competence of UNESCO.  In the field of education, the least developed
countries have benefited from activities under the following programmes: 
widening access to basic education; improving the quality and the relevance of
basic education; general and professional education; and higher education and
development.  In the area of development and social sciences, activities were
undertaken in least developed countries in the areas of social transformation
and development, and youth and social development.  In the field of culture,
and in the context of the World Decade for Cultural Development, UNESCO, in
cooperation with the United Nations Institute for Economic Development and
Planning at Dakar, has initiated a special training project on culture and
development.  Assistance was provided to several least developed countries in
the area of protection of sites, monuments and cultural properties.

57.  The least developed countries have also benefited from UNESCO activities
in the areas of communication, information and informatics.  Activities in
favour of the least developed countries have been undertaken in the context of
the following programmes:  towards a peace culture; contribution to the
elaboration of national strategies for the elimination of poverty;
contribution to meeting basic needs; contribution to the access to productive
resources; and contribution to the access to credit and to access to
information.

58.  The programme for the least developed countries enjoys fundamental
priority in UNIDO and constitutes one of the seven thematic priorities of the
organization.  Furthermore, the programmes and special measures for the least
developed countries are regularly reviewed, discussed, amended and approved by
all Ministers of Industry of the least developed countries during their
biennial symposium, held in conjunction with the General Conference of UNIDO. 
The recommendations of those symposiums, after endorsement by the General
Conference, establish the action programme of industrialization of the least
developed countries.  The fourth ministerial symposium will be convened at
Vienna, from 27 November to 5 December 1997.  The organization has also
cooperated with UNCTAD in the organization of the pilot seminar on the
mobilization of the private sector in order to encourage foreign investment
flows towards the least developed countries.


                      V.  INTERNATIONAL SUPPORT MEASURES

                            A.  External resources

59.  The commitment by the international community, particularly the
developed countries, to enhance aid to the least developed countries in order
to achieve a significant and substantial increase in the aggregate level of
external support to those countries, was one of the key provisions in the
Programme of Action for the Least Developed Countries for the 1990s.  To that
end, a set of alternative aid targets and commitments were adopted to
encourage donor countries to increase their efforts and improve their aid
performance vis-a`-vis the least developed countries.  Since 1990, however, a
number of major international and humanitarian crises, a global economic
downturn, and domestic preoccupations and budgetary pressures in a number of
the donor countries have dominated aid policies.

60.  Resource flows to the least developed countries have remained stagnant
in current dollar terms so far throughout the 1990s, and have diminished in
real terms.  The share of aid to the least developed countries in the combined
gross national product (GNP) of the Development Assistance Committee (DAC)
donor countries has dropped from 0.09 per cent in 1990 to 0.06 per cent in
1995.  Collectively, donors have failed to meet the special aid targets and
commitments for the least developed countries set out in the Programme of
Action.

61.  Few of the DAC donor countries have improved their performance with
regard to the aid targets for the least developed countries since 1990; in
most of these countries, the share of aid to the least developed countries in
GNP was lower in 1995 than in 1990.  However, four DAC countries continue to
meet the 0.20 per cent target:  Norway (the top performer with a percentage
share of aid to the least developed countries of 0.31 per cent of GNP in
1995), Denmark, the Netherlands and Sweden.  In volume terms, Japan, the
United States of America, France and Germany were the largest sources of ODA
to the least developed countries in 1995.

62.  In recent years, new resource flows to the least developed countries
have consisted mostly of ODA from DAC sources, such flows reaching a level of
US$ 16.6 billion in 1995.  Since there was a net outflow of non-concessional
resources from the least developed countries totalling US$ 0.6 billion, the
recorded total flow of external resources to them amounted to US$ 16 billion
on a net basis.  Official flows other than ODA have diminished in importance
as DAC countries, as well as international financial institutions, have
shifted to providing mainly concessional finance to the least developed
countries.  Developments in external financing for developing countries as a
whole, characterized by a steady increase in private investment and in total
resource flows, have hardly affected the least developed countries at all. 
There has been no perceptible increase in private financing flows to the least
developed countries, with the contribution of private capital remaining modest
and fluctuating from year to year.

63.  The trends in resource flows to the least developed countries reflect
the decline in total ODA (to all developing countries) from DAC donor
countries.  The share of total ODA in the GNP of DAC countries dropped
sharply, from 0.33 per cent in 1992 to 0.27 per cent in 1995.  According to
preliminary estimates, that share declined further to 0.25 per cent in 1996,
the lowest ratio recorded since the United Nations adopted in 1970 the overall
ODA target of 0.7 per cent of donor country GNP.  Details about the
geographical distribution of 1996 flows are not yet available but unless there
has been a significant shift in aid allocations to the poorest countries, a
further deterioration in aid performance vis-a`-vis the least developed
countries may well have taken place in 1996.

64.  The external financing requirements of the least developed countries
remain high because of the urgent need to overcome structural constraints and
low human resource development.  Securing an adequate share of available ODA
resources, enhancing aid effectiveness and lessening aid dependency over time
are the major challenges confronting the least developed countries in the
future.  Attracting assistance from countries other than DAC members and
promoting the flow of foreign private investment to the least developed
countries should be given high priority in view of the sluggish outlook for
ODA from DAC countries.


                       B.  External debt and debt relief

65.  The external debt situation of the least developed countries remains a
cause for serious concern.  With scheduled debt service payments estimated to
be in the order of one third of the aggregate export earnings of those
countries, external debt-servicing obligations continue to be an important
drain on resources and clearly exceed the capacity to pay of many of the least
developed countries.  As a consequence, they have accumulated massive payments
arrears.  The debt overhang compounds the pressures on the least developed
countries attempting to implement structural adjustment programmes and tends
to inhibit growth, as well as to dampen prospects for private capital inflows.

66.  From the end of 1990 to the end of 1995, the outstanding external debt
of the least developed countries increased by some US$ 20 billion, or 18 per
cent, to US$ 135 billion.  Most of the increase was due to new concessional
lending by the international financial institutions.  The total multilateral
debt of the least developed countries increased from US$ 38 billion at the end
of 1990 to US$ 55 billion at the end of 1995.  Bilateral long-term debt to
countries members of the Organisation for Economic Cooperation and Development
(OECD) and the Organization of Petroleum Exporting Countries (OPEC) decreased
slightly over the same period as a result of limited new lending and of debt
relief operations.

67.  The actual debt service payments made by the least developed countries,
which had reached US$ 5.8 billion in 1989, fell steadily during the ensuing
four years and remained far below the scheduled debt service. 
Correspondingly, the debt service ratio for the least developed countries as a
group decreased, from 29 per cent in 1989 to 14 per cent in 1993 and 1994. 
This reflected difficulties in payment, as the debt service actually paid fell
short of the scheduled debt service.  Aggregate debt service payments by the
least developed countries increased to US$ 6.4 billion in 1995, mainly as a
result of repayments and clearance of arrears by Zambia as this country
completed its rights accumulations programme with the IMF.  Debt service
payments by other least developed countries, however, increased.  As a group
they paid US$ 3.7 billion in external debt service in 1995, compared with US$
2.9 billion in 1994.  Excluding Zambia, debt service on multilateral debt made
up just over 40 per cent of debt service payments made by the least developed
countries in 1995.

68.  Various debt relief schemes continue to be implemented.  Since
December 1994, the Paris Club has applied Naples terms to the rescheduling of
the bilateral official debt of the poor and heavily indebted countries.  The
Naples terms offer a reduction of up to 67 per cent of the present value of
eligible debts.  By mid-1997, 19 least developed countries had obtained a
restructuring of their debts under the Naples terms.  Four of those agreements
concerned the reduction of eligible debt stocks.

69.  An important development in debt relief for the least developed
countries came at the annual meetings of the World Bank and IMF in September
1996, with the endorsement of the heavily indebted poor countries (HIPC)
initiative. 11/  This initiative provides a useful framework for implementing
a strategy of burden-sharing among all creditors to reduce the debt of heavily
indebted poor countries to sustainable levels.  Debtor countries will have to
show a track record of sustained strong policy performance, in principle over
a six-year period.  There are 29 least developed countries in the group of the
41 countries that have been identified as heavily indebted poor countries.

70.  The HIPC initiative builds on the existing mechanisms for providing debt
relief, particularly the Paris Club.  Other bilateral and commercial creditors
are required to provide debt relief comparable to the treatment provided by
the Paris Club.  Where existing mechanisms would not permit the achievement of
sustainability upon completion of a first stage of adjustment and reform,
enhanced action under a second stage is envisaged.  Paris Club creditors have
indicated a willingness to provide debt reduction up to 80 per cent in net
present value terms on a case-by-case basis during this stage.  Multilateral
creditors will also provide additional support and relief.  The World Bank has
established an HIPC trust fund for financing the scheme, and has earmarked
US$ 500 million as its own initial contribution to the fund.  The IMF
Executive Board in early 1997 also agreed on the modalities for IMF
participation in the initiative through the Enhanced Structural Adjustment
Facility.

71.  As the first beneficiary, the eligibility of Uganda for assistance under
the HIPC initiative was approved in April 1997.  The eligibility of Burkina
Faso might also be considered in 1997.  Other heavily indebted poor countries
will be considered on a case-by-case basis but because of the requirement for
a long track record of policy performance, only a few least developed
countries appear likely to benefit from the scheme during the current decade.

72.  Another recent development in the field of external debt of particular
relevance for the least developed countries is the understanding reached
between the Russian Federation and the Chairman of the Paris Club in
connection with the Denver Summit of Eight, held in June 1997, on the
principles for the accession of the Russian Federation to the Paris Club as a
creditor country.  Provisions for adjustment in the amounts of outstanding
obligations would have important implications for a number of least developed
countries which owe substantial debts to the Russian Federation.


                              C.  External trade

73.  At the beginning of the 1990s, the share of the least developed
countries in both world exports and imports fell by one half and one third
from the already meagre levels of 0.6 per cent and 1.0 per cent, respectively,
in 1980.  Moreover, the ratio of their exports to GDP fell from over 17 per
cent to 14 per cent during the same period.  On average, the export patterns
of the least developed countries have changed little over the past five years.
Contrary to other successful developing countries, the least developed
countries have not shared in the dynamism of export-led industrial growth: 
their share of manufactures in their total export has even decreased, from 44
per cent in 1990 to 38 per cent in 1995.

74.  This deterioration in the foreign trade situation of the least developed
countries has persisted throughout a period when many least developed
countries have been engaged in major structural adjustment programmes and
trade policy reforms.  In many cases, the least developed countries have
devalued their currencies, liberalized their import policies and exchange
restrictions, reduced their tariffs, and reformed their trade policy
institutions, instruments and procedures.  Several least developed countries
have recently opened up to world trade and now generally rely much more on
market mechanisms.

75.  Globalization and liberalization have increased the potential for
international trade to become an unprecedented engine of growth and an
important mechanism for integrating countries into the global economy.  These
processes offer the least developed countries important long-term
opportunities to reverse the economic decline that they have experienced over
the past two decades but they also raise serious concerns for them.  More than
any other group of countries in the world, the least developed countries, with
only a few exceptions, have become marginalized from the mainstream of global
economic activity and from sharing in its benefits.  Globalization may do
little to alleviate the trend towards marginalization and, without adequate
international support measures, may accentuate it.

76.  It is thus encouraging to note that the trading opportunities of the
least developed countries have been significantly enhanced by the
improvements, made subsequent to the Uruguay Round of multilateral trade
negotiations agreements, by major developed countries in their Generalized
System of Preferences (GSP) schemes in favour of these countries. 
Improvements were also made in the trading regimes applied under special
preferential arrangements, such as the Lome' Convention and the Caribbean
Basin Economic Recovery Act, for the least developed countries and other
developing countries participating in such arrangements.

77.  In May 1997, the Government of the United States of America introduced
substantial changes into its GSP in favour of the least developed countries. 
It now grants duty-free access to more than 1,700 new products, specially in
favour of designated least developed countries.  This measure substantially
expanded duty-free access to the United States market for a wide range of
agricultural products, petroleum and petroleum products and industrial sectors
not considered as sensitive.  It also covers almost all food and processed
food and fishery products, provided that imports find a place within the
tariff quotas.  This new facility is likely to create substantial new trading
opportunities for the least developed countries.  According to the indications
provided by the Government of the United States of America, the new
concessions for the least developed countries cover additional imports from
African least developed countries of about US$ 2.5 billion.

78.  Instruments applied by the European Union in favour of the least
developed countries have undergone important changes after the Uruguay Round
of multilateral trade negotiations.  The provisions of the Lome' Convention
for duty-free and preferential market access for the African, Caribbean and
Pacific (ACP) Group of States have recently been substantially expanded to
include some sensitive agricultural products.  Imports of industrial products
and raw materials are already duty-free and benefit from relatively flexible
rules of origin.  Product specific tariff quotas and ceilings have been
abolished.  Instead, the European Union introduced a system of modulated
tariff preferences.

79.  The Government of Norway has substantially enlarged the coverage and
treatment of agricultural products in favour of the least developed countries.
Access is duty-free and quota-free for all agricultural products, except
flour, grains and feeding stuffs, for which a 30 per cent preference is
granted within indicative tariff ceilings.

80.  Other preference-giving countries, in particular Canada and Switzerland,
have also substantially revised their GSP schemes and expanded GSP benefits to
a large number of new products.  In Japan, the GSP provides for duty-free
access for most industrial products imported from the least developed
countries.

81.  The World Trade Organization Ministerial Conference, held at Singapore
in December 1996, adopted the Comprehensive and Integrated WTO Plan of Action
for the Least Developed Countries.  The Plan of Action includes measures in
the areas of capacity-building and market access, and envisages, in
particular, closer cooperation between WTO and other multilateral agencies
assisting the least developed countries.  The Ministers agreed to organize a
meeting with UNCTAD and ITC as soon as possible in 1997, with the
participation of aid agencies, multilateral financial institutions and least
developed countries to foster an integrated approach to assisting these
countries in enhancing their trading opportunities.  A high-level meeting on
the integrated initiatives for the trade development of the least developed
countries is scheduled for 27 and 28 October 1997.  Several intergovernmental
and inter-agency preparatory meetings have also been convened.  The high-level
meeting will provide an opportunity for WTO members to announce, on an
autonomous basis, the measures they are taking to enhance access for imports
from the least developed countries.  The meeting is also expected to adopt an
integrated framework for technical assistance to support the least developed
countries in their trade and trade-related activities.

82.  In following up these commitments, the Government of the United States
of America and the European Union have recently put forward proposals for
further action in favour of the least developed countries in order to improve
their export opportunities and investments.

83.  The Government of the United States of America proposed a new Africa
initiative with three components:  the new concessions in favour of the least
developed countries within the United States GSP scheme mentioned above; the
establishment of a fund of US$ 150 million to promote, through the Overseas
Private Investment Corporation, private investment in Africa; and the
establishment of another fund of US$ 500 million to support infrastructural
programmes in the region.  This support is intended for African countries that
pursue sound economic policies and establish open markets.

84.  In June 1997, the Council of the European Union called for a further
commitment by WTO members, including the main trading partners and advanced
developing countries, to grant the least developed countries duty-free access
with simplified rules of origin and to present proposals on the basis of the
WTO Plan of Action for further opening their markets that should be comparable
to the market access offered by the European Union.

85.  The Council called for the further analysis of the possibility of
considering a consolidated preferential scheme to which all members of WTO
were committed.  The Council strongly supported the comprehensive approach
pursued in the WTO Plan of Action.

86.  The Council agreed on immediate new measures by the European Union to
improve market access for the least developed countries.  The Council will
establish an equivalent treatment for all other least developed countries to
the preferential treatment already given to least developed countries in the
framework of the Lome' Convention by 1 January 1998, and will improve the GSP
rules of origin.  The European Union will apply further subregional cumulation
in favour of integration groupings among developing countries, and will
respond positively to requests for derogations from the applicable rules of
origin requested by least developed countries.

87.  Developing countries also adopted important decisions with regard to
expanding membership or deepening their integration and preferential
commitments which have a substantial bearing on the trading opportunities of
certain least developed countries.  States members of the Association of
South-East Asian Nations (ASEAN) agreed on the membership in ASEAN of the Lao
People's Democratic Republic and Myanmar, for which ASEAN countries are
amongst the most essential trading partners.  The South Asian Association for
Regional Cooperation (SAARC) decided to accelerate the establishment of the
South Asian Free Trade Area, which should improve substantially trading
opportunities for its least developed members Bangladesh, Bhutan, Maldives and
Nepal.


                     VI.  CONCLUSIONS AND RECOMMENDATIONS

88.  While the recent economic performance of a number of least developed
countries is encouraging, recovery is still fragile and the medium-term and
long-term challenges facing these countries, in a world economy transformed by
globalization and liberalization, are complex.  The mid-term global review of
the implementation of the Programme of Action for the Least Developed
Countries for the 1990s identified the following as the main challenges facing
the least developed countries in the second half of the 1990s:  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.

89.  To succeed in coping with the above-mentioned challenges, the least
developed countries will need to further strengthen their national development
efforts which, as is evidenced by those countries that have improved their
performance, can make a difference.  It is imperative to sustain economic
reforms and effect further trade liberalization measures, pursue policies to
tackle supply-side constraints, and improve the efficiency of agriculture. 
For a number of least developed countries, bringing political conflicts and
civil strife to an early and peaceful conclusion and the restoration of a
viable system of government must be a prerequisite to commencing any
development programmes.

90.  The challenges facing the least developed countries are beyond their
capacity to overcome on their own.  International support measures -
financial, technical and commercial - are of critical importance in continuing
to influence their future growth and development.

91.  In the area of external financing, a reversal of the current trend in
donor performance with regard to the least developed countries will require
both a recovery in overall ODA and a reorientation of aid programmes towards
the least developed countries.  There is also a need for continuing to enhance
the quality and effectiveness of assistance to the least developed countries. 
External finance should help fund major investments programmes in the physical
infrastructure and social services which are necessary for helping the least
developed countries to encourage substantial private investment.  In addition,
the least developed countries will need the active support of non-traditional
donors.  The least developed countries should continue their efforts to
provide improved incentives for both domestic and foreign investment to
attract foreign direct investment and other private capital flows.

92.  Debt-relief measures for the least developed countries would help to
release scarce resources in order to boost social and human development
expenditure and to finance investment in critical economic restructuring in
the short term and medium term.  Reducing the outstanding debt of the least
developed countries to sustainable levels through debt-relief measures,
especially through the flexible application of the eligibility criteria for
the HIPC initiative, will help relieve the pressure on the least developed
countries and improve prospects for private capital inflows.

93.  The timely and effective implementation of recent initiatives in favour
of the least developed countries would enable them to actively participate in
international trade, production and investment.  Action to remove remaining
barriers to trade and enhance effective market access would contribute to this
process.

94.  Easing supply-side constraints is critical to enabling the least
developed countries to utilize the enhanced market access provided by the
Uruguay Round of multilateral trade negotiations agreements.  Many of the
structural constraints that have frustrated the response of the economy to the
new policy initiatives, such as weak technological capacity, lack of
entrepreneurial and managerial skills and inadequate physical infrastructure,
have to be tackled systematically.  The WTO Plan of Action for the least
developed countries contains recommendations on policy measures and programmes
to enhance the trading opportunities of the least developed countries in order
to facilitate their integration into the multilateral trading system.  At a
broad level, technical assistance, complemented by adequate financial support,
should be provided to the least developed countries through the common and
coordinated efforts of all donors, including international organizations such
as WTO, UNCTAD, ITC, UNDP, the World Bank and IMF.  Member States should seek
to give operational content to the WTO Plan of Action, for example, by
enhancing conditions for investment and providing predictable and favourable
market access conditions for the products of the least developed countries, in
order to foster the expansion and diversification of their exports to the
markets of all developed countries and, in the case of relevant developing
countries, in the context of the Global System of Trade Preferences among
Developing Countries.


                                     Notes

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

     2/  A/50/745, parts one to three.

     3/  The list of the least developed countries is currently comprised of
48 countries, the combined population of which was estimated at 588 million in
1995; the countries are:  Afghanistan, Angola, Bangladesh, Benin, Bhutan,
Burkina Faso, Burundi, Cambodia, Cape Verde, Central African Republic, Chad,
Comoros, Democratic Republic of the Congo, Djibouti, Equatorial Guinea,
Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Lao
People's Democratic Republic, Lesotho, Liberia, Madagascar, Malawi, Maldives,
Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Samoa, Sao Tome
and Principe, Sierra Leone, Solomon Islands, Somalia, Sudan, Togo, Tuvalu,
Uganda, United Republic of Tanzania, Vanuatu, Yemen and Zambia.

     4/  United Nations publication, Sales No. E.96.II.D.3.

     5/  General Assembly resolution 46/151, annex, sect. II.

     6/  Proceedings of the United Nations Conference on Trade and
Development, Ninth Session, Midrand, Republic of South Africa, 27 April-11 May
1996, Report and Annexes (United Nations publication, Sales No. E.97.II.D.4),
part one, sect. A.

     7/  Ibid.

     8/  Legal Instruments Embodying the Results of the Uruguay Round of
Multilateral Trade Negotiations, done at Marrakesh on 15 April 1994 (General
Agreement on Tariffs and Trade secretariat publication, Sales No. GATT 1994-
7).

     9/  See ibid.

     10/  Report of the United Nations Conference on Environment and
Development, Rio de Janeiro, 3-14 June 1992, vol. I, Resolutions Adopted by
the Conference (United Nations publication, Sales No. E.93.I.8 and
corrigendum), resolution I, annex II.

     11/  For the objectives and details of the HIPC initiative, see IMF,
"Debt relief for low-income countries and the HIPC initiative" (Working paper
WP 97/24), Washington D.C., 1997.


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