Statement delivered by H.E. Ambassador Gunnar Snorri Gunnarsson

Head of delegation,

Icelandic Mission to the European communities

(check against delivery)

Mr. President,

Let me first of all congratulate you on your election and salute the organisers of this third conference on the Least Developed Countries in the hope that it will contribute to greater progress in the decade ahead. Previous conferences and Programmes of Action have not led to the results aimed at and the plight of the Least Developed Countries remains one of the most urgent issues the international community has to face. The fact that the European Union has taken the lead in action to remedy this situation is encouraging and the venue of this conference bears witness to this commitment.

Our arsenal in the fight that lies ahead is limited and I will here only offer brief comments on our efforts in three areas, ODA, trade liberalisation and debt relief.

Iceland has not yet reached the UN target of spending 0.7 % of GNP on development aid but in absolute terms there has been a steady increase in allocations for the Icelandic International Development Agency. Contributions will have tripled over the period 1997-2002. We have adopted a policy of concentrating our ODA efforts in the LDCs. The initial focus tended to be in the fisheries sector but in recent years we have branched out to finance and organise projects in the sectors of gender equality, health and education. The location of our first embassy on the African continent, established this year in one of the LDCs, is a further step towards establishing the political dialogue that is the prerequisite for our common efforts to be crowned with success.

This week the Icelandic Parliament passed a law granting unilateral tariff concessions to the LDCs, putting them on par with our partners in the European Economic Area. This change was made further to our declaration a year ago in the World Trade Organisation and reflects GSP principles. It is our hope that this will open up new opportunities for LDCs on the Icelandic markets.

The Government of Iceland decided two years ago to participate in the HIPC initiative and will over the next few years pay over ISK 200 millions into the HIPC Trust Fund. This will be in addition to Iceland’s ordinary payments to the bank. It has been questioned whether the HIPC will deliver its promise of a sustainable exit from the debt treadmill for the most heavily indebted poor countries but it remains our hope that it will enable the poorest nations to use the funds that have been channelled into debt servicing to stimulate economic growth, combat poverty and strengthen their infrastructure. Debt servicing must not hinder efforts to build up essential health and education services that provide the basis for a healthy development of the economy. Further progress in ensuring good governance would be a key element in making both direct assistance and debt reduction initiatives truly effective.

Finally I would like to conclude by underlining with both the Secretary General of the United Nations and the Director General of the WTO the importance of the integration of the LDCs into the global trading system through a comprehensive new round in the WTO.