Economic and Social Council

 Distr. GENERAL
5 June1997
ORIGINAL: ENGLISH

Substantive session of 1997
Geneva, 30 June-25 July 1997
Item 2 of the provisional agenda*

     * E/1997/100.


                FOSTERING AN ENABLING ENVIRONMENT FOR DEVELOPMENT:
                FINANCIAL FLOWS, INCLUDING CAPITAL FLOWS; 
                               INVESTMENT; TRADE

                        Report of the Secretary-General


                                   CONTENTS

                                                           Paragraphs  Page

INTRODUCTION ...............................................  1 - 10     2

 I.   FRAMEWORK OF INTERNATIONAL COOPERATION AND NATIONAL
      POLICIES ............................................. 11 - 20     4

II.   POLICY ISSUES ........................................ 21 - 69     7


                                 INTRODUCTION


1.   At its resumed substantive session of 1996, the Economic and
Social Council decided that the theme of its 1997 high-level segment
would be "Fostering an enabling environment for development: 
financial flows, including capital flows; investment; trade" (decision
1996/310) and requested the Secretary-General to submit a report
prepared in collaboration with the Bretton Woods institutions and the
World Trade Organization (WTO). 1/  The present report, which is
submitted to the Council in response to that request, was prepared by
the United Nations Secretariat (Department for Economic and Social
Information and Policy Analysis and Department for Policy Coordination
and Sustainable Development), in collaboration with the United Nations
Conference on Trade and Development (UNCTAD) and the World Bank. 
Inputs to the report were also provided by the International Monetary
Fund (IMF) and WTO, as well as by the United Nations Children's Fund
(UNICEF), the United Nations Development Programme (UNDP), the Food
and Agriculture Organization of the United Nations (FAO), the
International Labour Organization (ILO), the United Nations Industrial
Development Organization (UNIDO) and the United Nations Educational,
Scientific and Cultural Organization (UNESCO).

What is an enabling environment?

2.   An enabling environment, understood in its broadest sense,
encompasses the whole panoply of national and international policies,
measures and institutions in the economic, social, legal and political
domains that influence or affect the growth and development prospects
of a country.  Fostering an enabling environment for development
implies a concerted effort by Governments at the national and
international levels, in collaboration with other actors in
development, to ensure that the interplay among those policies,
measures and institutions and the sum total of their impact promotes
not only sustained economic growth but a development style that is
sustainable and broad-based and whose benefits are shared equitably by
all members of society.

3.   The World Summit for Social Development specified the key
components of an enabling environment for social development. 
Similarly, other United Nations conferences have touched on various
facets of an enabling environment.  The present report does not
attempt to synthesize all these agreed frameworks.  It focuses on the
issues identified in the selected theme and has been guided by the
objectives for the high-level segment of the Economic and Social
Council set out in General Assembly resolutions 45/264 and 48/162.

4.   The key characteristics of an enabling environment are well
understood and generally accepted:  stability, predictability,
adaptability, growth orientation, transparent legal and regulatory
frameworks, and a strong base of social and physical infrastructures. 
It implies that countries follow sound and growth-oriented policies.

5.   However, the effort at the national level to improve the
environment for development cannot proceed in isolation from, nor is
it immune to, the international policies and institutions and the
global trends that frame, favourably or otherwise, the national
environment for growth and development.  This is particularly relevant
today when the gathering pace of globalization is eroding the ability
of Governments to influence economic outcomes and, at the same time,
turning the external environment into such a crucial factor that no
Government is able to cope with all of its repercussions alone.

6.   Developing countries, with their limited capacity to adjust to and
absorb external shocks, are particularly vulnerable to rapid changes
in the international economic environment.  This environment, in turn,
is determined primarily by the monetary, fiscal, trade and other
policies of major industrialized countries, by market and
technological forces and trends and, for developing countries at
least, by the policies pursued by multilateral financial institutions
and WTO, as well as by the state of development cooperation in
general.

Globalization and world economic prospects

7.   Globalization and the issues arising from it are particularly
relevant to the international debate on fostering an enabling
environment for development.  The process of globalization is
transforming the world economy and changing the nature of
international economic relations.  As part of this process, the
developing world has also changed dramatically.  New and dynamic
centres of growth, trade and investment have emerged in Asia and parts
of Latin America.  In other parts of the developing world, growth
prospects are also improving, although for Africa and the least
developed countries, the risk of further marginalization remains real. 
The prospects of these countries are clouded by shrinking official
development assistance (ODA), low levels of foreign direct investment,
the burden of external debt and worsening terms of trade.

8.   A majority of developing countries now accepts and pursues the
macroeconomic and outward-oriented policies required to foster rapid
economic growth.  Structural adjustment and economic reforms are being
pursued, more or less consistently, in a large number of countries. 
Entrepreneurship and the private sector are widely recognized as
dynamic factors of growth.  Similar policies are also being applied in
the transition economies.  As a result, for the past few years,
developing countries as a whole have been growing more rapidly than
the developed ones and their share in world trade and capital flows
has been rising.  The transition economies are also moving along a
path of steady and accelerating expansion.

9.   One consequence of these positive trends is that the developed and
developing worlds are becoming more and more mutually interdependent. 
Many of the most dynamic markets and investment opportunities today
are in some of the developing countries and in countries with
economies in transition.  Indeed, viewed in a longer term perspective,
it appears that the world today is at the threshold of sustained
global economic expansion.  However, the institutional and policy
framework required to fully exploit this global opportunity is not yet
fully in place.

10.  As the global environment becomes more fluid and the pace of
change accelerates, the case for developing new forms of international
cooperation to cope with and manage the associated risks and
challenges is evident; but in the present global economy, such
cooperation cannot be confined to Governments alone; it must also
include a wide range of actors.  Conditions are propitious for putting
in place the foundations for such international cooperation.  The
United Nations conference processes showed how this larger collective
endeavour can take effect.  In the post-cold-war period, economic and
social issues can be discussed in a pragmatic way.  Furthermore,
policy makers in all countries are confronted with the need to deal
with the implications of globalization in the light of conditions
specific to each country.  The policy dilemmas they face are in some
respects similar, although their depth and severity differ greatly
from country to country.


       I.  FRAMEWORK OF INTERNATIONAL COOPERATION AND NATIONAL POLICIES

11.  Each country has the primary responsibility for its own
development.  However, international cooperation and partnership have
a vital role in creating a favourable climate for capital flows,
investment and trade to flourish.  Many developing countries,
particularly those in Africa and the least developed countries, will
continue, for the foreseeable future, to require assistance to carry
out these policies and reforms successfully, and developed countries
have a major responsibility to create and sustain an enabling
environment for their development.

12.  The broad elements of an enabling international environment for
development are essentially the same as those that are relevant at the
national level: creation and maintenance of peaceful and stable
international conditions; democratization in international relations,
establishment of open, fair, equitable and transparent international
regimes; respect for and non-discriminatory application of the rules
of the game so as to create equal opportunities and a level playing
field for all; and protection of the weakest and the most vulnerable
members of the international community through more favourable
treatment in trade and finance.

13.  The above calls for coordination in the formulation and
implementation of macroeconomic policies by major industrialized
countries to create and sustain conditions of stability,
predictability and growth in the world economy, stable exchange rates,
low interest rates and fiscal deficits, as well as trade
liberalization, more equitable access of developing countries to
global markets, an increased flow of productive investments and
technologies and appropriate knowledge to developing countries, as
well as new and additional financial resources.

14.  A general consensus on the policies required to foster an enabling
environment for development at the national level has emerged.  Recent
experience has shown clearly that these policies are also the ones
most conducive to investment (domestic and foreign), capital inflows
and successful integration into the world economy through trade.

15.  First and foremost, reinforcing peaceful conditions, a stable
political framework, full respect for all human rights and fundamental
freedoms, and effective participation by civil society are
indispensable foundations for sustainable development.  Further, a
stable and transparent legal framework that provides for respect for
and enforcement of property rights, the rule of law and the tackling
of corruption, as well as transparent, efficient and accountable
public administration, are conducive to domestic and foreign
investment and capital inflows.

16.  Equally, an essential component of an enabling environment for
development is sound national macroeconomic policies.  Investment
(domestic and foreign), capital inflows and access to foreign exchange
are facilitated by a low and predictable rate of inflation, a
sustainable fiscal deficit and a realistic exchange rate.  In a world
of integrated financial markets and rapid capital movements, it is
also essential to ensure the soundness of the banking system through
prudential regulations, better assessment of credit risks, stringent
capital requirements, actions to prevent money laundering, improved
management of banks and better regulation of security markets. 
Economic and social development also require the promotion of dynamic,
open and free markets because they are an efficient means of resource
allocation and an instrument for harmonizing divergent interests. 
Countries should undertake any necessary structural adjustment and
reform, and pursue their outward-oriented policies.  Internationally
agreed rules such as those relating to an open and free multilateral
trading system tend to strengthen the basis for sound national
policies.

17.  Macroeconomic policies should also be perceived as sustainable. 
Consequently, the social costs of such policies, and their impact in
terms of recession and unemployment, cannot be ignored.  Hence, in
certain circumstances Governments will need to intervene in markets to
prevent or counteract market failure, promote stability and long-term
investment, ensure fair competition and protect social equity by
ensuring the provision of social services.

18.  Non-governmental actors and, in particular, the private sector are
playing an increasingly important and dynamic role in promoting
development, with the result that Governments are re-examining and
adjusting the extent and scope of public sector involvement in the
economic sphere.  However, Governments have a definite economic role: 
they must ensure an appropriate policy environment, encourage
entrepreneurship, create favourable conditions for the business sector
and for attracting foreign direct investment, provide basic
infrastructures and develop human resources.

19.  Growth and development are stimulated by the greater integration
of developing countries into the world economy.  However, the problems
of marginalization, volatility and vulnerability are not solved by
world markets alone.  Hence, the following questions arise:  How can
greater consistency between aid, trade and investment policies be
ensured?  What should the international response to the problem of
marginalization be?  How can the increased international and domestic
fragility in the global environment be reduced?  What should the role
of ODA be?  How can greater market access and more widespread capital
and investment flows be promoted?

20.  It is important that Governments engage in a dialogue on these
critical issues in order to devise practical policy responses that
would ensure the long-term stability and viability of the global
economy by promoting fairness and equity and participation by all
countries and groups within countries in the benefits of growth and
development.  The following sections address these questions and
identify possible approaches that could help in the search for viable
and long-term answers.

     Recommendations:

     1.   The Council may wish to emphasize the need for strengthened
     international cooperation to enhance the benefits and mitigate the
     risks associated with globalization and to better integrate
     developing countries in the world economy.  This would imply,
     among other things, more systematic attention to policy
     coordination to achieve greater coherence among macroeconomic,
     trade, financial and development aspects of economic policy-making
     by countries and at the global level.*

     (* Recommendations contained under the remaining sections of the
     report address more specific aspects of international cooperation for
     fostering an enabling environment for development.)

     2.   The Council may stress the importance of sound and stable
     macroeconomic policies for accelerated growth through better
     integration in the world economy.  Equally important is the need
     for the rule of law, a stable and transparent legal framework and
     public administration, and policies that promote entrepreneurship,
     savings and investment.  The establishment of realistic exchange
     and interest rates, reform of the trade and payments system, as
     well as the liberalization of other domestic prices should
     continue as they provide an appropriate incentive structure for
     producers and encourage outward-oriented growth strategies.

     3.   The Council may urge that structural reforms aimed at
     establishing a competitive domestic financial system,
     privatization and/or restructuring of public enterprises continue
     to be implemented in order to enhance the efficient allocation of
     resources and support private sector development; such reforms are
     also expected to boost domestic savings and investment and thereby
     contribute to higher economic growth.

     4.   The Council may emphasize that the availability and proper
     maintenance of adequate economic infrastructure, in particular a
     trained workforce and telecommunications and transportation
     facilities, affect the pace of integration of countries in the
     world economy and should be of high priority.  High-quality
     communications are essential for countries that aim to participate
     in the globalized production structures established by
     multinational corporations, to respond promptly to rapidly
     changing market conditions in industrialized countries or to
     participate in new export markets.  The Council may wish to call
     for innovative policies designed to promote public-private
     partnerships and opening up the social and infrastructure sectors
     to private investment to meet the enormous needs in these areas.

                              II.  POLICY ISSUES

Policy coherence

21.  With the accelerating integration of the world economy, the
interaction between the macroeconomic, structural, trade, financial
and development aspects of economic policy-making has increased and is
likely to intensify further.  Moreover, the opportunities and risks
associated with globalization are unevenly distributed because of
imperfections in factor and product markets.  A more equitable
distribution of benefits and mitigation of risks require careful
management of public policies and coordination of national and global
policies dealing with markets, as well as stronger international
support for infrastructure and human resources development in
developing countries.  In the current economic environment, the
question of policy coherence has thus emerged as a critical one for
all participants in the global economy.

22.  Policy coordination at the global level has been pursued
sporadically in the context of the group of seven major industrialized
countries (Group of Seven).  The Interim Committee of IMF regularly
considers the coordination of national economic and financial
policies.  At its meeting in September 1996, for example, the
Committee adopted an 11-point Declaration on Partnership for
Sustainable Global Growth. 2/  In April 1997, the Committee reaffirmed
that implementation by all members of the guidelines set out in the
Declaration would be essential to ensuring that all shared in an
increasingly prosperous world economy.  WTO was requested, at its
Ministerial Conference held at Singapore in December 1996, to study
the interrelationships of trade and investment further, and trade and
competition policies and working groups have been set up for this
purpose.  Yet the consistency among the trade, aid, financial and
environmental aspects of policies remains an important concern that is
not addressed comprehensively or coherently in any global forum. 
Similarly, at the national level, in many countries the institutional
arrangements for addressing issues of coherence among policies are
either weak or have not been put in place. 

23.  The task of achieving greater harmony between these policies lies
primarily with Governments at the national level.  However, as
recognized in the Ministerial Declaration on this issue, adopted at
Marrakesh, Morocco, at the conclusion of the Uruguay Round of
multilateral trade negotiations, their coherence internationally is an
important and valuable element in increasing the effectiveness of
these policies at the national level. 3/

24.  The strengthened multilateral trading system emerging from the
Uruguay Round is expected to contribute to more effective surveillance
and to strict observance of multilaterally agreed rules and
disciplines so that trade policy can play a more substantial role in
ensuring the coherence of global economic policy-making.  The
Marrakesh Declaration stressed the importance of efforts to improve
other elements of global economic policy and called upon the
international institutions with responsibilities in the areas of
trade, money and finance (WTO, IMF and the World Bank) to follow
consistent and mutually supportive policies. 3/  In this context, it is
necessary to avoid the imposition of cross-conditionality or
additional conditions.  WTO and the Bretton Woods institutions have
recently concluded an agreement to exchange views regularly through
participation in each other's meetings.  The staff of these
institutions are also developing pragmatic working relationships.  It
is too early to say, however, to what extent coherence in
policy-making has actually been enhanced.

25.  An important aspect of policy coherence that affects the
international environment for developing countries is the need for
greater coherence among development cooperation policies.  The
development objectives that these policies are designed to promote,
particularly in the poorest countries, will have a greater chance of
being attained if Governments consider the overall developmental
impact of their trade, aid and investment policies.  By the same
token, developing countries must also ensure greater consistency among
their policies designed to promote trade and investment.

26.  As national institutions are not always organized to take a
comprehensive and coherent view of these policies, certain
inconsistencies among them can arise.  For example, concessions in the
areas of trade and finance can be offset by changes in exchange rates
or interest rates or by domestic subsidy policies.  Interest rate
increases in major industrialized countries can trigger capital
outflows or raise debt burdens in developing countries.  A
deflationary bias in the macroeconomic policies of major
industrialized countries could have negative repercussions on
commodity prices that could more than offset aid flows to
commodity-exporting countries, which are mostly in Africa or are least
developed countries.  Agricultural subsidies distort agricultural
trade and perpetuate inefficient production patterns by eroding
comparative advantage.

27.  There are no easy solutions to such policy conflicts, but it may
be useful to examine the extent to which such issues could be
discussed and resolved within a global framework.  The recent
initiative of the Organisation for Economic Cooperation and
Development (OECD) to monitor the implementation of the OECD/DAC
development consensus 4/ in some African countries suggests that
Governments are beginning to respond to the need for such a coherent
approach.  But the OECD initiative is a limited one and does not
involve the participation of developing countries.

28.  The World Trade Organization provides an example of how a
framework may be designed to deal with the question of policy
inconsistencies in money, finance and development cooperation.  The
WTO working groups on coherence, on trade and investment and on
competition are studying various aspects of the interlinkages between
trade, investment and competition policies.  The question is, how can
greater coherence in economic policy-making at the global level be
pursued with wider participation and to the benefit of all?  More
specifically, can development cooperation policies be appraised, in a
multilateral context, in terms of their overall impact?

29.  In this context, one also notices that policies aimed at building
a more open international trading system are often questioned in
industrialized countries on the grounds of their adverse effects on
employment and wages.  The high unemployment rates prevalent in
Western Europe and stagnant wage levels in OECD countries in general
are used by some as a rationale to advocate protectionist approaches. 
In a low-growth, high unemployment environment, low-cost imports from
developing countries are presented as a threat to economic well-being. 
Although, in the Declaration adopted by the WTO Ministerial Conference
in Singapore, Ministers rejected the use of labour standards for
protectionist purposes and agreed that the comparative advantage of
countries, particularly low-wage developing countries, must in no way
be put into question, the continuing calls for higher labour, social
and environmental standards are seen by many in developing countries
as a way of promoting new and disguised forms of protectionism.  These
conflicting perceptions and the underlying policy dilemmas could be
reconciled better in the context of a more comprehensive and global
policy dialogue designed to promote coherent policies in all countries
for more balanced growth and development and to reduce unemployment in
developed and developing countries. 

30.  Another aspect that needs urgent attention is the whole question
of subsidies as these directly affect coherence among fiscal, trade,
investment, competition and aid policies.  The growth of subsidies
tends to increase inconsistencies among these policies.  Subsidies are
pervasive in developed and developing countries, though applied for
different purposes and in different sectors.  While any generalized
statement on as complex an issue as subsidies can be misleading, there
is clear evidence that subsidies often have a distorting effect.  The
most commonly subsidized sectors are energy, infrastructure and
agriculture as well as food and other basic needs and social services. 
Often designed to meet a perceived social need or economic goal,
subsidies tend to distort resource allocation through inefficient
price and incentive structures and reduced competition.  It has been
shown through specific case studies that subsidies often do not serve
their intended purpose, create dependency and addiction, entail a
large fiscal drain and often end up benefiting the better-off rather
than the poorest groups in society. 5/

31.  Reshaping subsidies based on detailed evaluation of their impact
would in most cases yield economic, fiscal and efficiency gains
through greater policy coherence and may lead to greater equity as
well.  However, Governments may be reluctant to act unilaterally
because of political constraints or a perception that such action in
isolation may reduce competitiveness.

32.  More transparency through more direct policy measures is the key
to subsidy reform.  Alternative and more direct policy options could
be pursued together with appropriate compensation mechanisms.

     Recommendations:

     1.   The Council may wish to note that countries that have been
     successful market integrators have complemented trade
     liberalization with macroeconomic stability, including control of
     fiscal deficits and inflation, avoidance of overvalued exchange
     rates, improved tax regimes and strengthened financial sectors. 
     It may encourage international financial institutions, other
     development agencies, and bilateral donors to play a major role in
     supporting countries on the path towards these policies, including
     through increased technical assistance and capacity-building.

     2.   The Council may further note that increased interdependence
     among national economies will require strengthened international
     cooperation and harmonization in the area of macroeconomic
     policies, environment, labour and health as well as in development
     cooperation policies, including enhanced participation of
     developing countries in such governance mechanisms.

     3.   The Council may stress the need for an international dialogue
     on these issues and consider devoting one of its high-level
     meetings with the Bretton Woods institutions and WTO, called for
     under General Assembly resolution 50/227, to this topic.

     4.   The Council may also request the Committee for Development
     Planning to study the coherence of development cooperation
     policies from the point of view of their overall impact, taking
     into account the ongoing work in this area, in order to develop
     approaches and modalities that the Council could consider at a
     subsequent coordination segment.

     5.   The Council could issue a call for an international dialogue
     on subsidies that could be initiated and stimulated, not only at
     the global but at the regional and local levels, with the support
     of organizations such as WTO, the Bretton Woods institutions and
     UNDP in cooperation with relevant specialized agencies.  The
     Council could consider placing this issue on the agenda of a
     future high-level segment.

Marginalization*

(* A number of recommendations in the sections on official development
assistance; external debt; and capital flows, investment and trade
specifically address the issues relating to marginalization.)

33.  The associated forces of globalization and liberalization have
resulted in increased openness in economic relations, as well as in
other dimensions of development.  The world has become economically
more competitive at the level of individuals, firms, countries and
regions.  As intended, this has benefited those in a position to take
advantage of the new opportunities.

34.  Increased flows of trade and capital have provided greater access
to resources and higher growth in many countries, and have
strengthened the global economy through a more efficient allocation of
resources.  Developing countries as a group have participated
extensively in the acceleration of global integration.  During the
first half of the 1990s, their overall ratio of trade to GDP rose 1.2
percentage points a year, while their share of global FDI rose to two
fifths.

35.  However, there are wide disparities in global economic integration
across developing countries.  Many developing countries did not
participate in the globalization of the world economy over the past
decade, and a large divide now separates the least from the most
integrated.  Many low-income countries are among the least integrated
and some have become even more marginalized during the past 10 years,
experiencing both falling incomes and lower levels of participation in
the world economy.  For example, the ratio of trade to GDP fell in 44
of 93 developing countries over the past 10 years, while the ratio of
foreign direct investment to GDP fell in more than a third.  If
current trends persist, many developing countries can expect to fall
further behind developed and the better integrated developing
countries in per capita GDP.

36.  Left to their own devices, the forces of globalization and
liberalization are likely to result in increased efficiency and
concentration of wealth, rather than in greater equity and
participation.  The beneficial effects of these two forces are thus
accompanied by the possibility of marginalization at many levels -
global, national, local, group and individual.

37.  At the global level, the least developed countries have long been
recognized as being at risk of marginalization in the world economy. 
Many other countries in Africa, notably those south of the Sahara, are
similarly challenged - they lack various elements in the physical,
financial, human and institutional infrastructure necessary to enter
and compete effectively in international markets.  Structural
difficulties also deter inflows of the FDI that is stimulating
economic growth in some other developing countries and, more
generally, perpetuate the dependence on a few highly volatile exports
that afflicts many of these poorer countries.  Domestic supply side
constraints seriously limit export response to the trade
liberalization efforts of the least developed countries and their
ability to exploit market access potential in the wake of the Uruguay
Round.  In many cases, the difficulties are compounded by an
unmanageable burden of external debt.

38.  The experience of countries that have been most successful in
attracting private capital flows suggests that official finance has
played an important facilitating role in helping them establish the
conditions necessary for such flows.  These countries have typically
relied on significant official finance during the two decades leading
up to integration.  Given the long gestation periods of investments in
human resource and infrastructure development, as well as the
investments needed to diversify their economies, Africa and the least
developed countries are in need of increased ODA flows.  Contrary to
the commitments in the Programme of Action for the Least Developed
Countries for the 1990s, ODA to these countries has been declining in
real terms in recent years, which could not be compensated even if
there were increased exports and greater FDI inflows.  Structural
difficulties also partly explain the meagre FDI flows to these
countries.  ODA will continue to be the most important component of
their external financing.

Official development assistance

39.  Since the end of the cold war the reordering of geopolitical
priorities has led to sharp cuts in aid budgets and a shift away from
long-term development and poverty reduction efforts at the very time
that many developing countries have become more receptive to
market-based reform.  Some of the reduction in assistance relates to
countries that lack access to private capital markets.  Many of these
countries have no realistic external financing alternative in the
short to medium term.  The slowdown in ODA is particularly worrisome
because such flows are usually directed towards the development of the
various forms of infrastructure that are required to participate in
the globalization process and build the foundations for growth and
development.  Even in the unlikely event that private sources replace
these lost flows in financial terms, they would be directed towards
short-term commercially profitable ventures rather than responding to
essential needs calling for a longer time horizon.  Sustained flows of
official development assistance remain essential if Africa and the
least developed countries are not to be further marginalized.

40.  Following a sharp fall in 1993 and a partial recovery in 1994, ODA
dropped by nearly 10 per cent in real terms in 1995 and fell again in
1996 to the lowest level in 10 years.  Moreover, the composition of
ODA has shifted, with a significant portion being used to fund
emergency relief and peacekeeping activities and less directed towards
long-term development needs.

41.  The position is worse than it appears in one further respect,
namely, the sizeable cut by bilateral donors in their commitments to
multilateral concessional lending windows.  During the period
1990-1995 multilateral aid disbursements cushioned the overall
decline, rising from 26 per cent to 32 per cent of total aid
disbursements.  The outlook, however, is less promising, because while
multilateral disbursements are rising, donor commitments are falling. 
For example, the donor commitments to the International Development
Association (IDA), the World Bank's concessional lending arm, dropped
by about $7 billion during the period 1994-1996.  Because of the lag
between donor commitments and disbursements, cash flows to IDA have
not yet declined.  But eventually they will, unless donors increase
commitments.

42.  ODA has retained its low-income focus as it should.  The share of
ODA going to low-income countries has remained constant:  69 per cent
in 1990 and 70 per cent in 1995.  There has been some redistribution
of funds, however.  Sub-Saharan Africa continues to take the largest
share of ODA, about 35 per cent.  In 1995, ODA to high-income
countries fell significantly and now represents only a small fraction
of the total.

43.  The declining availability of ODA and bleak aid outlook is
particularly worrisome for the least developed countries.  The
overwhelming dependence of these countries on ODA is likely to
continue during the foreseeable future.  The basic policy issues that
the international community faces in this regard are:  (a) how to
improve aid allocations to the least developed countries and (b) how
to enhance the quality and effectiveness of assistance.  Unless these
issues are adequately addressed, the long-term development objectives
and the sustainability of policy reforms in the least developed
countries will be jeopardized.

44.  Concentrating ODA on low-income countries makes a focus on poverty
reduction more likely.  Aid directed to middle- or even high-income
countries suggests that other objectives are being pursued.  A larger
portion of aid goes to low-income countries from multilateral sources
than from bilateral sources.  In 1995, 57 per cent of ODA from
bilateral sources went to low-income recipients; the proportion from
multilateral sources was 70 per cent.  No multilateral ODA goes to
high-income countries.

45.  The declining trend in ODA budgets also reflects a certain crisis
of confidence in aid as an instrument for promoting development. 
Unless this crisis is addressed squarely, it may be difficult to
reverse the negative trend.  The rationale for ODA needs to be
reaffirmed and placed on a strong footing for the years to come.  This
calls for a clear understanding and a sense of partnership and shared
purpose between donors and recipients.

     Recommendations:

     1.   The Council could promote an international understanding on
     the role of ODA based on a sense of partnership and shared purpose
     between donors and recipient countries.  Donors must reaffirm and
     adhere to the long-term developmental purpose of ODA and commit
     themselves not to erode it by immediate, emergency needs or
     politically defined and other non-developmental priorities. 
     Recipients should adhere to clearly targeted and more effective
     use of ODA.  Donors and recipients must accept the need for
     greater selectivity in ODA allocations based on mutually agreed
     policy commitments and goals that are designed to address market
     failure, protect the poor and catalyse private flows.  Donors must
     agree to improve the composition and quality of ODA to better
     match and serve its stated purposes.  A new international
     understanding along these lines should underpin a real commitment
     to providing new and additional resources for development.

     2.   The Council may wish to emphasize the need for the
     international community to reverse the recent downward trend in
     official development assistance with a view to meeting the agreed
     targets for ODA flows, in particular to the least developed
     countries.  More generally, the Council may wish to call upon all
     concerned to honour the commitments made in the mid-term review of
     the Implementation of the Programme of Action for the Least
     Developed Countries for the 1990s, in the mid-term review of the
     implementation of the United Nations New Agenda for the
     Development of Africa in the 1990s, in the Abidjan Declaration on
     African Diversification and in the African Diversification Fund
     for Agricultural Commodities.

     3.   The Council could encourage donors to renew their vision of
     aid as a means of helping poor countries create enabling
     environments for private sector development, and ensure that the
     resulting growth reaches all segments of society.  In so doing,
     aid will also promote the economic and strategic interests of
     donor countries.  These rationales require that aid support policy
     reform, infrastructure development, the provision of social
     services, and the creation of social safety nets.  In this regard,
     the Council could reaffirm the importance of the 20/20 initiative
     as one means of securing adequate resources for basic social
     services for all.  Implementation will require monitoring
     expenditures and donor contributions.  The Council may wish to
     call for further efforts to ensure that internationally supported
     adjustment programmes, including Enhanced Structural Adjustment
     Facility (ESAF)-supported programmes, incorporate social safety
     measures and restructuring of public expenditure, including
     increases in expenditure related to primary education and primary
     health services, in line with the recommendations of the World
     Summit for Social Development.

     4.   The Council could express its concern that contributions for
     the eleventh replenishment of IDA are not adequate to support even
     current levels of lending.  The Council may note that multilateral
     aid disbursements have cushioned the overall decline in aid in the
     recent past, but this will not last as contributions to
     multilateral facilities have fallen off as well.  The Council may
     stress the fact that it is essential that multilateral aid
     disbursements be maintained or increased.

External debt

46.  One of the specific obstacles to the development efforts of Africa
and other low-income countries over the past decade - and hence a
source of their marginalization - has been external debt.  While most
of the debt crises that emerged in the middle-income countries in the
1980s have been largely alleviated, serious problems remain in several
low-income countries.  Even with sound economic policies and the full
application of the debt rescheduling arrangements of the past few
years, these countries continue to face an unsustainable external debt
situation.  The resulting resource constraints have prevented them
from implementing the national actions, including investments in human
resource development, infrastructure and diversification, that are
necessary to participate meaningfully in the global economy.

47.  In order to address this problem, IMF and the World Bank have
established the Heavily Indebted Poor Countries (HIPC) Debt
Initiative. 6/  The objective of this Initiative is to lower to
sustainable levels the external debt of HIPCs with a strong track
record of adjustment policies and thus enable them to exit from the
debt rescheduling process.  The Initiative entails the recognition by
the international community that the external debt burden of many poor
developing countries is severely impeding their development efforts
and that some countries are unlikely to emerge from their development
crises without such measures as are now to be made available. 
Removing the debt overhang is a condition necessary for successful
reform, particularly in countries that must reinvigorate the private
sector and stimulate domestic investment.  Restoring country
creditworthiness will take time and depend on the continued efforts of
those countries to address their economic and social problems.

48.  In November 1996, the World Bank set up a HIPC Trust Fund that is
to be administered by IDA.  The World Bank has set aside $500 million
from net income as an initial contribution to the Trust Fund to meet
its share of the debt relief needed, and several bilateral
contributions have been received.  At the World Bank/IMF meetings in
April 1997, the World Bank approved a debt-relief package for Uganda,
making it the first country to benefit from the Initiative.  In
February 1997, IMF established a Trust for Special ESAF Operations for
the Heavily Indebted Poor Countries and Interim ESAF Operations.  The
contribution of IMF under the HIPC Initiative would mainly be in the
form of grants, though highly concessional loans would be used to
provide financing during the interim period to smooth heavy
debt-service obligations.  Discussions are ongoing, including with
bilateral sources, to secure the resources required to finance the
full costs of the Fund's participation in the Initiative.  These
decisions - together with the consent obtained from all ESAF Trust
creditors - would allow IMF to transfer up to SDR 180 million from the
ESAF Reserve Account to the ESAF-HIPC Trust.

49.  The Initiative demonstrates that, once the political commitment is
achieved, the international financial community can coordinate its
efforts to confront a fundamental, systemic cause of poverty and
isolation.  And because the Initiative requires the participation of
all relevant creditors, debt relief efforts will have to continue to
be closely coordinated.  This Initiative has raised high expectations
in the heavily indebted developing countries.  It is therefore
important to proceed to implement the Initiative as rapidly as
possible.

     Recommendations:

     1.   The Council could welcome the 1996 initiative of the Managing
     Director of the International Monetary Fund and the President of
     the World Bank, which was endorsed by the Interim Committee of IMF
     and the Development Committee of IMF and the World Bank, to
     resolve the debt problems of the heavily indebted poor countries
     and call upon the countries affected and the international
     community to work closely together to advance the implementation
     of the HIPC Initiative as rapidly as possible.

     2.   The Council may wish to call for an early agreement on the
     financing of the interim ESAF and the special ESAF operations
     under the HIPC Initiative and urge bilateral contributors to make
     available the resources necessary for the Initiative to be fully
     implemented.

     3.   The Council could call upon the Fund and the World Bank to
     interpret the criteria for eligibility for the HIPC Initiative
     flexibly and transparently so that the range of potentially
     eligible countries is sufficiently broad to resolve the debt
     problems of debt-distressed countries on a long-term basis.

Volatility and vulnerability

50.  One possible consequence of the more highly liberalized
international economic environment is the greater potential for
international volatility in prices, not only of primary commodities
but of other traded goods; international interest rates; or even
key-currency exchange rates with rapid and large movements of capital.

51.  The past two decades have witnessed the increased integration of
financial markets as a result of rapid deregulation and liberalization
of financial activities as well as rapid advances in communications
technology.  While this has increased the amounts and categories of
financing potentially available to countries and entities throughout
the world economy, so far only a small minority of countries and
entities have actually achieved sustained access to this financing. 
In addition, this integration raises the premium on Governments to
pursue sound macroeconomic policies to ensure the sustainability of
flows.  Nevertheless, integration also tends to increase the downside
risk of a sudden reversal of financial flows for an individual
country, as well as the possibility of spillover effects on others.

52.  As the scale of foreign capital has increased in the financial
markets of certain developing countries, these markets have become
highly vulnerable to shifts in sentiment among international investors
and fund managers, especially since an important part is of a
short-term speculative nature.  Sudden reversals or reductions of such
flows have threatened financial and macroeconomic stability, required
painful adjustments in the recipient country and created spillovers in
other emerging financial markets.  On the other hand, volatility in
international financial flows can also be caused by domestic policy
volatility, which can be constrained by rule-based international
regimes.

53.  As countries liberalized capital account transactions, several of
them witnessed bouts of more volatile financial inflows and outflows. 
Against this background of turbulence in some major emerging market
economies in 1994/95, efforts have been made to strengthen
surveillance, particularly with the aim of ensuring that, in a world
of integrated and volatile capital markets, IMF would be better
equipped to identify emerging crises at an early stage.

54.  In order to strengthen the ability of IMF to respond to a member
facing an external financial crisis and seeking assistance from the
Fund, the IMF Executive Board, in September 1995, agreed on the
elements of an Emergency Financing Mechanism (EFM).  The essence of
EFM is its exceptional procedures to facilitate rapid IMF Board
approval of financial support while ensuring the conditionality
necessary to warrant such support.  EFM would be used in circumstances
representing or threatening to give rise to a crisis in a member's
external accounts requiring immediate response from the Fund.  The
potential for spillover or contagion effects would be an important
consideration in a decision to activate EFM.

55.  In order to ensure that IMF has sufficient resources to deal with
an exceptional situation that poses a threat to the stability of the
international monetary system, the IMF Executive Board, in January
1997, adopted a decision on New Arrangements to Borrow (NAB).  The
amount of resources potentially available under NAB is roughly $47
billion, double the amount that has been available under the General
Arrangements to Borrow (GAB), and the number of potential
participating countries or monetary authorities with the financial
capacity to support the international monetary system has increased to
25, including a number of developing countries.  The New Arrangements
to Borrow will become effective when they are adhered to by potential
participants with credit arrangements amounting to at least 85 per
cent of the total, including the five participants with the largest
credit arrangements.  This will represent an important strengthening
of the international monetary system.

56.  Another important step taken to strengthen the surveillance
capacity of IMF is the establishment in March 1996 of a Special Data
Dissemination Standard for the voluntary dissemination of economic and
financial data by member countries that have, or seek, access to
international financial markets.

57.  Many of the concerns regarding international financial instability
are associated with its consequences for exchange rates.  Of special
importance in this context are the effects of the persistence for
extended periods of exchange rates that are inconsistent with
sustainable external payments positions.  Such exchange-rate
misalignments distort resource allocation through their impact on
relative prices, and have perverse effects on activity, employment and
the price level.  They have effects similar to, or even stronger than,
tariffs on trade flows since almost all decisions on production and
trade are based on price signals, and exchange rates enter the prices
of all internationally traded goods.  Perhaps the most damaging effect
of exchange-rate misalignment is that it triggers protectionist
measures that are not dismantled when exchange rates return to their
normal levels.  In this way, exchange rate instability poses a
continuing threat to an open trading system.

58.  Few of the major developing countries have adopted a largely or
completely non-interventionist stance towards financial inflows.  The
majority has had recourse to intervention in foreign exchange markets
to prevent currency appreciation and the emergence of unsustainable
payment imbalances.  However, where capital inflows are large relative
to current account deficits, such intervention has created serious
conflicts with domestic monetary policy objectives.  When intervention
is not sterilized, the rapid increases in the money supply threaten
loss of control of monetary policy.  Sterilization of intervention, on
the other hand, results in an increased fiscal burden as it requires
either a budget surplus or financing.  These lead to higher interest
rates and increased public debt, with adverse consequences for capital
accumulation and social welfare.

59.  More direct controls over capital inflows have also been used to
reduce the vulnerability to international volatility.  However, such
measures run counter to the prevailing philosophy of financial
deregulation and liberalization, and countries are often discouraged
from resorting to such measures by their fear of being cut off from
international financial markets.  Nonetheless, discussions of market
intervention have become increasingly nuanced, especially in the light
of the instabilities that accompanied some of the deregulation
measures.

60.  There is considerable discussion of the need for new interventions
in the international financial field.  International cooperation in
this area has been building in an ad hoc way, as the regulators in
major financial market countries find that the institutions they
supervise have increasingly important activities beyond their
jurisdiction.  Better supervision of international financial markets
will reduce the vulnerability of financial institutions to fraud,
mismanagement and excessive risk exposure.  In turn, this will reduce
the vulnerability of the non-financial users of the institutions. 
However, there is nothing in this to reduce the volatility of
international financial flows per se.

61.  Against the background of financial instability associated with
banking system difficulties, there is wide recognition of the need for
international action to improve and coordinate the regulatory and
supervisory frameworks for financial systems.  The Basle Committee on
Banking Supervision has developed a set of Core Principles for
effective banking supervision, which provide a valuable building block
for these efforts.  In response to an initiative at the Lyon Summit of
the Group of Seven, a Working Party of the Group of Ten and emerging
market economies is developing, with the support of all relevant
institutions, a concerted international strategy to promote the
establishment, adoption and implementation of sound principles and
policies needed for financial stability.

     Recommendations:

     1.   The Council may emphasize that against the background of
     increasing risk associated with financial instability, there is a
     widely recognized need for international action to improve and
     coordinate national regulatory frameworks for international
     financial transactions.  It may welcome the initiatives taken by
     the Basle Committee on Banking Supervision, the IMF and the
     Working Party of the Group of Ten and emerging market economies to
     establish standards to strengthen the regulatory and supervisory
     mechanisms for banking and financial markets.  It may note,
     however, that these are still limited in scope and do not cover
     all firms and actors in financial markets.  More effective
     restraint of financial instability will require a more
     comprehensive international regulatory and supervisory regime. 
     The Council could request IMF and the World Bank, together with
     other relevant institutions and groups, to explore ways of
     incorporating more fully all countries and other interested
     parties into the process of developing and implementing such a
     regime.  The Council may request the Committee for Development
     Planning to examine these issues with a view to contributing to
     this process.

     2.   The Council could encourage IMF to fully exercise its role of
     overseeing the international monetary system to ensure its
     effective operation, inter alia, through symmetric surveillance of
     the macroeconomic policies of each of its members.  In this
     regard, the Council could welcome the efforts undertaken since
     1995 to strengthen surveillance, to ensure that IMF is better
     equipped to identify emerging crises at an early stage and to
     facilitate its rapid response to such crises.

     3.   The Council could also reiterate the importance of ensuring
     that IMF has sufficient resources to assist its members and
     encourage the timely conclusion of the general review of quotas
     and approval of a substantial increase of quotas.  It could also
     call upon potential participants to ensure that the New
     Arrangements to Borrow become effective as soon as possible.

Capital flows, investment and trade

62.  Most developing countries have liberalized their FDI alongside
their trade regimes.  Although most FDI and portfolio capital still
flows to industrialized countries, an increasing proportion is going
to developing countries.  After declining in the 1980s, private
capital flows increased dramatically, and to unprecedented levels, in
the first half of the 1990s.  Between 1987 and 1996, private capital
flows to developing countries increased from $25 billion to
$244 billion and their share of total FDI has increased from
23 per cent in 1990 to nearly 40 per cent in 1996.  In 1993 FDI flows
surpassed official development finance and in 1996 they were almost
four times as much.  Net portfolio flows have seen a similar trend: 
from a negative level until the late 1980s, they reached some $32
billion in 1995 and $45 billion in 1996.  However, FDI and portfolio
flows are highly concentrated, mostly in Asia and parts of Latin
America.  Between 1993 and 1995 a mere 10 countries received
76 per cent of all FDI in the developing world and only about 20
developing countries are today considered creditworthy by
international capital markets and banks.  In recent years, Africa has
received only 4 per cent of total net private flows.

63.  Among the contributing factors to this surge in private flows are
the high growth rates experienced by many developing countries, the
spread of market reforms and, in particular, the deregulation of
private capital flows, the liberalization of world trade, the rise of
global institutional investors and the accelerating capitalization of
emerging markets and their integration into world financial markets. 
Local participation has been a common characteristic.  Macroeconomic
stability, market size, infrastructure endowments and the presence of
skilled manpower are all important in shaping the locational choices
firms make when investing abroad.  A key lesson that can be drawn is
that markets matter and gainful participation in global markets
requires carefully tailored policies that promote integration into the
global economy.  A key question is, what can be done to foster more
stable and more long-term investment and capital flows to a widening
circle of developing countries?

64.  While Governments may have assisted in making globalization
possible by reducing legal and administrative barriers to flows
between countries and regions, the main actors in the process have
been mostly private enterprises, largely based in developed countries,
although, in recent years, enterprises from newly industrialized
countries have become active in other developing countries. 
Transnational corporations are overwhelmingly responsible for the
advances in technology and the growth in trade and financial flows
that form the backbone of globalization.  However, within the
developing world, their activities have been heavily concentrated in a
small number of countries.  A challenge to the international community
in creating an enabling environment for development lies in inducing
transnational corporations to diversify their activities across a
broader range of developing countries.

65.  Foreign direct investment provides a number of benefits to
developing countries.  Hosting affiliates of transnational
corporations provides non-debt-creating capital inflows, as well as
potential access to advanced foreign technology, managerial skills and
foreign markets.  It can also soften the balance-of-payments
constraint, add to employment and have other positive direct and
indirect linkage effects on the economy.  These benefits greatly
depend on the degree of competition they face in domestic markets. 
Thus, the benefits do not come automatically and policies designed to
achieve such benefits may run into conflict with other objectives
regarding trade and development.

66.  A conflict between free trade and attracting FDI may arise in
cases where FDI is primarily motivated by an effort to circumvent
trade barriers.  Indeed, some countries with restrictive trade regimes
have been able to attract considerable FDI because it provided the
only means for foreign firms to access domestic markets.  Such
protection, in turn, can benefit transnational corporations once they
establish themselves in domestic markets.  They may then also exert
some pressure for protection from external competition, so that
protectionism in such instances may be closely associated with
policies to attract FDI.

67.  Given the importance that FDI has gained, an increasing number of
regional economic agreements address investment matters.  There are
also several multilateral investment agreements, dealing mostly with
specific subjects.  A more comprehensive agreement is being negotiated
between countries members of the Organisation for Economic Cooperation
and Development (OECD), which will be open to non-members of OECD,
once it is concluded.  The WTO Ministerial Conference (Singapore,
December 1996), agreed to establish a working group to examine the
relationship between trade and investment, on the understanding that
this work would not prejudge whether negotiations would be initiated
in the future.

68.  Another concern in the global economic system is the possibility
that enhanced competition between States for FDI, if carried too far,
would result in loss of benefits to host countries as the lion's share
of the gains could accrue to foreign firms.  The costs to the host
country of providing financial, fiscal and other indirect incentives
could turn out to be greater than the net gains of FDI.  Moreover,
competition leads to cost-minimization strategies which could have an
adverse effect on wages and on levels and conditions of employment in
enterprises.  Such a strategy might generate some short-term benefits
for a particular country but would become counter-productive if all
countries adopted it.  Social costs - in terms of job security, less
protection for children and families and increased income dispersion -
may also negatively affect consumer demand and therefore employment. 
Another way through which pressure on wages and labour standards could
operate is the weakening of the regulatory capacity of Governments in
the face of heightened international competition.  An important policy
conclusion is that rather than attracting FDI through increased
incentives, it may be wiser in the long run to rely on a sound
framework of policies and development strategies seeking greater
integration in the world economy.

69.  The key trade issues that affect development and that need to be
addressed within the context of WTO include increased access for
developing countries in areas of their comparative advantage, tariff
escalation, preference-erosion and the misuse of anti-dumping measures
and countervailing duties.  The growing trend towards regional trading
arrangements needs to be closely monitored, as agreed in WTO, to
ensure that it is consistent with and complementary to an open
multilateral trading system.  The potential negative effects of trade
liberalization on the least developed and net food importing countries
should be mitigated by increased financial and technical assistance.

     Recommendations:

     1.   The Council may wish to note the important agreement reached
     by the Interim Committee of IMF, at its meeting in April 1997,
     that the Fund's Articles should be amended to make the promotion
     of capital account liberalization a specific purpose of the Fund
     and to give the Fund appropriate jurisdiction over capital
     movements; the scope of such jurisdiction would need to be
     carefully defined and sufficient flexibility should be allowed
     through transitional provisions and approval policies.  The
     Council may call for further work to be undertaken, taking into
     account the need for flexibility under specific circumstances and
     such conditions as a sustainable macroeconomic framework,
     well-capitalized banking institutions and clearly defined legal
     and institutional arrangements.

     2.   In the light of the increasing importance of foreign direct
     investment in the world economy, the Council may wish to invite
     UNCTAD, WTO and the other organizations concerned to study the
     most appropriate ways of promoting rule-based investment regimes.

     3.   Beyond the standard prescriptions for Governments on how to
     attract FDI and portfolio flows over the long term, there is a
     need to create a strong institutional and information base for
     investors and fund managers to draw upon in their decision-making. 
     Among other things, this calls for further study of recent
     experience and best practices, greater exploration of the social
     services sector for FDI, improved statistical services and
     standardization in corporate disclosure, accounting and
     settlement.  The Council could encourage the institutions
     concerned, for example, UNCTAD, UNDP, the World Bank and IMF as
     well as the Committee for Development Planning, to undertake
     further work in some of these areas and assist developing
     countries through capacity-building.

     4.   The Council may wish to call for continued concerted action
     to remove lingering, disguised and other obstacles to free and
     open trade.  Particular efforts are required in the area of
     agriculture, which remains highly protected and subsidized, and
     other sectors of interest to developing countries, including
     textiles and clothing, within the context of the full
     implementation of the outcome of the Uruguay Round.

     5.   The Council may emphasize that the international community
     needs to devote greater efforts to increase the market access of
     least developed countries in particular.  The Council could stress
     the importance of fully and expeditiously implementing the
     Marrakesh Declaration, the Ministerial Decision on Measures in
     Favour of Least Developed Countries and the Ministerial Decision
     on Measures Concerning the Possible Negative Effects of the Reform
     Programme on Least Developed and Net Food-Importing Developing
     Countries. 7/

     6.   The Council could affirm the importance of international
     efforts to strengthen the capacity of developing countries to take
     advantage of the multilateral trading system and existing
     favourable provisions in the WTO Final Act.  It is also important
     that developing countries are well informed and equal partners in
     processes leading to trade negotiations in sectors of interest to
     them, including agriculture.

     7.   The Council may wish to request the Committee for Development
     Planning to examine the extent to which trade problems facing the
     least developed and other disadvantaged countries could be
     addressed in the aftermath of both the Uruguay Round and other
     liberalization measures, and to propose remedial actions.

     8.   The Council may wish to note that supply capacities are
     lacking in many developing countries, thus hampering their ability
     to reap the potential benefits of trade liberalization and FDI. 
     The development of these capacities continues to require technical
     and economic cooperation of various forms.  The Council may call
     for strengthening the supply capacity of exportable goods and
     services in least developed countries in particular.  The Council
     could consider encouraging the United Nations system, including
     IMF and the World Bank, and WTO to coordinate their action in this
     area, and urge all countries to participate in the forthcoming
     High-Level Meeting on Integrated Initiatives for Least Developed
     Countries, to be organized by WTO, UNCTAD, the International Trade
     Centre, the World Bank and IMF on 27 and 28 October 1997.

     9.   The Council may wish to note that work is under way in WTO
     and UNCTAD in the areas of trade, investment and competition, and
     invite these organizations to cooperate in studying all the
     implications of the relationship between trade and investment to
     lay the basis for developing sound and equitable rules in this
     area.  In addition, UNCTAD could be invited to pursue and advance
     its work on the linkages between trade and competition policies.


                                     Notes

     1/  See also Economic and Social Council resolution 1996/43.

     2/  IMF Survey, 14 October 1996, p. 327.

     3/  See The Results of the Uruguay Round of Multilateral Trade
Negotiations:  The Legal Texts (Geneva, GATT secretariat publication,
Sales No. GATT/1994-4), in particular the Declaration on the
Contribution of the World Trade Organization to Achieving Greater
Coherence in Global Economic Policymaking.

     4/  See OECD, Development Assistance Committee, Shaping the 21st
Century:  The Contribution of Development Cooperation (Paris, May
1996).

     5/  Andre' P. G. de Moor, "Key issues in subsidy policies and
strategies for reform" (Institute for Research on Public Expenditure,
the Netherlands).

     6/  See, for example, communique' of the Joint Ministerial
Committee of the Boards of Governors of the World Bank and the
International Monetary Fund on the Transfer of Real Resources to
Developing Countries, Washington, D.C., 30 September 1996; communique'
of the Interim Committee of the Board of Governors of the
International Monetary Fund (Press release No. 96, 19 September 1996);
and World Bank, "The Heavily Indebted Poor Countries (HIPC) Debt
Initiative", Annual Meetings Backgrounder (Washington, D.C.,
24 September 1996).

     7/  The Results of the Uruguay Round of Multilateral Trade
Negotiations:  The Legal Texts (Geneva, GATT secretariat publication,
Sales No. GATT/1994-4).

                              Selected references


1.   International Monetary and Financial Issues for the 1990s, vol. VIII
(United Nations publication, Sales No. E.97.II.D.5).

2.   United Nations Conference on Trade and Development "Globalization and
liberalization:  effects of international economic relations on poverty",
inter-agency thematic contribution to the International Year for the
Eradication of Poverty, 1996 (UNCTAD/ECD/PA/4/Rev.1).

3.   World Investment Report, 1996:  Investment, Trade and International
Policy Arrangements (United Nations publication, Sales No. E.96.II.A.14).

4.   Report of the Secretary-General entitled "Overall progress achieved
since the United Nations Conference on Environment and Development:  financial
resources and mechanisms" (E/CN.17/1997/2/Add.23).*

(* The outcome of the fifth session of the Commission on Sustainable
Development, which was devoted to the preparations for the special session of
the General Assembly on the implementation of Agenda 21, was also taken into
account in preparing the present report.)

5.   Report of the Secretary-General on productive employment and sustainable
livelihoods (E/CN.5/1997/3).

6.   "General review of the list of least developed countries", report of
Working Group III of the Committee for Development Planning (CDP/1997/4 and
Add.1 and 2).

7.   Trade and Development Report, 1996 (United Nations publication, Sales
No. E.96.II.D.6).

8.   Trade and Development Report, 1995 (United Nations publication, Sales
No. E.95.II.D.16).

9.   G. B. Assenza, "Private capital mobilization - framework and analysis",
Development and Multilateral Institutions Programme, Working Paper No. 3,
(Lysaker, Norway, Fridtjof Nansen Institute, February 1997).

10.  World Trade Organization Annual Report, vol. I, Trade and Foreign Direct
Investment (October 1996).

11.  E. Fernandes-Arias and P. J. Montiel, "The surge in capital inflows to
developing countries:  an analytical overview", World Bank, Economic Review,
vol. 10, No. 1, p. 51.

12.  Fabrice Hatem, International Investment:  Towards the Year 2000, Study
Centre on International Investment, Ministry of Economic Affairs of France
(Paris, Arthur Andersen, 1996).

13.  International Investment:  Towards the Year 2001 (United Nations
publication, Sales No. GVE.97.0.5).

14.  E. V. K. Fitzgerald, "Intervention vs. regulation:  the role of the IMF
in crisis prevention and management", UNCTAD Review, 1996 (United Nations
publication, Sales No. E.97.II.D.2), p. 35.

15.  J. A. Kregel, "Some risks and implications of financial globalization
for national policy autonomy", UNCTAD Review, 1996 (United Nations
publication, Sales No. E.97.II.D.2), p. 55.

16.  "General Council sends 30 reports to the Singapore Ministerial
Conference" World Trade Organization Newsletter:  FOCUS, No. 13
(October/November 1996), p. 1.

17.  "WTO Ministerial Conference, 9-13 December '96", Sustainable
Developments:  Newsletter of the International Institute for Sustainable
Development, vol. III, No. 6 (16 December 1996).

18.  M. Kohr, The WTO and the Proposed Multilateral Investment Agreement: 
Implications for Developing Countries and Proposed Positions, Third World
Network, Trade and Development Series 2, 1996.

19.  M. Dubey, An Unequal Treaty:  World Trading Order After GATT (New Delhi,
New Age International Limited, 1996).

20.  K. Griffin and T. McKinley, New Approaches to Development Cooperation,
UNDP Office of Development Studies, Discussion Paper series 7, 1996.

21.  J. Eatwell, International Financial Liberalization:  The Impact on World
Development, UNDP Office of Development Studies, Discussion Paper series 12,
1996.

22.  "The current international trading system and prospects for the
promotion of trade among developing countries", paper prepared for the sixth
summit of the Group of Fifteen (the summit level group of developing
countries), Harare, Zimbabwe, 3-5 November 1996.

23.  "Composition of fiscal adjustment is critical to its long-term success",
IMF Survey, 27 January 1997, p. 1.

24.  Foreign Direct Investment in Africa (United Nations publication, Sales
No. E.95.II.A.6).


              

Date last posted: 29 November 1999 12:16:05
Comments and suggestions: esa@un.org