G77 asks for international actions

by Martin Khor

NEW YORK: Tanzanian President Benjamin William Mkapa, speaking on behalf of the Group of 77 and China, called for actions at international level to counter both the global environmental and development crisis.

Presenting a comprehensive review of current development problems, Mkapa proposed:

* A review of the TRIPS agreement in the WTO to relax the conditions for technology transfer;

* A new round of commodity schemes to rationalise raw materials supply whilst guaranteeing fair prices;

* More action on cancellation of external debt stocks;

* Increased official development assistance (ODA) and FDI flows to developing countries, increase in GEF capital and financial support to the Desertification Convention; and

* Preferential and unrestricted access to markets of developed countries.

Earlier, in opening the five-days' of speeches, Brazilian President Fernando Henrique Cardoso declared: "The five years that elapsed since the Rio Conference, has clearly shown that changes in the global political and economic structure have not been followed through by commensurate progress in the fight against poverty and the predatory use of natural resources... we must correct the imbalance that has emerged between advances in the agenda of political and economic freedom, on the one hand, and that of sustainable development, on the other."

The Tanzanian President said, UN Conference on Environment and Development (UNCED) was unique in that world leaders recognised not only the imminent environment crisis but how it was embedded in our economic and social systems. "We recognised that a realistic and long term resolution of the crisis lay in dealing squarely with the challenge of simultaneously fostering environmental protection and development, in an integrated manner, through an unprecedented global partnership."

Decline in ODA

And while there have been some good achievements, they were modest by the 1992 standards. Although at Rio, the developed countries agreed to reach the UN target of 0.7% of their GNP towards ODA, in fact, the aid contribution declined substantially since Rio in 16 out of 21 members of the OECD's Development Assistance Committee. This led to an overall decrease in combined aid from 0.34% of GNP in 1992 to 0.27% in 1995 and 0.25% at present.

This "disastrous decline" in ODA eroded the capacity of developing countries to implement the Rio agreements. The result has been environmental degradation, worsening poverty in some areas and widening inequalities.

In many developing countries, investment and trade are accepted as being more secure and dignified foundations for development. Mr Mkapa said although FDI has increased substantially in the past five years, its focus "is always on projects that yield quick returns and not necessarily compatible with the Rio goals of sustainable development."

"Secondly, not all developing countries have in place that level of human resource capacity and infrastructural development necessary to be attractive to FDI. As of now FDI interest in most such countries is minimal, regardless of those countries' great efforts at political and economic reform."

He added that most developing countries continue to improve their investment regimes and other aspects of regulatory framework to encourage both domestic and foreign investment.

"But a loss of investments are still required to refine it, to build the necessary financial and human capacity and infrastructure, and to integrate economies, all of which can help to attract FDI. Such investments will continue to need and depend on ODA funding."

"In terms of development financing, FDI and ODA are in completely different leagues and they cannot be interchangeable." Mkapa said that Rio had recognised that technology transfer was essential for developing countries to make the transition to sustainable development. However, this transfer has not been as fast as expected.

Developing countries lack sufficient resources to acquire package technologies or pay royalties. "It is thus imperative that we arrive at internationally agreed modalities on how to transfer technology from developed to developing countries on a predictable and sustainable basis."

He called for the promotion of publicly funded technology and R&D projects to encourage technology transfer on concessional terms.

"The World Trade Organisation is also urged to undertake a review of the TRIPs agreements, as soon as possible, with a view to relaxing the conditions for the transfer of technology, particularly of environmentally sound technologies, to developing countries."

Solutions to critical sectoral issues

Mkapa also called for solutions to critical sectoral issues, such as unsustainable patterns of production and consumption, a financial mechanism for the Desertification Convention, reduction of Greenhouse Gas emissions and measures to improve energy efficiency and develop new, clean and renewable sources of energy. The Netherlands Prime Minister, Mr Wim Kok, speaking on behalf of the European Union, said "we are in danger of passing thresholds beyond which serious (environmental) damage will occur, some of it irreversible."

The industrialised world, Kok said, should take the lead in reducing its emissions of greenhouse gases. He said, developed countries should conclude a legally binding commitment in Kyoto (at the Conference of Parties of the Climate Change Convention in December). The EU has agreed to a phased reduction of greenhouse gasses emissions of 15% below the 1990 level by the year 2010. Mandatory and recommended policies and measures, including harmonised ones, must ensure that this target is achieved.

Noting that deforestation is taking place at a rate of 11 million hectares per year, he proposed the start of negotiations for a global Convention on Forests, to be open for signature in the year 2000.

The EU also pledged to devote more resources to combat desertification.

Kok reiterated the EU's interest in initiatives for distribution and management of water and for sustainable energy policies. The EU proposed to study the feasibility of a fourfold increase in eco-efficiency to be achieved in two to three decades.

The EU, Kok said, commits itself again "to provide substantial new and additional concessional financial resources" for Agenda 21 implementation.

He added: "We will do our best at least to stop the downward trend in development assistance and we will do our utmost to reverse this trend, in order to reach the 0.7% ODA target. Such assistance should in particular aim at eradicating poverty."

He also requested the Secretary-General to present strategies for long term sustainability, within the time frame of 50-100 years, which would be the background for high-level consideration of the General Assembly.

The Japanese initiatives

Japan's Prime Minister Ryutaro Hashimoto, announced two initiatives:

* A Comprehensive Strategy for the prevention of global warming (or Green Initiative), consisting of two pillars: Green Technology (to promote efforts of developed countries in energy conservation technologies, introduction of non-fossil energy sources, development of innovative energy and environmental technologies, and afforestation and preservation of forests) and Green Aid (utilising ODA and private resources to cope with energy and global warming).

* A new plan called Initiatives for Sustainable Development toward the 21st Century (ISD), to be funded by ODA. This plan would cover air and water pollution measures; global warming; water issues; preservation of the natural environment; and environmental education.

Mkapa called for the capital of the Global Environment Facility (GEF)to be increased substantially beyond the current $2 billion in order to fund programmes within its mandate and new areas (such as the Desertification Convention), and for a review of the GEF mandate and streamlining its decision-making to make it "less cumbersome, less bureaucratic and more transparent." Calling for a more conducive international economic environment, the Tanzanian President welcomed recent policy statements in the US and at the G7 Summit on trade and investment in Africa, but stressed that for LDCs these initiatives cannot be a substitute for ODA but should be an addition to it.

"There is also the need to look afresh at the question of commodity prices and terms of trade for the LDCs," he added. "Our development partners need to show political willingness to participate in a new round of commodity schemes aimed at the rationalisation of the supply of raw materials, whilst guaranteeing fair remunerative prices for our natural resources."

Mkapa noted that the period since Rio had been characterised by globalization and liberalisation of the world economy. "We need to ensure that globalisation is pursued in compatibility with the over-riding objective of sustainable development. In this regard, the private sector, including transna-tional companies, have a critical role in preventing damage to the environment."

He added that no area deserves more urgent attention than external debt. "Debt service is gobbling up over 30% of Africa's export revenues, 25% of our savings and over 4% of GDP. With Africa's low level of savings, such a burden is clearly unmanageable."

"Debt rescheduling can work for some developing countries but for highly indebted poor countries, more needs to be done in terms of debt stock cancellation, at least for those countries that have clearly demonstrated the will to put their economies in order."

"We appreciate recent initiatives to reduce debts both within the Naples terms of the Paris Club as well as those within the multilateral framework. But when criteria for eligibility are too stringent, or if the promised relief is to come in the too distant future, the medicine may arrive when the patient is beyond help." (TWE No. 165, 16-31 July 1997)

Martin Khor is the Director of Third World Network.