by Martin Khor

Havana, Apr 2000-- The Programme of Action (POA) of the Havana G77 Summit also seeks to foster increased cooperation among the countries of the South and for follow-up, including an institutional follow-up.

South-South Cooperation

On South-South cooperation, the POA said that South-South cooperation is a crucially important tool for strengthening economic independence. However, progress over the years has not been commensurate with the commitments in the various declarations and programmes of action. The lack of effective follow-up has lessened the impact and effectiveness of such co-operation in recent years.

The tendency for decisions taken in multilateral fora at the global levels, to impact directly on the developing countries, makes it all the more necessary for our countries to foster increased co-operation and co-ordination of effort.

Among the commitments in this section are: (1) To renew efforts to expand South-South trade and investment

* Review the Global System of Trade Preferences (GSTP) among developing countries with a view to deepening and expanding the GSTP and invite the Chairman of the Group of 77, to convene an intergovernmental consultative meeting as soon as possible and to request UNCTAD to contribute.

* Invite the Chairman of the G-77, in consultation with the Chairman of the G-77 Chamber of Commerce and Industry, to convene an extraordinary meeting to review the performance of the chamber and to formulate a specific programme of work. Encourage regular organization of a business forum and a South-South trade and investment fair.

* Strengthen current modalities and mechanisms for South-South cooperation, including by regional economic groupings; Intensify cooperation and integration in all modes of transport among developing countries; Encourage the landlocked developing countries and the transit developing countries to further strengthen their collaboration through implementation of existing transit arrangements and agreements and to consider of new arrangements and agreements in order to enhance the efficiency and increase the flow of transit trade.

* To harness industrial complementarities among countries of the South, including through promotion of practical initiatives in the area of industry to increasing the productive capacity and fostering enhanced South-South investment.

(2) To strengthen cooperation in the monetary and financial field

* Note the initiative G-77 Chamber of Commerce and Industry to establish a G-77 Trade Development Bank with its headquarters in Nairobi and branches in all regions of G-77; Continue to review the proposal of the establishment of a South-South monetary fund, South-South economic and social development fund and a South-South commodity price stabilization fund, within the process of reviewing the feasibility study of the South Bank initiative undertaken by the Group of 77 in 1983 as an innovative financial arrangement of the South to build up capital markets and facilitate South-South trade and investment.

* Create at the national level, institutional arrangements for developing and strengthening capital markets in the countries of the South. Establish linkages between the stock exchanges and secondary bond markets of the regions of the South.

(3) To strengthen cooperation in promoting social development including the enhancing of capacity-building and human resources

* Decide to exchange experiences on: Pro-poor health care delivery, population planning and education programmes developed in the South based on local skills and resources; Innovative arrangements including centers of excellence established in the South for greater spread of knowledge existing in the South in the field of social development; Successful programmes focussing on youth, children and women. Incentives to attract more capital to generate more research for affordable remedies to diseases prevalent in the South; Actions to spread various alternative forms of medicine existing in the South.

* Invite member States to consult and coordinate, as necessary, their position prior to the annual general conferences of all relevant intergovernmental organizations.

(4) To promote multilateral cooperation and arrangements towards the expansion of South-South cooperation

* Invite G-77 countries to contribute to the expansion of the resources of the Perez-Guerrero Trust Fund for Economic and Technical Cooperation among Developing Countries (PGTF); To publish an annual report on South-South cooperation; To revitalize the role of various G-77 action committees in various fields of cooperation as provided for in the Caracas Programme of Action,

* Encourage the establishment of a network among focal points of developing countries by the Special Unit for TCDC, to create a web of information for development.

* Invite the Administrator of the UNDP to strengthen the TCDC Unit as the UN focal point for South-South cooperation through the preservation of its separate identity and the provision of adequate resources to ensure the full implementation of decisions of the South Summit under its sphere of competence and to enable it to carry out its relevant mandates and responsibilities.

* Promote the further use of experts from developing countries in the programmes and projects of the UN system

* Decide to convene a high level conference on South-South cooperation in the year 2003.

* Work to operationalize the Africa-Asia and Africa-Latin America and the Caribbean Platforms for action on the implementation of the Convention to Combat Desertification

North-South Relations

On North-South Relatons, the POA said: "We are deeply concerned about the current state of North-South relations and the weakening of the commitment of the developed countries to international cooperation in support of development that was a hallmark of these relations prior to the 1980s.

"The post-cold War period with its promise of a peace dividend has not fulfilled the hopes and expectations of the developing world..... At the same time we also noted with concern the declining commitment to multilateralism which has negatively affected international cooperation for development. In fact, despite the growing prosperity of the North, the level of finance for development for multilateral assistance including ODA has experienced a continuous decline over the years.

"We have also witnessed with concern the marginalized role of the UN in decision-making on the major international economic issues and the shift of such decision-making to the Bretton Woods institutions, in which developed countries exercise effective control by virtue of the system of weighted voting, and to the WTO in which they have sought to pursue non-transparent and exclusive decision- making procedures inimical to the interest of the developing countries. These developments have adversely affected the climate for pursuing a constructive and effective dialogue between North and South..."

According to the POA, a stable international economic system rests critically on the renewal of an effective North-South Dialogue. Such co-operation would need to be approached in a manner "which is perceived by the developing countries to be equitable and fair and that will lead to fostering political will of all countries to build a constructive dialogue based on the spirit of partnership, common but differentiated responsibility, mutual benefit, and genuine interdependence.

"Within this framework we believe that a renewed North-South Dialogue should seek to achieve two major objectives namely, the restoration of the focus on development in existing international relations and the need to correct the imbalance in the operation of the international economic system which has placed the developing countries at a clear disadvantage vis-à-vis the developed countries.

"For North-South relations to play a more dynamic and central role in the global economy, we need to thoroughly evaluate the obstacles in the way these relations were conducted. We will also assess our potentials and strengths with a view to formulating strategies to effectively confront these challenges.

"In the context of North-South dialogue, special attention should be given to the solution of critical problems for developing countries, such as restrictions to world trade hindering development, the volatility and instability of the international financial system and the drastic reduction of financial flows under preferential terms and conditions towards the countries of the South; the widening technological gap between the North and the South; the worrisome foreign debt of developing nations and the extremely unequal distribution of world income to the detriment of the most vulnerable economies.

"The process of globalization and any multilateral negotiations on agriculture must take fully into account concerns and special needs, including those related to food security and rural employment, of developing countries which are predominantly agrarian economies. Recognizing that food security is an important issue, we call for the expeditious implementation of the Marrakech Ministerial decision on measures concerning possible negative effects of the reform programme on least developed and net food importing developing countries.

"For the global economy to recover, it will be necessary to restore confidence in the international trading system, and offer new opportunities for the countries of the South to ensure access to the markets of developed countries. Towards this end multilateral trade negotiations should pay special attention to the development dimension of international trading arrangement. Similarly, the principle of non-reciprocity and the preservation and full implementation of special and differential treatment for developing countries should be firmly entrenched in the multilateral trading system.

"In the spirit of fostering North-South relations we underline the necessity for developed countries to eliminate laws and regulations with adverse extra-territorial effects and other forms of unilateral economic coercive measures, inconsistent with the principles of international law, the UN Charter and the principles of the multilateral trading system.

"We also express our grave concern over the impact of economic sanctions on the civilian population and development capacity in targeted countries and therefore urge the international community to exhaust all peaceful methods before resorting to sanctions, which should only be considered as a last resort. If necessary, these sanctions must be established only in strict conformity with the Charter of the United Nations with clear objectives, clear time frame, provision for regular review, precise conditions for their lifting and never be used as a form of punishment or otherwise exact retribution.

"We express deep concern over the air attack against El-Shifa pharmaceutical factory in the Sudan on 20 August 1998. We recognize that such an act has had a negative impact on the economic and social development of the concerned country and express our continued solidarity and support of its demand for a just and fair consideration of the matter in accordance with the Charter of the United Nations and International Law."

In action proposals in this area, the Heads of State and Government, committed themselves to:

(1) Foster a new North-South partnership to promote consensus on key issues of international economic relations and development

* Revitalize the North-South dialogue and to that end, invite the G77 Chairman to take steps to convey promptly the G-77 concerns and interests to our developed partners, including through the meetings of the G-8, and to initiate appropriate action with a view to strengthen the existing international arrangements within the UN system in coordination with other groupings from the South.

* Request the High-level Advisory Group of Eminent Personalities from the South, while preparing its report on globalization, to include therein a comprehensive assessment of the North-South dialogue.

* Work towards a comprehensive international strategy to reverse the decline in ODA, to achieve the target of 0.7% of GNP of developed countries by the end of the first decade of the 21st century and also within that target ensure to earmark 0.15% of their GNP for the LDCs and to endeavour to reach the target of 0.20% for the LDCs by the year 2000.

* Work towards outright cancellation of unsustainable debt of developing countries, and reaffirm the need of a just and lasting solution to the problem of the foreign debt of developing countries, which considers the structural causes of indebtedness and prevents the recurrence of this phenomenon in the future. In this regard, we attach special priority to the creation of appropriate conditions worldwide to curb financial volatility, ensure the necessary institutional reforms and reactivate the financial flows towards the countries of the South, and other ways of financing for development.

* Welcome and fully support the holding of the Third UN Conference on the LDCs in 2001

* Work towards an enabling international economic environment conducive to full implementation of Uruguay Round agreements in particular the operationalization and strengthening of the measures relating to the special and differentiated treatment for developing countries and the GSP and proper functioning of all principles of a free multilateral trading system including its universality.

* Work towards incorporating the agriculture sector within normal WTO rules, addressing the particular problems of predominantly agrarian economies, small island developing economies and net food importing developing countries. In order to enhance the incorporation of the agricultural sector within the WTO rules, the necessary measures should be taken so as to fully address the particular problems of predominantly agrarian developing economies, small island developing economies and net food importing developing countries.

* Pursue action to encourage the major economies of the North, particularly the G-8, to enhance coordination and coherence of their macroeconomic policies with development objectives of the South.

* Support reforms, which should lead to the emergence of a new financial architecture, that ensures full participation of the developing countries in the international economic policy decision-making and that ensure stability, transparency and democratic functioning of the international financial system.

* Work to ensure for the effective integration of all countries into the international trading system including improving supply side capabilities of developing countries especially the least developed among them, overcoming the debt problem and to create conditions in our countries to attract adequate financial flows, including ODA, and to ensure institutional reforms and reducing financial volatility.

* Work towards ensuring that rescheduling of debt or its cancellation is financed through additionality of resources and not at the cost of other forms of official development assistance.

* Work towards achievement of the universal membership of the World Trade Organization as soon as possible in order to strengthen the multilateral trading system. We strongly believe that appropriate assistance should be made available to developing countries seeking accession. They should be offered terms that neither exceed nor are unrelated to the commitments of developing country and LDC members of WTO. We urge that all WTO members refrain from placing excessive or onerous demands on applications from developing countries. We, therefore, stress the need for a transparent, streamlined and accelerated accession process that is in keeping with WTO rules and disciplines.

* Invite UNCTAD in close cooperation with the Geneva Chapter to establish and pursue a programme to elaborate trade policy tools that promote the development dimension within the multilateral trading system.

* Advocate a solution to the serious environmental problems, on the basis of the recognition of the ecological debt of the North and of the principle of common but differentiated responsibilities between developed and developing countries, highlighting the need to gain access under preferential terms to the appropriate financial resources and technologies in order to ensure a sustainable development as provided in Agenda XXI.

(2) Restore the central role of the UN in global economic issues, development and international cooperation

* Invite the Chairman of the Group of 77 to include the issue of the role of the UN in global economic issues in G77 meetings.

* Call upon UNCTAD, in view of the significant expansion of the activities of transnational corporations (TNCs), including the increasing number of mega-mergers among corporations in developed countries as well as cross border acquisitions in the developing countries, to monitor these activities and analyze their economic, social and environmental implications for the South with a view to maximizing their potential benefits and minimizing their possible negative effects.

* The contribution of the transnational corporations (TNCs) to sustained economic growth and sustainable development is determined by their global strategies characterized by the search for increased competitiveness and ever-higher profits. Such a situation is not necessarily consistent with job creation and the realization of development objectives in many developing countries.

"In this context, with a view to achieving a balance between the business plans of TNCs and the developmental objectives of developing countries, we call upon UNCTAD and ILO, within their respective mandates, to study the impact of TNCs activities on unemployment as well as on the competitiveness of small and medium enterprises in developing countries. We also call on the TNCs to integrate the development objectives of host developing countries in their business strategies.

Institutional Follow-Up

The POA also has a section on institutional follow-up, which was was approved at the Ministerial session of the Summit on 14 April morning, along with the rest of the POA. However at the closing session attended by the Heads of state and government, this section was orally amended in light of the institutional decisions, including the setting up of a South Coordination Commission, announced in the closing address of the President of the Summit - Nigerian President Obesanjo. (The final amended text was to be issued later.) A motion by Ghana provided that the chairman of the Summit will be in office until the next Summit.

Obesanjo's statement (with further oral motions from the floor) said:

* "We agreed, firstly to strengthen our collective negotiating capacity, including the capacity for coordination and implementation of decisions, policies, and programmes. We have therefore decided to establish a Coordinating Centre utilising the South Commission outfit to be appropriately located and made up of G-77 Council comprising of: the G77 chairman of the Summit, the G77 Coordinator, the chairpersons of ASEAN, CARICOM, OAU, NAM and other similar regional organisations of the South. The Council will coordinate the implementation of the South Summit's Programme of Action as well as decisions on South-South cooperation. The Chairman of the G77 Summit, the Chairman of NAM, the Chairman of the OAU, the Prime Ministers of Malaysia and Jamaica are charged with the responsibility for the establishment of the Council on behalf of the Summit.

(Separately, it was announced that the Prime Ministers of Malaysia and Jamaica will come up with the plan for this within six months.)

The POA section (before the amendments) states that while the establishment of a secretariat of the Group of 77 remains relevant as recommended by various G-77 ministerial meetings, the articulation of a rational structure for the management of the affairs of the G-77 is a critical priority.

Although the present loose arrangement has succeeded in achieving a reasonable level of support to the activities of the G77 Chairman and members, the time has come to adopt a more structured arrangement for managing the affairs of the Group. To this end, it was decided to strengthen the existing arrangement of the Office of the Chairman of the Group of 77 in New York.

An annual contribution of US$5,000 was decided, and those countries in a position to contribute more were invited to do so.

The G77 Chairman was invited to review the complementaries and harmonization of various programmes of Action of South-South cooperation adopted by various South-South groupings, taking into account the Programme of Action tabled by the Non-Aligned Movement, Panel of Economists and other groups from the South.

It was decided to establish a special fund with a target of US$10 million to assist full implementation and follow-up of the decisions adopted by the South Summit.

The annual meeting of the Chairmen/Coordinators of Chapters of the Group of 77 in the year 2000 should consider ways to improve coordination mechanisms among the Chapters, to strengthen arrangements for advancing the Group's positions in the UN system, and to report on its this to the upcoming G77 Ministerial Meeting

It was decided to establish a research programme including through links with research institutions in the South which have the potential to carry out analyses directly relevant to the work of the G-77.

It was also decided to establish Groups of Experts in their individual capacities, to review and comment upon the agendas of major multilateral conferences with a view to providing guidance on the objectives and goals of the developing countries, as should be reflected in the outcome of such fora.

The G77 Chairman should establish a monitoring, analysis, identification, management, follow-up and evaluation mechanism to ensure implementation of its South-South projects and initiatives.

Finally, it was decided to convene the Second G-77 South Summit in the year 2005.

Martin Khor is the Director of Third World Network.

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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