1. Interregional co-operation
I would like to deal with two aspects of the United Nations Economic Commission
for Europe's role in financing for development: interregional and also
intraregional. This is because on one side, the UNECE region represents
the richest part of the world, and on the other side, there is an enormous
heterogeneity inside the region in terms of incomes per capita.
The advanced ECE economies have been a major source of finance for developing
countries, both directly and indirectly, through the intermediaries of multilateral
regional and global institutions. Although the actual ODA has remained significantly
below the target of 0.7 per cent of GNP, some of the developed countries'
contributions in terms of their GDP are worth mentioning here today such as
Denmark (1.06%), the Netherlands (0.84%), Sweden and Norway (0.8%). President
Bush recently made a proposal for a three-year US $ 5 billion increase in
American foreign aid to poor nations.
The UNECE secretariat welcomes the statement in the Monterrey Draft Outcome,
which urges developed countries that have not done so to make concrete efforts
toward the target of 0.7 per cent of GNP. Nevertheless, it agrees with the
Consensus document that further progress needs to be made in the coordination
of assistance among donors, that funds should be disbursed quickly in a coherent
framework of assistance. Providing debt relief to most indebted and poorest
countries that face unsustainable debt burdens should be further re-considered.
However, although the ODA is important it will not have the expected impact
unless effective institutions of a market economy complement it. This is a
lesson from the experience in the UNECE region in both the past and the present.
This points to the important role which international organizations, including
the regional commissions, can play in promoting capacity building, including
the creation of a legal and institutional framework. Another important aspect
is the support of policy dialogue among countries at the regional level, and
the provision of policy advice, which, as mentioned in the Consensus, should
take into account the social costs of adjustment programmes.
The work of the UNECE on norms and standards has contributed to capacity
building and promoted at the same time the integration of the transition economies
into the wider division of labour in the region and the world economy at large.
This body of work represents a considerable investment by UNECE member governments
and other participants. Therefore, we strongly support the Consensus' call
to strengthen the participation of developing countries and countries with
economies in transition in norm setting.
We believe that many of these standards, norms and conventions would create
larger benefits if they were adopted beyond the UNECE region, and one of the
activities of the organisation has been to increase their global visibility.
Developing countries should also be encouraged to follow the regional integration
mechanisms that have been successful in the UNECE region. These comprise not
only measures to reduce barriers to trade but also to foster policy dialogue,
which could be supported by the UNECE.
2. Intra-regional co-operation
Since 1990, Europe has witnessed dramatic political and economic changes
with the collapse of the Communist regimes in Central and Eastern Europe and
the former Soviet Union. There has been considerable progress toward the goal
to create functioning market economies, and in most countries of Central and
Eastern Europe this transition process is now nearly complete.
In recent years, most transition economies have experienced relatively strong
economic growth, but there remains still a considerable gap in real incomes
per capita compared with Western Europe. Within the UNECE region, eight low-income
countries are eligible for the IMF Poverty Reduction and Growth Arrangement.
In seven low-income countries of the CIS - Armenia, Azerbaijan, Georgia, Kyrgyzstan,
Republic of Moldova, Tajikistan, and Uzbekistan (CIS7) about 20 million people,
about half of the total population, live in extreme poverty. Most of these
countries are highly indebted and rely almost exclusively on official sources
of finance.
That gap in development levels compared with Western Europe remains one of
the most important challenges of the European continent because it risks being
a source of economic and political instability. On the basis of this, one
can draw an immediate conclusion that there will be a further need of ODA
from most developed states of the region to the low-income countries of the
region. An important part of aid is coordinated by the EU and oriented to
candidate countries through PHARE and also to non-candidate countries through
TACIS.
In addition to the need for assistance, the UNECE has always insisted on
the importance of institutions (including private property rights, law enforcement,
fighting corruption) and other socio-political variables in determining economic
performance. These factors play also a crucial role in the transition process
in Eastern Europe and the CIS.
During the past decade attracting foreign direct investment has been one
of the priorities of the transition economies. Experience proves that multinational
corporations (MNCs) contribute to output and employment by restructuring acquired
enterprises, investing in new capacity/and or improving the efficiency of
existing operations.
3. The role of UNECE in the follow-up to the FFd Conference
The adoption of the Monterrey Consensus must not be the only outcome of this
Conference; it should have a follow-up for all participants. The challenge
to close the development gaps inside the region will also shape the future
activities of the UNECE. In this connection:
- The UNECE fully supports the Monterrey Consensus, para. 64, according
to which the Regional Commissions should foster policy dialogue among countries
at the regional level on macroeconomic financial, trade and development
issues.
- The UNECE also shares the view that sustainable development is inevitable
and that we should not sacrifice social developments and environmental protection
to growth. The report of the Secretary-General on the implementation of
Agenda 21 (para 238) suggests that the Regional Commissions could effectively
transform themselves into regional sustainable development commissions.
The UNECE will include the social dimension of economic development into
its agenda - it is the only Regional Commission in which the social dimension
is missing.
- The intra regional aspect of FFd will further accelerate cooperation
among regional commissions in such areas as trade facilitation, FDI promotion
etc.
I thank you for your attention.