A PROGRAMME OF ACTION FOR LDCs

Speech of Undersecretary MRS. ROSARIO G. MANALO

Head of the Philippine Delegation to the 3^rd UN Conference on the Least Developed Countries

14-20 May 2001, Brussels, Belgium

(Check Against Delivery)

Mr. President:

On behalf of the Philippine Delegation, allow me to congratulate you and the other members of the Bureau on your election. I also extend, on behalf of my country, sincere appreciation to the European Union and its Parliament for hosting this conference and to the Belgian Government for the hospitalities extended to my delegation.

Mr. President:

Allow me to focus on a number of issues, which my delegation believes must be addressed in a Programme of Action for LDC's.

My delegation is concerned that there has been a marked decline in Official Development Assistance to developing countries including LDC's. In 1975, grants and other assistance to developing countries was almost 80 billion dollars. In 1999, the total was barely 45 billion. Between 1992 and 1995, ODA fell in real terms by a hefty 14 percent. The decline in aid flows to LDC's has been even more alarming as it has dropped by 45 percent since 1990 in real per capita terms. It is now back to the levels of some three decades ago.

Clearly, this decline in ODA must be reversed. It remains critical for the development of developing countries. LDC's in particular, rely heavily on external rather than domestically generated resources to finance capital formation and domestic budgetary processes. It is therefore important that the target of 0.7% of GNP for industrial countries in official development assistance be realized. My delegation would like to express its appreciation to those of them who have complied with this commitment.

Development is particularly difficult for countries saddled by crippling debt. The LDC's as a group, according to the World Bank owed 121 billion dollars in 1990 and over 150 billion in 1998. Thirty-three of these countries entered the new millennium with unsustainable levels of external debt even after the full deployment of traditional debt relief mechanisms. Adequate debt relief for the world’s heavily indebted poor countries is therefore urgently required.

Capacity building is key to the development of LDC's. The lack of social and economic infrastructure, the weakness of market development, the thinness of the entrepreneurial class and the low private sector production capabilities must be adequately addressed to reap the benefits of reform and integrate the LDCs into global progress. The empowerment of people through education is vital to this objective and it is also the best instrument for promoting democracy and advancing good governance.

Mr. President

As a developing country, the Philippines is not immune to some of the problems confronting LDC's. Poverty alleviation remains to be the primary objective of my government. We are also confronted with a considerable debt burden and we have our own needs for capacity building, access to technology and markets, and we have sectors, which have been disadvantaged by foreign competition in a globalized economy. Hence, while fully recognizing the need for special attention for LDC's, it must also be recognized that certain actions in favour of LDC's could and should find application in addressing similar problems in other developing countries. Our capacity to respond to proposals in the Programme of Action will also be conditioned by these very real constraints.

Nonetheless, despite its very limited means, the Philippines has been extending since UNCTAD IV technical assistance to other developing countries particularly LDC's. These are mainly in the areas of human resource development and triangular cooperation projects. To date, 131 developing countries have benefited from our technical assistance programmes.

The potential for increased trade to promote development and alleviate poverty in the developing world should be realized. In the words of the IMF Managing Director, "The true test of the credibility of industrial countries' efforts to combat poverty lies…in their willingness to open their markets to poor country's exports and to deliver on their promises of official development assistance". The governments and parliaments of industrial countries have more than just a moral obligation here. They must allow developing countries freer access to their markets and avoid eroding tariff reductions through excessively stringent product standards, which are difficult for these countries to attain. The expansion of agricultural production and exports of developing countries could also be stimulated through the elimination of market distorting agricultural subsidies in the developed countries.

Mr. President

An important aspect of our task at this conference is to ensure that the programme of action that we will formulate will be properly implemented. For this reason, we believe that we should all agree to adopt an effective mechanism for its implementation, follow-up, monitoring and review at the national, regional and global levels. We believe that this element is crucial if we are to avoid facing 10 years from now the criticisms we now face about the ineffectiveness of the first two programmes of action for LDC’s.

Thank you for your attention.

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