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Statement
by Prof. M.G.K. Menon, Member of Parliament
on October 15, 1999 in
the Second Committee (Economic and Financial) of the United Nations. Mr.
President, At
the outset, we would like to fully associate ourselves with the statement
by the distinguished representative of Guyana, Chairperson of the Group of
77. We would also like to compliment the Secretariat on the excellent
quality of the reports before us. Mr.
President, The
last meeting in this century of the High Level Committee on TCDC which was
held earlier this year, took place at a time when the world looks very
different from what it was barely two decades ago, primarily due to the
process of globalization. These integrative forces, unleashed by
globalization, do have the potential of major positive developments for
the developing world. However, over the last two or three years, it is the
destabilizing effects of globalization that have taken the centre-stage of
international deliberations. Furthermore, as my delegation had pointed out
during the general debate, instead of the growth that was expected to be
the outcome of globalization, the forces of rapid technological change
accompanied by liberalisation, have instead led to a spate of financial
crises and continuing economic exclusion of vast sections of humanity.
This underscores the need for the developing countries to work together to
overcome their shared vulnerabilities and disadvantages and to maximize
the benefits that could accrue to them from the process of globalization.
It was with this conviction that we actively participated in the Eleventh
session of the High Level Committee on TCDC. We are committed to promoting
South-South cooperation in an integral and holistic manner. Increased
differentiation in the levels of development in the South can provide a
unique source of strength, and the basis for broadening the scope of
South-South cooperation; in this we agree with the Secretary General’s
report on the "State of South-South Cooperation". In the past
two decades, scientific and technical competence has grown substantially,
in most cases beyond recognition, in several developing countries, thereby
creating a significant complementarity, with the needs of others. Large
and growing domestic markets, considerable human and natural resources,
and the inherent creativity and skills are all part of the enormous
potential that could be used by the South for the advantage of all. What
is required is the will and the investments to give effect and meaning to
South-South cooperation that can benefit from these developments. For
example, apart from the traditional sectors, India has considerable
strengths in the frontier areas of information technology and electronics,
satellite and remote sensing technology, radio astronomy, non-conventional
and alternative energies, bio-technology as well as herbal medicines, and
chemical technology, which it has been willing to put at the service of
South-South cooperation. Indeed, many of our training institutions and
research laboratories are already doing so. We have involved private
training institutions and apex chambers of trade and industry such as the
Confederation of Indian Industry and the Federation of Indian Chambers of
Commerce & Industry in our ECDC and TCDC efforts. Over
the years, we have provided technical, scientific and economic cooperation
to other developing countries valued at over US$ 2 billion conservatively.
Last year alone, we provided an estimated US$ 130 million, under various
programmes of technical and economic cooperation with other developing
countries, through both bilateral and multilateral cooperation
arrangements. Our programme has been constantly expanding and we propose
to continue on this path. The
report on the ‘State of South-South Cooperation’ has documented the
healthy growth in intra-South trade, demonstrated by the fact that nearly
half of the export trade of developing countries is amongst themselves.
That this has been possible, despite the constraints related to attitudes
favouring traditional North-South linkages in trade, and paucity of trade
financing, is a source of optimism. The growth of regional and
sub-regional groupings, committed to accelerated economic cooperation and
integration, has obviously played an important role. In South Asia, we are
committed to a South Asian free trade area, as soon as possible. In the
interim, India has concluded free trade agreements with Nepal, Bhutan and
Sri Lanka; and a similar agreement is under active consideration with
Bangladesh. Similarly, the formulation of a cooperative work programme by
BIMST-EC comprising Bangladesh, India, Myanmar, Sri Lanka and Thailand,
within six months of its establishment, is an indication of the
willingness of its members to operationalise enhanced economic cooperation
between them. The priority areas of BIMST-EC include South-South
cooperation, trade facilitation and development of a free trade
arrangement, enhancing business pluralities and taking initiatives for
making the international economic and trading system more favourable for
developing countries. In order to intensify existing linkages between
members, establishment of multi-modal transport linkages, regional
cooperation in the energy sector, promotion of tourism and active
participation by the private sector in all these activities, are being
actively explored. Both
trade and investment between countries of the South are, as outlined in
the report, impeded by the heavy indebtedness of many countries of the
South. We specially share the concern on financing of trade mentioned in
the report and agree that in many developing countries, the problem is not
simply that of liquidity, which can sometimes be addressed through
clearing house mechanisms, but a paucity of real resources. The phenomenon
of debt-overhang, with its concomitant expectation of increased taxation
in the future, makes an economy appear more vulnerable. Bold initiatives
to address these issues need to be explored. The problems of low and
middle income developing economies which continue to service their debt,
often at a tremendous cost, also need to be considered by the
international community, so as to open up new avenues for South-South
cooperation and therefore for expansion of the global economy. We
note the strikingly uneven nature of foreign direct investment. However,
we are unable to fully share the prescription often advanced and
implicitly outlined in paragraph 27 of the Report (A/54/45) that the
quality of public administration and control of corruption in public
service are the most important factors for attracting investment. It is
clear from the World Investment Report that the objectives of TNCs, which
seek to increase their international competitiveness, are different from
those of developing governments, which want to spur national growth. Thus,
no matter how well a developing country is governed or how stable be its
macro economic environment, these are not the sole parameters that
determine foreign investments. The
report has raised a crucial and troubling question whether globalization
fosters or retards industrialization of developing countries. It has also
highlighted that cooperation in industry, technology transfer and
enterprise development is perhaps one of the weakest aspects of
South-South cooperation, though it has pointed out, taking the example of
the operations of an Indian company, TATA, the growing links between
entrepreneurs of the South. The place of traditional factors of production
is today being rapidly taken over by a single intangible asset which is
non-replicable, unique and proprietary- Knowledge. The problem is that
Knowledge is not allowed to flow easily from the North to the South, since
it has the potential to create wealth. South-South cooperation, in order
to be relevant, must transfer usable knowledge, which adds to the
productivity of our countries, and seek ways and means to achieve this.
Otherwise, we would only replicate the failures which have often
accompanied cooperation between North and the South. Sophisticated
and advanced technologies exist, or could be developed, to meet the needs
of our countries in a cost-effective manner. But developed countries are
not likely to be interested in these objectives, since for them research
and development has to be geared to subserve profit motives. It is,
therefore, necessary that the developing countries should help themselves
by reinvigorating South-South cooperation, to transfer usable knowledge
which adds to productivity and which helps them to acquire a distinct
"niche" profile as quality players in the globalized market.
Examples like the software industry in India, mentioned in the report,
need to be replicated many times over in different parts of the world. Much
of the Indian economy is engaged in producing goods through small and
medium enterprises (SME) which create employment in situ even while they
collectively serve the needs of millions of consumers both in India and
abroad. India has, in response to requests for assistance in this sector
from developing countries, set up projects relating to vocational training
in many partner countries in Asia and Africa. Indian projects are
generally multi-purpose, being aimed at producing goods of value to
society, generating employment and, by being located in areas often remote
from large urban centres, easing population pressures on them. We are also
increasingly being requested to assist in the agricultural field, either
with improved seeds or with agricultural expertise; or recently, with
actual translocation of farmers to an African country to demonstrate the
techniques for growing rice and other staple crops. As the foremost milk
producer in the world, the Indian dairy industry has of late become a
focus of interest under our TCDC programmes. India has entered into dairy
milk production cooperation in Central Asia and East Asia. In meeting
these industrialisation needs, Indian expertise brings with it the whole
weight of its experience in balancing limited finances, exhaustible
natural resources, societies in transition between tradition and
modernity, extremes of temperature and other such factors, often common to
the countries to which it is carried, thus making for easier assimilation. We
share the view, expressed in paragraph 29 of the report that the
international community, especially the multilateral system, has both a
moral and a financial obligation to support South-South cooperation. But
more than that, we strongly believe that in this era of scarce
developmental resources, promotion of South-South cooperation provides the
most cost-effective manner for the utilization of available funds. We
have noted with interest the appraisal of the work of the United Nations
in promoting South-South cooperation. India is host to several
UN-affiliated international Science & Technology Centres which are
engaged in the promotion of cooperation among developing countries, either
regionally or on a wider basis, such as the Asia Pacific Centre for
Transfer of Technology and the International Centre for Genetic
Engineering & Biotechnology (in New Delhi), the Centre for Space,
Science & Technology Education in Asia Pacific (in Dehra Dun), ICRISAT
(in Hyderabad), the Science & Technology Policy Asia Network known as
STEPAN (in New Delhi) and the Committee on Science & Technology for
Development or COSTED (in Chennai). These institutions have developed
sound professional networks with other international organizations in
pursuit of research and training activities for the benefit many
developing countries. We are disappointed that the work of these centres
has not been reflected in the report before us. We
believe that the full scope of South-South cooperation has not yet been
realized by the operational activities of the UN system. Some of the
measures which could be considered for enhancing the full utilisation of
South-South cooperation are: ·
More
frequent meetings on this subject either at experts level or at high
level, perhaps on an annual basis. ·
Sustained
efforts through regional and country offices of UNDP to integrate TCDC in
the national and technical cooperation programmes of developing countries. ·
Better use
and connectivity of UNDP’s Information Referral Service (INRES) [to be
soon replaced by WIDE] for showcasing and publicizing TCDC programmes of
developing countries as well as increasing their utilization. ·
Urging
multilateral financial institutions (MFIs) to use TCDC modalities for
executing large infrastructural projects and for consulting services
provided to developing countries. ·
Persuading
developed countries to adopt the TCDC route for disbursement of
multilateral and bilateral aid in order to maximise returns. ·
Urging
developed countries to give priority to local resources while undertaking
development cooperation projects in developing countries. ·
Urging
developed countries to refrain from using their ODA funds as ‘tied
aid’ or export credit, and instead, to allow the sourcing of expertise,
products and services from developing countries. ·
Promoting
the sharing of skills and expertise in high-technology areas like
information technology, biotechnology, communications technology and
infrastructure development -- areas where the developing countries have a
commonality of interests and a diversified base to promote intra-South
cooperation. Mr.
President, These
activities must be supported by the initiatives of developing countries
themselves. In India, we propose to impart a broader dimension going
beyond Asia and Africa to extend a regional focus to the South Pacific,
the Caribbean and Central America, in our programmes, promoting the
concept of multiple beneficiaries, as put forward by the Secretary General
last year, as a strategic orientation to our activities in this field. We
hope in the future to extend this regional approach. Mr.
President, Developing
countries cannot thrive on a diet of advice and words alone. It is
essential that adequate resources become available to them for promoting
their growth and development, inter alia, through South-South cooperation.
Predictable and assured resource levels commensurate with the needs are a
key ingredient of effectiveness and impact. We, therefore, remain
concerned that shortfalls and decline in core resources are adversely
affecting the capacity of the UN system to contribute to national
development efforts and are adversely affecting its responsiveness to
their emerging and growing needs. Since the early nineties, we have
undertaken several reforms of institutions of UN, Funds and Programmes,
dealing with operational activities. Significant emphasis was also placed
on making development cooperation a central focus of UN’s activities in
the reform proposals considered by us during the 52nd General Assembly. It
has been our consistent view that the impact on development is the real
touchstone on which we will judge the efficiency and effectiveness of
reforms. It is, therefore, disturbing that the role of the UN in this
sphere is constrained by the declining volume of resources at its command,
even as we commence the Multi Year Funding Frameworks. If the Funding
Frameworks cannot meet their sole objective, that is, an increase in core
resources of the Funds and Programmes concerned, their utility in our eyes
would be severely compromised. We strongly believe that immediate remedial
steps must be taken to place the funding of operational activities on a
secure, predictable and assured basis, commensurate with the increasing
needs of programme countries. India, as one of the largest voluntary
contributors to the core resources of UN Funds and Programmes from amongst
the developing countries, is contributing positively to this endeavour;
and calls on all countries, specially the underperforming donors, to
improve their voluntary financial contributions to the operational
activities of the UN system. Mr.
President, We
also believe that operational activities of the UN system must be
conducted in a manner which conforms to the resolutions of the General
Assembly, especially the resolution 53/192, on the Triennial Policy
Review. Any action by individual funds or programmes which does not fall
within these parameters is unacceptable and would need to be appropriately
modified. A
word, Mr. President, on the UN Development Assistance Framework. We
support UNDAF not as a evolving grand strategy, but as a synergistic
approach designed to make the system more efficient, under national
ownership, in responding to national development plans and priorities.
This vision had also received recognition by the General Assembly in its
resolution 53/192. Similarly, we believe that the UN Development Group, as
indeed had been proposed by the Secretary General, must, in no way, dilute
or compromise the distinctive character or identity of the participating
entities or the accountability of their heads vis-a-vis the Secretary
General or their respective governing bodies. Coordination activities of
UNDG are useful and even essential under certain circumstances, but they
should not be elevated to such a level that they overwhelm all other
important objectives and becomes an end in itself. Furthermore, since
coordination is largely required at the national level, it is generally
best left to be undertaken by national governments themselves whose
primary responsibility in this regard was recognized by GA resolution
53/192. Turning
now, Mr. President, briefly to document A/54/273. Cooperation between
India and SADC has been outlined in paragraph 14 of that report. We plan
to continue and further develop our mutually beneficial cooperation with
SADC and to build on our extensive bilateral links with its member
countries. |