Magazine article UN Chronicle

Assembly Reaches Consensus on Approach to External Debt of Developing Countries

Magazine article UN Chronicle

Assembly Reaches Consensus on Approach to External Debt of Developing Countries

Article excerpt

The General Assembly, in a widely hailed consensus, reached agreement on 8 December on strengthened international co-operation aimed at resolving the external debt problems of developing countries.

Recognizing that debt-servicing problems constituted a "severe, restrictive and continuing burden for the economic and social development of many developing countries", the Assembly, by resolution 41/202, agreed on a number of common elements that should be taken into account in addressing external debt problems.

Among those elements:

* External indebtedness should be tackled in the framework of a strengthened and improved strategy of international co-operation for sustained world economic growth and development, involving the participation of creditor developed countries and debtor developing countries, multilateral financial institutions and international private banks.

* The interrelated issues of debt, money, finance, resource flows, trade, commodities and development should be addressed in the context of their close interrelationship, recognizing the competence of the multilateral financial institutions and relevant United Nations bodies and agencies.

* Stronger growth and development in the developing countries should be encouraged.

The Assembly agreed that a lasting solution would also require complementary actions in mutually supportive areas of economic policy, including growth-oriented national adjustment processes and structural changes; dismantling of protectionism and expansion of international trade; increased financial flows and lending programmes that support growth; and coherent policies by industrialized countries to promote an international economic environment conducive to sustained, non-inflationary growth.

The Assembly also agreed there was an important relationship between a country's mobilization of resources, its net inflow of development finance and foreign exchange export earnings, and its debt-servicing possibilities, affirming that debt-restructuring arrangements and development-oriented financial agreements should continue to be worked out on terms and conditions that took into account the internal and external factors affecting the economy of the country concerned.

Special attention was to be given to implementing specific relief measures for the least developed countries. Donor developed countries reaffirmed their commitment to adopt concrete measures in support of adjustment efforts for African development, reiterating the importance of increasing official development assistance (ODA) in that regard.

The text was forwarded to the Assembly by its Second Committee (Economic and Financial) on 28 November. At that meeting, Aase S. Danielsen (Norway), echoing the sentiments of many delegations, called the resolution the Second Committee's "most important achievement for the year". Chester Norris (United States) said the text had been carefully and painstakingly crafted, and "could serve as a model of co-operation". …

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