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Mr. Chairman,
We would like to thank the Secretary-General for his report entitled
“External debt crises and development".
2. According to Secretary-General’s report, the total external debt stock of the
developing countries during 2002 was close to 2.4 trillion US dollars or 39.1
per cent of their gross national income. The same figure at the end of 1996 was
1.8 trillion dollars. The amount as well as the increase in the figures is
astronomical.
3. The combination of extreme poverty and extreme indebtedness has plunged a
large number of low income countries into a desperate downward spiral.
Governments have no chance of meeting the social needs of their people when they
are forced to spend more than half of their budgets on debt servicing. The more
than 700 million people, who live in 42 "Highly Indebted Poor Countries (HIPC)",
have no prospects of improving their economic and social situation. For these
countries, even full use of traditional mechanisms of rescheduling and debt
reduction may not be sufficient to attain sustainable development.
4. HIPC initiative was launched in 1996 to provide debt relief to more than 40
highly indebted poor countries, mostly from Africa. But HIPC covers only a
fraction of the unsustainable debt of the developing countries. Secondly, it
requires the potential beneficiary countries to go through a long list of
difficult conditionalities before it is made eligible for relief. Resultantly,
the relief provided under this initiative has been too little and too slow.
After seven years of its launching, only 8 countries have so far been able to
reach the “completion point”.
Mr. Chairman,
5. HIPC initiative, though not enough, remains an important initiative dealing
with the debt problem of the 42 eligible countries. However, there is no similar
willingness as yet to deal with the problems of other developing countries that
also have a high debt to exports and debt to budget revenue ratios but are cut
off from HIPC eligibility on the basis of the per capita criterion. It is
important that we begin to think constructively about radical changes in the
framework for the management of the debt overhang of non-HIPC eligible countries
that are willing to apply the debt relief to programs for poverty alleviation,
by diverting debt repayments for poverty alleviation projects. This could be a
major initiative to enhance the capacity of non-HIPC highly indebted developing
countries to fight poverty.
6. The debt sustainability of middle-income developing countries is not only
essential to their economic growth but also important for the smooth functioning
of the world economy.
Mr. Chairman,
7. Debt repayment is increasing absolute poverty in poor countries. Vast sums of
money, which can help raise the peoples' quality of life through education,
health care and employment are being diverted to meet crippling repayments to
debtor countries’ financial institutions. According to Secretary-General’s
report, last year alone, developing countries paid 343.4 billion US dollars in
debt service. This means 60 dollars for every man, woman and child. In fact for
every one dollar given in aid, the industrialized countries received around 9
dollars back in debt service. This is one of the greatest injustices of our
time.
8. The developed countries as well as the international financial institutions
must review their policies for debt relief. They must take immediate action to
provide a global, comprehensive and durable solution to the external debt
problems of all developing countries, so that they could divert their meager
resources being spent on debt servicing to social development. This is also in
the long term interest of the developed countries themselves. With the current
debt sustainability level and slow action by the International Financial
Institutions, these countries have no chance of sustainable development. It is
therefore important that new and innovative ways of debt relief such as “debt
for sustainable development swap” are pursued seriously.
9. In this exercise, the United Nations must play a key role. It should evolve
and implement a comprehensive debt relief strategy. In this regard, we propose
that the General-Assembly should consider establishing a body, in order to
suggest the possible role of the UN in resolving unsustainable debt burdens of
the developing countries. We believe that the United Nations being the only
representative body of the world nations has the necessary mandate and capacity
to initiate such a process.
Mr. Chairman,
10. With regard to the sub-item (d) we would like to stress on the reform of the
international financial architecture, which has been a concern for the
international community for a long time. Since the decisions and policies of the
BWIs impact every country of the world, the global financial institutions need
to be more participatory, transparent and development friendly. In this regards,
we attached great importance to enhancing the participation of developing
countries in the decision-making process of the BWIs. By participation, we mean
enhancing the ability of developing countries to raise their voices effectively
and influence the design and content of the international development agenda. In
this regard, we fully support the call of the Group of 24 Ministers recently
made in its communiqué for a timetable leading to an early completion of work
towards enhancing the voting power, voice, and participation of developing
countries in BWIs and for regular reporting of progress. We, however, believe
that this issue can be addressed effectively only by a comprehensive package of
measures. It would also require a sharp focus on genuine development and
structural reform agendas.
Mr. Chairman,
11. Finally, my delegation would like to welcome the holding of international
Ministerial Meeting on Landlocked and transit developing countries in Almaty,
Kazakhstan. Pakistan views the outcome of this conference, as the first concrete
step towards properly identifying and meaningfully addressing the special needs
and concerns of landlocked developing states and their transit neighbors.
12. Pakistan, as a transit developing country, is committed to providing easy,
efficient and expeditious transit access to our landlocked neighbors to help
them expand their international trade, and, would do whatever it can to realize
this objective. In doing this, Pakistan is not only modernizing its existing
highways and railway system but has also embarked on constructing new road
networks, ports and other related facilities. The construction of a world class
motorway from our northern frontiers bordering Afghanistan to the sea-port at
Karachi is part of this policy. A modern port is also being built at Gwadar to
the west of Pakistan. With the commissioning of this port, Pakistan will be able
to provide dedicated, efficient and cost effective port facilities to our
landlocked neighbors including latest facilities for cargo vessels in line with
modern ports.
13. We hope that the efforts of Pakistan and other landlocked and transit
developing countries would be complemented by befitting technical support and
financial assistance of the donors, international financial institutions and
other stakeholders.
I thank you, Mr. Chairman.