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India seeks workable models for poor nations

It seeks replicable models to help the world's 50 poorest countries reduce poverty and mobilise resources.

india Updated: Sep 19, 2006 10:48 IST

India wants international organisations to provide replicable models to help the world's 50 poorest and most vulnerable countries build national capacity for domestic resource mobilisation to reduce poverty.

"The key to achieving sustained economic growth in the Least Developed Countries (LDCs) is developing productive capacities," said India's Minister of State for External Affairs Anand Sharma Monday at the United Nations General Assembly's high-level meeting on these nations.

"For this, the development partners need to move vigorously in supporting the efforts of LDCs," said Sharma, head of the Indian delegation, at the meeting, reviewing progress on an agreement forged five years ago in Brussels aimed at assisting the LDCs.

The issue of debt is a critical one for many LDCs, he said. India welcomed the Multilateral Debt Relief initiative (MDRI) and looked forward to the G-8's political intentions being fully converted into unqualified commitment.

India, on its part, has demonstrated its commitment to help LDCs, which are in a particularly difficult position, in reducing their external debt burden by writing off the debt owed by seven Highly Indebted Poor Countries (HIPCs) who had reached their 'decision points'.

Debt relief through HIPC initiative or MDRI alone is not sufficient unless accompanied with efforts to improve debt management capacity and a proactive approach to assist achieve higher growth, enhanced exports performance and revenue mobilization through better market access and enhanced trade related opportunities, Sharma said.

The launching of the third round of negotiations for the Global System of Trade Preferences holds promise in terms of immensely benefiting both LDCs and other developing countries. India is also in the process of finalising a package for preferential market access for LDC products.

Official development assistance (ODA) disbursements to LDCs are more than a third short of the agreed target. There is an urgent need for new and additional commitments to fulfil the commitment by the developed countries to meet the 0.15-0.20 percent target for ODA to LDCs.

This needs to be without prescribing development modes, policies of actions, either directly or through conditions attached to their support, as has been noted by the Secretary-General, Sharma said.

Moreover, wherever appropriate, aid should help promote greater foreign and domestic private investments consistent with national priorities for sustainable development.

However, a "one size fits all" approach for all LDCs is not practical and is unlikely to succeed and while private sector investment is important, the physical and social infrastructure in many LDCs is too weak to attract investment, and therefore requires sequencing.

LDCs and other developing economies also need to be assisted in capacity-building, particularly in setting up the requisite institutional framework to help prioritise the sources and destination and to attract, evaluate and facilitate, foreign investment inflows, Sharma said.

India has been a strong votary of South-South cooperation. The Indian Technical and Economic Cooperation (ITEC) has, since 1964, provided technical assistance of over US$ 2.5 billion and more than 5,000 representatives of developing countries receive training in over 250 institutions in India every year.

New Delhi has constantly tried to increase mutually beneficial economic cooperation with all LDCs in general, and with those in our extended neighbourhood, in particular, Sharma said referring to programmes in Afghanistan, Myanmar, Maldives, Nepal and Bhutan.

Africa has always been a high priority for India and we are strengthening our cooperation through NEPAD and through other efforts such as TEAM-9 for Western Africa, he said noting that its commitment in terms of lines of credit and other concessional financial assistance adds up to almost US$ 1 billion.

According to a report of the Secretary-General prepared for the High-Level Meeting, governance has improved in the LDCs since world leaders adopted the Programme of Action for LDCs in Brussels in 2001.

While conflicts in the LDCs have decreased in number since then, these countries still suffer disproportionately from civil unrest, with half of the UN's 16 active peace operations being in LDCs. The report cites poverty and underdevelopment as a breeding ground for unrest in the LDCs.

The report calls for increased investment in education, health, clean water, sanitation, physical infrastructure and rural and agricultural development. It also calls for expanded international support, including greater and better aid, accelerated debt relief and better market access for LDCs coupled with support for improving export capacity.

--Indo-Asian News Service

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