Addis Ababa — "The UNCTAD Conference is being referred to as the 'New global deal for least developed countries'," said Mr. K.Y. Amoako, Executive Secretary of the Economic Commission for Africa (ECA). "I want to propose that out of this, and the Financing for Development Conference, comes a 'New Global Compact with Africa'.

Mr. Amoako was speaking at the opening of the Eighth Session of the ECA Conference of African Ministers of Finance, being held at the ECA Headquarters here from 21 - 22 November 2000, to prepare African countries for the two major events that have been mandated by the UN General Assembly to be convened during 2001: the UN High-Level Meeting on - Financing for Development -- and the 'Third United Nations Conference on Least Developed Countries (LDCs)'.

"The compact would be with Africa, not for Africa," stressed Mr. Amoako. "If the rich countries are willing to invest the necessary resources, through aid, debt relief and market access to give African economies the jump-start they need, much of Africa should be able to put in place the necessary political and economic reforms to ensure that their economies take off."

Mr. Amoako cited substantial injection of official development assistance to the poorer countries, debt relief and trade as necessary components of the compact. He added that a New Global Compact with Africa would also acknowledge the need for political reform and a "reformed international financial system which serves all nations, with increasing regard to the poorest".

Also speaking on the occasion was Ethiopia's Prime Minister Meles Zenawi, who stressed that while the Heavily Indebted Poor Countries (HIPC) debt relief initiative represented a major step forward, there were still problems to be resolved, and resolved positively.

"The HIPC arrangement is characterized by an arbitrary definition of what constitutes debt sustainability," said Mr. Meles. "It is also believed that HIPC's capacity to provide adequate relief is questionable. In light of this, it appears only logical that it would be necessary to review the HIPC program with the objective of achieving the desired result both in the assessment of debt sustainability and in the provision of adequate relief."

HIPC was launched in 1996 by the World Bank and International Monetary Fund. It was marketed as the first comprehensive approach to reducing the external debt of the world's poorest, most heavily indebted countries, and aimed to place debt relief within an overall framework of poverty reduction. A major review in 1999 resulted in an enhancement of the original framework. Debate is still ongoing as to whether the "deeper, broader and faster" debt relief provided by HIPC is meets the needs of debtor countries. Forty-one countries are classified as heavily indebted, 33 of them in Africa. Ethiopia is currently being considered for debt relief under HIPC.

Mr. Meles also said that although the concept of country ownership was generally accepted, the various conditionalities introduced have not only slowed down the process, but had also undermined the capacities and functions of state institutions. "The concept of development and its ownership has been subjected to continuously changing 'development fads', which, at the end of the day, may result in thwarting ownership", he stressed.

Organization of African Unity (OAU) Secretary-General Salim Ahmed Salim reiterated that Africa's external debt and its impact on the continent's people, declining levels of development assistance and other factors had undermined the economic development of African countries. "Up to now, very few African countries have qualified for the HIPC Initiative", stressed Mr. Salim. "Also, in relation to the magnitude of Africa's debt, the resources available for debt relief under the initiatives have been grossly inadequate. The issue, therefore, is no longer one of intermittent experimentation with palliatives; the problem requires a major effort, in terms of ensuring that the burden is meaningfully alleviated and in the long run the total debt is cancelled. This, I believe, can be achieved provided there is the requisite political will."

Organized by ECA with the African Development Bank (ADB) and the United Nations Conference on Trade and Development (UNCTAD), the Conference is being attended by some 30 African Ministers of Finance and Trade, Governors of Central Banks and leading economists and development experts.

Participants are taking part in panels discussing Debt, ODA and links to Poverty Reduction; Trade and Investment; and the International Financial Architecture focusing on some of the major development challenges facing Africa. They are also addressing the need to accelerate Africa's growth and development through better integration into the global economy, particularly in relation to the least developed countries - 33 of which are in Africa.

Ministers are reviewing recent developments in the context of their previous positions and recommendations, and defining positions for the forthcoming global conferences. They are also deliberating on the recommendations of a preliminary High-Level Regional Consultative Meeting on Financing for Development and Preparatory Meeting for the Third UN Conference on LDCs, which took place in Addis Ababa, from 15 - 17 November 2000.

The Conference, scheduled to end tomorrow, will issue two Ministerial Statements to ensure that Africa's concerns are firmly placed on the agenda of the High Level Intergovernmental Event on Financing or Development and the Third UN Conference for the Least Developed Countries.

(END)

The full text of Mr. Amoako's statement is available on the ECA Website ( www.uneca.org), as are the Conference Issues Paper and other relevant documents. Statements by Prime Minister Zenawi and Secretary-General Salim will be available shortly.

For further information, please contact:

The Communication Team Economic Commission for Africa P.O. Box 3001 Addis Ababa Ethiopia Tel: +251-1-44 50 98 or +251-1-44 31 61 Fax: +251-1-51 03 65 Cell: +251-9-20 17 94 E-mail: ecainfo@uneca.org Web: http://www.uneca.org/

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