STATEMENT OF PRESIDENT OLUSEGUN OBASANJO,
CHAIRMAN OF THE G-77, TO THE SOUTH SUMMIT
APRIL 12, HAVANA CUBA
I am honoured and delighted to welcome you all to the first-ever South Summit taking place at a unique juncture in the annuals of human history. May I, on your behalf, express our deep appreciation to our host, President Fidel Castro, and through him, to the Government and the great people of Cuba, for the warm reception and very generous hospitality extended to us since our arrival and for the excellent facilities placed at our disposal. This is not surprising. Havana, to all of us, is like a home-coming. It is a place, where I personally feel the spiritual bond with the great Cuban people of the some ancestry with me. And I know that for each one of us here, today, that feeling of kinship with the people of Cuba is mutual as we are all represented, in one way or the other, on this beautiful island.
Today we are witnessing in Havana Cuba, the realization of an important decision taken at the South-South Conference on Trade and Investment, held in San Jose Costa Rica in January 1997, to hold a South Summit in the year 2000. This is to mark the end of the 20th Century and the beginning of the 3rd millennium. Our presence here today, facilitated by Cuba's offer to host this Summit, represents a major achievement. I must therefore congratulate Cuba for its offer to be the host of such a historic meeting. This to be expected given Cuba's well-known commitment to the cases of developing countries. I am confident that this event, taking place now, would propel us to greater heights, in our quest for development and the realization of a just and equitable global economic arrangement.
Excellencies,It is indeed just as well that this meeting is taking place at the dawn of a new millennium, defined by the difficulties and challenges of the past, and above all, the uncertainties and opportunities of the future. This Summit is, therefore, an opportune moment for us to engage in deep and sober reflection on how we have fared while at the same time charting the way forward.
The geo-political landscape of the world has undergone profound transformation since the leaders of the South met in 1964 to establish the Group of 77. The formation of our Group was a response to the challenges of poverty, underdevelopment, low-level cohesion among developing countries and global exclusion, in a less than hospitable international political and economic environment. We were fired by the zeal to act, in concert, with the over-riding objective of reversing our collective economic difficulties.
We were of the firm belief, that acting together in solidarity, would lead us to the rapid socio-economic transformation of our countries. Our hope then and as now, was that our coming together would assure our peoples a dignified existence. In addition, we were, and remain convinced, that the attainment of collective self-reliance of the countries of the South should be anchored on a durable self-sustaining economic growth and widespread socio-economic development, in and among our countries. Such can approach was an indispensable foundation, if we were to play a credible role in global political and economic governance.
As we begin our meeting today and the news of our gathering flashes across the globe the question on the lips of many of our people is: What have we accomplished so far, and what is the purpose of this meeting. Some would simply conclude that our Summit is nothing more than another round of talks about talks. Yet others, with a dose of skepticism will simply ask: Of what use is a South Summit after decades of slumber, when the rest of the world is so far ahead? Such remarks are understandable expression of the frustrations of our people. Frustrations against decades of leadership, which in many cases, have remained insensitive to their sufferings and deprivations. Yet we cannot because of the failure and disappointments of the past fold our hands today and give up the struggle.
The fundamental question we must, therefore, ask ourselves is: How far have we gone in realising the twin objectives of meeting the legitimate aspirations of our people and in carving out a credible role for the countries of the South in the management and reshaping of global economic relations?
But before we give our perspectives on this important question, it is proper and fitting, to pay tribute to our compatriots for their vision in initiating the establishment of our Group in 1964. The dynamic role our Group has played in the last 36 years in the field of multilateral negotiations on international economic and social issues is, indeed, a testimony to their farsightedness. It is to their eternal credit that, today, the Group of 77 has emerged as a prominent and formidable negotiating force within the United Nations systems and in the field of international and multilateral negotiations on trade, finance, development and related issues.
Your Excellencies, I believe that there is a consensus of opinion that while our Group has demonstrated the necessary dynamism to give practical expression to our goals as conceived 36 years ago, we still have a long way to go. It is, indeed, disconcerting to observe that the problems of poverty, underdevelopment and global inequity are not only prevalent in our midst, but have also been aggravated by our inability to meet the challenges of a fast globalising world economy. Perhaps more important, we must come to grip with the reality that our uncertain journey into the new millennium will continue to be shaped by the profound forces of globalisation and liberalisation unleashed in the lost part of the 20th century. Consequently we must be prepared to live with the irreversible trend of these forces now, and in the foreseeable future. We must devise strategies to cope with the challenges of this development.
Distinguished Heads of State and Government,The accelerated globalisation of economic activities, driven by modern technology, increasing role of market forces in the allocation of resources and the shrinking role of the State in economic activities, has brought in its wake, new opportunities and challenges for all peoples and all countries. The consequent expansion of world trade and output, the acceleration of the mobility of factors of production and seeming disappearance of national frontiers have all together led to the emergence of a global village in which, it was assumed, all countries and peoples will prosper.
Alas, our collective experience, so for, has underlined, with certainty, that globalisation has brought mixed blessings. The prosperity it engenders is unevenly shared among countries and regions of the world. While the industrialised countries remain its major beneficiaries, the vast majority of members of our Group have been unable to take advantage of the opportunities presented by this phenomenon. We have been consigned largely to the periphery of the global economy with the risk of further marginalisation especially for the most vulnerable of our members, the Least Developed Countries.
These adverse consequences of globalisation have led us in Nigeria to conclude that a troubled relationship has emerged between globalisation and the imperatives of development. This disturbing reality is more than amply demonstrated by the failure of globalisation to spur economic recovery, faster growth, greater employment opportunities and poverty eradication in developing countries. Rather, it has exhibited a tendency to accentuate the income and welfare gaps between the rich and the poor, among and within countries and regions. Never has the world witnessed such massive disparities in international economic and social activities. And nowhere is this trend more glaring than in the countries of the South.
It is against this background that countries of the South welcomed the choice of globalisation as the theme for the 10th Session of the United Nations Conference on Trade and Development (UNCTAD10) held recently in Bangkok, Thailand. As the first major global conference of this millennium, we are gratified that the far-reaching outcome of UNCTAD 10 set the tone for a new approach to the collective management of global economic activities that has as its thrust the advent of "prosperity for all and marginalisation for none."
In our quest for a better management of the world economy, we must engage ourselves in a critical appraisal of the unsatisfactory evolution of the open rules-based multilateral trading system under the WTO. The increasing importance of trade in global economic activities and the dominance of the WTO in shaping the character of international economic relations demand our special attention here. That the multilateral trading system, anchored on the architecture of the Uruguay Round Agreements, is in a state of serious crisis was manifestly evident in the failure of the Seattle Ministerial Conference of the WTO. The enthusiasm and high expectations which motivated developing countries to sign the Uruguay Round Agreements have been shattered by the shortcoming of the multilateral trading system.
The asymmetric nature of the Agreements is depicted by the imbalance in the rights and obligations of the membership of the WTO. While countries of the South undertake the daunting task of harmonising their domestic economies with the commitments assumed under the various Uruguay Rounds Agreement, the major trading powers, the principal beneficiaries of the system, renege on their obligation to facilitate our effective integration into the multilateral trading system. In particular, the non-implementation of the special and the differential measures in favour of developing countries, the increasing protectionist measures against export products from our countries, and the paucity of technical and financial assistance have prevented us from taking advantage of the opportunities presented by globalisation.
It is my firm belief that, given the failure of the Seattle Ministerial Conference, we should, at this Summit, evolve fresh approaches for the equitable management of global trade relations that would be supportive of development and prosperity for all. In this regard, I charge the Summit to agree on a common platform of action for our Trade Ministers to facilitate the attainment of the implementation of the development dimensions in the various WTO Agreements, when the stalled Ministerial Conference of the WTO resumes. Furthermore, we should make a strong case for increased resources to UNCTAD to enhance its support for trade-related issues of capacity-building and technical assistance programmes. Besides, additional funding of UNCTAD will enable it continue, with increased vigour, its positive trade agenda in support of developing countries in multilateral trade negotiations.
Excellencies, The recent financial crisis in South East Asia has brought to light, in the most telling manner, the dark side of globalisation. The crisis revealed the vulnerability of even the best performing economies of developing countries to the powerful forces of globalisation. This Summit should underscore the urgent need for decisive international actions to reduce the incidence of financial volatility associated especially with short-term speculative capitol flows, which have grave social end economic consequences for developing countries. In this regard, we welcome the on-going debate on the reform of the international financial institutions and the imperative for countries of the South to participate fully and effectively in the design and the management of the new international financial architecture.
The new financial architecture should, accordingly, be structured and sufficiently funded to respond to the needs of developing countries. In this regard, measures for the meaningful resolution of the external debt crisis of developing countries, with its constraint on development financing, should be an integral component of the restructured international financial architecture.
Distinguished Heads of State and Government, The heavy external debt burden and large unsustainable debt service obligations of developing countries constitute the motor obstacle in their quest for social and economic development. They undermine the capacity of our countries to make positive adjustments. They also create the greatest obstacle in our determined effort to move our people out of poverty. It is clearly unacceptable that the external debt burden should continue to constrain our ability to channel public investment into physical and social infrastructures and human resource development. Furthermore, the debt burden continues to deter new foreign investments and erodes the ability of our countries to participate meaningfully in a globalised world economy.
For the African region, the most marginalized and least able to cope with external shocks, its persisting external debt burden has become the principal obstacle to social and economic development and the eradication of widespread poverty. Allow me to furnish some statistics for Africa on these issues, which only tells part of the story of the countries of the South, and which grimly illustrate the extent and depth of the external debt problem:
By the end of 1998, total debt, as a percentage of GDP, reached 65.5%.
- The debt stock represented 303% of exports of qoods and services in 1998.
Debt service, as a percentage of exports of qoods and services, rose to 30.9% in 1998
- Some countries spend up to 40 % of their national budget on debt servicing.- Accumulated arrears on interest and principal payments reached US $64 billion in 1996, representing 27.4 % of total debt.
Two-thirds of the increase in the total debt stock since 1988 has been due to arrears, and not new loans. Africa has indeed been making net negative transfers to creditors as interest payments exceed new lendingThe debt per capita, standing at US $357, far exceed the per capita income of the average African, which is US$100. There is no better time than now, at the dawn of a new millennium, to give the countries of the South a fresh start to enable them grapple with the socio-economic development of their countries. To facilitate such a fresh start it is imperative for the developed nations to take immediate steps to relieve the developing nations of their crippling debt burden by outright cancellation of the debts, most of which are spurious. A central element of the new international financial architecture that we seek to build must include such definitive resolution of the external debt problems of development countries. Similarly it must include measures to arrest the growing phenomenon of illegal capital flight and the repatriation of illicit wealth siphoned abroad by corrupt political leaders and their collaborators back to their countries of origin.
Distinguished Heads of State and Government, It is unfortunate to observe the weakening of constructive dialogue between the North and South. Surely, Increasing interdependence among countries at different levels of social and economic development in our global village of today, compels new form of multilateral relations. Such relationship should be based on the principles of mutuality of interest and benefits, shared responsibilities and genuine partnership. Essential elements of this engagement should entail the enhancement of the role of the developing countries in global economic decision-making. It should also include decisive international actions to ensure the mobilisation of human and material resources for the elimination of inequalities among and within the countries of the world.
Let us therefore send a clear message from Havana to the industrialised countries. A message that their reluctance to change the institutional arrangements, policies and practices that continue to nurture and sustain the prevailing North-South disparities in several areas of life constitutes the greatest threat to international peace and security. They must demonstrate, not just in words but also in practice, their commitment to genuine partnership with the countries of the South.
It is a matter of concern that the core resources of the United Nations Funds and Programmes that have traditionally brought meaningful improvement to the lives of our people have been declining in recent years. We call on developed countries to halt this decline. We urge them to fully and faithfully implement their commitment to provide substantial resources to these Funds and Programmes. Similarly, the alarming decline of Official Development Assistance (ODA) must be arrested. It is regrettable that ODA, which had traditionally bridged the financing gap in assistance to developing countries, particularly the LDCS, has been on the downward trend since the second half of the 1990s. The current ODA flows are at their lowest levels ever, recording less than one-third of the internationally agreed target of 0.7 % of the GNP of donor countries. It must be acknowledged that ct few donor countries have faithfully and consistently kept to their commitment of meeting the 0.7% ODA target, and even in some cases even surpass it. To this group of countries, I wish to express the sincere appreciation of the members of the G77 for their genuine friendship and practical demonstration of faithful commitment to our developmental aspirations and international cooperation. Their support serves as a beacon in the field of international cooperation worthy of emulation. This Summit should therefore issue a strong statement on the imperative for the international community to take urgent action to reverse the downward slide of ODA.
Excellencies, Despite our intensified efforts to attract Foreign Direct Investment, regrettably the flow of investment to developing countries has been on the decline. It fell to 28% of global FDI flows in 1998. A more disturbing trend is that the current pace of the globalisation of the international financial and capital markets has mode it extremely difficult for us to mobilize external resources for development. Similarly unsettling is that globalisation has engendered the increasing privatisation of resource flows to developing countries, with FDI and foreign portfolio investment accounting for the lion share. Besides, the distribution of these resources among developing countries is starkly uneven as only a handful of countries enjoy access to international capital. The record speaks volume. Five developing countries received 55% of FDI flows to developing countries in 1998 while the 48 least developed countries (LDCS) received less then 1%. This Summit should underscore the fact that globalisation can only be meaningful to the vast majority of our people if it delivers on its promise of a new era of prosperity. It must therefore facilitate the mobilisation of new and additional sources of investment resources for financing development, which must have as its central focus the eradication of poverty in developing countries. This makes it mandatory for us all to work assiduously for the success of the forthcoming United Nations High-level Event on Financing for Development.
Distinguished Heads of State and Government,As we, in the South, look forward to more fruitful and credible contacts and arrangements with the countries of the North to address the difficulties of today, let us prepare ourselves to face the challenges of the new millennium. To this end, our Summit provides a unique forum for us to redouble our individual and collective efforts in advancing the high ideals and noble objectives of South-South cooperation. We, the leaders of the South, need to demonstrate to our peoples and the international community that we are deploying our best efforts at fostering development among ourselves. Therefore we need to come up with practical options and measures to revitalise all aspects of cooperation. I hardly need to remind us that the increasing cooperation among the dominant economic powers is largely responsible for the current level of effluence in industrialised societies. We must leave Havana with a renewed sense of dedication and solidarity to make South-South cooperation a more dynamic aspect of international cooperation for development. As a measure of our collective strength, we should re-dedicate ourselves to make South-South cooperation ct credible vehicle for ensuring the equitable participation of developing countries in the emerging global economic order.
The rich end diverse development experiences and know-how among our countries, as well as our similar needs end problems offer c common platform for action and a unique window of opportunities for greater bilateral, sub regional, regional and interregional cooperation among our countries. It is therefore gratifying to note that the pest few years have witnessed the growth in some aspects of South-South cooperation. Nigeria has always demonstrated its commitment to South-South Cooperation. Only recently during my visit to India early this year we signed an agreement with an Indian firm for a major power project. Such linkage is a recognition of our confidence in the competence of institutions and firms in the South. However, it should be recognised that our achievements in this area have been modest. We could definitely achieve more through the sharing of development experiences, transfer of technology end joint ventures investment. We could further enhance such cooperation by harnessing the latent synergies and complementarities of our emerging economies. It is therefore imperative for us to show our commitment to South-South cooperation by elevating the process to an integral end essential component of our efforts to promote rapid development. I therefore, urge this Summit to re-examine the current modalities and mechanisms for South-South cooperation. This should position our countries on a more solid footing for the (attainment of our common objective for collective self-reliance and sustainable development.
Distinguished Heads of State and Government, We are all witnessing how the monumental advances in modern technology end knowledge, particularly in the fields of telecommunications, information end computer technology, as well as genetic engineering have led to the advent of a "New Economy". Indeed the global environment is now being propelled by information technology. Today, information and computer technology determine the competitiveness of products, corporations end national economies. This revolution now compels countries and regions of the world to re-align their priorities.
In the face of these profound developments, developing countries must fashion out policies to improve substantially their technological capabilities. This course of action, on our part, is all the more crucial as the technological gap between the developed and developing countries is widening. It is quite obvious that the South cannot afford the often-trumpeted transfer of technology from the North through the market place. It is often assumed that innovations in information and computer technology are the exclusive preserve of the North. The contributions of the South, particularly South East Asia, to the development and advancement of computer and information technology are well- acclaimed and making tremendous impact on the economies of the industrialized notions. This confirms that in the South we have very skilled people with the requisite knowledge and proven competence in science and technology. What we of course, lack is the financial resources to translate their researches and ideas into commercially viable projects.
Nevertheless, we must acknowledge that the majority of our societies have not even commenced the journey to the computer and information age. Yet Internet and Electronic Commerce are rapidly transforming the economies of the industrialized nations. This has further widened the gap between the North and the South while narrowing the time and space for business transactions and social interactions. Unless we make haste and, indeed, take fundamental steps to bring our peoples into this "New Economy" their well-being would be diminished further.
Distinguished Heads of State and Government, As we gather here, the gaze of our people, end indeed, the entire international community is on us. Consequently, we should make this Summit a historical moment for our teeming populations trapped in conditions of underdevelopment. We should summon the personal courage end political will to take the difficult decisions we have avoided for a long time. Let us take our destinies in our own hands by charting a new way forward. Let us prove to ourselves and the entire world that we can, collectively, make a difference. Our task may be daunting, but we can make a modest start by resolving to take meaningful actions at the national, South-South and international levels, in the pursuit of our goals of development end international relevance.
At the national level, we must consolidate democracy and make good governance, encompassing transparency end accountability, the cardinal policies of governmental administration. In this regard, please permit me, to give a personal illustration. Prior to my return to office as the President of my country lest year, I was involved, except for a brief interlude, in various activities targeted at promoting end fostering peace end development in different parts of the globe. The focus of my activities was economic and social problems confronting developing countries. My experience clearly shows that only those member States within our Group, whose leaders, in carrying out their executive functions and the demands of office, anchored their governmental and political processes on good governance, have been able to make sustainable progress in the social and economic arena. By contrast the lock of transparent leadership in many of our member States is largely responsible for the insecurity end instability, which inhibits the emergence of an enabling environment for social end economic investment in our various States.
My country, Nigeria, until the advent of our Administration aptly fit in this mode. In a space of about fifteen years, our per capital income declined from $1,000 to less then $300. That is not all. All social and economic infrastructures, such as health, education and telecommunications that were functioning effectively and efficiently and were, indeed, at their peak in 1979 have virtually all collapsed by 1999! What is true of Nigeria is unfortunately true of many of our member States. The solution is not far fetched. Let us resolve, here and now, to enthrone and operate an all-inclusive and all-benefiting political and economic order. Our actions must, of necessity, include the following:
We must allow our citizenry to shape, identify with public policies and own the development processes.We must do away with the social and economic want and Deprivations that tear apart our national cohesion and consensus. We must judiciously harness and utilise our national resources to assure our people a dignified and humane existence. We must redouble our efforts to combat poverty and ignorance among our people by according priority to employment, education, health, physical infrastructure and rural development. We must banish corrupt practices from our national life and societal process.At the level of South-South cooperation, we must banish the rhetoric of old and commit ourselves to practical collaboration and cooperation in the fields of trade, investment and technology. In this regard, we must not depart from Havana without coming up with innovative approaches and mechanisms for widening and deepening South-South cooperation.At this juncture, I wish to express our Gratitude to the Secretary-General of the United Nations for the support, which the G77 continues to receive from the UN Secretariat. I also wish to acknowledge the immense support of the UNCTAD. Since its inception, the organisation has remained a faithful friend of the G77. Its role, in the field of policy analysis, the promotion of international cooperation end the development of technical capacity for developing countries is inestimable. I thank UNDP, UNIDO, all other development Agencies and donor countries, which have in several ways supported the struggle of the 677 to raise the living standards of our peoples.
At the international level we must strengthen our cooperation and collaboration to defend and advance our common interests in the global economy. We must not relent in our efforts to engage in a constructive dialogue and rewarding relations with the countries of the North on issues of mutual interest and concern to the entire international community. To this end, the Summit should invite the industrialised countries to show a new commitment to addressing in concrete terms the lingering difficulties hindering development of the South.
This should include: the outright cancellation of external debt. the emplacement of a fair and development oriented regime of international trade, meaningful action to ensure the transfer and dissemination of technology and narrowing the 'digital gap', substantive measures to ensure technology the flow of adequate and sustained resources for development, practical commitment to the eradication of poverty and the protection of the environment. As we rise from this Summit, we should extend our hands of genuine friendship ann partnership to the countries of the North. The new world of increasing interdependence compels us as developing countries to work together to rekindle our partnership with other members of the world community with whom we share a common destiny as members of the human family.
I thank you.