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This section outlines the goals and principles that will guide the course of Habitat II. It defines equitable human settlements as those in which all people, without discrimination of any kind, have access to housing, infrastructure, health services, adequate food and water, education and open spaces. It also lists different types of discrimination, such as race, color or sex. The principle of poverty eradication includes the objective of meeting the basic needs of all people, especially disadvantaged and vulnerable groups, and enabling all women and men to attain secure livelihoods. The section states that the family is the basic unit of society and should be strengthened, and that all people have basic rights and must accept their responsibility to respect the rights of others.

Delegates debated a proposal by the G-77 and China referring to sustained economic growth and equitable development, which was objected to by some developed countries. On the sections regarding the eradication of poverty, delegates discussed a reference to the special needs of women. Some delegations said the Conference should focus on habitat issues and not simply mirror the Beijing agenda, while others insisted the issues could not be compartmentalized. The EU proposed, in reference to solidarity, language on nondiscrimination and the "household and families in all its forms." Several developing countries objected that "household" was undefined.

Bracketed proposals in this section include references to: practices affecting settlements that governments must renounce; the right to adequate housing and right to adequate housing "realized progressively;" sustained economic growth; various forms of the family; and the need for an increased flow of financial resources to developing countries. Delegates also bracketed a G-77 and China proposal on bilateral and multilateral cooperation.