BRIEFING NOTE FOR 22 MAY 2000

PREPARATORY COMMITTEE FOR THE SPECIAL SESSION OF THE UN GENERAL ASSEMBLY ON THE REVIEW OF THE WORLD SUMMIT FOR SOCIAL DEVELOPMENT

SUMMARY

On Monday, 22 May, Working Group III met from 10am to 1pm and discussed the draft political declaration. Working Group I met from 3pm to 6pm and debated Commitment 8, on structural adjustment programmes, and Commitment 9, on resources.

The following summary covers only text negotiated in the current sessions.

WORKING GROUP III: PART I

Draft Political Declaration: Chair Bagher Asadi appealed to delegates to take up a first read of the text using the version dated 7 April, 6:45pm rather than the version from 7 April, 1:00pm. The EU, G-77/CHINA, PAKISTAN, CUBA, and CHINA preferred the 1:00pm version. The US said they could work from the 6:45pm version, and noted the outstanding issue of workers' rights as the main sticking point in paragraphs 5 and 5 bis. Starting with the later version, the EU proposed deleting paragraph 5 bis on the condition that language be added to paragraph 5 on reaffirming the will to respect, promote and realize the principles contained in the ILO Declaration of Fundamental Principles and Rights at Work and its follow-up. PAKISTAN did not support specific mention of ILO conventions, and said that if the EU proposed qualifying language on employment, then qualifying language on poverty eradication should also be included. The G-77/CHINA suggested references to: mobilizing new and additional resources at the international level; full respect for the basic rights of workers, including the rights of migrant workers; full respect for non-discrimination, tolerance and diversity; and equitable distribution of wealth, including, inter alia, realization of an equitable multilateral trading system free from non-trade barriers. Delegates agreed that with these proposals, which remain bracketed, the G-77/China formulation of paragraph 5 and the EU-proposed 5 bis could be deleted. The EU added language on reaffirming attachment to the principles of good governance and rule of law, which also remains bracketed.

In 6 bis, specific reference to middle-income/developing countries was considered in the general context of countries dealing with debt. The EU proposed reversing the last two sentences for the paragraph, and favored language stating that the full financing and implementation of the enhanced HIPC initiative, in the context of poverty reduction strategies, is essential for realizing its potential. The US opposed specific references to HIPC initiatives, preferring a more general reference to the debt problems of developing countries. Chair Asadi proposed a reformulation stating that the debt problems of middle-income developing countries also need to be addressed with a view to resolving their potential long-term debt sustainability. These references remain bracketed.

In paragraph 9, Chair Asadi asked delegates to consider his proposed version from 7 April, 6:50pm, representing a clean version of this text. He noted that the first three sentences were identical in both the 6:45pm and 6:50pm versions, while the last two sentences remained bracketed in the earlier version. ALGERIA noted that many had expressed preference to work on the 1:00pm text, and stated that her delegation had difficulty on principle with working from several different versions. The US said she could accept proposals from either the 6:45pm or 6:50pm versions, including: an EU reference to cooperation among governments and other actors, including NGOs; language proposed by Mexico on recognizing the need for reforms for a strengthened and more stable international financial system; and an EU reference on coordinated follow-up to major conventions. The EU also accepted the text proposed by Mexico. INDIA highlighted an essential difference that might hold up consensus, between reference to reform of IFIs in G-77/China text versus reform of  the international financial system in Mexico and EU proposals. The G-77/CHINA proposed, and the US opposed, reference to recognizing the need to continue to work on a wide range of reforms for a transparent, accountable and stable international financial system, including democratization of the Bretton Woods Institutions, with a view to enable it to deal more effectively and in a timely manner with new challenges of development in the context of global financial integration. All of these references remain bracketed.

WORKING GROUP I: PART III

Commitment 8: Structural Adjustment Programmes: Delegates agreed to withdraw the chair's proposed text for paragraph 103, on encouraging policy makers to reduce the need for SAPs by pursuing appropriate and integrated macroeconomic policies. In 105(c), on ensuring good governance, the G-77/CHINA proposed alternative language on ensuring transparency and accountability by both governments and IFIs for improved efficiency SAPs. Opposing the language, the US stressed that the chapeau to 105 confines the ambit of the provision to national policies. The alternatives were left bracketed.

The US, reiterating its argument on the scope of 105(c), opposed the G-77/China-proposed 105(g), on considering introduction of a debt relief arrangement as a component of SAPs and implementation of poverty reduction strategies. Supported by the EU and stressing that IFIs are addressed in other provisions, the US preferred Japan's language on implementing fully and speedily the enhanced HIPC initiative in order to deliver debt relief to countries implementing poverty reduction strategies, but substituted "effectively" for "speedily." LIBYA stressed the participation of IFIs in SAPs as partners with governments and underscored that limitation to the national level would be "problematic and unjust." The EU proposed deleting 105(g). The alternatives remain bracketed.

Commitment 9: Resources: Delegates agreed on 110(c), on improving and restructuring, as appropriate, national tax regimes and administration in order to establish an equitable and efficient system that supports social development policies and programmes, and taking measures to reduce tax evasion. In 110(d), on removing, in all countries retaining them, tax allowances for bribes paid to foreign public officials, and pursuing recovery of assets where funds were illegally acquired, the G-77/CHINA preferred reference to tax allowances for bribes paid to secure foreign contracts. The US preferred referring to bribes paid to foreign public officials, including those to secure foreign contracts. The EU, supported by the US, proposed replacing the paragraph with language from a GA resolution on corruption, requesting the international community to support the efforts of all countries aimed at strengthening institutional capacity for preventing corruption, bribery, money laundering and illegal transfer of funds. Stressing the issue was a fiscal one and not corruption, INDIA favored the G-77/China language over the EU proposal. The chair, supported by the EU and opposed by LIBYA, proposed alternative language on eliminating tax concessions/deductible expenditures incurred in securing foreign contracts by illegitimate means/payments. The US said the reference to securing foreign contracts was too narrow. With no agreement, the chair noted he would formulate alternative wording.

In US-proposed text for paragraph 111, on considering, at the international level, further means to mobilize additional resources, INDIA objected to the reference to considering. The US, with the EU, agreed to insert promoting. Language on more effective use of existing resources was moved into a subparagraph, but INDIA objected to including existing resources in a paragraph on the international level. The EU and SENEGAL suggested that the text should refer to mobilizing both existing and additional resources. The EU, with the US, opposed a chair's proposal to move the existing resources reference to paragraph 110, which addresses the national level. INDIA questioned why ODA is going down if resources exist at the international level. With no consensus, the text remains bracketed. In 110 (b), on tax shelters, delegates agreed to a US reformulation on exploring ways to combat the use of tax shelters and tax havens that undermine tax systems.

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