Third UN conference on least developed countries

Mr President

Under your guidance the Australian government looks forward to outcomes from this conference that will help the least developed countries achieve broad reaching sustainable development.

Australian Commitment to LDCs

Mr President, Australia is strongly committed to the reduction of poverty and the achievement of sustainable development in countries less fortunate than our own. The primary focus of Australia's overseas aid program is on poverty reduction in the Asia-Pacific and on responding to the region's political, economic and social changes. Australia is addressing its attention to important issues of international concern, namely: HIV/Aids, good governance, the digital divide and improving access to education, strengthening developing countries capacities and competitiveness, and encouraging development of poverty eradication strategies in Least Developed Countries (LDCs) including through international reform of agriculture and promotion of a new round of multilateral trade negotiations to deliver a more equitable, open and predictable trading environment.

800 million people live in poverty in the Asia-Pacific region- the largest concentration of people living in poverty in the world. It is little surprise then, that this region is home to twelve of the world's LDCs. While the Australian aid program has a geographic focus on the Asia-Pacific Region, it also acknowledges the economic and social development challenges facing others particularly in Africa and funds development activities where we can add value.

The long-term objective of Australia's assistance to Pacific countries, including Pacific Island LDCs, is to achieve the maximum possible degree of self-reliance. In the medium-term Australia's aid aims to produce five principal outcomes for Pacific island countries: better governance, stronger economic growth, greater capacity, better service delivery and environmental integrity.

Australia's overseas aid program in East Asia, which includes all East Asian LDCs, is addressing the immediate needs of those countries affected by the financial crisis of the late 1990s, as well as being underpinned by long-term recovery strategies. While economic and social conditions have significantly improved in the most affected countries, much needs to be done to strengthen the resilience of the region to future shocks and to reduce the vulnerability of the poor. This is being achieved through a focus on strengthening economic governance and social protection.

Australia is keen to make its contribution to the international effort to assist LDCs. The Australian International Development Assistance Agency (AusAID) is working with the World Bank to assess opportunities to address the knowledge divide in developing countries, with a particular focus on opportunities presented by new information and communication technology.

The Pacific is sometimes left out of the global HIV/Aids picture given the low incidence of the disease and small populations in most Pacific Islands countries, but there is an increasing awareness in the Pacific of the need to prepare for an increase. Australia is contributing to the international efforts to combat the spread of HIV/Aids. Australia's Foreign Minister, Mr Downer, will be convening a Regional Meeting on HIV/Aids in Melbourne in October at the time of the sixth International Congress on Aids in Asia and the Pacific which will look at practical ways of handling this important issue for our region. Australia is co-facilitating the Preparatory Meeting leading up to the General Assembly Special Session on HIV/Aids which will take place in June this year.

Trade and LDCs

Throughout the world trade remains a primary engine for growth. The opening of world markets has underpinned fifty years of growth in the world economy and has been an essential factor driving an unprecedented increase in quality of life for much of the world's population. Average tariffs on manufactured goods in industrialised countries have fallen from about 40% to 4% over the last 50 years. Experience has shown that lowering trade barriers - in addition to undertaking wider structural economic reforms - has significantly assisted the economic development of countries that have taken these steps.

But despite this progress, there are still almost 3 billion people trapped in poverty, living on less than US$2 a day. There is no doubt that more, significantly more, needs to be done to ensure that the framework for further trade and investment liberalisation takes account of the particular needs of developing countries, supports their economic development and provides full access to the world trading system.

The past 50 years has shown that broad-based multilateral negotiations are the best way to deliver a more equitable, open and predictable trading environment. That's why Australia has long been a strong supporter of the World Trade Organization (WTO) and is a strong advocate for an early launch of a new, market-access focused round of multilateral trade negotiations. The benefits for both developed and developing countries in removing barriers to trade are enormous. A new round would not only result in further trade liberalisation but would also help ensure that countries do not backslide on their existing commitments to wind back protection.

Australia believes that international reform in agriculture offers LDCs and developing countries more generally, the strongest prospects for alleviating poverty and reducing the threat of hunger and malnutrition. This stems clearly from the fundamental role of agriculture in these countries. Agriculture provides, on average, 70 per cent of employment and 30 per cent of output. In many cases it has the potential to make a major contribution to foreign exchange earnings, to provide essential inputs and a necessary demand stimulus to the rest of the economy.

However, the stark reality is that total agricultural support in OECD countries rose to a staggering US$360 billion in 1999, equivalent to more than six times the total flow of aid to developing countries. Government support to farmers has returned to levels not seen for more than a decade. This situation must be reversed.

The existing imbalance in international trade rules denies efficient agricultural exporters the ability to trade their way to sustainable growth and higher living standards. If poverty is to be alleviated in developing countries, it is critical that the gross discrimination against agriculture and agricultural exporting countries embedded in the world trading system is removed.

Australia is the Chair of the Cairns Group of Agricultural Trading Nations. Membership totals 18 and is made up of 3 developed and 15 developing countries. The broad objectives of the Cairns Group for the agriculture negotiations lie in three key reform areas. We are seeking the elimination of export subsidies and substantial reductions in all forms of trade-distorting domestic support. In relation to market access, we are seeking deep cuts to all tariffs and the elimination of tariff escalation. The Group has emphasised that it is committed to providing flexibility for developing countries, through special and differential treatment, to enable them to address food security and rural development concerns. This interest in flexibility is reflected in each of the Group's negotiating proposals.

Australia strongly supports the position that a new round of multilateral trade negotiations in the WTO, centred on market access in agriculture, services and industrial goods, will help achieve the sustainable economic growth and development needed to improve the lives of people in the developing world.

Australian Trade-Related Assistance to LDCs

Australia has an active program of technical cooperation and policy dialogue with developing countries, including Least Developed Countries, aimed at strengthening their capacity to participate in global and regional trading arrangements and to take advantage of new trade opportunities.

Areas of direct trade-related assistance include trade policy development, strengthening of customs and quarantine procedures, taxation (including tariff) reform, trade and tourism promotion and investment policy formulation, strengthening economic policy and management, human and institutional capacity building in the public sector and legal and judicial strengthening. Infrastructure development - particularly transport and communications - also contributes to more effective involvement in world trade.

Many other development programs funded by Australia have indirect or secondary impacts on economic management, private sector development and public sector capacity building. In addition, around 1000 students from developing and least developed countries are studying economics, business and administration in Australia.

Through these various programs, assistance is provided to help developing countries identify and manage the potential economic and social impacts of trade and investment liberalisation, identify new sources of revenue and market opportunities and cope with the institutional and regulatory requirements of the global trading system.

Debt

Australia recognises the debilitating effects of an unsustainable debt burden on LDCs, and has been at the forefront in efforts to find a lasting solution to this serious problem. Australia is taking action on two fronts: multilaterally and bilaterally.

Multilaterally, Australia has been a strong supporter of the Heavily Indebted Poor Countries (HIPC) Initiative co-ordinated by the IMF and World Bank. Australia considers the enhanced HIPC Initiative is the most credible way to provide sustainable debt relief to the world's poorest countries. It involves all creditors, including multilateral development institutions, giving debt relief. It provides debt relief in the context of establishing sound institutional and policy frameworks to aid further development. It is also structured to ensure that the proceeds of debt relief go towards basic health, education and poverty reduction.

Australia has demonstrated its commitment to the HIPC initiative through its contribution to assisting the World Bank and IMF meet the costs of the HIPC Initiative. Australia has advocated that the enhanced HIPC Initiative should be implemented quickly and effectively to enable eligible countries to receive debt relief as soon as possible.

Bilaterally, Australia has announced that it will provide 100 per cent debt forgiveness to countries which qualify for debt relief under the HIPC Initiative.

Australia's contribution to debt relief for HIPC countries are additional to the aid budget, not at the expense of other aid programs.

The Future

Mr President, looking to the future Australia will continue to help LDCs, particularly in the Asia-Pacific region. They face many challenges. We do not profess to know all the answers. But, our engagement in development in the Asia-Pacific region does give us relevant skills and experience and insights. Our Asia-Pacific perspective coupled with our preference for practical workable solutions to development problems is what Australia can best contribute to this conference and to the interest of
LDCs.