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Statement by
Mr. Chairman, Let me begin, on behalf of the Indonesian delegation, by expressing our sincere appreciation to the Secretary-General for his efforts in providing his reports on the various agenda items of the Second Committee as early as possible. We also wish to associate our delegation with the statement made by the distinguished Representative of Venezuela on behalf of the Group of 77 and China. Last March the Monterrey Consensus resolved to address the challenges of financing for development around the world, particularly in developing countries. More recently, the Secretary General has stressed that, though some progress has been made, achieving the agreed time bound targets of the Millennium Development Goals will be impossible if progress continues at its present pace. What is needed is an improvement in the national and international enabling environments to promote cooperation and, most importantly, to mobilize domestic and international financial resources in accordance with the Monterrey Consensus. Having attentively read the reports of the Secretary General before us let me make a few brief remarks on two items, the international financial system and development and the perennial issue of the external debt crisis. First, we are very concerned, as pointed out in the statistics of the report, that for the fifth year in a row the developing countries have made a net outward transfer of financial resources. For the past three years alone, the scope of those negative transfers has surpassed $100 billion, reaching $180 billion in the year 2000. These outflows were most pronounced in Africa, Eastern and Southern Asia and Western Asia. We therefore fully agree that to meet this challenge the international community must substantially increase the flow of the ODA as well as fully provide the appropriate debt reduction for low income countries, as agreed in the Monterrey Consensus. Mr. Chairman, As to ongoing reforms in international finance over the past years, the Monterrey Consensus called for sustaining such efforts with greater transparency and the effective participation of developing countries including the continued development of international standards and codes for macroeconomic policy-making and financial regulation. It also included concerns about corporate financial reporting, auditing and governance, especially in developed countries. Cooperation on fighting money-laundering and corruption, was also intensified. In response to the Monterrey Consensus, which sought to put in place clear principles for the management and resolution of financial crisis that provide fair burden sharing, we hope that the consideration of the role and responsibilities of the public and private sectors in preventing and resolving such crises will lead to a equitable solution. Indonesia, attaches great importance to the reform of surveillance. Thus, we are pleased that at this year’s annual April meeting the International Monetary and Financial Committee (IMFC) reviewed the reform of IMF policies on surveillance and the policy conditions for the use of Fund resources. It is also encouraging that agreement was reached on the IMF placing stronger emphasis on assessing the global impact of policies in individual countries, particularly the largest. We believe that such global surveillance should be combined with greater country-level surveillance with particular attention being paid to the need for good corporate governance including accountability, transparency and auditing among others. Mr. Chairman, Turning briefly to the debt crisis, sustainable debt continues to be elusive. While the external debt problem has shown some improvement in 2001 over 2000, the total stock of debt of the developing countries and economies in transition was almost 2.5 trillion or almost 40% of their gross national income. In Africa those figures have soared to reach crippling levels that constitute an enormous drain on their development resources and greatly inhibit their efforts to achieve the Millennium Development Goals. The report before us notes that, while the enhanced HIPC Initiative provided the opportunity to strengthen the economic prospects and poverty reduction efforts of its beneficiary countries, it also questioned the speed and scope of its implementation. The enhanced HIPC was launched to achieve a faster, deeper and broader means to such debt relief. But, according to the report, out of the 26 eligible HIPCs from a total of 42 HIPCs only 6 had in fact reached the Completion Point by July 2002 and progress had continued to be slower that expected. We believe that the BWIs should exercise more flexibility in order to speed up the process and make it more meaningful. To make a more significant impact on the overall debt burden of the developing countries, including both low and middle income countries, we must fully explore new initiatives such as mechanisms for debt-for-sustainable-development swaps and the cancellation of unsustainable debt. We also see great merit in the utilization of Special Drawing Rights for development purposes. This approach should be further explored as an innovative means for mobilizing sources of financing for development for the developing countries. Thank you.
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