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INFORMAL WORKING GROUP ON FINANCE

Co-Chair Pierre-Marc Johnson announced that the Bureau had decided that this Group would first address Article 6, as requested by the G-77 and China, and then move on to Articles 20 and 21, as contained in A/AC.241/L.19.

ARTICLE 6 -- OBLIGATIONS TO PROVIDE ASSISTANCE IN IMPLEMENTATION or OBLIGATIONS OF DEVELOPED COUNTRY PARTIES: The text for Article 6 in document A/AC.241/L.18 was used as the basis for discussion. One of the major issues was the title. Developing countries preferred the original formulation, "Obligations of Developed Country Parties," since this would logically follow Article 4, which addresses general obligations, and Article 5, which addresses the obligations of affected Parties. Japan preferred the title in L.18 because it incorporates both developed countries and countries in a position to provide assistance. France proposed "Obligations of Country Parties Able to Provide Assistance."

The G-77 and China requested the inclusion of its proposal for paragraph 1 (from the paper dated 30 March 1994), which references the obligations of developed country Parties to support the efforts of affected developing country Parties, promote access to financial resources and technology, and allocate 0.7% of GNP for ODA. Many countries agreed that paragraph 3 (voluntary provision of assistance) should not be placed in this article on obligations, but moved to Article 20 (financial resources).

Despite the intentions of the Co-Chairs, much of the discussion focused on categories of countries. G-77 members argued that there should be no reference to the former Soviet republics in paragraph 1, since this is not an economic assistance convention and that some of these countries will soon join the G-77. Malaysia suggested that these countries develop their own regional implementation annex. France suggested new text to state, for the purposes of this article, that affected country Parties who were part of the former Soviet Union shall be regarded as developing countries. Uzbekistan, Japan, Armenia and Azerbaijan insisted that reference to these countries be retained.

ARTICLE 20 -- FINANCIAL RESOURCES: During the afternoon session, several delegations, including Greece, on behalf of the EU, Benin, Algeria, on behalf of the G-77, China and Japan made several amendments to Article 20. However, due to the numerous proposals, it was agreed that the Group would reconvene in the evening in a smaller room to draft text.

During the evening, a general discussion on the Article was held. Most delegations were in agreement that the Article should be developed based on three main principles: (1) partnership, as provided by the statement "as mutually agreed;" (2) differentiated responsibilities between developed and developing countries; and (3) flexibility. Notwithstanding, several African delegations raised concerns related to the Article. The reference to "mutually agreed" may call into question the legality of the Convention vis- …-vis other such bilateral and multilateral agreements and whether it precludes the possibility of obtaining multilateral funding. While paragraphs 2 and 3 outline how available resources would be spent, there is no indication of how to mobilize new and additional resources. Furthermore, no provision is made for concessional loans, although it is clear that grants would not resolve current desertification problems.

PREAMBLE: After the general debate, the Group embarked on a paragraph-by-paragraph reading of L.19. The Group discussed only the first two preambular paragraphs, which relate to 0.7% of GNP for ODA and the importance of providing financial resources and technology. The paragraph dealing with the 0.7% target is bracketed, as is the section referring to finance and technology, which was supported by most OECD countries.

The US explained that in spite of the non-binding nature of the Preamble, any reference to GNP targets will present political problems to the US Government in the ratification of the Convention. Hence, it should be deleted. In addition, the UK argued that this paragraph has no relation to the objective of the Convention, and its inclusion in the Convention would also mark the first time ODA targets were included in a legally-binding instrument. The G-77 and China, however, want both the references to the ODA target and finance and technology retained in the text.

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