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WORKING GROUP I

FINANCE: The paragraph-by-paragraph discussion on the Chair's draft text took most of the day. In paragraph 1, the G-77 and China suggested that emphasis be placed on the role of the intersessional ad hoc open-ended Working Group on Finance. The G-77 and China asked that paragraph 2 (provision of finances) be split into two sections to strengthen the discussion of the role of the GEF. They also took issue with the reference to "insufficient provision of new and additional financial resources," because this implies that there are additional resources. They requested that the last sentence concerning the Uruguay Round be deleted. The US, EU and Japan found the draft paragraph acceptable, but requested deletion of the reference to "a minimum acceptable level" of GEF funding. Canada and Australia, requested that the paragraph have a more balanced approach, which could be achieved by moving paragraph 8 (national policies) here or including language to that effect.

On paragraph 3 (ODA levels), the Philippines suggested that the idea of participation at all levels be tied into the treatment of ODA. Egypt noted that the efficiency in ODA use is important, and suggested that countries offering ODA review the efficiency of use and possibilities for improvement and report back to the CSD. India called for a time frame of two or three years by which the target of 0.7% GNP ODA levels will be reached. The G-77 and China requested deleting the reference to increased private flows and adding a reference to "commitments of concessional funding." Austria asked that present financial flows be acknowledged, but also suggested language to establish a link between these flows and advancement of sustainable development. The US and Japan found the reference to private flows valuable. The EU noted that references to time frames would revive discussions that are not appropriate.

On paragraph 4 (desertification negotiations), Hungary suggested adding a similar reference to the Climate Change Convention and the G-77 and China suggested adding reference to the Small Island States Conference. On paragraph 5 (role of public awareness), Austria and Canada suggested that the reference to the Commission's role in promoting public awareness be replaced with more detailed language. On paragraph 6 (trade liberalization), the G-77 and China objected to the words "ill-equipped" to compete in world markets and requested that the reference be changed to developing countries "particularly in Africa." They also requested the establishment of a diversification fund for African commodities, but in the face of US objection and no other support, the Chair requested that they withdraw this amendment. Bangladesh suggested that the "least developed" countries be singled out for assistance in matters of trade.

On paragraph 7 (debt), the G-77 and China suggested that the reference to the international debt strategy be removed. The US and the EU disagreed. The US and the EU also announced they were submitting text for new paragraphs calling on UNEP to survey private sector initiatives and calling for the integration of environment and development strategies.

There was considerable disagreement on paragraph 8 (national policies). The G-77 and China proposed deleting the references to the need for adequate national policies, replacing it with wording that indicates that such calls are attempts to divert attention away from the provision of new and additional financial resources. The US, Canada, the EU and Japan preferred the original text. The US also suggested adding a paragraph on national sustainable development strategies. Poland requested a reference to the unique problems faced by countries with economies in transition. Japan suggested that the need for reducing military expenditures also be added. Korea stated that this is a sensitive issue. France said the G-77 and China proposal changes the nature of the document and impedes any attempt to reach consensus without explicitly noting each side's understanding of the issue. The G-77 and China said they could compromise as long as the political commitment to Agenda 21 and the Rio agreements do not fade.

On paragraph 9 (lending institutions), the G-77 and China suggested including reference to grant capacities and regional banks. The US and the EU provisionally agreed. On paragraph 10 (innovative financing mechanisms), Austria noted that the text is pessimistic about these options. Australia suggested that the text mention incentives. The US agreed with the G-77 and China in the need for further examination of these mechanisms.

On paragraph 11 (financing sectoral clusters), India noted that sectors should not be "lumped" together. The G-77 and China called for a matrix of policy reforms by developed countries. The US noted that this proposal changes the meaning. China proposed a paragraph 11 bis, which calls for the continuation of the<W2I> ad hoc <D>open-ended working group on finance. On paragraph 12 (steps to increase effectiveness of the CSD), the G-77 and China called for the deletion of the reference to greater involvement of private sector and NGO experts and to informal expert group meetings. The US, Canada, and the EU objected. Malaysia called the delegates' attention to the fact that the working group on finance needs clear instructions from this session of the CSD.

MAJOR GROUPS: During the short discussion of major groups, delegates generally expressed satisfaction with the Chair's draft text. In the chapeau to paragraph 1, Australia and the Philippines supported the special reference to the role of women. Benin wanted to refer to other vulnerable groups, including youth and the aged. Tunisia also stressed reference to youth and children. Austria argued that the role of women is different than that of youth -- women shape daily decisions at the household level on sustainable development whereas youth must be educated and trained. The Chair said that she would reformulate the chapeau.

Egypt proposed language calling for case studies on the involvement of major groups in different sectors. In paragraph 2, the EU, the US and Australia wanted to ensure that the reporting requirement mentioned here is within the context of national reports and not mandatory. China had a problem with the reference to "local support institutions" in paragraph 5,which calls on international organizations to involve major groups in decision-making processes.

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