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MATRIX OF POLICY OPTIONS AND INSTRUMENTS

The PHILIPPINES, on behalf of the G-77 and China, said that the Matrix itself is a useful tool, but it is most indicative and illustrative of what can be done. The elements of the Matrix and the concept itself are good as an intellectual exercise, but there is still much of a theoretical, metaphysical "pie in the sky" quality to the presentation. The items in the Matrix are simplistic and cannot capture the complex ramifications of particular issues. There is also a lack of quantification. The elements in the Matrix need more discussion in terms of what measures have been adopted and which have worked out in both developed and developing countries. The Matrix avoids an in-depth analysis of the economic, environmental and social impacts that should be considered by sustainable development. While the G-77 and China welcome inclusion of the Matrix in the report, it is not the solution to our financial problems. The solution we seek is the full implementation of the commitments made in Chapters 33 and 34 of Agenda 21.

FRANCE, on behalf of the EU, said the Matrix has potential and suggested that the CSD study it further by focusing on different sectors and target groups, exploring the most promising options for different countries and regions, and involving different groups when defining the appropriate mechanisms, based on existing case studies. He suggested that the work be undertaken by an intergovernmental panel instead of a multi-year action plan, as proposed in the Secretary-General's report.

CHINA stated that a three-page Matrix oversimplifies a complex matter and added that although individual elements could be taken into account, other issues such as ODA and GEF funding, which is currently "peanuts," must be dealt with. He said the Matrix is illustrative of what is possible, but it only serves as a tool that is subject to the decisions of sovereign States without external interference or imposition. It is premature to initiate any mechanism for the coordination of the Matrix.

FINLAND highlighted the innovative work behind the Matrix and how it can be further elaborated. The challenge is to design such sustainable financial and economic systems that would bring together development objectives and strategies and the basic criteria for provisional rural finance and environmental management. Three models could be tested: (1) a minimalist model on credit provision; (2) an integrated model that provides other technical services; and (3) a financial model that places sustainability at the heart of development for the poor. The target population must participate in the execution and evaluation of the systems and users' needs must be respected.

The UK agreed with many of the points made by the G-77 and China, including the need to further investigate the economic implications of the policy options. We need to ensure that international cooperation and coordination is done on a voluntary basis and is not of a mandatory character. He expressed hope that the CSD will agree to further explore the potential of the matrix.

UGANDA said the Matrix was useful for constructive discussion but it should not divert attention from adhering to Chapter 33 of Agenda 21. The usefulness of the Matrix can only be determined once it adopts a practical approach that takes into account policy issues such as partnerships, domestic attitudes and public participation.

INDIA noted that one of the uses of a Matrix is to simplify things, but this can be disastrous if its context is not understood. This should be pointed out to politicians who may not understand these technical aspects. He said that the impression one gets from the measures is that they are equal and can be substituted for each other, which is misleading. Thus, while foreign direct investment is useful in some cases, such as the telecommunications industry, it could not address issues related to water. He also noted that the Matrix is silent on debt and pointed out that debt-for-technology swaps should be considered.

COLOMBIA said that the Matrix is ambitious and it is impossible at this stage to consider a new conceptual framework. The Matrix is but one technical blueprint or structure and thus can be helpful in managing financial and economic activities in a country. The Matrix could divert attention from areas where progress needs to be made. The Matrix is not a magic wand that will solve all problems, but is an illustrative machinery. The proposal in the Secretary-General's report for a multi-year action plan linked to the Matrix is premature. Since we do not yet have a clear understanding of the nature of the Matrix, we cannot contemplate establishing a programme based on it.

BULGARIA said that the systematization of instruments in the matrix format is extremely helpful, but is not a panacea. We need a number of concrete methodological and economic principles, and the Matrix could serve as a basis for further analysis in this area.

JAPAN concurred with India and said the Matrix provides a framework for further discussion. In order to be effective and understand their nature and purpose, the instruments require common guidelines that are drawn from available experiences, as they lack quantification of their effectiveness. In this respect, the CSD should undertake concerted efforts, at the international level, to encourage the sharing of experiences and develop a common understanding on the issues related to matrices.

The IMF compared the Matrix to a menu card. Each instrument is like a peanut, but every peanut is helpful when one is hungry. The Matrix outlines the various external and internal financial possibilities as well as the multilateral and domestic economic and non-economic decisions that are useful. He noted that some delegates are uptight about these issues since they require policy makers to take tough decisions that have economic and social implications. He supported the idea of an expert group to study the feasibility of the various financial and economic instruments. The IMF would be willing to be part of the group.

The US reiterated its support for work on the matrix concept by appropriate organizations or institutions, such as UNCTAD, OECD, IMF and the World Bank. He agreed with the need to quantify the various elements. It is worth looking at a range of costs and detailed estimates. The US urged the Working Group to support further work on the Matrix so the CSD can explore the most promising options for implementing Agenda 21.

The REPUBLIC OF KOREA warned of the dangers of the oversimplification, ambiguities and lack of balance in the Matrix. He thought it is premature at this time to think about some kind of working group or multi-year work programme.

CANADA noted that the proposed instruments are also sensitive for developed countries. He said the question is not if it is possible to undertake them, but whether governments are ready to consider some of the options. If there is agreement to move forward, the Working Group should discuss how the studies will be undertaken and by whom. If these decisions are not made now, the CSD will only have discussions to show as its achievements at the five-year review of UNCED.

CHINA said that the recommendations to the CSD should indicate that the proposed instruments had not been agreed to, but there was agreement that there should be follow-up. The CHAIR responded that the Matrix is not intended for adoption, but solely as a framework for future work.

The PHILIPPINES said that the G-77 and China agree with the IMF, Japan and the Chair that the Matrix provides a map or a framework that shows various ways of arriving at a destination. We are supposed to arrive at a destination of global rehabilitation through sustainable development, which a framework or map can do, however, in Rio the developing countries were told by the affluent countries that they would be given help. We can reach this destination on our feet, but we were promised roller blades or a bicycle. The CHAIR added that with cooperation, we can even fly.

CHINA insisted that the Matrix should not be included in the report of this meeting because it is the opinion of an individual, not the opinion of sovereign States. The CHAIR objected saying this meeting has been charged to look at innovative approaches to finance sustainable development. At the last session of this Working Group, we saw the embryo of the matrix idea. We asked Dr. Panayotou to expand upon it and, thus, we cannot say it is not part of our process. We should not be afraid of new ideas. We are not asking for a decision to accept the Matrix. It is merely a framework with which we can proceed. He urged delegates not to cast it aside, but to look at it, develop it and push it forward, if it has possibilities.

AUSTRALIA suggested that in the follow-up studies: examples from both developed and developing countries should be used; one sector should be studied, focusing on how a particular instrument was implemented and how it can be utilized; the pros and cons of the instruments should be indicated; and issues such as equity, access and environmental protection should be addressed.

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