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DRAFTING GROUP II

Financial Resources and Mechanisms: Delegates agreed to the Co-Chairs’ text in 40, “Financial resources and mechanisms play a key role in the implementation of Agenda 21,” to be followed by Paragraph 33.13 of Agenda 21. A G-77/CHINA amendment was bracketed: Hence all financial commitments of Agenda 21, particularly those contained in Chapter 33, and [especially] (G-77/CHINA) [including] (CHAIR) those [objectives] (EU) related to the provision of new and additional resources that are both adequate and predictable, need to be urgently fulfilled. The US, supported by the EU, objected to the special reference to new and additional resource commitments. CANADA said his country was unlikely to fulfill the Agenda 21 ODA commitment of 0.7% GNP “urgently.” The G-77/CHINA could not accept the EU’s reference to new and additional resources as “objectives” rather than commitments. Chair Amorim said he was “very disheartened” and that some delegations were not in a mood to negotiate. Delegates agreed: Renewed efforts are essential to ensure that all sources of funding (deleting international and domestic as well as private and public) contribute to “economic growth, social development and environmental protection” (CHAIR), in the context of sustainable development and “implementation of Agenda 21" (US). The US said that if delegations continued to treat the words ”sustainable development" as a “pariah” there would be nothing to discuss.

In 41 (ODA), the US and G-77/CHINA bracketed a revised G-77/CHINA proposal noting that, for developing countries, ODA remains a main source of external funding and is “essential” (CHAIR) for implementation of Agenda 21. They also bracketed a sentence in which the EU proposed “now,” the US “short and medium term” and the Chair “at this stage” for the G-77/CHINA’s text that “ODA cannot be replaced by private capital flows.” An EU proposal calling for “recipient and donor countries to address the underlying factors” for the decrease in ODA was altered to state: “intensified efforts should be made to reverse this trend, taking into account the need for effective utilization of ODA” (G-77/CHINA) and “in the spirit of global partnership, underlying causes of the decrease should be addressed by all countries” (CHAIR). The US supported and the G-77/CHINA altered text calling for strategies to increase support for aid programmes and for revitalizing the commitments donors made at UNCED.

In 42 (role of ODA), delegations agreed that ODA plays a significant role, inter alia, in capacity-building, infrastructure, combating poverty, environmental protection and promoting institutional development in developing countries, and “has” (Chair) a crucial role in the least developed countries. AUSTRALIA highlighted ODA’s “catalytic role in encouraging, where appropriate, country-driven policy reform efforts.” The G-77/CHINA expressed concern about conditionalities and bracketed this text.

On a G-77/CHINA-proposed paragraph 45, on multilateral financial institutions’ (MFI) concessional funding, the US objected to an implication that developing countries are totally dependent on external resources and agreed to replace “achieve” with “fully implement” sustainable development. Text on MFIs and stringent conditionalities was replaced with a call on such institutions to “continue” (US) to respond to the development needs and priorities of developing countries. A call on developed countries to urgently meet commitments under the 11th replenishment of the IDA was accepted. In text on the GEF, CANADA, the US and AUSTRALIA supported EU text calling for satisfactory GEF replenishment and flexibility in its mandate. The G-77/CHINA called for adequate, sustained and reliable funding, review of its decision-making process and expansion of its scope and coverage. Both texts were bracketed. G-77/CHINA-proposed text on UN funds and programmes was bracketed after alternative amendments were submitted by AUSTRALIA, the US and the EU.

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