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Wieczorek-Zeul Favours More South-South Cooperation

By Ramesh Jaura

Germany's Development and Economic Cooperation Minister Heidemarie Wieczorek-Zeul has called for a greater regional cooperation and a larger exchange of goods among developing countries. This was as important as the need for removing trade barriers for the goods of developing countries to the markets of the industrialised nations, she said in an interview with TERRAVIVA.

''The current practice is that the more finished the goods entering the industrial states are, the higher are the tariff walls they are confronted with.

We must put an end to this tariff escalation so that the poorer developing countries are enabled to step out of the role of the suppliers of raw materials.

'' This, she argued, was necessary because the LDCs continue to be dependent to a great extent on the export of a few commodities.

The primary exports of these countries comprise some 70 per cent of all that they sell to the rich countries.

The situation of the LDCs is further aggravated by the fact that commodity prices are not only unstable, but also that - in contrast to oil prices - they have also registered a steep downward trend.

Wieczorek-Zeul said: ''Not only the industrialised, but also the developing countries themselves need to liberalise trade.

Because the average tariffs of developing countries for imports from other developing countries are higher than those for imports from the North - as much as 20 per cent higher than in the case of farm products and three times higher than for finished products.

'' The German Economic Cooperation Minister added: ''With that in view, we welcome and support the efforts towards regional cooperation, in order to promote exchange of goods on a regional level.

Also the World Bank has, at its spring meetings at the end of April, decided to lend further support.

'' The ''Everything But Arms" initiative of the European Union was a first step towards dismantling trade barriers.

A second step in that direction was the decision of the OECD at the beginning of the week, to untie official development assistance to the LDCs.

This means that LDCs will no longer be obliged to turn to a donor country to procure know-how and equipment for development projects within the framework of financial cooperation.

According to expert estimates, this may save LDCs between 20 and 25 per cent in terms of costs.

Wieczorek-Zeul said Germany remains committed to the promise given by Chancellor Gerhard Schröder at the Millennium Summit last year to contribute its share to halving the proportion of those living in extreme poverty by 2015.

With this in view, the German government cabinet last month adopted a Programme of Action, entitled 'Poverty Reduction - A Global Responsibility'.

The Programme is backed by an implementation plan, which contains steps for individual actions.

As part of the programme of action, the German government has defined ten priority areas for action on poverty reduction, which it is pursuing both in its bilateral relations and in its involvement at the European level and in international institutions.

''Our central element for halving poverty is the establishment of strong economic structures which foster pro-poor growth, create scope for poverty reduction, increase employment and foster the development of the productive potential of the poor,'' the German Economic Cooperation Minister said.

Germany also supports measures aimed at the rapid removal of protectionism in the agricultural sector at the European and international levels; in particular it advocates a reduction of all forms of export subsidies so as not to harm food production in the developing countries.

''We favour starting a new, comprehensive WTO round of negotiations at an early date in which the interests of the developing countries are taken into account in all areas under negotiation.

We recognise the developing countries' difficulties in implementing existing regulations.

We are willing to make concessions to the developing countries in a new round,'' Wieczorek-Zeul said.

She chaired a global forum Thursday at LDC-III on 'Enhancing Productive Capacity: The Role of Investment and Enterprise Development'.

She pointed out that the German government appreciates the private sector's use of its financial and technical resources for the purposes of poverty reduction.

With this in view, it is making increased use of the instrument of Public Private Partnership (PPP).

''The starting point of our strategy is that investments worth several hundreds of billions of US dollars are required to face global challenges,'' said the German Economic Cooperation Minister, who is also deputy chair of Germany's ruling Social Democratic Party (SPD).

''It would be absurd to use only public funds for the purpose.

We should, therefore, mobilise the private sector for the purpose.

'' A mix of ODA and foreign direct investments would contribute towards stepping up the pace of development in the LDCs.

Wieczorek-Zeul said that in Germany a total of about 1.3 billion US dollars had been mobilised for the purpose.