The European Parliament devoted the 13 May 1992 to the problems of cooperation with developing countries. Among the topics debated by the Assembly it is worth remembering East-West and North-South relations (Bindi Report), the Impact of the Single Market on developing countries (Pons Grau, Daly and Mendes Bota), the role of private investment and defence of the environment (Verhagen Report); food safety (Wynn Report), the role of non-governmental institutions (Vecchi Report), the debt question (Laroni report). We publish here an article by Nereo Laroni (Soc-It) on this last question.

IN THE FOREGROUND: UNDER DEVELOPMENT

The debt problem has always entailed political constraints, economic restriction and instability.It implies as between states the same social hierarchies as exist nationally in the different cultural contexts. Attempts have therefore constantly been made to regularize the situation, even to the extent of waiving the creditors' supposedly inviolable right to repayment. As early as the code of Hammurabi, one may find the following formulation: "If you have lent your neighbour a sum of money for sowing and the harvest has been destroyed by drought or bad weather, you must allow him to repay the debt over the following years". Today, even without considering the ethical factor, it might be argued that the present quantitative and qualitative imbalance between North and South is so great that immediate and radical measures must be taken. The seriousness of the situation is clear from the figures: the total debt of the LDC's amounted in 1989 to US $ 1322 m, while the level of debt servicing stood at appr

oximately US $ 170bn.In sub-Saharan Africa alone, the total debt rose from US $ 138 bn in 1988 to US $ 147 bn in 1989 and almost US $ 161 bn in 1990. The GNP per inhabitant of the LDCs has not risen for several years; in sub-Saharan Africa per capita income has fallen from US $ 400 in 1986 to US $ 340 in 1988. Gross internal investiment has fallen in real terms over the last decade; again, in sub-Sararan Africa the 1988 per capita figure was as low as that for 1968. In 1980 the total level of investiment was US $ 45 bn was opposed to total income of US $ 225 bn -i. e. 20% of total income.

The total income of the region fell in 1986 to US $ 186 bn. Investiment had risen by 1 bn, accounting for some 15% of GDP. This represents considerable effort if one considers that total consumption had fallen, over one year alone, from US $ 172 bn to 148 bn while population rose by 3.5%. It is thus essential to bring about a substantial increase in public financial transfers to the LDCs. In this connection, it is regrettable that the objective of reserving 0.7% of GNP for aid to the LDCs ( including 0.15% for the least advanced countries ) has not always been achieved, by certain Member States in particular; that the UN conference on the least advanced countries has failed to make substantial progress with regard to aid levels; that the financial allocation for Lomè IV is lower than that requested by Parliament; and that the proportion of the EEC budget devoted to developement aid has not been substantially increased in recent years. If we wish to help the LDCs to emerge from the unprecedented economic

and social crisis now afflicting them, it is essential to allocate, without delay, 1% of the GNP of the industrialized countries to developlment aid. (Of this, 0.75% should go to the LDCs and 0.25% to the countries of Central and Eastern Europe.) The debt problem should be faced in the spirit of the proposal of the Craxi report to the UN. In conclusion, and with regard to the countries of Africa, the following actions should be given priority:

- continuation, amplification and acceleration of the policy of writing off the official debts of the least advanced and middle-income countries, and especially of those countries afflicted by emergencies, provided there is a clear benefit to the populatoin as a whole; - continuation and intensification of the action of the international financial institutions aimed at providing the least advanced and middle-income countries with special credit lines on the basis of long term loans at highly preferential rates; - continuation and redifinement of the policy of readjustment and reduction of official debts of the Club of Paris, extending the benefit -given certain conditions - to periods following those covered by the previous agreements; - extension and reinforcement of the Brandy plan for bank loans concerning the middle-income African countries, in the context of coordinated intervention programmes including loans to governments and international financial institutions; - reinforcement o

f actions aimed at the conversion of debts owed to government, and to undertakings and entities covered by state guarantees into "found for nature" to be financed also by other resources, giving priority, subject to the agreement of the local populations, to forest protection, rehabilitation of desertified land and marine reclamation and preservation measures; - promotion and developement of financial and commercial agreements under which, for the servicing of medium and long term debts in respect of loans made by banks to the LDCs, provision is made for utilization of the future proceeds of supply contracts concerning their resources, to be guaranteed by suitable clauses regarding neccessary permanence and duration.

Nereo Laroni, MEP