65. Many developing countries are experiencing severe balance-of-payments problems because of, inter alia, lack of basic infrastructure, the deterioration in their terms of trade in the past decade, and also because of the slow growth of their share of the markets in the world economy. A full response to this problem requires action at the global level and such action must be vigorously pursued. In this connection the Conference recommended that developing countries should coordinate their positions in the relevant international fora and that developing countries themselves take concerted action in this area unilaterally in the spirit of solidarity and in pursuance of the principles of self-reliance through institutions of the developing countries.

66. The Conference recommended:

1. the enlargement of existing financing facilities administered by some developing countries and

2. the examination, in the context of para. 79, of the feasibility of a financing facility to meet the balance of payments problems, with contributions from interested developing countries and administered by them.

67. The Conference recognized that efforts in this direction should in no way limit, nor be a substitute for the expansion of resources available from the existing multilateral institutions. It was recommended that developing countries should intensify collective efforts in international fora to ensure that developed countries join the developing countries in establishing a mechanism to alleviate the financial burdens imposed on the developing countries on account of oil price adjustment and the continued inflation of the prices of their imports of goods and services from developed countries and that a group of experts be established to meet in Baghdad during he second half of 1981 in order to work out the modalities of such mechanisms.

68. The Conference recommended that developing countries concerned should seek increases in the capital of existing regional and subregional development banks comprising industrialized and developing countries. In this context, they should increase their share in such capital and so increase their participation in the decision-making processes of these financial institutions. Membership in these banks should be enlarged to include all interested developing countries of the region as well as other developing countries wishing to be contributors, and the structures and lending programmes should more closely respond to the real needs of the developing countries, including, inter alia, their need for financing of pre-investment projects. Furthermore, developing countries should support, within these regional and subregional development financing institutions, the establishment of facilities designed to undertake equity investment and promote co-financing of equity investment, in particular from other developing countries.

69. The Conference agreed that these recommendations should be examined in light of the particular circumstances and procedures of each institution.

70. The Conference recommended that financial flows among developing countries, both governmental and private, should be stimulated through a series of policies and measures, among which the following deserve immediate attention:

1. Governmental and semi-governmental institutions of developing countries should increase their deposits in other developing country banks particularly those operating in international markets. Developing countries should encourage their institutions to increase their participation in the banks of developing countries on the basis of commercial practices;
   

2. Special attention should be given to the setting up of regional and interregional trade development banks as well as to strengthening existing regional ones, broadening the fields of operation and encouraging the participation of all countries concerned within the region. The Conference recommended that work on the establishment of an Export Credit Guarantee Facility should continue within UNCTAD;

3. Bilateral, subregional and regional payment arrangements should be reinforced and linkages among themselves should be devised in order to facilitate interregional payment arrangements;

4. Developing countries should encourage their institutions to take fuller advantage of opportunities existing in the developing countries’ financial and capital markets, including negotiated credits and equity investments;

5. Developing countries should increase their participation in the purchase of financial instruments issued by national governments, central banks, public and private companies of other developing countries in the international capital markets, on the basis of commercial practices.

It was also suggested that the financial authorities in developing countries with a strong position in international capital markets should assist other developing countries in securing greater access to financial resources from these sources through such means as syndicated loans.

71. The Conference recommended that interested developing countries maintain a favourable economic environment, in conformity with their national legislation, policies and economic systems, conducive to bilateral and multilateral financial cooperation among themselves through a range of investment incentives, inter alia, joint venture agreements, as well as other instruments designed to enhance the soundness and attractiveness for an increased flow of capital among themselves. Treaties to avoid double taxation would greatly facilitate this increased flow. It was recommended that to achieve the foregoing objectives, relevant measures should be elaborated by a technical group of experts.

72. The Conference recommended the improvement of the institutional framework among developing countries to ensure greater awareness of the investment opportunities, and proposed that the appropriate authorities should meet at an early date to exchange information and elaborate their details.

73. The Conference recognizing the valuable work done by the Group of 24 and by the experts of the Group of 77, recommended that this work should continue and in particular that the Group of 24 should give greater attention to monetary and financial aspects within the programme of ECDC.

74. The Conference recommended the establishment of a technical group of experts to study the ways and means for the dissemination among developing countries of relevant information about development projects undertaken in developing countries in order to enable other developing countries to participate in tendering of these projects through international competitive bidding.

75. In international competitive bidding the Conference recommended that, for development projects to be executed in their territories or financed by them, developing countries should take appropriate measures to eliminate the disadvantages faced by bidders from developing countries vis-a-vis those from the developed countries. These measures should include, inter alia, the provision of information on the conditions of the bidding on a timely and prompt basis, as well as special treatment consistent with national practice.

76. The Conference recommended that preferential treatment should also be extended to suppliers from developing countries in the context f government procurement taking into account cost, quality and the time factor.

77. The Conference considered that the contribution of ECDC to financing development goes beyond the transfer of resources and should be considered as a process of mutual benefit and it discussed, inter alia, the following points:

1. The need for an adequate flow of resources for development financing should be addressed by developing countries also within the framework of ECDC. The financing requirements of developing countries imply an increased commitment for the transfer of additional resources from the industrialized countries if the targets set forth in the Third International Development Strategy are to be met. The amount and modalities of development financing from developed countries has been inadequate. During the past decade financial cooperation among developing countries for development has been notably increased. However, it was mentioned that further possibilities of cooperation are open on a bilateral and multilateral basis. In this regard, several proposals which had been made, were noted.

2. It was considered that utilization of financial and other resources should be devoted to the priority sectors of the developing countries such as energy, infrastructure, raw materials, agriculture, capital goods, trade and transport in accordance with their national plans and programmes.

3. A number of financial activities might contribute to strengthening the development perspectives of developing countries. Flexibility in institutional arrangements would be helpful to accommodate different possibilities of action.

78. The Conference recommended that financing should be available for projects and activities which would lead to the further expansion of ECDC, and that this could be facilitated by strengthening the links between existing regional and subregional institutions.

79. The Conference recommended that a Group of Experts be established to examine the proposals made by the Non-Aligned Movement and the Group of 77, and to propose concrete measures by the end of 1981 for financial cooperation in the field of development financing, inter alia, the entry into force of the Non-Aligned Solidarity Fund, and the bank for developing countries as indicated by the Group of 77 Ministerial Meeting at Arusha in 1979.