Raul S. Manglapus

Before you began to occupy that exalted Seat, Mr. President, you were already discharging a noble international mandate, having presided for years over the Special Committee against Apartheid. Under your direction, the global counterattack against that insult to the race of man has gained signal victories. And now, there you are, Mr. President, a friend of the Filipinos, who visited us in 1987, a friend of our late martyr, Ninoy Aquino, having worked with him at Harvard. We Filipinos rejoice that it is you who will preside over this body of nations for the next 365 days.

And to Mr. Dante Caputo, the former Foreign Minister of Argentina, let me say how much our prediction of success for his presidency last year has been proved correct. His expert hand steered us through the proceedings without conflict, without incident, without delay. We had faith in him as an outstanding human leader, and he justified that faith.

(spoke in Spanish)

Filipinos can take added pride in the fact that Dante Caputo, our successful outgoing President, is a man who, like us, has his roots in the world of Hispanic culture.

(continued in English)

Last year, I came to this rostrum to bring the Assembly a message from the poor of my country. I said that they are poor not because they come from an indolent race. For, I said, our countrymen now cover the earth: 2 million of us in the Americas, half a million in the Middle East, a quarter of a million in Europe, half a million in Asia and the Pacific - seekers all of toil and life, teachers of nations, physicians of men, builders of industry, designers of modules that challenge the stars and settle on the moon, men and women of skill and diligence, like those of Europe who settled America and here built a new world.

I said they are poor not because they do not know how to fight for their rights. For they were the first in Asia to shed their blood against Western colonialism and produce their own republic. Ninety years later, they were the first nation in the world to mass by the millions to confront guns with rosaries and bring down a dictator without the shedding of blood. In those four bloodless, spectacular days of February they raised, under Corazon C. Aquino, the new peaceful rallying cry of people power, which even now is resonating, sometimes unsuccessfully, always gloriously, in the streets of nations in transition on more than one continent of this earth.

I said they are poor not because they multiply too fast. And they know that in rich nations it is the building of cities and industries, not the extermination Of human instincts, that has reduced this multiplication.

I said they are poor not because their nation does not grow. For our country does grow. Now that we are free again , although we remain harassed by the extremes of right and left, we have kept to our democratic course and our economy is growing again: last year by 6.8 per cent, last semester by 5.3 per cent.

They are poor, I said, because they have inherited an external debt from the dictator - now $30 billion - and in order to service it their country must divert about 20 per cent of its annual budget and send out annually $1.7 billion more than it receives. All these years the countries of the North have insisted that one may not talk of debt relief beyond the boardrooms of the International Monetary Fund (IMF) and the World Bank. Yet international debt forgiveness became a reality just about the time the IMF and the World Bank were born, for both these institutions were conceived by the same bold, victorious, visionary leadership that, remembering the stubborn mistake in 1919 at Versailles, forgave in 1947, in London, 70 percent of the German debt.

And so I called last year for the formation of an international debt and development commission in order to recapture that original vision. The Group of 77 responded quickly, and two resolutions were drafted. The first called on the Secretary-General of the United Nations to continue using his high offices towards a common understanding on a solution to the international external debt. That resolution was passed by the forty-third session of the General Assembly with only one member voting against, and one abstaining.

This year the second resolution, submitted as a draft decision by Tunisia on behalf of the Group of 77--the one calling for the establishment of the commission on debt and development that I had the privilege of proposing last year--is on the agenda of this Assembly. The draft decision calls upon this forty-fourth session of the General Assembly

"To establish, under the aegis of the Secretary-General, an Advisory Commission on Debt and Development composed of eminent persons from the academic, political and financial sectors with knowledge and experience in international finance, trade and development, to develop innovative approaches and evolve specific proposals related to all types of debt in order to solve the debt problem of developing countries in a manner consistent with their sustained growth and development." (A/C.R/43/L.19).

The draft decision provides that "Debtor and creditor interests shall be represented in the membership of the Commission, which shall take into account the need for appropriate geographical representation and regional balance." (ibid.).

It commands that "The Commission shall take into consideration the various existing studies and recommendations on the subject, including the views of the Secretary-General set out in his report entitled 'Towards a durable solution of the debt problem' and those expressed by the United Nations Conference on Trade and Development in the Trade and Development Report, 1988." (ibid.). Finally, it gives this Commission a life of three years and commands it to submit annual reports to the General Assembly. A commission of this kind was proposed by the non-aligned summit in Belgrade early this month.

The Assembly must adopt this draft decision, for the global attack on debt must be pressed. The Assembly must adopt it because you yourself, Mr. President, have articulated the economic, political and social consequences of the international debt. The Assembly must adopt it, for the time is come when original rigidities are yielding to flexibilities. In 1987 Japan suggested IMF-funded bonds to buy out debtors' loans. At the 1988 Toronto summit France proposed the forgiveness of debts of the poorest of the poor in the sub-Sahara. At the forty-third session of the General Assembly last year, French President François Mitterand proposed an IMF-guaranteed conversion of loans into bonds to reduce financial charges of debtor countries and urged creditor countries to finance this scheme. Last year, as we were delivering our opening statements in this Hall, the Secretary of the Treasury of the United States - at the annual IMF-World Bank meeting in Berlin - was standing firm against the use of international aid funds for private-debt reduction.

A week later, as I negotiated in Washington a review of the Philippine-United States military bases agreement, the same Secretary of the Treasury began to show flexibility. He agreed to the Philippine position that a portion of United States compensation money could be used for a debt-reduction component of the bases compensation package.

It was for us - and perhaps for all international debtors - a historic breakthrough, a budding promise of universal relief. Four months later, the bud blossomed into a full-fledged plan. On 10 March 1989 United States Secretary of the Treasury Nicholas Brady announced that plan, which allows - nay, encourages - the financing of international debt reduction and debt service by the International Monetary Fund and the World Bank.

Because of the plan, our Philippine negotiators may soon sign with private banks a debt-relief agreement that could be unprecedented. It will be voluntary, for the extent of debt relief is determined by the willingness of commercial banks to agree to substantial discounts en debts repaid. It will be a substantial debt reduction, possibly up to half of the debt to banks which choose to exit from our borrowing programme. And there will be new resources - up to $1 billion from the hard core of institutions that will continue to support us.

I spoke to the Assembly last year of our poor. They are still poor, and they are still there, but they may now look hopefully to new horizons. Flexible minds make new horizons possible. It is the flexible and creative mind of Secretary Brady, bending with the international reality, that has given us this new horizon.

It is, indeed, thank God, the new age of flexibillity. I saw it happening in the Soviet Union, too, last month, when I met with Mr. Gorbachev in Moscow, where flexibility is pronounced ~restroika and glasnost, and includes the ability to change, to admit past imperfections and to dream of new perfections.

Let us aid this new flexibility~ let us speed its momentum by providing it with global underpinnings, underpinnings which can emanate only from the peaceful processes of the United Nations and the instruments that awaken its talent to create.

One such instrument could be the proposed Advisory Commission on Debt and Development. The Commission will come to life, not as a challenge to the creditor nations, but, indeed, as a tribute to them and as a move of collaboration by debtor nations in that new openness which creditors have begun to display.

The Brady plan sees forgiveness as essential to revitalizing adjustment and making us credit-worthy again. The Brady plan can jumpstart the stalled engines of development of debtor nations. The Brady plan is a beginning, and it must answer still other questions.

Is there no criterion, for instance, with which to judge the application of debt-reduction or relief, except that they should be pursued?

Must we wait until all the physical levels of production and productivity potentials are obliterated for the debt to be written off or forgiven?

Are not meaningful reductions possible only when there are new facilities that are not caught up in the inertia of the international bureaucracy or of strongly held philosophies and interests?

Otherwise, will the focus ever go beyond sub-Sahara? Should not the Government major actors of the plan be mobilizing their leverage and adjusting their financial regulations? Is it enough to lay out the bare bones, which lose their flavour in the broth of rhetoric? Should not the Commission be advising not only on how to persuade creditors to reduce debt but also on how to help debtors produce in order to pay debt?

There is, for instance, the generation of power - power produces goods; goods pay debts. The Commission could stimulate power-generation and raise the power capabilities of debtor countries. It could ask the questiom if rich countries have often been ready to underwrite slum clearances, cannot they launch a programme to underwrite power equipment on concessional terms for the development of a slum-cleared economy that in time, will develop the capacity to repay these concession al loans?

Let the world take note that the most outstanding success of the United Na tions is the United Nations itself.

The United Nations cap is full of feathers these days. There is a feather for putting Namibia irreversibly on the road to independence and to becoming the 160th Merrt>er of the United Nations. There is another feather for the Secretary-General's mediating a cease-fire and bringing fighting between Iran and Iraq to an end. There is a special feather: the 1988 Nobel Peace Prize for the United Nations peace-keeping forces.

There are still other feathers perhaps soon to be pinned on that cap--for United Nations campaigns on drug abuse, on the envircnment, and on terrorism. Can there be United Nations campaigns any more urgent than those against these universally recognized evils--drug abuse, abuse of the environment, terrorism? I submit that there can.

There is a conventional theological faith that every human being is born with original sin. There is a new theology, a theology of bondage, not liberation. Today, a human being is born not only with original sin but also with original debt. To quantify it, the third world now owes $1.3 trillion to creditors, so every child in that world is indebted up to $1,000 at the moment of birth. At an annual rate of interest of 10 per cent compounded, these human beings at the age of 21 will each owe $7,000, and if they marry at that age, husband and wife will begin their married life with a joint burden of over $14,000. Is not that a challenge worthy of 159 Members of the United Nations to take up?

Is not this campaign worthy of being launched now, now that the momentum of flexibility has stirred the ranks of the lenders?

Is not this the moment for the debtors to extend the hand of collaboration to the creditors, in a Commission, as the draft decision puts it, "of eminent persons from the academic, political and financial sectors with knowledge and experience in international finance, trade and development, to develop innovative approaches and evolve specific proposals related to all types of debt in order to solve the debt prct>lem of developing countries in a manner consistent with their sustained growth and development"? (A/C.2/43/L.19, para. (a))

Let the Commission be the next feather in the United Nations cap. It will be a timely and elegant feather. A world of hungry debtors awaits its pinning in the United Nations cap.