Providing multilateral financial assistance

Increasing multilateral aid expenditure
Arranging multilateral payments
Using multilateral funds
[South] Institutional cooperation among African and Latin American clearing and payments arrangements may help to promote interregional cooperation among central monetary authorities and revive some of the non-operative payments and clearing arrangements between these regions. The rules of the Latin American Integration Association LAIA payments system allow the participation of any country from outside the region. The prototype payments arrangement [modelo de acuerdo de pagos], which is in an advanced phase of preparation, might also serve as a tool for the conclusion of prospective arrangements with third countries. The [Montevideo Treaty] offers adequate mechanisms for its members to negotiate and conclude preferential trade agreements with any developing country.

Central banks and other national government agencies may have important contributions to make in shifting the existing African-Latin American trade to the payments systems of these two regions. Central banks should stimulate the use of these mechanisms for interregional payments, lift foreign exchange restrictions and stimulate corresponding relations among commercial banks. In light of the successful operation of the swap facility in the Asian Clearing Union (ACU), the latter has offered ACU's technical assistance this area. The representative of ACU regarded the mandatory channelling of relevant transactions as an element in the success of his grouping.

Governments should give general political support to interregional cooperation and adopt appropriate policies aimed at eliminating the obstacles to this cooperation, such as the lack of efficient telecommunication and transportation facilities and the tariff and non-tariff barriers hindering the flow of external trade among developing countries.

1. By 1994 it had become increasingly recognized by multilateral assistance programmes that, in technical cooperation, the channelling of external assistance through projects had not been effective, nor had the impact been sustainable, notably in the case of population programmes. One UNDP report concluded that project proliferation had led to the dissipation of resources over many activities, straining the capacity of governments to service them and impairing the capacity of the United Nations system to provide adequate technical administrative support.

2. One good solution for development is when there is national policy dealing with health care, education, and social empowerment, and such policy is supported by global initiatives such as by the World Bank, UN agencies, and other multi-lateral groups (Amartya Sen).

Type Classification:
C: Cross-sectoral strategies
Related UN Sustainable Development Goals:
GOAL 10: Reduced Inequality