There are three specific points of interest in the beginning portion of the resolution. Specifically, the clauses referring to Africa, the balanced references to the dual efforts of debtor and creditor nations, as well as multilateral lending institutions, and the manner in which the last preambular clause deals with a host of other financial and economic topics that add to the problems facing indebted poor countries. The specific references to Africa show the widespread recognition of the serious nature of the problem facing those countries. The African debt is of great concern because those countries are not experiencing significant economic growth, the total amount of their debt payments is unsustainable at current levels and the recent trends of "reduced private flows, and further that the overall declining trend in official development assistance is a cause for concern.15  By addressing the African situation in this manner, the international community is recognizing the crippling effects that the debt problem has on not only the economies, but the peoples of these countries. 

The numerous references to the efforts of all parties involved is key .It is reflective of how negotiations aimed to avoid placing blame on one party or another, and instead focused on the fact that there have been serious attempts made since 1982 to address this issue. All sides recognize that a solution has not yet been reached and that there must be continued efforts. None of the references made state that there is a perfect solution, but in such negotiations it is obviously important to recognize all efforts as important to the process. It is important to note that the language of the clauses reflects a negotiated settlement and not anyone regional bloc's position on the issue, even though the wording of earlier drafts may have been much stronger. Member States did not start with a consensus document with this language, they negotiated to this point. 

Lastly, it is important to recognize that states do not address the issue of debt in a vacuum. Given the reference to the ongoing international financial crisis and the laundry-list of items in the last preambular clause, it is apparent that this issue is addressed as it intersects with other important economic and financial issues. Terms of trade, commodity prices, improved market access, trade practices, access to technology and other topics are listed as important to overall global economic growth and the creation of an environment conducive to overcoming this heinous problem. 

In its 37 operative clauses, the resolution covers a multitude of sub-topics and peripheral issues that fall under the heading of the debt problem. Several of the clauses point out that the debt issue is one to be considered together with all other global economic and financial issues. To this end, operative clauses 2, 3,4, 9 and 10 stress that efforts to strengthen the global economy must be considered simultaneously with initiatives meant to solve the existing debt problem. The negotiations that produced this resolution recognized that debt relief without the consideration of actions to address the various other macroeconomic problems that plague the globalization process, would not promote sustainable development efforts. 

The operative clauses refer to special groups of countries, including those in Africa, countries affected by natural disasters and those having special needs because they are recovering from a conflict situation. These categories of indebted states are singled out within the resolution as needing special consideration by the international community, which is illustrated in operative clauses 7, 8, 15, 28 and 33. As in the preambular portion of the resolution, which made references to Africa, it is stressed that the debt problem has a particularly crippling effect on these countries and deserves priority as the international community seeks to find a durable solution to the crisis.

Overall, the operative clauses are concerned with the Highly Indebted Poor Countries (HIPC) Debt Initiative of the International Monetary Fund and the World Bank. In all, nine of the operative clauses, constituting almost one quarter of the total number of operative clauses, deal with the initiative, its implementation and its shortcomings. The clauses promote the program, which is meant to help HIPCs overcome their debt problems, as well as stating that the program should be extended to more countries, be fully supported by industrialized countries and take into consideration the views of all states in efforts to change it over time. While the resolution also addresses various plans aimed at bilateral debt restructuring through the work of the Paris Club, as well as various plans to help alleviate commercial bank debt, the focus is generally on the HIPC initiative. The resolution focuses on the HIPC initiative because the program is new and poses the greatest prospects for helping the poorest countries overcome the existing debt crisis. 

It is important that delegates are familiar with the documents, programs, initiatives and organizations referred to in the preambular and operative clauses of the resolution. One could write down and research the background, structure and meaning of each one in order to gain a good overview of the topic itself. This would be, of course, after reading about the background on the debt crisis and familiarizing ones self with the terminology used in discussing the topic. In order to aid with the process of familiarizing everyone with the topic area, it is important to have at least a minimum of knowledge concerning each of the three types of international debt. 

International Debt 

Within the international system, developing countries have different options on how to receive financial assistance. There are many forms of investment by companies, developed Member States, non-governmental organizations or even organizations such as the International Monetary Fund or the World Bank. It should be noted that these differing types of assistance have very different characteristics. They can have different rates of interest, payback periods, time of disbursement and even conditions a country must meet before having the loan released. It is also important to note the intent of the different debt -relief measures, as well as the ultimate effect that they have on developing Member States. When considering developing countries debt, many of the arguments for durable solutions focus on several different aspects of one individual type of debt. When the international community considers solutions to the debt problem they focus on three different types of debt stock: bilateral, multilateral and private or commercial. 

Bilateral Debt 

Bilateral aid or assistance can be characterized as that which is distributed by specific donor states to an individual debtor state. The United States gives a significant amount of bilateral assistance to Egypt and to Israel, which will in turn pay back loans under existing agreements between the two parties. Often this sort of assistance is the assistance most relied upon by the poorest developing states. Unfortunately for these needy states, the amount of money being allocated to development financing through bilateral aid has been dropping since the end of the Cold War, when it was a significant policy tool used by East and West alike for gaining the favor of developing states.16  A 1996 World Bank Report points out that "almost all major donor countries are cutting their aid as a share of their GNP and --in some cases --in real terms."17  The report goes on to say that these aid flows are declining at a time when opportunities for helping reduce poverty, protect the environment and promote private sector growth through aid are multiplying.18  The 1997 Report showed that "about 12 percent of all development assistance is now devoted to emergency aid, compared with less than 2 percent in 1990."19  This is disturbing when one considers that there is less money to be had overall and an increasing amount of what is out there is going to emergency assistance, as opposed to long-term poverty reduction programs in least developed countries.

Along with the drop in amounts of bilateral assistance being allocated to developing states, there has been a significant increase in the number of conditions being attached to loans. Many states are now expected to observe international human rights norms, pursue democracy and/or reform their monetary and fiscal policies in order to be considered for aid allocations. With less assistance to stimulate developing economies at the close of the 20th century, many states have found it increasingly difficult to increase output to generate funds to pay back existing debt. This cycle threatens many states, but is especially vicious in Africa and Central America, where the amount of interest on loan payments alone can be more than export earnings in a single year. 

Recognizing these problems, developed donor states, led by the G- 7, formed the Paris Club to assist in renegotiating developing country debt on a case-by-case basis. In 1994, the Paris Club reached agreement on the Naples terms, created to provide deeper debt stock reductions than previous Toronto and London terms for debt service reduction.20 Unfortunately, the requirements set out to allow developing countries the chance to qualify for debt forgiveness under the Naples terms were too stringent, and only Uganda and Bolivia initially met the criteria for this sort of forgiveness.21  This is also the criticism leveled at the Cologne agreement, which dictates that poor countries "must spend six years in one of the IMF's structural adjustment programs" and "generally make an exceptional effort to meet IMF targets" before being considered for debt relief under the program.22 The problem has been that the number of states qualifying for debt -relief is very small and the qualifying countries have problems meeting all the structural adjustment requirements placed upon them for qualifying.

Multilateral Debt 

Most Multilateral lending to developing countries comes directly from the International Monetary Fund and the World Bank group. These two mechanisms, which together are also known as the Bretton Woods Institutions, are available to developing countries for several different types of loans, as well as certain types of consulting expertise. They were originally constructed after WWII in order to provide Western Europe with the funds needed to rebuild their economies after the devastation of war. During the late 1970's and the early 1980's, the Bretton Woods Institutions became a significant lender to the developing world, supporting efforts to develop and advance economically as the 'lender of last resort. ' The total amount of debt accumulated by the poorest of the poor countries during this period became unsustainable and countries began to fall behind on their payments. The international community needed to find a plan that would maintain the solvency of these mechanisms and allow developing countries with unsustainable debt to have some breathing room.

Between 1996 and 1997, the IMF and the World Bank designed a framework to provide special assistance for heavily indebted poor countries that pursue IMF and World Bank-supported adjustment and reform programs, but for whom traditional debt relief mechanisms are insufficient. The Heavily Indebted Poor Countries Debt Initiative (HIPC) entails coordinated action by the international financial community, including multilateral institutions, to reduce to sustainable levels the external debt burden of these countries. This program provides an outstanding opportunity for the worlds poorest countries to overcome unsustainable amounts of debt, however remains tied to some of the Bretton Woods most controversial policies, that of structural adjustment programs.23

Structural adjustment programs are certain policy objectives set out by the World Bank and IMF that developing countries must meet before qualifying for a loan, or in the case of the HIPC, debt forgiveness. They include such measures as currency devaluation, market liberalization, reduction of bureaucracy, removal of government intervention in the economy, and the privatization of government-owned industries. These stipulations do not take into account the economic, political and social dynamics that exist in a country, and can often have disastrous effects. When currency is devalued, the price of basic foodstuffs and fuel skyrockets, and governments attempting to reduce bureaucracy and government intervention will often cut social programs, especially education and health care in the face of these new economic constraints. These problems are exacerbated by the declining amounts of foreign investment and compounded by volatile market prices for primary commodities which provide the export earnings to make debt service payments as well as pay for social programs.

As an example, one need only look at Uganda, which is a great success story and a model for the IMF and World Bank, as it is the only African country to have any portion of its debt forgiven under the HIPC scheme.24 Uganda spends more each year on repaying its debts than on education and health services combined, and its gross national product is about $325 a year, while its debt owed per capita is around $183 per person.25 The net effect of the program in Uganda was that it is worse off by over $10 million a year after having gone through all of the various parts of the program.26  Many point to this example as one of the chief reasons for needing to reform the program, as well as making calls to change the programs criteria so that more countries are eligible for relief.  Uganda is not the only example, but one of the best known examples of this initiative's shortcomings. 

Debt from Private/Commercial Lending Institutions 

Private lending institutions were the lender of choice for many developing countries, especially Latin America, in the 60's and 70's. Countries that had experienced economic growth in the past were likely candidates for these kinds of loans and they were attractive because there were few strings attached to their disbursement. Unfortunately, high interest rates coupled with falling export earnings of many developing countries towards the end of the 1970's produced an economic crisis culminating with Mexico's default in 1982. More recently, the East Asian and the Russian Ruble crisis affected the supply of private funds and aided in the deterioration of lender confidence.27 However, overall private capital flows have been stronger in recent years than either multilateral or bilateral assistance, especially in the financing of "large-scale infrastructure projects (mostly power)."28 It is important to note that these sources tend to target middle income countries, and not least developed and highly indebted poor countries, which are also in need of financing for their development priorities. 

Recently, commercial lending institutions have undertaken many different plans to get something back on their investment, in order to avoid becoming destroyed by the problem. Working with developed countries, many debt conversion programs, first considered under the 'Brady Plan', were made possible. Programs such as debt for equity swaps, debt for nature swaps and debt for development swaps have assisted countries in cutting their total debt stock. These initiatives are positive as they assist in the development process, while also lowering the overall amount of debt facing developing countries. Unfortunately, these programs have been used only to a limited degree, but have been successful in countries like Costa Rica, where certain amounts of debt were converted into agreements that protect large tracts of rain forest. 

Since the initial phases of the debt crisis in the 1980's, loans from commercial lenders have dropped in popularity among debtor countries and because of a growing reluctance among the various banks. Most aid flows now originate from multilateral lending institutions or from bilateral sources, because these lenders offer better overall terms and lower interest rates and they are more willing to accept the risks associated with such allocations. However, the strings attached to these types of loans can often make them as difficult to stomach as high interest commercial loans. The ability of a country to attract commercial loans depends greatly upon future growth potential and existing financial and economic practices. These factors have limited the allocation of these funds, generally, to middle income countries in Latin America and Southeast and East Asia. 

Conclusion 

In the original Agenda For Peace, from May of 1994, the Secretary General stated that "the lack of financial resources necessary for economic development is exacerbated by the debt crisis, which makes an already difficult situation much worse."29 His message continues to ring true at the end of the millennium as amounts of foreign assistance allocated to developing countries continues to fall and durable solutions to existing problems with commercial, bilateral and multilateral debt have yet to be found. Since the 1980's, the world has witnessed a drop in prices for developing county exports, a drop in the amount of foreign aid and assistance as well as Foreign Direct Investment coupled with a rise in the amount of money spent on debt servicing by developing countries. This has stymied economic growth and forced the international community to create various schemes aimed at alleviating debt-servicing burdens on the poorest countries. Various Paris Club strategies such as the Naples terms, and the HIPC initiative of the IMP World Bank and the innovative strategies of private lenders have not been effective at overcoming the problem. The international community is at the dawn of the new millennium and must now face the consequences of the existing global financial problems. 

While it is true that the topic is very contentious, the UN General Assembly has come to a consensus on the resolutions that have been passed on the issue. This adds emphasis to the fact that more and more, this topic is seen as not only vital to north -south relations, but also to the very survival of many people in the developing world. There is obviously a great deal at stake for all involved, and the international community, at least in the GA, must take cohesive action. Central to the issue is the overall effect that the existing debt burden placed on developing countries has on the global economy. For this reason, to effectively address the topic, consensus is essential. 

Researching the issue of debt and related economic and financial topics is highly technical and detailed. The terminology is jargon laden and the information can be confusing. Begin with the basics by reading the information from books that will act as a background. Then spend time on familiarizing yourself with the terminology that is associated with this topic. Delegates should spend time on the Internet and with periodicals reading articles that will familiarize you with how to utilize this terminology effectively. 

To fully understand your country's stake in this issue one must consider your state's role as a debtor and/or creditor. Is your country a debtor or creditor? What portion of your countries GDP is devoted to Official/Overseas Development Assistance (ODA) or Debt Servicing? Has your country participated in any debt relief programs? Has your country ever defaulted on a loan? Look over past debt reduction strategies and consider what types of programs would your country support to address the current crisis? What is the composition of debt held by your county as far as bilateral, multilateral and private financial institution based? What is the future role, if any, that can be played by the United Nations and its related agencies in overcoming this problem? 

Debt Glossary 

Arrears -The amounts of principal and/or interest currently due but not paid. High levels of debt arrears indicate serious debt repayment difficulties. 

Commercial loans -loans given at market interest rates, that can be pegged at a fixed rate for the duration of the loan or left to float at a flexible rate with the market. These loans are distributed commonly by banks like Chase Manhattan. 

Concessional loans -These loans are given at low interest rates or with a grant element built in. 

Conditionality -The practice, usually associated with standard structural adjustment programs, whereby certain conditions are set for extending loans to developing countries. These 'conditions' can range from economic performance changes, changes in economic policy or democratization of government. 

Creditors --Individuals, countries and/or organizations to whom debts are owed. There are generally understood to be three types of international creditors: Private creditors which are private commercial banks like Chase Manhattan or Chemical Bank; Bilateral creditors who represent individual governments of countries lending money; Or, multilateral/ending institutions such as the IMP and the World Bank. 

Debt Service -The amount of interest payments and repayment of principal on debt owed to other government, international and regional organizations and private financial institutions and corporations. 

Paris Club --the forum of official creditors for negotiating debt rescheduling and restructurings with debtor countries. 

Rescheduling -the postponement of payments due on all or part of an outstanding debt. 

Structural adjustment -A set of policy reforms designed to overcome major imbalances in a country's economy, such as overvalued exchange rate, or large budget or trade deficits. 

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