Inter-American Relations: A Collection of Documents, Legislation ...

(f) It is imperative to strengthen a genuine multilateralization of external financial cooperation. By reason of their multilateral nature the international financing agencies should avoid allowing pos sible bilateral programs between countries to influence their decisions;

(g) It is necessary to create effective machinery that will make it possible to liberalize external credit, reduce interest rates, and broaden the volume and terms of loans, taking into account circumstances such as the plurennial nature of certain projects or programs; and to propose the creation of an Interest Equalization Fund, whose resources, as well as those required by other possible mechanisms, should be provided by contributions of international financing agencies and of developed countries;

(h) Greater participation by public agencies in the channeling or use of external financing is desirable; and

(i) Measures are required to ensure that the terms of external financing are no less favorable for Latin America than they are for other developing areas of the world.

29. It is considered indispensable that external financing be completely freed of elements that impose special conditions, because of their multiple effects on the economy of Latin America, such as: the artificial creation of trade currents, including those resulting from application of the additionality concept; the requirement for an excessive component of local expenditures and investments; the creation of superfluous agencies; possible undue influence on internal decision; the compulsory use of specified ocean shipping lines; and the making of purchases on the basis of inadequate lists which represent high costs and distort the trade of the region. As a possible temporary solution the use of AID loan or other similar funds for purchases in Latin America is envisaged.

30. The need is emphasized of renewing the United States financial contribution to the International Development Association, and of support to Latin America, to facilitate the use of its credits by all countries of the region, modifying for such purpose the standards of eligibility and not trying the granting of such credits to specific conditions. 31. The access of the Latin American countries and their regional and subregional organizations to the capital markets of the United States should be facilitated, by decreasing costs and giving greater flexibility to the administrative and other requirements that now make such access difficult.

32. Available funds should be increased and improvements made in the utilization of the mechanisms for financing Latin American exports, taking into account the need for such credits to be granted under terms and conditions that will make it possible to maintain and improve the competitive position of Latin American products and their trade on international markets, including the use of soft loans when the matter depends basically on the financing terms. In this sense it is considered important to revise the conditions for the use of Inter-American Development Bank funds, in order to expand preshipment credits, provide for the availability of financing for exports of manufactures and semimanufactures, and not limit them to trade among Latin American countries.

33. It should be agreed that private foreign investment should not be considered assistance, nor should it be computed as part of financial cooperation for development. Private foreign investment, subject to national decisions and priorities, should operate in favor of the mobilization of domestic resources, generate income or prevent expenditures of foreign exchange, promote savings and national technological research, represent a real technological contribution, and participate as an element supplementing national investment, preferably associated with it-these being factors that have not always prevailed. Concern is expressed at the global magnitude of the flow of external financing that it [private foreign investment] has originated, and at the excessive use of local financing resources, the effect of certain marketing agreements that disrupt competition in the internal or external markets, and the possible resultant effects on the economic development of the region.

34. Interest is expressed in increased international cooperation in the financing of multinational projects and the extension of such cooperation to projects for the promotion of economic integration, this being a reflection of decisions of the integration agencies in their specific field. This cooperation should be provided in conformity with the Declaration of the Presidents of America.

35. Insistence is placed on the necessity of greater participation by Latin America in the discussions on the reform of the international monetary system, including those that may take place outside the sphere of the International Monetary Fund and, particularly, within the so-called Group of Ten. The prompt ratification and activation of the provisions on Special Drawing Rights and the search for mechanisms that will make it possible to obtain additional financing for development at the opportune time are considered matters of importance.

36. The importance of expanding tourist travel to the Latin American countries is pointed out, by avoiding the adoption of measures that would obstruct it and supporting by means of technical and financial assistance the improvement of services in this field and improvement of the tourism infrastructure.

37. All countries making up the Inter-American System should be included in the annual country reviews made by CIAP, in order to study the execution of commitments undertaken, including those national policies that may impinge on the economic development of the Latin American countries.

D. SOCIAL DEVELOPMENT

38. It is reiterated that:

(a) Their (the Latin American countries) economic development should be conducive to effective social transformation, whose basic goals should be to attain substantial improvements in the standard of living of the population, particularly in rural areas, and to bring less privileged or marginal groups into active participation in the process of economic and social progress and full enjoyment of its benefits.

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(b) Investments for social development are one way of raising standards of living of the people, a factor of great importance for the increase of productivity and a better distribution of income; therefore, they deserve preferential attention, taking into account the particular situation of each country.

(c) The goals set forth in the Declaration of the Presidents of America on the social development of Latin America can reach full and prompt fruition only if there is a considerable increase in international technical and financial cooperation for social development, which cooperation should be provided on the basis of the programs and policies of each country, with due consideration for national characteristics.

To that end, the financial cooperation should be granted without discrimination and on especially flexible terms; therefore, mechanisms such as the Fund for Special Operations of the Inter-American Development Bank (whose resources should be increased in due course) should be used more widely.

E. TECHNICAL COOPERATION

39. It is affirmed that the following principles should be observed in the field of technical cooperation:

(a) Technical cooperation should be a joint undertaking of the parties concerned. Its volume, processes, and form of coordination should be fitted to the national objectives of each country, according to its economic and social development plans.

(b) Technical cooperation should be channeled through the national coordinating agencies of each country or, as the case may be, of regional or subregional agencies.

(c) Technical cooperation should be directed toward supporting and supplementing the national programs of each country and the agencies in charge of the execution of those programs, but not toward replacing such programs or agencies.

(d) Multilateral technical cooperation should be strengthened and substantially increased.

(e) Latin American experts should be used in so far as possible in programs of technical cooperation.

(f) Technical cooperation should not be cut down as the countries of Latin America achieve more advanced and complex stages in their growth; rather it should be adapted to the new conditions in the development process.

(g) In attention to the needs and responsibilities involved in the process of national and regional development, technical cooperation should be made available basically on nonreimbursable terms.

F. SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT

40. For the fulfillment of their economic and social development programs, the countries of Latin America recognize that it is necessary vigorously to promote a process of scientific and technological development, based on maximum domestic effort and supplemented by international cooperation. In this sense the countries of Latin America will adopt a concerted action plan, through a broad pro

gram of scientific and technological cooperation that requires the help of international cooperation, especially of the United States.

41. It is imperative to carry out fully the Action Program agreed by the Presidents of America with respect to science and technology. To that end, and in view of the fact that scientific and technological development requires resources of an order of magnitude much in excess of the amount currently being invested at the national and regional levels, it becomes necessary to have available special funds for such development, which should be granted without repayment commitments.

On the basis of the complementarity of efforts mentioned, the United States of America should:

42. Support the Latin American countries in respect to science and technology, channeling its cooperation in consideration of the goals and priorities set by those countries and through the pertinent national and regional organizations.

43. Adopt suitable methods to improve the transfer of technology to the region. In this respect it should:

(a) Contribute to the improvement of scientific and technological information through the training of experts and assistance in setting up national information centers, which would make it possible to create regional scientific and technical information machinery, including information on patents, trade-marks, licenses, etc.

(b) Intensify assistance for improving the region's scientific and technological infrastructure, by means of the following measures, among others: increased exchange of scientists; promotion of cooperative programs of research on problems of importance to Latin America; strengthening and supplementing the necessary physical facilities for scientific and technological research.

44. Improve the transfer of science and technology among the countries of Latin America, for which purpose it should:

(a) Substantially increase its financial support of the multinational projects contained in the Regional Program of Scientific and Technological Development; and

(b) Support the efforts for cooperation among Latin American countries in relation to teaching and research, among both state and private organizations or universities.

45. Assist in the efforts of the Latin American countries to speed up the establishment of their own science and technology, for which effect it should:

(a) Encourage research work in the Latin American countries by United States concerns that have branches or affiliates there, using national or regional scientific and technological ability;

(b) Study, within the framework of Latin American national or regional programs, the execution in Latin America of certain specific scientific and technological research programs of interest to the region that are presently being carried out in the United States by government or paragovernment bodies;

(c) Support the national development programs prepared by the countries of Latin America to encourage scientific and technological development; and