text: debt,amoreequitable sharing ofthecostandareversal ofthetransfer of resources fromdeveloping todeveloped countries arising fromthedebtproblem. 126.Mostdelegations stressed thecloserelationship between thequestion of indebtedness ofdeveloping countries andtheactivities oftransnational banksand askedtheCentretocontinue; itsin-depth studyandanalysis ofthedebtissueas itrelated totransnational banks. Furthermore, thosedelegations wereoftheview thattheprogress achieved sofarinresolving thedebtproblem, through debt-equity conversion andothermeasures, hadbeenextremely limited andproved inadequate inalleviating theproblem oftheindebtedness ofdeveloping countries. Therefore theyheldthataninternational solution tothedebtproblem wasof extreme importance. Manydelegations supported theviewthatitwasnecessary to reverse thenettransfer ofresources fromdeveloping countries. Theyalso deplored thenegative implications ofinterest rateincreases astheyadded additional coststofuturedebtservice. Several delegations notedthatthedebt problem wasnotlimited tofinancial issuesonlybuthadaglobal socio-economic character. Therefore adurable solution should besought through political and economic means. Theyoutlined theimportant roleoftheUnitedNations inthat process. 127.Several delegations stressed thattheCommission onTransnational Corporations wasnottheappropriate forumforadiscussion ofinternational debtissues. Some ofthosedelegations recognized theimportance ofthedebtproblem fordeveloping countries anditsdeleterious impact ontheirgrowth anddevelopment. Nevertheless, theystatedthatthemeasures forsolving thedebtproblem were betterdiscussed elsewhere uparticularly intheBretton Woodsinstitutions. They maintained thattheactivities oftheCentreinvolved unnecessary duplication, to thedetriment oftheoptimal useofresources atthedisposal oftheCentre, even ifitwereaccepted thattransnational banksweretransnational corporations and therefore adiscussion oftheirrole,including theirroleininternational debt, fellwithinthemandate oftheCommission. Onedelegation pointed outtpatthere wasnorelationship between thetransnational character ofbanksandthe international debtcrisis because manyoftheindebted countries didnotevenallow theestablishment offoreign banksintheirterritory. Somedelegations made specific observations withregardtothereportbeforetheCommission. For example, onedelegation observed thatthereport wastoooptimistic aboutthe beneficial effectofchanges inregulatory policies ofhomecountries of transnational banksonthedebtsituation, thataccesstodebtreliefshould be conditioned bydomestic policies ofhomecountries ratherthansecondary market prices andhencethevalidity ofthecase-by-case approach, thattherewasno justification forthecreation ofanewdebtfacility whichwouldincrease transaction costsandthatpublicintervention shouldoperate through marketforces. 128.Mostdelegations expressed thehopethattheCentre wouldcontinue its activities ontheroleoftransnational banksinthedebtproblem ofdeveloping countries. Thesuggestions onthatissueincluded amorein-depth examination of mechanisms forreducing thestockofdebtanditsservicing, andthesizeofthe reduction; alternative waysofovercoming thenetoutflow ofresources from developing countries; theimpactoftheinternational interest ratestructure on developing countries' debt-servicing obligations; therelationship between the -49-.,~ .~ :1! \ t j I 1 I I1 j i j ! I) j I I{ I j I 1. ! \provision ofnewmoneyandthetransfer ofresources fromdeveloping countries; the ~ffects ofdebt-equity swapsoninflation andgrowth, netforeign direct investment andincentives fordomestic entrepreneurs; linksbetween theroleoftransnational banksindebtandsustained development; andtechnical assistance instructuring debt-reduction instruments.
analysis: The text discusses the debt problem of developing countries, the role of transnational banks, and the need for an international solution. It highlights the negative implications of interest rate increases, debt-equity conversions, and the need for a durable solution that addresses the global socio-economic character of the debt problem. The text also touches on the importance of technical assistance in debt-reduction instruments.