Mr. Chairman, Excellencies, Ladies and Gentlemen,

At the outset, let me welcome all participants of this important forum: and express the deep gratitude to the Bureau of the Preparatory Committee and the Coordinating Secretariat, the institutions of the United Nations for the meticulous preparatory work completed for the smooth conduct of the Conference. We are particularly grateful to the Government of Mexico, as well as to the authorities of the city of Monterrey for hosting this historic meeting and also for the elaborate arrangements made for this event. The economic progress of Mexico, in our view, is a positive example to those countries that are taking the hard lessons of transitional transformations.

For months we had been preparing to convene this unique global gathering of both developed and developing countries, the United Nations system and the Bretton Woods Institutions to consider and address challenges of financing for development and present to international community a new agenda for global economic and financial progress with a specific set of measures and goals to be met in a timely way. And the “Monterrey Consensus” is a good guideline for all of us.

The recent tragic developments in the United States, new realities in the: developing world made clear the expediency of establishing common mechanisms against international terrorism, including its global economic and financial impact.

It has become obvious that sustained economic growth is the best contributor to international security and that both need the unqualified commitment of every nation. Hence, we have to devote not only the political will and but also the resources required to overcome scourges of hunger, illiteracy, diseases and poverty.

For low-income countries, the main factor for success of economic reforms and poverty eradication programs lie in obtaining free access to the world markets,
liberalization of trade and resolution of external; debt problems. It is in this domain that both the United Nations and international financial institutions can launch their initiatives.

Poverty alleviation has been a key consideration of my Government's reform programs. Georgia is among the transition economies that have suffered most during the past decade. Fiscal collapse in the early 1990s, associated with a catastrophic decline in GDP, made it impossible for the Government to finance its most basic functions, let alone an effective social safety net. A series of bold reforms have been introduced; creating the foundations for a market economy in the country; but weak implementation of these reforms did not allow society to reap their fruits.

In November 2000, the Government, in its interim Poverty Reduction Strategy Paper has laid out structural reforms in five main areas to reduce poverty and stimulate economic growth: 1) social sector reforms to improve allocation of benefits to better target the poor; 2) supportive macroeconomic policies, such as tax and customs administration, to raise fiscal revenues; 3) public administration reform based on recommendations of the anti-corruption commission; 4) private sector development to foster investment in infrastructure as well as other areas; and 5) agricultural reform.

Recently a draft of the full National Poverty Reduction and Economic Growth Programme has been developed. The strategy identifies economic growth as the main engine of poverty reduction, but also recognizes the need for a new focus grad priority to reforms in social sectors.

I should like to make particular reference to the persistence of the external debt problem and its negative consequences for countries, where democratic and market oriented economic transformations are under way. We are alarmed by the fact that debt servicing has gown at a much greater rate than the debt itself. There are many countries which have no prospect of paying off their debts as the share of their foreign debt against their GDP and budget expenditure is rather high.

In this respect, let me draw your attention to the problem related to the considerable volume of external debt of Georgia, as a vivid example of this global problem. Formally, Georgia does not belong to the group of countries with huge foreign indebredness. Although, the share of Georgia's foreign debts against GDP reached 431 per cent in 2001. Last year the Government's total debt-service obligations accounted for 15% of its total revenue. Hence, despite significant reforms, the pension fund remains in an extremely difficult constraint and is unable to finance a basic pension, In addition, it is well known that more then 350 000 refugees and internally displaced persons from Abkhazia and Tskhinvali region are still a heavy burden for our budget.

In this context, debt reduction may in some cases be a necessary condition for crises resolution and can play a vital role in freeing resources which can be directed towards programs carried out to attain sustainable development.

Georgia, a recent member of the WTO, is determined to further contribute to the policy of the liberalization of global trade and considers its participation in the multilateral trading system as an important step towards integration into the world economy. We believe that a more equitable trading system has a major role to play in securing poverty eradication.

The international financial institutions are an essential component of the development architecture and have an important role to play in increasing global prosperity for all. The World Bank and the International Monetary Fund have already invested a lot to strengthen economic, financial and legal systems of newly independent states. We are extremely grateful for the significant assistance rendered to Georgia by major donor contributors that was the backbone for fostering democratic transformations in the country at the most crucial stage of national development.

In this regard, we would like to support the initiative of the United States Government regarding the increase by the World Bank and other development batiks the share of their funding provided to the world's poorest countries as grants rather than loans for education, health, nutrition, water supply, sanitation and other human needs thus significantly enhancing social security system of the poorest economies. We also sincerely appreciate the intensive efforts and contribution of the European Union to the process of the financing of the overwhelming sustainable development.

We also underline the extremely important role of the United Nations in promoting security and sustainable economic development. The link between the two has never been more evident. Hence, there is a need to devise a new model of interaction and intercoordination of the UN efforts on these key issues, including the further increase of the role of the LTNDP, as a leading structure of consolidation of these efforts in the field. The universal character of the UN gives us art opportunity to achieve global stability and prosperity on this premise. In this respect, we consider establishment of a new global economic security system containing the guarantee for small transition economies, including countries of South Caucasus for sustainable growth and effective exploitation of their resources as a major prerequisite for ensuring sustainability as a whole.

To conclude, let me express hope that the FFD Conference will become an important stage in the global economic processes, leading us to concrete: actions far eradication of poverty and sustainable development of every nation,

I appreciate your readiness to listen and understand