Statement byH.E. Archbishop Celestino MigliorePermanent Observer of the Holy See to the U.N.Before the second committeeon Agenda 93 (E):External debt crisis and developmentNew York, 24 October 2003Mr. Chairman,  International economic relations, from a development standpoint, are based on three pillars: finance, trade and aid. However, in the view of my delegation, aid is not to be regarded as the principal pillar for development. Rather, it is a complement to the other two principal pillars. The international economic system has yet to develop an efficient means so that finance and trade would help development.  From the second decade of this Organization’s existence, the international community started witnessing the increasing spread of the chronic debt crisis affecting almost all developing countries around the world. In spite of the global political and economic changes of the 1990s and of the concerted efforts aimed at resolving the debt problems of the poorest countries, the total external debt of developing countries increased from $1.5 billion in 1990 to $2.4 billion in 2001.   The HIPC (Heavily Indebted Poor Countries) program has yet to find a lasting solution to their debt and debt-servicing problems. In addition, other countries, which had already suffered acute debt crises in the 1980s, are encountering again serious difficulties in complying with their external debt-servicing obligations. This recurrent debt crisis has caused an overall outflow of financial resources over the years, which divested those nations of their vital resources essential to their basic development, even to minimum levels of healthcare and education.  Although the major international conferences have acknowledged the need to reverse this trend, no satisfactory solutions have been agreed upon to date. It is imperative to do so now. The international debt is like an illness, unless completely cured, is bound to recur.  This means that the international community faces two challenges: (1) the need to find a solution to all outstanding debt problems; and (2) the need to create a lasting financial system suitable for the development of all countries.  Regarding the first challenge, my delegation wishes to underscore the pressing need for additional resources to address it. Adequate and sufficient concessionary financing seems to be required, together with an equitable distribution of the financial burden among the international community. This approach could assist those developing countries to recover from unsustainable debt burden caused by factors such as natural catastrophes, severe economic shocks or conflict.  To facilitate this recovery, the international community should adopt principles and mechanisms that can provide for fair burden-sharing between the public and private sectors as well as among debtors, creditors and investors. This framework could be coupled with a standing debt-work-out mechanism that would bring together international debtors and creditors to restructure unsustainable debt.  The second challenge involves the creation of a sound international financial system suitable for the development of all countries. The deep-seated causes of the debt crisis often emerge from the lack of adequate credit for the creation of genuine and productive employment for the populations of poor countries and for the stabilization of trade terms that ensure the payment of international debts. An international financial system capable of addressing such issues can lead to sustainable development, sustained economic growth and poverty reduction.  In fact, financing for development is not just a technical task. Since human beings are endowed with the inherent capacity for moral choice, no human activity takes place outside the sphere of moral judgment. Therefore, those activities that have enduring consequences on the life of an entire population, particularly on its poorer segments, deserve particular attention and moral scrutiny.  The solemn commitments enshrined in the Millennium Declaration call for a sound and sustainable financial architecture designed to support economic and social development of all countries. The increase in poverty, the threat of terrorist attacks with which poverty may, in some cases, be linked, and the increasing number of conflicts around the world that have darkened the first three years of this new millennium demonstrate that urgent action in favor of responsible financial development is critical to peace and international security, the very first purpose for which the United Nations was founded almost sixty years ago.  Thank you, Mr. Chairman.