Naples Summit, 1994

Development

With respect to the communique's statement on developing countries, the leaders agreed to continue to try to enhance development assistance as well as promote trade and investment in developing countries. At a finance ministers meeting in Madrid in October 1994, however, the leaders of the G7 rejected a US$52 billion plan proposed by IMF managing director Michel Camdessus to create new funds for development assistance. The industrial countries stated that they would agree to contribute no more than US$23 billion in aid, and "insisted that it all be allocated in a way that favoured the former Communist world and the poorest nations". Japan's contribution, the largest among the G7, was valued at 2.15 billion SDRs, or US$3.1 billion. (NIKKEI, Oct. 5, 1994) In response to the proposal, the G7 argued that the IMF's request for US$52 billion "risked stroking global inflationary fires". (New York Times, Oct. 3, 1994)

With respect to Canada, the February 22 1994 budget stated that the resources of the International Assistance Envelope would be reduced by 2% in 1994-1995 - an amount totalling CDN$262 million. In addition, Finance Minister Paul Martin stated that the budget would include a freeze on aid spending for an additional two years. The cuts took Canada to 4.0% of GNP. As with other industrial countries, Canada's reasoning for development assistance cuts was due primarily to continued financial constraints arising from the country's difficult economic situation. (Dept. of Finance Estimates, ODA, 1994-95; 4) Despite these figures, however, the Canadian government continues to pledge to meet the UN target of 0.7% of GNP for official development assistance.

Similar to the environment, development commitments made at Naples were significantly fewer and less tangible than those from previous years. Although promising to "enhance development assistance" in LDCs, aid packages from all G7 countries declined significantly from 1992-93, as none of the G7 have been able to reach the 0.7% target of GNP for ODA.