Interview with Eduardo Praselj, Chairman of the Perez-Guerrero Trust Fund
UNITED NATIONS, Dec 26 2007 (IPS) – We have provided financial support to 179 South-South cooperation projects since 1987 in the fields of food and agriculture, trade, technology, energy, raw materials, technical cooperation, finance, industrialisation, and health, Eduardo Praselj, chairman of the Perez-Guerrero Trust Fund (PGTF), told IPS.
The PGTF was established by the General Assembly in 1983 to support activities in economic and technical cooperation among developing countries (ECDC/TCDC). PGTF-funded projects are designed to have a maximum multiplier effect and in the case of regional projects, serve as pilot projects for other regions.
The Trust Fund is named after the late Manuel Perez-Guerrero, chairman of the Group of 77 (1980-1981) and secretary general of the UN Conference on Trade and Development (UNCTAD) (1969-1974). Funds are channelled through the United Nations Development Programme (UNDP), following the approval by the Group of 77.
Praselj has served as deputy minister of energy and mines in Venezuela and as president of Petroquímica de Venezuela. IPS U.N. Correspondent Mithre J. Sandrasagra spoke to Praselj about the PGTF:
IPS: How has the responsiveness of the PGTF to the growing need for supporting South-South cooperation contributed to achieving the MDGs?
Eduardo Praselj: PGTF operations were launched in 1987 with a core capital of 5.0 million dollars so that only interest accrued on the core capital could be used for supporting projects. PGTF so far has provided financial support to 179 South-South cooperation projects, involving directly 114 countries and collectively all the G-77 members. Total allocation amounts to 10.1 million dollars. These projects include the priority areas of the Caracas Programme of Action on ECDC [economic cooperation] adopted in 1981 and the South- South cooperation areas of the Havana Programme of Action adopted in 2000. These areas include food and agriculture, trade, technology, energy, raw materials, technical cooperation, finance, industrialisation, and health. Although the guidelines for utilisation of PGTF establish that PGTF can only provide catalytic support to S-S cooperation projects, completed projects represent a contribution towards meeting some of the MDGs. Detailed information on impact of completed projects can be found in the Survey page of the PGTF section on the G-77 webpage (www.g77.org).
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IPS: In light of the sizeable reduction in interest rates in recent years, how critical have new contributions become in supplementing PGTF interest earnings?
EP: PGTF was originally designed to operate on the basis of the interest earnings of its initial core capital (5.0 million dollars). From 1987 to 1999 these earnings averaged 500,000 dollars per annum and provided the basis for supporting 61 projects with a total allocation of 5.1 million dollars. From 2000 to 2007 interest earnings of the initial core capital have averaged some 230,000 dollars per annum. Contributions have been critical in preserving partially the responsiveness of PGTF to meeting S-S cooperation s growing requirements. Impact of new contributions has significantly increased availability of resources.
IPS: What efforts are being made to expand the PGTF core resources?
EP: In 1997 the Group of 77 launched a fund-raising effort aimed at increasing PGTF resources. The main targets were member countries and international organisations. Up to mid-December 2007 PGTF has received 59 contributions from 24 member countries totalling 1.28 million dollars. This amount includes a 1.0-million-dollar contribution to the core capital by Venezuela. In addition, PGTF and the International Fund for Agricultural Development (IFAD) signed in 2006 a Grant Agreement providing for a contribution by IFAD of 200,000 dollars over a two-year period. The first tranche of 100,000 dollars has already been disbursed and will support three projects.
There is a regular fund-raising effort geared towards enlisting contributions from G-77 member countries. While many countries announce and make their contributions throughout the year, the G-77 has opened a new channel for contributions, namely the U.N. Pledging Conference for Development Activities. PGTF was included in this mechanism in December 2003 and has received through this channel pledges totalling some 72,000 dollars.
In order to increase the impact of PGTF resources, the Fund has been working on co-financing agreements with other institutions. This includes on the one hand case-by-case approaches since project sponsors are required to secure inputs from other sources of an amount at least equal to the resources requested from PGTF. On the other hand PGTF has worked on more structured schemes with other institutions with a view to have more predictability and stability in the co-financing activities. For instance, the United Nations Industrial Development Organisation (UNIDO) has co-financed so far two projects with PGTF one completed and one under implementation where UNIDO s contribution amounts to 148,000 dollars.
IPS: Looking forward, what are the major challenges facing the PGTF?
EP: To preserve the responsiveness of PGTF to the growing needs for supporting S-S cooperation through mobilisation of additional resources, both from G-77 member countries and international organisations. To approach other institutions both governmental and private as potential donors, with a view to establishing long-term cooperative arrangements. To approach and motivate institutions of the South capable of preparing good project proposals to submit proposals to PGTF on a regular basis, so as to ensure that PGTF-supported projects have a high quality, large impact and potential for replication. To continuously improve the operating arrangements related to the submission, appraisal, approval, and implementation of projects, in order to facilitate the submission of proposals and timely implementation of approved projects.
