143. My Government and the Panamanian delegation are deeply gratified by the election of Mr. Abdul Rahman Pazhwak to preside over the twenty-first session, a wise choice which does honour to this Assembly.
144. This is also a fitting occasion on which to extend cordial greetings to all the representatives of Member States gathered here, and especially to those of the newly independent and sovereign States which have joined the United Nations, particularly Guyana, the latest to be admitted to membership.
145. The people of Panama, the product of a special conjunction of historical and geographical circumstances, are an open-hearted people with a lively awareness of all the issues that preoccupy the world. The Panamanian, who has been ethnically and spiritually shaped by the merging of several races and cultures, combined with the contribution of the proud American Indian, far from having become amorphous and nondescript possesses a clear-cut identity that expresses itself in a vigorous and independent sense of nationality which has more than once led him to the unyielding defence of his sovereign rights and of what is legitimately his.
146. It is not surprising, therefore, that the Panamanian has developed, almost as an absolute condition for survival, a considered and realistic judgement of his own position which enables him, by the same token, to understand that of other peoples of the world, who are indebted to Panama for having allowed its geography to be altered by the opening up of its heartland in order to provide passage for an unending flow of passengers and goods going to and from all corners of the earth.
147. This wise and realistic Judgement, which is rooted in and focused on universality, makes Panama one of the most fervent believers in the work and mission of the United Nations. We have come before this Assembly on various occasions to support what is just, to denounce what is reprehensible, to condemn what is punishable, to offer our co-operation to the needy and to request co-operation ourselves, but always in a fair and reasonable manner.
148. My delegation regards the various symptoms of world crisis as a challenge to the United Nations, rather than as a manifestation of its inability to cope with them. The reason why we adopt this approach is
that it is for us the developing countries, which constitute the majority and contain most of the world's population, to take heart and join forces in order to strengthen, and never to hamper or weaken, the action of the United Nations. And this goal cannot be attained if there are any doubts concerning the Organization's efficiency.
149. With regard to such critical and complex problems as disarmament, control over the proliferation of nuclear weapons, the use of outer space and so on, the Government of the Republic of Panama will always vote and act in defence of the general interests of mankind, which should not be incompatible with those of each individual country.
150. We support those who from this rostrum have advocated the conclusion of a disarmament agreement that would release substantial resources needed to speed the development process. We also support the conclusion of an international treaty banning nuclear weapons, which threaten the world with the possibility of a holocaust whose consequences for mankind would be irreparable. It should be clearly understood, however, that we hope that nuclear power will be used to the utmost possible extent for peaceful purposes, and that it will be released from servitude to arms and placed at the service of world progress.
151. We must strive unceasingly for peace, for the signs we see augur ill for the future. We must therefore march shoulder to shoulder, even if that involves renunciation and sacrifice, in order to reap the incalculable benefits of a peace that exalts the principle of recognizing and respecting the human condition.
152. Various distinguished speakers have already defined clearly other more localized but equally complex problems which affect the international community and can be easily identified merely by mentioning the country or region concerned. The impression and assessment of the nature and intensity of each conflict vary according to the location of each observer of the world scene, but we are all in agreement on the existence and seriousness of those conflicts. From our analysis of all these problems, we Panamanians, placed as we are at a strategic observation point, have concluded that most of them have common denominators.
153. In our view, the political conflicts can be identified more accurately, since they are governed mainly by the imperatives of power politics, which still exist despite this Organization's efforts' and in violation of the principles embodied in the Charter. This is inevitable, for the aim of power politics is the maximum furtherance of what each Power defines as its national interests.
154. A few weeks ago, on 30 August to be precise, Secretary-General U Thant told the students of the University of Chile that "the concept of power politics, whether as the instrument of nationalism or ideological extremism, is the natural enemy of international order as envisaged in the Charter". In our view, it is logical, although regrettable, that it should be so, for the unbridled competition between the various Powers makes it necessary for them to achieve the maximum satisfaction of their ever-increasing domestic needs. The exercise of power politics absorbs such vast quantities of resources that despite the expressly defined policy of foreign aid to the developing peoples the industrialized countries, that is, the powerful ones, have reduced the volume of their foreign aid from 0.9 per cent of their gross national income in 1961 to a disquieting 0.7 per cent in the past year. It is a tragic anachronism that during the United Nations Development Decade the gap instead of closing, is becoming wider and is turning into a chasm which threatens to engulf the developing countries' future.
155. In his accurate analysis of this burning problem, Secretary-General U Thant also said: "This is, indeed, the most crucial and the most challenging long-term struggle of this century. For just as the internal stability of the advanced nations has proved to rest on narrowing the gap between rich and poor, so will the future stability of the relations between nations and of peace itself." The Secretary-General's statement is in line with the wise and felicitous words of His Holiness Pope Paul VI, who in his message to the Governing Council of the United Nations Development Programme at its recent session in Milan observed that "development is the new name for peace".
156. The widening gap between the wealthy countries' level of economic well-being and the multifarious needs of the low-income countries clearly results from a number of very complex causes. We recognize that the will to progress and self-help are indispensable and irreplaceable factors, and that far-reaching structural and institutional reforms are called for in the developing countries. These well- known facts have been cited by the industrialized countries as an excuse for not assuming fully their great responsibility to take part in the integrated development of the less privileged countries. That argument has even been developed, in some circles, to the extreme point of maintaining that economic orthodoxy is an essential condition for development. Unfortunately, that thesis does not square with the history of the development of the industrialized countries of our time, and also fails to take account of the upsurge of hope now stirring in the minds of the overwhelming majority of the peoples represented here.
157. The most dramatic consequence of economic orthodoxy can be tangibly detected in the terms of trade. Faced with the rapid decline of export prices of primary commodities and the increase in the prices of manufactured goods, the industrialized countries offer the explanation that this disastrous deterioration is simply the result of the free play of economic forces on the international markets. However, we note that a few decades ago the industrialized countries themselves established preferential price systems for their domestic primary production. More recently, the new economic organizations of the developed world have adopted similar practices.
158. Furthermore, when confronted with the deterioration in the terms of trade the industrial nations immediately draw our attention to the great evils of the single crop system. However, with one notable exception there has not been a single reduction in tariffs that would permit the underdeveloped countries to export their manufactured goods to markets with greater purchasing power.
159. The imbalance in the terms of trade leads to a continuing drain on the external.resources of the countries exporting primary commodities — a drain so considerable that it already exceeds the volume of foreign aid they receive. This situation is creating a growing lack of confidence in the system which now determines international market prices; moreover — and this is even graver and more dangerous — this phenomenon is leading to the crystallization of two separate worlds.
160. A logical consequence of this division could be the formation of groups of countries which, although politically antagonistic, would align themselves according to their level of economic development, thus dramatically adding to the host of very serious problems now besetting the world. Before we are confronted with this dilemma we must try as far as possible to achieve true and effective economic interdependence at the international level. This should stop being voluntary and become mandatory, so as to overcome the negative effect of the combined influence of power politics and economic orthodoxy.
161. Proceeding from these considerations, my delegation invites the Governments of the States Members of the United Nations to consider the desirability and feasibility of setting up a system of economic co-operation and mandatory interdependence, based on the establishment of a sliding scale of contributions levied on the national income of every Member State. The funds thus obtained would be rationally invested in accordance with the developing countries' most urgent needs in order to supplement their domestic savings and their efforts to achieve a faster rate of economic growth. It would be for the United Nations to establish new bodies or adapt existing ones to collect, supervise and distribute the funds thus obtained.
162. My delegation feels that the proposal we have formulated deserves serious study and consideration, for the developing countries' limited domestic savings and the resulting increased rate of foreign indebtedness make it urgently necessary to find an effective solution to the problem of development financing.
163. My delegation is not so presumptuous as to claim that the formula we have suggested is a panacea for the ills afflicting the developing countries, but we do believe that it would contribute towards the establishment of an international community in which men would live and flourish under the rule of Justice, with greater dignity, material prosperity and real opportunities to develop their spiritual forces.
164. The adoption of this formula for the redistribution of income at the international level would also generate and foster in the developing countries a sense of identification with and participation in the international order which now holds them in isolation from the rapid progress of the industrialized countries.
165. We also recognize the need for encouraging the formation of wider areas of production and consumption through the establishment of common markets. The obvious aim is to broaden and improve the basis for intensifying the development of those countries, which, by making initial sacrifices, can adjust their economic structures to the demands of wider markets and thus reap the benefits to be derived from economies of scale.
166. The financing of development requires that we pay due attention to the problems arising from the international flow of private capital. The critical demand for productive capital in the developing countries and the prospects of high returns attract resources from the international private sector. The mobilization of this private capital is usually effected in a manner expressive of great administrative skill, advanced technical knowledge and entrepreneurial dynamism. These characteristics are highly constructive, but the investment of the resources in question need to be regulated so as to provide short-term, medium-term and long-term benefits to both the investors and the recipient countries by channelling the investments so as to serve the purposes of development. In our view, this would mean adopting formulas that would permit an attractive and equitable distribution of profits and the establishment of machinery to control possible negative effects on the recipient countries' balance of payments.
167. These arrangements, which are already being applied in certain countries, should be supplemented by the effective exercise of the right of peoples and nations to control and administer their natural wealth and resources in the interest of their national development and of the well-being of the people of the State concerned. This is the principle laid down in paragraph 1 of General Assembly resolution 1803 (XVII) adopted on 14 December 1962.
168. Paragraph 3 of this resolution states: "The profits derived must be shared in the proportions freely agreed upon, in each case, between the investors and the recipient State, due care being taken to ensure that there is no impairment, for any reason, of that State's sovereignty over its natural wealth and resources."
169. The resolution also states, in paragraph 5, that "the free and beneficial exercise of the sovereignty of peoples and nations over their natural resources must be furthered by the mutual respect of States based on their sovereign equality". Furthermore, it is affirmed in paragraph 7 that "violation of the rights of peoples and nations to sovereignty over their natural wealth and resources is contrary to the spirit and principles of the Charter of the United Nations and hinders the development of international co-operation and the maintenance of peace".
170. My delegation wishes to lay special emphasis on these categorical principles, for their strict observance by the industrialized countries is fundamental for the developing countries. Our natural resources are so limited that their exploitation by others considerably restricts our own possibilities of exploiting them for the benefit of the countries in which they are found.
171. Panama, whose only substantial natural resource is its geographical position hopes to carry the provisions of the aforementioned United Nations resolution on natural resources into effect. It intends to achieve the effective exercise of its sovereign rights over the strip of its territory currently known as the Panama Canal Zone, and to derive from the operation of the Canal the benefits to which it is in justice and equity entitled.
172. With regard to this last point, my Government is aware that the benefits due to the State exercising sovereignty over the territory concerned should be in just proportion to the total benefits accruing from the inter-ocean throughway. However, it is interesting to note that in the half-century which has elapsed since the opening of the Panama Canal to world shipping, the extent of the economic and other benefits which international trade and other beneficiaries derive from the Canal's existence each year is fantastic, and is constantly increasing. Part of these benefits can be measured in terms of the ton-miles saved by using the Canal. We know what the amount of these savings is from the research carried out by experts from various well-known international institutions, who, on the basis of separate calculations and independent methods, have arrived at very similar figures.
173. With the aforementioned objective in view, we are now negotiating a new treaty with the United States of America concerning the problems arising from the present legal status of the Panama Canal, I am happy to inform you, on behalf of His Excellency, Mr. Marco A. Robles, President of the Republic of Panama, that during the negotiations we have had evidence on the part of the authorized spokesmen of the United States Government, of a real desire to reach agreement with a view to abrogating the ignominious treaty of 1903, which is still in effect, and replacing it with one or more treaties that satisfy the legitimate aspirations of our people and reflect the interests of both parties on a basis of equality and co-operation.
174. In this connexion, the President of the United States, Mr. Lyndon B. Johnson, in a speech on 18 December 1964, clearly enunciated his decision to propose to the Government of the Republic of Panama the negotiation of an entirely new treaty on the existing Canal. This unilateral statement, which was welcomed by the Government and people of Panama, was confirmed and amplified in the joint statement issued by Presidents Robles and Johnson on 24 September 1965.
175. Fortunately, the interests of the Republic of Panama and of the United States of America are not incompatible; rather, they are complementary, and for that reason Panama reaffirms its optimism as to the successful outcome of the present negotiations. Panama's well-founded hopes for success are also based on the understanding and goodwill shown by this great country, which is host to the United Nations, and on the support that we find for our cause, and will no doubt continue to find, in this international gathering of the weak and the mighty, the small and the great, the poor and the rich.
176. During an unofficial visit which U Thant paid us a few weeks ago, we were able to see for ourselves the reasons why countries with contradictory and conflicting interests agree when it comes to recognizing his personal merits and his successful performance of his functions as Secretary-General. For this reason, once more on behalf of my President, I am happy to echo the appeal made to him by the President of the General Assembly urging him to continue to inspire, encourage, pilot and guide the destiny of the United Nations.
177. Before concluding, I should like to express our warm gratitude to the United Nations for the effective assistance it has given the Republic of Panama, through the services of its specialized agencies, in drawing up programmes and projects to promote my country's economic growth and social progress.
178. I must also express our faith in the United Nations which, in a difficult period of Panama's history, heeded our calls for justice and for respect of our national dignity, which, for the Panamanian people, is its most precious and most cherished possession.