Notwithstanding, mobilization of domestic resources cannot be viewed in isolation from the international environment. Due to the globalization process, which has further sharpened and escalated the impact of international environment on the national economy, both horizontally and vertically, the critical impact of external factors on the internal capacity for mobilization of domestic resources has increased. Therefore, in addition to domestic policies and actions, the imperative of a conducive international environment will be an important issue for our discussions in this agenda item. Trade is the most important mechanism for almost all developing countries to mobilize and expand the needed resources for financing of development. Even in those countries, which have not been able to attract international financial flows, trade is the only source of absorbing external finance as a vital source of economic growth and poverty eradication.
Market access continues to be a major obstacle to the exports of developing countries.
Another major source of financing for developing countries is foreign direct investment and other private flows. In the examination of ways and means to increase and optimize the international private flows for development, the sources and direction of these flows are important. These flows are often concentrated in a small number of countries and regions. Most developing countries have found it difficult to benefit from these flows. On the other hand, managing speculative short term flows is also a serious challenge for those able to attract such flows.