Experience has demonstrated the fundamental importance of high rates of domestic savings, efficient local financial systems and sound economic policies in the developing countries. In all the fast-growing developing economies, domestic savings are one of the main engines of growth, often supported by private foreign investment. Development co-operation needs to address these essential factors so that more developing countries will be able to compete for capital and technology. Our vision of development is one that fosters self-reliance in which countries and people are less in need of aid. However, many poorer countries simply do not yet have access to other resources sufficient to achieve the outcomes that serve everyone's interests.
Private flows are highly concentrated in a limited number of countries and sectors.
The smaller and least developed countries still attract little of this potential source of development finance. Moreover, private resources generally do not flow directly to some key sectors of priority need, such as health and education. Development will depend upon the continued availability of concessional resources, while countries build the capacity to create and mobilise domestic resources and attract private capital flows. For a number of highly indebted poor countries, development will also depend upon concerted international action to alleviate an unsustainable burden of debt. In our 1995 Development Partnerships policy statement we reaffirmed our commitment to generating substantial resources for development co-operation to back the efforts of countries and people to help themselves.