LYON. Nov 10: More private sector investment is vital if the world's poorest countries are to share benefits of the global economy, French Prime Minister Lionel Jospin told an International Conference opening here, reports AFP.

But tne countries themselves must create the right economic and legal framework to attract such investment, and for this they will need traditional development aid from foreign governments. Jospin said.

His speech opening the United Nations conference for Trade and Development's four-day partners for Development Meeting stressed the need for greater cooperation between governments, business and citizens in achieving development.

UNCTAD Secretary General Rubens Ricupero set the tone for the discussions, urging participants to draw up a "register of

But government action was not enough, and "private initiative and the autonomous action of citizens" were also vital to development, he said, noting that about 85 per cent of longterm resources in developing countries already came from the private sector.

The conference brings to-

gether about 2,000 representatives of governments, business and non government organisations from both the developed and developing world in a bid to create "partnerships" for development combining the finance and expertise of all these sectors.

Ricupero called for the "mobilisation of the vast resources" available in civil society and the private sector to aid development and said "'the formidable forces of the market economy will be used In the service of development."

But while he promised a "pragmatic" meeting focused on "concrete projects to change people's lives/ some representatives of the developing countries themselves were less sanguine.

Ivory Coast Prime Minister Daniel Kablan Duncan noted that while foreign direct investment had soared in recent years, only two to three per cent went to developing African countries.

He acknowledged that Africa "has to improve its image" for social and political stability and a strong economic framework, but said that it could not attract private investment without "A minimum

volume of infrastructure." for which financing is hard to find.

Inter American Development Bank (IDB) President Enrique Iglesias said that Africa had made great strides in economic reforms and political stability but still had trouble attracting private Investment at least partly because people did not know enough about the possibilities.

The Asian financial crisis and its aftermath had also done a great disservice to the developing world as it made investors wary of any untried markets for their money.

A stark reminder of the extra unpredictable problems of developing countries came with Jospin's announcement that he was calling for an international debt moratorium for the next few years for countries badly hit by hurricane Mitch, which killed more than 11,500 people and left some 13,000 missing across central America.

The UNCTAD conference here will focus on initiatives such as micro-finance — small loans to enable people in poor areas to set up business — and was to put producers in developing countries directly in touch

with potential customers through Internet trade.

Micro-finance has proved a great success in areas such as Bangladesh and Latin America, but mainstream banks have so far been reluctant to get involved.

The Director General of Axa investment Managers. Kevin Dolana. told participants that his company is about to launch a fund which would initially make 10 per cent of its finances available to micro-finance banks.

But he said his group had to be very careful in setting up such operations since the funds it has to invest for its clients are largely pension funds where investors have a low risk threshold.