|Department of Public Information • News and Media Division • New York|
Sixty-eighth General Assembly
29th & 30th Meetings (AM & PM)
Strong Funding Strategy Vital to Attainment of Millennium Goals, General Assembly
President Stresses at High-Level Event on Financing for Development
International Community Must Put Sustainability
At Core of Process, Secretary-General Says as Two-Day Event Begins
Meeting the Millennium Development Goals before the 2015 deadline and paving the way beyond hinged on a strong financing framework that reflected a changing landscape of climate emergencies, economic crises and innovative solutions, delegates heard today as the General Assembly began a two-day High-level Dialogue on Financing for Development.
Ministers and other representatives of Member States, as well as speakers from the private sector and civil society were participating in the meeting, which included three interactive multi-stakeholder round tables and an informal interactive dialogue. United Nations Secretary-General Ban Ki-moon opened the Dialogue, along with John Ashe ( Antigua and Barbuda), President of the General Assembly, Masood Khan, Vice-President of the Economic and Social Council, and Mukhisa Kituyi, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD).
Secretary-General Ban said the world was at a critical crossroads and significant financing would be needed to meet the challenges posed in the post-2015 development agenda. Sustainability was at the core of the financing for the development process.
“As we work together to formulate our vision, principles, goals and targets for the post-2015 development agenda, let our efforts be firmly rooted in a sound financing strategy based on mutual accountability and shared responsibilities,” said the Secretary-General.
Now was the time to make the necessary commitments to fulfil the existing Millennium Goals and devise solutions for increasing financing for development in the post-2015 agenda, Mr. Ashe said. A single, strong financing strategy that rolled together both the Monterrey Consensus and Doha Declaration was needed. Private funding, good governance and South-South cooperation should all be given attention in the post-2015 agenda, he said.
Mr. Khan said progress had been made in achieving the Millennium Development Goals but new challenges had emerged that required innovative funding solutions. Although public funding sources remained critical, he agreed that a financing strategy that included methods for building great private sector financing was required. A more stable worldwide financial system would be the cornerstone of efforts to garner these types of private sector investments.
Welcoming the call for increased investment, Mr. Kituyi said the first step must be increasing existing efforts and fulfilling the commitments that were already been made. He said that while attention was already being turned toward the post-2015 agenda, the current development objectives, particularly the Millennium Development Goals, must be taken to completion.
Throughout the Dialogue, many speakers emphasized that the Monterrey and Doha agreements provided a strong framework for future discussions on financing for development. However, the Head of the European Union Delegation pointed out that the world had changed a great deal over the last decade and the international community must take into account changes in wealth distribution and the role of potential new donors when devising the post-2015 development agenda.
Several speakers, including the representative of Benin, speaking on behalf of the least developed countries, called on developed countries to address free trade issues that hindered growth in those less developed and make good on their official development assistance (ODA) commitments, which reportedly dropped by 12 per cent in 2012. He said all debts to least developed countries should be cancelled and South-South cooperation bolstered. Without such commitments, he said, those least developed would find it nearly impossible to attain their specific Millennium Goals.
There was widespread agreement that strong social policies would be needed to reduce poverty and achieve sustainable development. However, Belize’s representative, speaking on behalf of the Alliance of Small Island States, called for a dedicated mechanism to provide financing to developing countries that included access to concessionary financing. She said it was important to remember that we live in an inter-dependent world and that the international community needed to take into account the real costs and restraints faced by developing countries.
Haiti’s representative said that when discussing financing for development, it was her country’s experience that the quality was as important as quantity, and frank discussions must address lessons to be learned in both the global and local approach to the issue.
High-level representatives from Australia, Russian Federation and Qatar addressed the Assembly.
Also delivering statements were the representatives of India, United Republic of Tanzania, Brazil, Indonesia, Bangladesh, Libya, Republic of Korea, Egypt, New Zealand, Slovakia, United States, France, Sweden, Germany, China, Malaysia, Mexico, Jordan, Argentina, Ecuador, Pakistan, Solomon Islands, Saint Lucia, Japan, Senegal, Turkey, Colombia, South Africa, Venezuela, Bolivia and Haiti.
Others speaking today included representatives of Fiji (on behalf of the “Group of 77” developing countries and China), Ethiopia (on behalf of the African States), Saint Kitts and Nevis (on behalf of the Caribbean Community (CARICOM)), Belize (on behalf of the group of Small Island Developing States), Benin (on behalf of the group of least developed countries) and the European Union Delegation.
The Assembly will reconvene 8 October to continue its High-level Dialogue.
The General Assembly met this morning for its two-day High-level Dialogue on Financing for Development. Before it were reports of the Secretary-General on A life of dignity for all: accelerating progress towards the Millennium Development Goals and advancing the United Nations development agenda beyond 2015 (document A/68/202); Follow-up to and implementation of the Monterrey Consensus and Doha Declaration on Financing for Development (document A/68/357); International financial system and development (document A/68/221); External debt sustainability and development(document A/68/203); and International trade and development (document A/68/205).
Also before the Assembly was the Summary by the President of the Economic and Social Council of that body’s special high-level meeting with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development (document A/68/78–E/2013/66), held in New York on 22 April 2013, and a note by the Secretary-General on Coherence, coordination and cooperation in the context of financing for sustainable development and the post-2015 development agenda (document E/2013/52).
JOHN ASHE ( Antigua and Barbuda), President of the General Assembly, said more than a decade had passed since the adoption of the Monterrey Consensus. Much had been accomplished since then, but much remained to be done in light of emerging new challenges. With little time left before the 2015 deadline year for meeting the Millennium Development Goals, the international community must construct a framework that would build on the Monterrey Consensus and the Doha Declaration while addressing those new challenges, he said.
The fragilities of the world financial system included economic weaknesses spilling over from developed to developing countries, high levels of unemployment and the slow pace of poverty reduction, he continued. While official development assistance (ODA) had risen in net terms, there had been an overall drop in assistance levels, notably in areas strongly linked to efforts aimed at achieving the Millennium Goals. With two years left until 2015, the world must now make the necessary commitments, he emphasized.
However, questions remained as to how the financing for development process could help to shape the post-2015 agenda, and how the three pillars of sustainable development could be woven into it, he said. As enshrined in the Monterrey and Doha agreements, private sector funding was to be taken into consideration, alongside good governance, South-South cooperation and other measures. Financing for development was critical to attaining the Millennium Goals and to crafting a strong post-2015 agenda, which would require a single, strong financing strategy reflecting both the Monterrey and Doha agreements, he said in conclusion.
BAN KI-MOON, United Nations Secretary-General, said that a decade after world leaders gathered in Monterrey, Mexico for the International Conference on Financing for Development we were at another important juncture as we worked on the post-2015 development framework, with sustainable development at its core. He stated that predictable levels of ODA were critical for many developing countries and urged all countries to fulfil their pledges and meet their ODA targets.
He noted that international public financing would not be enough to build a sustainable and prosperous world and that funding from the private sector would become important. Increasing domestic public finance by broadening the tax base and improving tax administration would be crucial. “We must join forces to eliminate illicit financial flows, enhance the regulation of secrecy jurisdictions and promote asset recovery,” he added.
He stated that the international community must put sustainability at the core of the financing process. He urged all efforts to be rooted in sound financing, with a keen awareness of existing constraints. The successes of the Millennium Development Goals showed that smart investments could make a difference in people’s lives. “A strong financial commitment to human solidarity today will improve prosperity and security tomorrow,” he said.
MASOOD KHAN ( Pakistan), Vice-President of the Economic and Social Council, said the existing financing framework helped achieve the Millennium Development Goals and gave specificity to the global partnership for development. The world witnessed remarkable progress with regard to the Millennium Development Goals and several targets had been met. Even the poorest countries made significant achievements, however progress was insufficient and uneven between countries. The global financial crisis caused significant set-backs worldwide and as we approached 2015 we should strengthen our efforts to accelerate progress toward achieving the Millennium Development Goals.
All existing commitments must be taken into account, but there must also be an awareness of new challenges that have emerged. Public funding sources remained critical and it was imperative that developed countries fulfil their financing commitments. Declines in ODA resulted in great financing challenges for many developing countries. Public financing sources alone would not suffice. A financing strategy should put greater emphasis on directing private funds toward these development goals. A stable financial system would be a pre-requisite to facilitate such investment, especially in areas that were traditionally underfunded by the private sector.
Development financing touched on many areas, with Monterrey and Doha as reference points. As the international community elaborated its new development agenda, he said he was confident deliberations could bring important insights into the formulation of a new financing framework, with strengthened partnerships in the new global environment.
MUKHISA KITUYI, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), said the Monterrey Consensus placed development firmly on the world’s agenda. However, funding had lagged and growth had slowed to current levels of about 3.8 per cent. While remittances had seen a mild increase, those flows needed to be channelled into more productive areas. The broader post-2015 development agenda must be the focus in financing for development to achieve those sustainable development goals. Much investment was needed. For instance, the Food and Agriculture Organization (FAO) estimated that new investments in agriculture were needed to meet demand in more than 90 countries, with sub-Saharan Africa alone requiring about $10 billion each year. On addressing climate change, the United Nations Department of Economic and Social Affairs estimated that $1.9 trillion per year was needed.
The first priority must be scaling up existing efforts and implementing commitments already made, he said. A framework for addressing those needs included three main thrusts: mobilizing resources, channelling them into appropriate areas and implementing them on the ground. In addition, public sources needed to be bolstered and private sources tapped and harnessed into sustainable development projects. While global attention was already turned to the post-2015 era, a final push was needed to meet the Millennium Goals. Social achievements, including education and health, would only be sustainable if partnered with economic growth. Aid and investment targeted at economic sectors should also be scaled up. Monitoring was needed vis-à-vis commitments required for meeting Millennium Development Goal 8. The work on a financing framework would determine exactly how successful the development goals were. Strong systemic reform was needed. A reform of the financial system could only be effective if developing countries’ voices were included and heard. In closing, he said “a new set of development goals would be meaningless without progress on financing”.
CHRIS BACK, Senator from Australia, said the importance of official development assistance as a source of finance for development had decreased over the years. In many developing countries, particularly in Asia and the rapidly growing economies of Africa, other sources of finance were proving more effective at generating economic growth. Stressing the role of trade as an engine for development, he said this would be a key theme for Australia’s presidency of the G20 in 2014. He also emphasized the importance of South-South cooperation, attracting investment from the private sector and improving poor countries’ access to international trade and investment opportunities.
PETER THOMSON (Fiji), speaking on behalf of the “Group of 77” developing countries and China, urged the General Assembly President to appoint co-facilitators to hold informal consultations with a view to taking a final decision by 2013 on the need for a follow-up financing for development conference, keeping with the Assembly resolution 67/199. The conference should be held before the end of 2015 so that it would contribute meaningfully to the post-2015 agenda. He reiterated his delegation’s call for the establishment of an appropriate follow-up mechanism within the United Nations system to bridge the gap between policy making and the implementation of commitments.
Turning to the global financial and economic crises, he said these were not a justification for developed partners to avoid fulfilling existing cooperation for development, highlighting the irony of lagging ODA at a time when leaders recently reaffirmed their commitments to the Millennium Goals and a post-2015 agenda. Reflecting current challenges, the Green Climate Fund would play a key role, as would remittances for development, debt relief and the bolstering of international trade. However, systemic shortcomings of international monetary, financial and economic institutions must be addressed through serious reforms. A more inclusive framework of global economic governance was required to improve the functioning, stability and resilience of those institutions, requiring a strengthened role and increased effectiveness of the United Nations, including high-level engagements with relevant international and regional financial institutions and other stakeholders.
TEKEDA ALEMU (Ethiopia), speaking on behalf of the African Group, said that international cooperation should be at the heart of the new global development framework. The annual meeting of the World Bank Group and the International Monetary Fund (IMF) next week was an opportunity for policy makers to agree on measures to speed global economic recovery and lay the basis for more participation in financing development. It was critical for low-income countries to continue rebuilding their fiscal buffers, so they could maintain growth — a policy recommendation he hoped would emerge from that meeting. He said commitments made in Monterrey, and reaffirmed in Doha, must be scaled up, as official ODA had fallen for a second consecutive year in 2012 and some countries were at risk of debt distress. Further, trade restrictions introduced in 2008 were still in place, stalling World Trade Organization (WTO) negotiations. Developed countries must be committed to raising $100 billion annually by 2020 for the Green Climate Fund. African countries must promote rapid, inclusive growth. Thus, development financing should enhance developing countries’ capacity to mobilize domestic resources and address institutional constraints, which in turn, would help them implement reforms to ensure effective revenue collection.
DELANO F. BART ( Saint Kitts and Nevis), speaking on behalf of the Caribbean Community (CARICOM), associated his statement with the “Group of 77” developing countries and China. He said this was an opportune time to assess the status of development cooperation, exchange views and review efforts toward the commitments set out in Monterrey and Doha. The ability to achieve the Millennium Development Goals had been severely hampered by the global financial and economic crises, in addition to the impact of the food crisis on countries with small, vulnerable economies.
“CARICOM can never overstate our concern over the insignificant recognition by the international community of the needs and concerns of small, open, vulnerable and highly indebted economies like ours, which by virtue of gross domestic product (GDP) per capital are classified as middle and even high income countries.” He said that many such countries had a debt to GDP ratio of 100 per cent, which inhibited the ability to attain development goals. The international community needed to do more than take note of these facts and take a more systematic approach to deal with the needs of developing countries that were categorized as middle income countries. These countries needed increased concessionary financing and it was essential to identify new and innovative approaches to marshal international resources for development.
International trade was indispensible to advancing development, and it was necessary to uphold a universal, rules-based, open, non-discriminatory and equitable multilateral trading system that contributed to growth and sustainable development. CARICOM emphasized the need for an informed discussion of international cooperation in tax matters within the context of a meaningful dialogue on financing for development. “The way forward lies in the political will to ensure that the challenges that we are up against do not multiply and that our development objectives are made.”
LOIS MICHELE YOUNG (Belize), speaking on behalf of the Alliance of Small Island States, said her group remained committed to ensuring the effective and full implementation of the Barbados, Mauritius and Millennium Development Goals commitments. Looking to the future, she said “we need a strategy that links national sustainable priorities and the global development agenda”. Poverty reduction, improving access to basic social services and achieving sustainable development needed to be backed by strong policies and clear and practical measures.
The implementation of key policies in economic frameworks needed to continue to increase resource mobilization and boost future growth. Real costs were attached to sustainable development and financing, from public to private, and must be geared towards projects that could deliver, including through innovative financing mechanisms. She called for a dedicated mechanism to provide financing to developing countries that included access to concessionary financing, with attention paid to Small Island Developing States, and efforts to support clean technologies and green economies. She concluded that it was important to consider that “we live in an interdependent world bound to one another” and the world should move towards common goals together.
JEAN-FRANCIS ZINSOU ( Benin), speaking on behalf of the least developed countries, a group of 49 Member States, said the key issue of implementing the Millennium Goals was at the heart of the Monterrey and Doha agreements, but little progress had been made thus far. Challenges, including corruption and an unequal share of development and investment assistance, must be overcome to build strong economies. The international community must take appropriate measures to promote investment in his group of countries to bolster growth and job creation. His group was making efforts and hoped that within the current dialogue a framework would include an investment promotion scheme that would be set up for least developed countries.
Calling on World Trade Organization members to spare no effort to conclude talks, he urged stakeholders to reach consensus that would consider least developed countries at the Bali meeting in December 2013. He asked developed countries to respond to the needs of least developed countries, including through aid for trade, as agreed upon in the Istanbul agreement. He was concerned with the drop in ODA to least developed countries and the preliminary estimates of an ODA reduction by 12 per cent in 2012. Innovative financing sources, he said, could play a major role in shortcomings regarding least developed countries, including taxing financial transactions. All debts to least developed countries should be cancelled as well. The potential of South-South cooperation should be harnessed. Benin, for its part, aimed at holding a conference in 2014 to address some of those issues. During the ensuing dialogue, he said that many of the least developed countries would not meet the Millennium Goals without due commitments.
THOMAS MAYR-HARTING, Head of the European Union Delegation, said in monitoring the Monterrey commitments, last July’s progress report showed headway towards meeting the Union’s own commitments, among them assuring EUR45 billion per year went towards development aid. The Monterrey and Doha agreements provided a strong conceptual underpinning upon which future discussions on financing for development should be based. However, the world had changed over the past decade, most notably in terms of global wealth distribution, the ability of countries to influence global trends and the role of emerging donors. While commitments were reiterated at last month’s Millennium Goals special event, the current dialogue should focus on the most off-track Goals with special attention paid to groups such as the least developed countries, landlocked economies and Small Island Developing States.
ARUN JAITLEY ( India) said the international partnership to provide support to achieve the Millennium Development Goals had failed to deliver. The global crises of the past several years also had a detrimental impact on the ability of developing countries to mobilize finance for their development aspirations. He pointed to the gap in commitments and disbursement of ODA, emphasizing that it had reached $167 million in 2011 and had further widened in 2012. There appeared to be “no light at the end of the tunnel”, he added, referring to the Doha Development Round of the World Trade Organization. The stunted market access for developing countries was exacerbated by rising protectionist tendencies in the developed countries and falling levels in foreign direct investment. Emphasizing the role of South-South cooperation, he said it had increasingly complemented global development cooperation in recent years.
MAHADHI JUMA MAALIM ( United Republic of Tanzania) said the most important common denominator for achieving the Millennium Development Goals was the means of implementation, particularly financial resources and technology. Over 43 years, we have had an ODA target of 0.7 per cent of gross national income (GNI) for developed countries, but to-date that target had only been achieved and/or surpassed in five years. Both the Monterrey Consensus and Doha Declaration on Financing for Development underscored the importance of domestic resources mobilization in achieving economic growth, poverty eradication and sustainable development. Many developing countries have taken initiative to mobilize domestic resources. The economies of many developing countries were growing, including in Africa, which was home to 6 out of 10 of the fastest growing economies in the world.
The United Republic of Tanzania has steadily broadened its tax base and implemented several financing policies to stimulate its economy. Africa as a whole is seeing increased investment in sectors such as agriculture, energy, transport and telecommunication, health and education. The United Republic of Tanzania has identified some of these sectors as key drivers in development, which under the Big Results Now initiative, should accelerate its transformation to a middle income country.
VLADIMIR SERGEEV ( Russian Federation ) said a conceptual framework to mobilize resources was essential for development in all countries, as declared in Monterrey and Doha. Some of the most immediate tasks were to ensure donor community commitments are kept, create new international financing economic systems, support the poorest countries in developing new policies, overcome the fragmentation of financial development mechanisms, expand partnerships, and identify new donors in the decision-making process. During the G20 conference earlier this year, a range of financing topics were discussed and agreed upon. He stated that the Russian Federation was committed to increasing cooperation with new partners to achieve the global financial objectives and increase its contribution to international development. His country would strive to reach the United Nations recommended goal for ODA of no less than 0.7 per cent of GNI.
ALI BIN FAHAD AL-HAJRI, Assistant Minister for Foreign Affairs of Qatar, said the Monterrey conference was a turning point for the role of international aid for development. Developing countries took on their own responsibilities for development and committed to economic and social policies for meeting these goals. They were also given a greater share in decision-making. Donors, for their part, agreed to provide greater assistance and improve the terms of trade to alleviate debt. Many developed countries also undertook commitments to substantially increase ODA.
The Doha conference reaffirmed the commitment of developed countries, despite the financial crisis. The instability of the global economy threatened the ability to reach development goals, such as hunger. Developing countries were suffering the most as a result of the global crisis, but he urged the international community not cower in the face of these challenges and instead undertake new financial measures and means for investment. Qatar believed the impasse in the Doha negotiations constituted a threat and must be completed as soon as possible. The global system must be restructured in support of developing countries, which still lacked financial resources to fulfil the Millennium Development Goals and other development objectives.
Guilherme de Aguiar Patriota (Brazil), associating the delegation with the statements made by Fiji on behalf of the “Group of 77” developing countries and China, said development efforts, including financing, must support a new paradigm for inclusive and sustainable growth. Brazil welcomed the establishment of the intergovernmental committee of experts on financing for sustainable development and supported the design of a strategy to facilitate the mobilization of resources. The follow-up and implementation framework of the Monterrey Consensus and the Doha Declaration should be strengthened through a more integrated approach to development and enhanced coordination and coherence among the many financing structures and facilities. Since Monterrey, many developing countries had significantly mobilized their own domestic resources for development. Resources allocated to social programmes, should be counted as investments and not as expenditures or public debt. Social justice and sustainable development were everyone’s responsibility and required a new global partnership. Official development assistance would continue to play an important role in eradicating poverty. Foreign direct investment and private sources of financing could be more effective if more coherent policies, respectful of national priorities and governance structures, were put in place. Brazil’s experience showed that national and regional development banks had a key role in financing social and physical infrastructure projects as well as regional integration. The eradication of poverty and hunger and social inclusion must remain the overarching objectives of the Sustainable Development Goals in a post-2015 agenda.
DESRA PERCAYA ( Indonesia) said that while growth in some developed countries gave hope for a stable global recovery in the years to come, emerging economies’ growth had weakened. Despite the latter’s resilience in the 2008 crisis, “their economic development foundation could not bear the burden of stabilizing the overall global economy”, he said. Global financial volatility and economic crisis increased the number and vulnerability of the poor and weakened domestic growth. The lack of transparency in global economic governance made it challenging to coordinate policies. He said it was imperative to honour the sprit and principles of the Monterrey Consensus, as underscored in the Doha Declaration on Financing for Development, adding that there had to be a push for meaningful reform in the global financial architecture, a provision of innovative financing and realization of fair trade. He called for holding a Financing for Development Follow-up Conference before deciding on the post-2015 global development agenda.
ABULKALAM MOMEN ( Bangladesh) said ways must be sought to ensure that decisions taken in Monterrey, Doha and elsewhere were effectively implemented. His country was concerned that trade as an “engine” of development had not been put into “real life” action, with the promise of duty free markets yet to be fulfilled and the 49 least developed countries share in global trade still totalling a mere 1 per cent. Aid for trade and technology transfer was needed for these counties to leapfrog towards economic growth. Other concerns included lagging and declining ODA, the heightening of climate vulnerability and remittances. Commitments made at a recent special event on Millennium Goals needed to translate into action to ensure that financing for development was truly development for all.
ELMAHDI ELMAJERBI ( Libya) said past commitments had been challenged by economic crises, which were addressed and reaffirmed at Doha. Taking into account the link between economic development and resource mobilization, the crises were directly affecting developing countries, which also faced high unemployment levels and other challenges. Measures were needed to address those issues, ensuring that local conditions were conducive to both local and foreign investment. Trade had also experienced spikes and valleys. For those reasons, an equal global financial system was needed and Rio+20’s (United Nations Conference on Sustainable Development) call for financing for development should ensure that developing countries could work with multinational stakeholders.
PAIK JI-AH ( Republic of Korea) said development costs rose far higher than public spending budgets. At Rio+20, leaders agreed that significant resource mobilization from a variety of sources was needed. Poverty eradication and climate change needed private, public, domestic and international resources, including ODA. Since each country was responsible for its own development, domestic resource mobilization was an important key to progress. Her country’s own progress was driven by inclusive and sustained economic growth. Anti-corruption efforts needed to be bolstered and ODA should be scaled up. Innovative financing for development should also mobilize new forms of resources, she said, pointing to her country’s air-ticket solidarity levy. New funds for climate financing, such as the Green Climate Fund, should be considered in the broader global framework of financing for sustainable development. She emphasized that a renewed global partnership for development must engage all development actors.
MOOTAZ KHALIL ( Egypt) said during the dialogue, the Assembly should review progress on commitments to the Millennium Goals. As Rio+20 reaffirmed the need to face new challenges to sustainable development, he welcomed the proposal of establishing an international strategy to do so. The Goals and the post-2015 agenda could not occur without strengthening partnerships with developing countries and mobilizing additional resources. Developing countries were calling for redoubled efforts for financing development to achieve the Goals and were working towards transparency and good governance. Developed countries must honour their ODA commitments. Actions for innovative mechanisms must move forward, with results that complemented not replaced traditional resources. Trade development was also needed, he said, noting that the WTO December meeting should improve developing countries’ access to international markets. Coordinated international efforts were also needed to repatriate fleeing capital from countries of origin to combat corruption and organized crime, which hampered development. The United Nations must continue to support progress.
JIM MCLAY ( New Zealand) said over the last decade, new actors and innovative financial instruments had transformed the global development landscape, while challenges not envisaged at Monterrey had emerged, including the global financial crisis. Noting that his country’s official development assistance had remained “fairly stable”, he said the reality was that overall assistance was decreasing while demand was growing. Development effectiveness and donor coordination were vital to “getting value for each ODA dollar”, he said. External financing from South-South cooperation, among other sources, now provided much larger flows, and new partnerships — including with the private sector — could supplement traditional financing mechanisms. Domestic resource mobilization was critical to attracting foreign and domestic investment. He also urged enhanced efforts to advance the Doha Development Agenda.
František Ružička ( Slovakia) said that to set the post-2015 development agenda, both global challenges and local needs should be taken into account. With the global economic crisis having affected many countries, traditional sources of financing for development were not enough and more sources of financing, including global and private funds, were needed. Although official development assistance remained crucial, it was imperative to increase the involvement of the private sector, which had an important role in creating jobs and facilitating technology transfer. He also called for expanding the dialogue between aid recipients and donor countries.
Terri Robl ( United States) said this was the time for fresh ideas to move people out of poverty. The ability to achieve the Millennium Development Goals and set a post-2015 agenda was dependent on the ability to maximize a wide range of financial flows. ODA would remain crucial, especially for countries where it was essential to combat situations of grave poverty. Worldwide, the United States was using ODA in a targeted fashion to achieve enduring results. However, ODAs were only a small part of the story — private investment should be boosted and developing countries must increase their own revenue streams. The international community had an incredible opportunity to end extreme poverty and achieve development outcomes. The development landscape was being transformed. Countries reliant on assistance to reduce poverty had stronger economies and there was new potential for mutual growth and investment. Development, however, also needed to be sustainable and the United States welcomed the current dialogue that included all facets of development. She stated that the global community had a strong foundation to build upon with the Monterrey and Doha agreements and that the United States saw this as an opportunity to eradicate poverty in the next two decades.
FranÇois GAVE (France) said that his country believed that efforts in financing for development should be focused on five areas. First, traditional official development assistance should be maintained. As many new global challenges had emerged, development strategies should adapt and partnerships at all levels were needed, including South-South cooperation. Second, countries should take ownership for their own development and mobilize domestic financing for development. Third, the involvement of private sector should be increased. Fourth, innovative financing was needed. Countries should look for new sources of financing complementary to traditional official development assistance. Fifth, efficiency and accountability must be enhanced in using finance for development. He also called for a Follow-up Conference on Financing for Development.
Magnus Lennartsson ( Sweden) said that mutual accountability was needed in implementing the Monterrey Consensus. Acknowledging that official development assistance remained a critical source of financing for development and encouraging Member States to intensify efforts to live up to the 0.7 per cent gross national product(GNP) target, he stressed the need for stakeholders to ensure development cooperation efforts were results-oriented, sustainable, transparent and accountable. He also pointed out that the mobilization of domestic resources was the most important component of financing for development, with each country taking the primary responsibility for its own development. He believed that developing countries needed to achieve good governance, broaden their tax base, develop policies for equitable and responsible allocation of resources, combat illicit financial outflows and fight corruption. Stressing that a responsible post-2015 development agenda should be ambitious and inclusive of all actors, he said his country supported the strengthening of regional and continental integration efforts, including South-South cooperation initiatives and a strengthened role for civil society and the private sector in global development.
Seiko Thoms ( Germany) said that in the next two years, all development partners needed to step up in order to achieve the Millennium Development Goals. He said it was important to streamline all processes dealing with financing issues. The post-2015 track and the financing track needed to be coordinated and the Monterrey agreement needed to evolve for the mobilization of post-2015 financing resources. As the international community moved forward, it was important to recognize that the agreement that came out of Monterrey was still valid and relevant. Germany supported the revision of tax systems, targeted financing, practices of governance and the evolution of local financial markets. Stronger tax cooperation and administration and efforts to combat issues like tax avoidance were key. Germany welcomed the results of the G-20 sessions from this year and said efforts needed to be made to improve the business climate to spur private investment and broaden tax bases. Private households also needed to be empowered to improve their living conditions and external financial support should be provided to those countries that were unable to meet their needs alone.
Wang Min ( China) said that promoting world economic recovery and growth and realizing common development and prosperity for all countries were the fundamental objectives and tasks of the cooperation on financing for development. Therefore, Governments should adopt responsible macroeconomic policies, engage in timely communication and coordination, and work together. Noting that official development assistance was the main source of financing for many developing countries, he said developed countries should shoulder the primary responsibility for financing for development and fulfil their commitments, whereas developing countries should continue to strengthen South-South cooperation so as to complement North-South cooperation. He also stressed the need for improving global economic governance, and called for deepening the international financial system reform and building a free, open and non-discriminatory multilateral trade system. In addition, he pointed out that the relationship between financing for development and that for sustainable development should be further clarified.
HUSSEIN HANIFF ( Malaysia) said global efforts to address development were inadequate, voicing concern that ODA had fallen for two consecutive years. Malaysia relied on foreign direct investment (FDI) to strengthen its capital market, which in turn, drove development. Yet globally, net FDI flows to developing countries were estimated to have fallen 4 per cent from 2011 to 2012. European countries must resolve their debt crisis. Malaysia looked forward to enhancing trade and investment with other States, urging that the Doha Round of WTO negotiations be concluded. He also called for a follow-up mechanism to ensure implementation of financing for development commitments.
MAURICIO ESCANERO ( Mexico) said follow-up on Monterrey should build on the Millennium Development Goals and the post-2015 agenda. Each country had a responsibility to ensure its development, which should be supported by the international community, and to that end ODA commitments must be met. Mexico, as a provider of South-South cooperation, wanted to redouble its efforts through, for instance, triangular cooperation. A new international cooperation law was a clear sign of the country’s willingness. Strengthening South-South cooperation must be done in line with efforts from developed countries to overcome poverty and inequality. Middle-income countries had a key role to play and promoting those countries had a spillover beneficial effect on developing countries. With those issues in mind, Mexico had decided to host on 15-16 April 2014 the first ministerial meeting on the Global Partnership for Effective Development Co-operation.
DIANA ALI AL-HADID (Jordan), aligning with Fiji, stated that the Monterey Consensus set out to achieve coherence and consistency between policies to support developing countries in realizing the objectives set down by various international conferences and summits, including the Millennium Summit. Incoherent policies undermined development, and the international community was still facing complex developmental challenges which had revealed the weaknesses of the international financing system in mobilizing resources for development. The commitments that the international community made in Monterrey and Doha about ensuring predictable development assistance and supporting nationally owned development strategies needed to be reemphasized, she added. Identifying innovative financing mechanisms that could supplement traditional sources was also vital. There was no doubt that trade remained the dynamic force behind the growth of the global economy. Fiji hoped that the negotiations on a global trade deal under WTO’s Doha Round of talks would move forward at the forthcoming Ninth Ministerial Conference to be held in December.
MATEO ESTREME ( Argentina) said development financing had suffered from the economic crises and must be a focus of the current discussions. For development, improved access to financing for the public sector was essential to fight poverty. Public policies must take into account, among other things, job creation. Financing energy projects was also key to development, as it optimized the use of resources. Commitments made must be fulfilled regarding ODA. Measures must be taken to remedy the current situation. In the private sector, funding should be complementary to official financing means.
FREDY TRUJILLO ( Ecuador) said in the framework of the new global financial architecture his country proposed making progress on innovative financing mechanisms for development, such as the International Monetary Fund’s special drawing rights and the eco-tax on oil exports. It was now necessary to restructure the system, as set out by Joseph Stiglitz in 2008. Political commitments by northern countries were now needed alongside a continental approach when dealing with foreign direct investment. The skewed asymmetry must be transformed into a more equal system. In Ecuador, the Texaco-Chevron case was an example of injustice, with a colossal oil spill in the Amazon that had damaged the environment and had not contributed to development. It was important to foster and strengthen regional agreements and to reset the global relationship with new North-South negotiations. The new architecture should be an instrument for financial sovereignty with a vision that comes from the South. A completely new type of development bank should be created to focus on the Millennium Goals.
SAHEBZADA A. KHAN ( Pakistan) said that, despite some progress on the goals set at Monterrey and reaffirmed at Doha, the objectives of sustained economic growth and sustainable development were yet to be achieved. Official development assistance remained short of commitments and a number of developing countries had yet to grow out of debt. Developing countries, especially those in the least developed category, had not benefited from international trade and capital flows, while access to development financing had become a serious challenge. Inclusive economic growth and sustainable development required sound domestic socioeconomic policies, domestic resource mobilization and good governance, as well as a global economy that provided equitable opportunities to all countries. It was crucial to design policies that enabled the private sector to overcome its short-term horizon and risk aversion, particularly on infrastructure, innovation and small and medium enterprise financing. Pakistan was correcting its structural imbalances, encouraging domestic resource mobilization, improving revenue collection and strengthening partnership with the private sector and sought enhanced trade and investment from the international community. Given its unquestioned legitimacy and representative character, the United Nations should continue to lead efforts to foster a spirit of genuine partnership.
HELEN BECK ( Solomon Islands) said building the post-2015 agenda offered an opportunity to change the way we do business, since the one-size-fits-all model will not work and we needed to recognize the challenges of each individual country. The means of implementation must be at the cornerstone of the sustainable development and financing agenda, given the fact that many Millennium Development Goals would not be met by 2015. International support could mean real change for the least developed countries, but ODA must remain predictable and sustained. She called for funds for climate change to be distributed in a transparent manner, as many climate change mechanisms were empty shells with no money for operations. The reform of the international financing system was critical to ensure it is inclusive and accountable to all Member States. Trade was a key component in poverty eradication, as the least developed countries’ current share of global trade was less than 1 per cent. She also expressed concern about the failed conclusion of the Doha Round and hoped for a favourable outcome when talks resumed.
MENISSA RAMBALLY ( Saint Lucia) said developing states were in a precarious position. Saint Lucia reiterates CARICOM’s call for the international community to take a more systematic approach to deal with the needs of developing countries that are characterized as middle income countries. Such an approach should mitigate further erosion of development achievements made to date. Saint Lucia recognized that it was vital to adopt new and innovative approaches and work closely with partners. The Monterrey Consensus and Doha Declaration have provided the framework for advancements in international development financing. The way forward lies in the political will to identify inclusive solutions. She said her country believed that true development would happen when commitments are made and commitments are kept.
JUN YAMAZAKI ( Japan) said financing for development had long been an essential tool to attain one of the fundamental goals of the United Nations. However, financing was not an end in itself but rather a means for development. All development partners should participate in the Global Partnership for Effective Development Co-operation, with collaborative work between the United Nations and the Partnership, through the United Nations Development Programme (UNDP) and the Organisation for Economic Cooperation and Development (OECD) being essential. In June, his country had hosted the Fifth Tokyo International Conference on Africa Development at which African leaders expressed great interest in welcoming private-sector investment. That reflected that the investment flow to Africa now exceeded the flow of assistance. Therefore, Japan’s assistance to Africa should be utilized strategically by focusing on fostering human resources as a catalyst for further investment. Such cooperation promoted sustainable growth while cultivating ownership by African countries themselves.
KHALY ADAMA NDOUR ( Senegal) said given the current slow recovery of global economic growth, challenges facing developing countries were serious, demonstrating the depth and scale of the limits of States to cope with threats. The current Dialogue was an opportunity to sculpt new strategies to achieve the Millennium Development Goals. The Monterrey Consensus was a major milestone, but its adoption had not fully allowed his country to correct imbalances and restore economies. Foreign capital flows, low volumes of migrant remittances and scant foreign direct investment were of concern. The international community should play a more decisive role in terms of its commitments, including ODA. On ODA, measures must be adopted to ensure predictably of flows of aid. A fairer trade system was also needed.
Özgür Pehlivan ( Turkey) said that financing for development remained a global challenge and Member States should mobilize and effectively use all financing sources. The Monterrey Consensus and Doha Declaration had provided basis for global partnership in that regard. He pointed out that the global economic crisis had negatively affected both developed and developing countries, and that in addition to official development assistance, other sources of financing for development should be also explored, such as remittances and private investment. Concerted international efforts must be made in reforming the global financial system and long-term lending capacities of international and regional financial institutions should be strengthened. He also stressed the importance of trade development and investment in small and medium enterprises, as well as in infrastructure.
MIGUEL CAMILO RUIZ ( Colombia) recognized the importance of holding this Dialogue at a time when the Millennium Development Goals needed to be achieved and a post-2015 agenda created. While progress had been made since the Monterrey and Doha agreements, there needed to be a follow-up mechanism on implementation that could possibly operate within the Economic and Social Council. Measures should ensure timely debt relief and debt restructuring. For trade to fulfil its role as a driver for development, progress was needed in the next Doha round in Bali, at which a mechanism should be set up to ensure fair treatment, with a special package for least developed countries. International trade systems must support those and other measures to stabilize markets. A coherence and effective global economic governance system must also be established. Turning to the post-2015 development agenda, he said Millennium Goal 8 must be the focus, as well as fulfilling ODA commitments and the use of innovative financing sources. New strategies needed to harness private financing for public projects.
LIZWI NKOMBELA ( South Africa) said that as the 2015 target date approached the achievement of the Millennium targets could be hampered by the economic, food and energy crises, debt burdens and climate change. Access to financing, responsible lending and borrowing, and debt restructuring must be addressed. Commitments should be honoured, especially given that the African continent faced severe challenges to meet the Goals. This High-level Dialogue should be a biennial event, given the pressing crises facing many States. His country attached great importance to assistance for poverty eradication and development.
VICTOR OVALLES-SANTOS ( Venezuela) urged action to convene a financing for development conference before 2015 and a follow-up mechanism to ensure support for the Millennium Development Goals. Actions could not be delayed, he said, adding that “the world is waiting”. A reform of the international financial system was needed. Some issues the Committee of Experts should address included trade stimulation, debt relief, global and regional research systems, development financing and the restructuring of international institutions. The United Nations should also redefine its relationship with the Bretton Woods institutions. He regretted the lack of engagement of countries following the financial crisis and hoped that commitments would be fulfilled in the future.
SACHA LLORENTI SOLÍZ ( Bolivia) said that the world was facing multiple challenges, such as economic, environmental and food crises. Particularly, the global economic crisis in 2008 had affected many countries, with the poor paying the heaviest price. He attributed the failure in resolving this crisis to the existing “capitalist system”, in which there were always “a few winners and many losers, including Mother Earth”. His country had proposed a different system, he said, one that was not about the exploitation of people, but about the use of nature for the benefits of mankind, one that could reduce poverty, improve social services and ensure fair distribution of wealth. He also stressed the need for maintaining a balance between economic growth and environmental protection.
ASTRIDE NAZAIRE (Haiti) said, as a member of the least developed countries and the small island development States, that her country was committed to the pursuance of United Nations conferences, targets and practical modalities aimed at achieving the Millennium Development Goals. Haiti had an improved business environment. Private, foreign capital now played a big role at an unprecedented level. As a result of those efforts, along with harnessing the potential of remittances, Haiti was on track to achieving Goal 2 on providing access to education. The economic crises had struck a strong blow to Haiti. Following the 2010 earthquake, Haiti had received aid for recovery, but achieving the Millennium targets had been the result of bilateral and multilateral funding. Beyond the need to maintain and increase public funds for development, some problems had arisen from channelling ODA. Concessional loans or the vicious cycle of debt were among questionable practices that were damaging in the long-term. It would be useful to build on the development system itself. When discussing financing for development, the quality was as important as quantity and frank discussions must address lessons to be learned in both the global and local approach to the issue.
A round table held this afternoon, entitled “The impact of the world financial and economic crisis on the reform of the international monetary and financial system and its implications for development”, was chaired by Mr. Samuel Moncada, Member of the Intergovernmental Committee of Experts on Sustainable Development Financing and Permanent Representative of Venezuela to the United Nations.
Speakers included Rupert Thorne, Deputy Secretary General, Financial Stability Board, Bank of International Settlements, Basel; Eduardo Gálvez, Ambassador and Deputy Permanent Representative of Chile to the United Nations, and Member of the Intergovernmental Committee of Experts on Sustainable Development Financing; Axel Bertuch-Samuels, Special Representative to the United Nations, Deputy Director, Strategy, Policy, and Review Department, International Monetary Fund (IMF); Yuefen Li, Head, Debt and Development Branch, United Nations Conference on Trade and Development (UNCTAD); and, Manuel F. Montes, Senior Adviser on Finance and Development, The South Centre, Geneva.
Mr. MONCADA said that since 2008, the international community had taken important steps to address vulnerabilities made apparent by the financial and economic crisis. These had focused on strengthening the safety and soundness of the banking sector, particularly through Basel III. It was crucial to extend the regulatory framework beyond the banking sector to the entire financial system, including shadow banking. The development of international financial regulations would also benefit from greater representation and participation of developing countries in the regulatory process. He posed some questions he hoped today’s discussion would address, including how unconventional monetary policy in developed countries impacted developing countries and what policy options were available for addressing global imbalances.
Mr. THORNE said that the financial boom before the crisis was fuelled by excessive and unregulated growth. In order to achieve sustainable growth, it was important to address weaknesses in the banking system. National regulation needed to be boasted by more cross-border cooperation, he added. Reducing the damaging boom and bust cycles was also of key importance. It was critical to make banks more resilient, end “too big to fail” practices, transform shadow banking and make derivatives markets safer. Basel III was instrumental in substantially raising quantity and quality of capital. Ending “too big to fail” was an ambitious but necessary goal to ensure that even the largest financial organizations could fail without causing major public and economic disruption, he pointed out. Transforming the shadow banking system would require filling regulatory gaps, he said, emphasizing that the goal was to transform shadow banking into resilient sources of finance for the economy. Making derivatives markets safer was also important to ensure their sustainability.
Mr. GÁLVEZ said crises provided opportunities. He recalled the period of positive globalization of the 1990s when economists put forth ideas in line with the popular “feeling of euphoria”. Then, with the Asian market crisis in 1997, protests and demonstrations became rampant while the international community discussed a new global financial architecture. The United Nations through an international conference, Monterrey Consensus, brought together the World Bank, IMF, members of the civil society and private sector in an attempt to find a constructive response to a complex global problem. A new agenda was adopted to help countries grow.
Much like the problem in 1997, the global recession in 2008 caused a social reflex in many parts of the world. The G20 was created to make certain decisions. The Group’s reaction at the beginning of the crisis was in the form of a rapid response and to an extent, the United Nations was marginalized. Now was the time to humanize Government. That did not need to be in contrast to the G20. However, it did need to be in line with the Sustainable Development Goals.
Mr. BERTUCH-SAMUELS said there was no doubt the global financial crisis had shunned millions out of work and caused a public debt crisis that engulfed several European countries. However, if historic crisis contagion patterns repeated themselves, things could have been far worse. Not only had emerging economies managed to sustain growth, but for the first time, low-income countries had been able to weather the storm by using economic buffers established in the Monterrey Consensus. Emphasizing the need to implement simpler economic processes and survey large institutions that caused financial trouble, he called for regulatory reforms that enhanced supervision through private sector reforms.
The IMF had increased lending “firepower” and streamlined conditions attached to loans. Surveillance had also been reformed. The IMF strengthened its way of calculating risks in the global economy through better assessing spillover risks from one country to the next. To meet the increasing financial needs it had bolstered borrowing. To borrowing countries, the IMF had introduced a zero interest rate through the end of 2014. A post-catastrophe debt-relief trust allowed Haiti to eliminate its outstanding debt following its 2010 earthquake, he said. Stressing the importance of governance reform, he said it was a top priority for the IMF’s legitimacy and effectiveness. There is too much money being generated in developing countries which was not staying in those countries but rather moving out.
Ms. LI said that growth continued to be disappointing although the economic strength and vulnerability of countries had evolved since the crisis. In the beginning developing countries remained resilient by relying on domestic demand and stimulus packages. When talking about the United States, Europe, and Japan, initially there were signs of hope. Since May 2013, emerging economies like Brazil and India had experienced currency depreciation amounting to 14 per cent. Both developed and emerging economies growth had staggered and developing countries were feeling the pinch.
It was critical to address the major contributors to the boom and bust market, she stressed. Emerging economies had collectively experienced capital volatility. Turning to debt issues, she said the current crisis had made people aware of the need for a debt restructure mechanism. The global financial crisis demonstrated the need to undertake reform to regulate both source and destination countries to minimize incidents of destabilizing capital flows.
Mr. MONTES highlighted an outcome document from the Conference on the World Financial and Economic Crisis and its Impact on Development. He mentioned volatile private capital flows touching on policies in trade, investment and international development. The crisis had intensified calls by some States for reform of the current global reserve system to overcome its insufficiencies. Inadequate financial regulation included overreliance on market self-regulation, a lack of transparency and irresponsible behaviour. He called for an increase in regulation and supervision. The United Nations on the basis of its universal membership was well positioned to participate in various reform processes aimed at improving and strengthening the effective functioning of the financial system.
In an ensuing interactive dialogue, the representative of Germany, emphasizing that reaction to the financial crisis had not sufficed, stressed the need to manage and promote risk aversion before the crisis hits. He highlighted the importance of a multisectoral approach, saying that the World Bank, IMF, and civil society could contribute to the solution by building capacity, skills and knowledge that would counterbalance the effects of the crisis.
A member of the private sector said she was extremely concerned with the heightened emphasis and reliance on the private sector to fill the finance gap. Pointing out the “systematic hole in the very middle”, she said that private sector finance did not happen without basic building blocks, such as competitive advantage and the development of “bankable projects”. A representative of civil society called for a new economic paradigm, demanding a re-launch of the initial reform spirit of the 2008 crisis, including a strong participation of civil society.
The representative of Ecuador said that the crisis was getting worse. In some countries, “safety belts and security blankets were falling apart”. Major transnational organizations were undermining the well-being of States and developing economies. Because of their enormity in size and power, they could afford to flex the rules, namely Texaco and Chevron. Regional institutions must get stronger and break the concentration of where those multinational organizations existed. People put their money into community banks, which is then used for investment elsewhere. Multinational institutions must acknowledge that small communities had a right to develop, too, he added.
Mauritius’ delegate said sophisticated markets prescribed norms which then get applied to least developed markets. It was important to make the distinction in their ability to implement those norms. A representative of the European Union delegation welcomed efforts by the Bretton Woods institutions, underlining the importance of trade as an engine of growth. Open economies and free international trade was essential for a free economy, he said, calling for enhanced cooperation between the G20 and the United Nations.
The representative of Saint Kitts and Nevis said that the Caribbean was a region where there were small and vulnerable States constantly subjected to the ravages of natural hazards. It was one thing to attain decent levels of income; it was another to have it all wiped out by a hurricane. Given that a significant amount of economic infrastructure was based on tourism, he called for trade and technical assistance.
A representative of Jamaica also spoke today as did several officials from civil society and private sector.
* *** *For information media • not an official record