The Chronicle Interview

With preparations for the World Summmit on Sustainable Development already well under way, Nitin Desai, Under-Secretary-General of the UN Department of Economic and Social Affairs and Secretary-General of the conference, has a lot on his mind. But this is not the first time Mr. Desai has found himself facing such a challenge. From 1990 to 1993, he was the Deputy Secretary-General of the United Nations Conference on Environment and Development (UNCED). One major outcome of that Conference was Agenda 21, which will be one of the many topics discussed at the Sustainable Development Summit, taking place in Johannesburg, South Africa from 26 August to 4 September 2002. Mr. Desai sat down with the Chronicle's Russell Taylor on 17 January to discuss, among other things, Agenda 21, the Johannesburg Summit and the International Conference on Financing for Development in Monterrey, Mexico.

Why hold the International Conference on Financing for Development and the Johannesburg World Summit on Sustainable Development?
The Financing for Development Conference has been in the works for some time. But it acquired additional force after the Millennium Summit because, with this big global commitment to the development goals, we had to address the question of the resources required for reaching them. It has acquired still greater force because of the search for a vibrant multilateralism following the events of September 11. We should see these three conferences as in some ways connected: Doha, the ministerial meeting of the World Trade Organization; Monterrey, the meeting on Financing for Development; and Johannesburg, the meeting on sustainable development. In a way, what was achieved in Doha was that development was placed at the centre of the world trade agenda. It is not that development was not there, but it was always treated as an add-on to a system of trade policy, which was focussed very much on the basic objective of trade liberalization.

It is very important that we recognize that the concerns of developing countries receive central place. Monterrey is trying to place development in the centre of the world financial agenda. It is not that this has never received attention, but the focus of financial policy has always been in terms of issues such as stability, etc. What I am saying is that we should judge the effectiveness of financial policy at every level-national or global-from the perspective of what it means for development, what it means for savings and investment, what it means for resources for major, committed public programmes, particularly on the part of the United Nations. And Johannesburg is very much a conference about what sort of development that should be. In that sense, the three are very connected. It's very important we recognize that you need success in all, because together they constitute a package that would place development absolutely at the centre of the agenda of global economic cooperation. That's why it is a very opportune time for this conference.

One of the topics for discussion is mobilizing financial resources, domestic and foreign direct investment, and other private capital. What's required?

BZ/AE Vanoutrive

When we talk of domestic resources, the issue really is about building capacity to develop the financial system domestically: savings institutions; capital markets; institutions which channel investments in appropriate directions; and institutions which give poor people better access to credit, for instance, institutions for microcredit. So the agenda on domestic resource development is first an agenda on how a financial sector ought to develop, how capacity to develop the financial sector can be built. But it is also an agenda on how public finances should be managed, and it is an agenda on modern issues of governance, particularly as it pertains to the economy.

One thing that is under active consideration is a global convention on corruption, as the strengthening of fiscal administration also enhances the public sector's ability to mobilize resources. The value that a global conference adds to this is-first, it leads to a better, shared understanding of what are the ingredients of a sound policy at the national level. Much more important, it provides a framework for a more vigorous programme of assistance for capacity-building, and for developing financial institutions, capital markets, investment institutions and fiscal management.

As far as private foreign investment is concerned, there are many things which are under discussion. The key issue here is what type of domestic framework would attract foreign investment. For example, what can be done to reduce the perception of risk, which is what really stands in the way of the much more enhanced thought in this area? And there is also a lot of capacity-building that can be done to help countries mobilize foreign investment. All of these are basically attempts at reducing the lack of information about a country and its potential, and at strengthening the legal and investment systems. This is being attempted by the UN system, particularly by entities like UNCTAD [UN Conference on Trade and Development].

Another area that had been identified is international trade. What directions do you expect will be taken at the Monterrey Conference to encourage economic growth and help eradicate poverty?
This is not a conference on the content of development. This is a conference on the financing of development. So obviously, besides these market-based resources and domestic resources, there is a lot of discussion on concessional resources, official development assistance (ODA), debt. Can we really turn around the declining trend in overseas development assistance? There is also the whole issue of debt. We, of course, have the initiative on the debt of highly indebted poor countries (HIPC). But there is also some talk of what is described as a "managed workout" of sovereign debt, which would in a way try and ensure that there is a greater consideration of debtors' concerns in any workout between debtor and creditor, between public and private creditors, etc. All of these are on the table and a lot depends on how the process itself evolves.

As far as trade is concerned, the primary focus of discussion is going to be the Doha development route. What the Monterrey Conference will be doing is looking at the connections within the trade agenda and the finance agenda. It is not a trade-negotiating conference; it is really a conference about finance.

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You've mentioned the HIPC initiative - what is expected to come out of this Conference which can help the heavily indebted countries?
Basically, the focus is on the implementation of the HIPC initiative. It is already there on the table, but it needs resources in the trust fund. We have to look at the pace of implementation, how many countries will be covered over what time period. The pressure is on the pace of the implementation of the HIPC initiative. As far as bilateral debtor is concerned, a great deal has already happened in terms of write-offs, etc. There may also be some discussion on these funds. The agenda on debt is quite wide, much wider than the points I mentioned. I am just highlighting a few.

Many people, in the Western world particularly, ask what the money is for and can there be any more given out. How do you think some of these developed countries are going to react when asked to share more of that burden than they have in the past?
I would say that the key issue here is to convince people that the money is going to be used for the purposes which they have endorsed at the Millennium Summit. How can we ensure aid effectiveness? How can we ensure a good connection between aid and the goals which are commonly accepted? I don't think people are against helping others. I think what people want is to be convinced that they are really helping those people who need the assistance. Certainly, issues of performance monitoring and aid effectiveness are on the agenda.

The international monetary, financial and trading system is another area that has been identified for action. Can systems that were created in the last century adequately handle the needs of this century?
One of the things I would like to stress is that this Conference has involved the very active collaboration of the Bretton Woods institutions, the World Trade Organization (WTO), and various other financial institutions and the private sector. It is not a classical UN conference. It is the Member States serviced by the UN Secretariat who come out with the end product. This is something where the Bretton Woods institutions, the WTO and others have been very actively engaged, and also the finance ministries. So really, in some ways, this Conference has a broader political base than many other conferences. On the specific question that you asked, institutions do not get frozen in time simply because they were set up at a certain time. The World Bank has evolved. People forget that initially the World Bank did a lot of its work in Europe and it was in the '50s that its focus shifted to assisting the developing countries of Asia, Africa and Latin America. You see how ODA has evolved, and other new methods, such as in the '60s the compensatory financing for export, or in the '70s the special drawing rights. Or look at a kind of revolution that has taken place in recent times with the debt initiative, the HIPC initiative. So I think what needs to be asked is not when they were set up, but do we have a way of making decisions today which reflects today's reality? And how can we increase the influence of developing countries in these decision-making processes? This Conference partly reflects the desire to have a forum where developing countries will have a greater sense of involvement, ownership and influence.

Mr. Kofi Annan recently said that progress in Agenda 21 goals has been slower than anticipated and that some conditions are worse than they were ten years ago. What does he mean by that?

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Agenda 21 is about development, about environmental protection, about social equity, and if one looks at Agenda 21 in these terms, then one would certainly have to accept that we still do not see great improvements in any of those dimensions. Yes, there is greater awareness of their connection. There are some institutional developments at the national, regional and global levels, and there has been some strengthening of environmental legislation at all levels. But we still have a great deal of work to bring out the connection between these three dimensions - economic development, environmental protection and social equity - in terms of practical programmes at every level. There are very good examples of individual successes at the community level or in a particular project, but what we now need to do is to make these things go to scale, take the integration of these dimensions at the local level and make them much more widespread.

I would say Agenda 21 was hampered in the past in part because it was very novel. What it was trying to do was to connect areas of policy, project and programmes that are normally handled separately. Part of the reason for the slowness of implementation is that we had not worked out fully how the very ambitious programmes outlined in Agenda 21 would be translated at the field level into policies and projects. We need to move from the articulation of principles and policies in Agenda 21 on to aid programmes, clear goals and commitments. Second, there is, of course, this disappointment about the availability of financial resources. The fact is that since 1992 ODA has declined; 1992 was when the Conference was held, and 1992 was a "peak" year. There is also a feeling that we have not been able to inject resources fully into the science and research and development agenda. Has the science agenda been translated into technology development and technology diffusion? Broadly speaking, the operational dimension, the finance dimension, the technology dimension are some of the things which have stood in the way of our being able to go ahead.

You were involved in defining the concept of sustainable development - what is it exactly?
There are different ways that one can look at sustainable development. Let me put it in one way which people will understand. I would describe it as taking an asset management perspective to development directly. As in a household or an enterprise, you would basically hope that it is possible for you to sustain your consumption without eroding your capital. You live in a house, you don't want that house to deteriorate. You have a garden, you don't want the garden to deteriorate. You essentially see yourself as being able to consume what you need in an amount that would not lead to any decline in the quality of your assets. What we are doing with sustainable development is applying asset management on a broader front. It should apply not just to the house, it should apply to a region or to a country. But there is also a dimension which would not necessarily be fully present in a household: you also worry about who is getting the benefit of this consumption. How is it being distributed across the different parts of the world? So when you say "sustainable development", it is not enough to say that production is increasing. You must also ask if increased production is leading to a loss of resources or to long-term environmental problems which future generations will have to spend money to clean up, or ask whether it is leading to risks for current or future generations. How is consumption distributed?

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Basically, it is a process; it is not a description of a state. You cannot say this is sustainable development. What you can say is this development is taking place sustainably. Think of it as an adverb rather than as an adjective. It is a description of a process, not of a state of affairs. There are formal definitions. I don't want to give one here, but I will give you an example which will describe it better.

In my country (India) a lot people use wood fuel to cook at home. The smoke stays inside the kitchen; women ingest it and suffer from a lot of bronchial diseases. In fact, some people estimate that the amount of smoke that they take in is equivalent to smoking two packs of cigarettes a day. So, apart from the problem that it poses in terms of deforestation, apart from the fact that it is not a very reliable source of energy for a growing, increasingly prosperous population, it is also a great health hazard. Suppose I had an invention which provided these people and their families with a better designed stove or with a safer alternative form of energy. With one invention I would simultaneously address an environmental problem of deforestation, a developmental problem of meeting rising energy needs, and a social problem of women's health.

That is what integration is. That could be described as a programme of sustainable development. That example probably clarifies more than definitions do as to what we mean by sustainable development. Earlier, there was a tendency to look at these things separately. So you would look at an energy programme in terms of, is it meeting energy needs? You would look at the forestry programme in terms of, is it saving the forest? And you would look separately at the programme on women's health. What we really want are synergies. And here, an intervention which had been driven by a concern for women's health can actually have a highly beneficial impact on development because it meets energy needs, and on environment because it will be saving forests.

You had been involved with the Rio Summit and earlier with the Brundtland Commission-do you have any personal perspectives or optimism to offer?
I would say that it is a very deep change that we are looking for in the way we do business at every level-whether it is at the household level, at the enterprise level, at the governmental level, or at the level of international organizations. It is not just a matter of correcting a decade or two of distorted development. It is a natural correcting of perhaps even some centuries of distorted development. So it is going to take time. The real test is, are we moving in the right direction? I would say that there are, in many respects, significant successes that we can show. The greatest success may be that nobody now challenges the case for integrating these three issues. In that sense, sustainable development has entered the basic framework of thinking. Our challenge is to give it practical expression. I remain optimistic. We are certainly much further ahead than we were when we were writing the Brundtland Report in the mid-1980s.



Links:
Johannesburg Summit 2002