From 18 to 22 March, the United Nations Summit on Financing forDevelopment will be held in Monterrey, Mexico. Preparation for this event included morethan a year of debates aimed at generating consensus, five regional conferences, broadparticipation from civil society and the private sector, and, in its final stage, theparticipation of over fifty chiefs of state. Along with the "Development Round"of the World Trade Organisation, which began in Qatar late last year, and the Summit forSustainable Development to be held in Johannesburg in September, this event represents atruly global dialogue on the problems of development amidst globalization.

The timing couldn't have been better. In fact, for developing countries,the Asian crisis in 1997 represented a sharp break between the phase of abundant privatecapital which began in the early 1990s, and another characterized by little availabilityof external financing, in far more volatile conditions, at less favourable costs and lessattractive maturities. For Latin America, 2002 will be the fourth year running in whichnet capital inflows are less than interest payments on foreign debt and profit remittancesby foreign companies. The impact of this decline in external financing has been verynoticeable. Economic growth in Latin America from 1998-2002 will reach just 1.5% annually,which is barely the same as population growth.

Because of this, the Asian crisis triggered a profound debate on the needto reform the international financial system. The reform process, however, has been slowand partial, characterized by the lack of consensus around critical issues and even on thevery content of the reform agenda. In fact, for the first time the "MonterreyConsensus" offers a common agenda. This agenda is comprehensive in many senses: itincludes actions necessary at both the national level and on a global scale; it deals withprivate and official flows; and it deals as much with long-term financing needs asproblems generating short-term instability in capital flows.

National savings are the main financing source for investment in everycountry. The importance of increasing national savings is particularly evident in LatinAmerica, where they are very low, and in fact the lowest they have been in twenty years.It is also important to strengthen financial systems to provide investors with long-termresources, suitable financing to micro- and small businesses and poor households, and toavoid the excessive frequency of national financial crises. In every area, Latin Americasuffers from significant deficiencies.

At the international level, the Monterrey agenda underlines first andforemost the importance of stability when it comes to private capital flows enteringdeveloping countries, whether through foreign direct investment or financial flows. Interms of official resources, the Summit will support the United Nations target regardingofficial aid to development (0.7% of the GDP of industrialized countries), which is themain source of external financing to the world's poorest countries. Today, official aidstands at just one-third of this target and it is essential, as a result, to adoptconcrete actions to meet the target within a prudent period. The Summit will alsoemphasize the essential role of multilateral development banks, which constitute one ofthe few financing sources for developing countries when periods of drought such as thecurrent one hit private capital markets.

The Monterrey agenda also includes an integral vision of how to avoid andmanage crises, whose high economic and social costs are only too familiar to LatinAmericans. This integral approach includes more preventive economic policies duringperiods of abundance, more information and better regulation of financial markets, asuitable amount of exceptional funding being made available from the InternationalMonetary Fund during crises, multilateral mechanisms for facing problems of excessiveindebtedness, an active role for regional financial bodies, and the need to limit thereach of the conditions under which financial institutions facilitate resources.

This also involves a call for more equitable participation on the part ofdeveloping countries in multilateral financial bodies. This is the rich agenda that thisSummit provides to help us strengthen international financial cooperation.