International Conference on Financing for Development

Department of Public Information - News and Media Services Division - New York
Monterrey, NL, Mexico
18-22 March 2002
18 March 2002

1st meeting (AM)


The International Conference on Financing for Development opened this morning in Monterrey, Mexico, bringing together representatives of governments, the business community, international financial institutions and civil society to seek ways of mobilizing crucial resources for enhancing economic growth and achieving global development goals.

The Monterrey consensus, the final document to be adopted at the end of the Conference, was presented this morning by the Co-Chairpersons of the Preparatory Committee for the Conference, Shamshad Ahmad (Pakistan) and Ruth Jacoby (Sweden). The Conference, stated Mr. Ahmad, was not a culmination point, but the beginning of a long and continuing process. It was an important step towards evolving a realistic framework for development.

The Conference also heard from the Executive Secretaries of various United Nations regional commissions, who highlighted factors which obstructed the flow of aid and development efforts of their respective regions, such as the debt burden and armed conflicts. If financing for development was to be increased, said the Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), the role of regional financing institutions in every part of the world must be strengthened to make them the principal sources of financing for development.

Also this morning, the Conference elected Vicente Fox, President of Mexico, as President of the Conference. In addition, Jorge G. Castañeda Gutman, Minister for Foreign Affairs; Francisco Gil Diaz, Minister for Finance; and Luis Ernesto Derbez Bautista, Minister for Trade of Mexico as Co-Presidents of the ministerial segment of the Conference.

The Conference also elected Miguel Hakim Simon, Vice-Minister for Foreign Affairs; Agustin Cartens, Vice-Minister for Finance; and Luis Fernando de la Calle, Vice-Minister for Trade of Mexico, as Co-Presidents of the high-level segment of the Conference.

Elected as Vice-Presidents of the Conference were Cameroon, Egypt, Ghana, Sudan, Namibia, Bangladesh, Iran, Japan, Pakistan, Thailand, Bulgaria, Czech Republic, Poland, Romania, the Former Yugoslav Republic of Macedonia, Chile, El Salvador, Saint Lucia, Trinidad and Tobago, Denmark, France, Sweden, Turkey and the United States.

Further, Jorge G. Castañeda Gutman, Minister for Foreign Affairs of Mexico, was also elected as Vice-President ex officio of the Conference. The election of the Rapporteur-General would be taken up at a later date.

In addition, the Conference adopted its rules of procedure, agenda and programme of work, as orally revised.

The Conference also approved accreditation for five additional intergovernmental organizations -- Commonwealth Foundation, Banque des États de l´Afrique Centrale, Partners in Population and Development: a South-South Initiative, International Association of Economic and Social Councils and Similar Institutions, and Eastern Caribbean Central Bank. It also approved accreditation for two additional non-governmental organizations -- Institute for International Economics and Center for Global Development.

The Conference also decided that the composition of its Credentials Committee would be the same as that of the Credentials Committee of the General Assembly at its fifty-sixth session -- China, Denmark, Jamaica, Lesotho, Russian Federation, Senegal, Singapore, United States and Uruguay.

Statements were also made this morning by the representatives of the Economic Commission for Europe (ECE), the Economic and Social Commission for Asia and the Pacific (ESCAP), the Economic and Social Commission for Latin America and the Caribbean (ECLAC) and the Economic Commission for Africa (ECA).

The Conference will continue its general exchange of views at 3 p.m. today.



The International Conference on Financing for Development met this morning to hold its opening session. It was expected to elect its Bureau, including the President and Co-Presidents, and adopt the rules of procedure, agenda and programme of work. It would also appoint the members of the Credentials Committee.

Following its consideration of organizational matters, the Conference was expected to begin its high-level segment, with reports on activities by relevant "stakeholders" and statements by the Executive Secretaries of the United Nations regional commissions and representatives of the regional development banks.

In an effort to mobilize crucial resources to boost economic growth and to fulfil internationally agreed development goals, the United Nations decided to convene the Conference, being held in Monterrey, Mexico, from 18 to 22 March. The Conference was expected to conclude with the adoption of the "Monterrey Consensus", in which Member States resolve to address the challenges of financing for development around the world, particularly in developing countries.

For further background, see Press Release DEV/M/1 issued on 15 March.


Election of Officers

NITIN DESAI, Under-Secretary-General for Economic and Social Affairs and Conference Secretary-General, declared the Conference open and presided over the election of the Conference President and Co-Presidents, including that of Mexican President Vicente Fox as Conference President. All were elected by acclamation. He then invited Miguel Hakim Simon, Vice-Minister for Foreign Affairs; Agustin Carstens Cartens, Vice-Minister for Finance; and Luis Fernando de la Calle, Vice- Minister for Trade of Mexico, as Co-Presidents of the Conference, to preside over today's high-level official segment.



SHAMSHAD AHMAD (Pakistan), Preparatory Committee Co-Chair, presented the Monterrey consensus to the Conference. The document was the result of a unique and perhaps unprecedented preparatory process that had ended in complete consensus among all stakeholders weeks ahead of the main event. The credit went to all who had participated in the process. Through a realistic and constructive mindset, the objectives had been reached.

The Conference was not a culmination point -- it was the beginning of a long and continuing process, he said. The pace and complex nature of globalization required sustained efforts to ensure that development remained at the centre of economic activity. There could be no partial solutions, and all relevant actors must coordinate their policies towards facilitation and promotion of development. The United Nations, as a universal and representative body of the international community, could and should play a catalytic role in unleashing globalization´s potential to finance development.

The Conference was an important step towards evolving a realistic framework for development, he said. Ownership of the process lay with the developing countries, but their potential was conditioned by the enabling environment of trade and aid, among others. The approach to follow-up must be focused and result oriented, he stressed. The United Nations could play a key role in the process.

RUTH JACOBY (Sweden), Preparatory Committee Co-Chair, said all had worked hard over two years to prepare for the Conference. It had been a long and at times bumpy road, as there had been no blueprint for the work. Among the challenges had been to cover areas of domestic policy, private financial flows, trade, official development assistance (ODA), debt and systemic issues, and to do so in a holistic and inclusive manner. The deep commitment of all participants had marked the preparatory process as a whole and had made it possible to be innovative, practical and flexible. It was the Committee´s fervent hope that the consensus would provide a foundation to mobilize resources for development.

The first step had been taken, she said. But now the international community must push on. The Conference was a huge awareness-raising event. That awareness must be nurtured.

BRIGITA SCHMÖGNEROVA, Executive Secretary of the Economic Commission for Europe (ECE), said the advanced ECE economies had been a major source of finance and other resources for developing countries, both directly and indirectly, through the intermediaries of multilateral regional and global institutions. That included the provision of ODA, although the actual support had remained significantly below the target of 0.7 per cent. The ECE secretariat welcomed the statement in the Monterrey consensus urging developed countries to make concrete efforts to reach that target.

She said the ECE's work on norms and standards had contributed to capacity- building and promoted, at the same time, the integration of the transition economies into the wider division of labour in the region and the world economy at large. Many of those standards, norms and conventions would create larger benefits if they were adopted beyond the ECE region, and one of the organization´s activities had been to increase their global visibility.

The Conference should have a follow-up for all participants, she said. The ECE fully supported paragraph 64 of the consensus calling for a follow-up international conference to review implementation of the consensus. The ECE shared the view that sustainable development was inevitable. The social dimension of development would be included in the ECE´s agenda.

KIM HAK-SU, Executive Secretary, Economic and Social Commission for Asia and the Pacific (ESCAP), said the Commission had been striving to develop an Asian-Pacific perspective on the question of development financing, driven by its desire to enhance its understanding of the process and to share its insights with other regional bodies. The region was both vast and diverse, extending from Turkey in the north-west to the Cook Islands in the south-east. It had giants like China and India, and countries as small as Tuvalu. The region also had economies that had joined the ranks of the developed in the last few years, as well as 13 of the world's least developed economies.

He said that, for ESCAP, the first priority was to achieve the Millennium Development Goals, for which States themselves had to raise the necessary resources. At the same time, ODA flows should be greatly enhanced, especially to the least developed nations. The analysis and dissemination of research were also essential to strengthening policy-making. The ESCAP was facing enormous challenges, emanating from the 1997 financial crisis. One lesson learned had been that economies at different levels of development faced widely varying macroeconomic challenges. The ESCAP countries should assess their capabilities and avoid taking on unrealistic tasks. Although globalization was a "compulsion" from which developing countries could not "opt out", participating in it should proceed at a measured pace. Meanwhile, underlying all growth and social development policy frameworks were vital issues of State and corporate governance.

JOSÉ ANTONIO OCAMPO, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), said that apart from the volatility of short-term capital flows, sharp swings between abundance and scarcity in private external financing for the developing world had been one of the most "disturbing" features of the global economic system over the past three decades. Those ebbs and flows had translated into sharp business cycles, with economic and social costs "very high indeed". That situation must be addressed through a comprehensive approach to international cooperation that provided for macroeconomic policies with a more clearly preventive orientation during economic booms.

Also required, he went on, was better regulation of financial markets, adequate supply of exceptional financing from the International Monetary Fund (IMF) during times of crisis, clear delimitation of the scope of the conditionality applied by the Fund, and multilateral mechanisms for dealing with debt overhangs. Key objectives should be to diminish capital volatility at its source and make room for the adoption of counter-cyclical macroeconomic policies by developing countries. Incentives were needed to adopt austerity policies during booms and policies to promote economic reactivation during crises, as one explicit goal of global cooperation was to "smooth out" business cycles in the developing world. At the same time, multilateral schemes for dealing with debt overhangs were no substitute for emergency IMF funding, whose purpose was to resolve problems of liquidity.

K.Y. AMOAKO, Executive Secretary of the Economic Commission for Africa (ECA), said that most African leaders were looking to the Conference for a more holistic response to the challenges faced by African countries. While almost all of the issues mentioned in the draft final document lean in the right direction, none of them come with clear commitments. He noted that the decline in international aid had come at a time when many African countries had improved their capacities. There was a need for enhanced partnerships to assist those countries, which could serve as models for their neighbours. For a number of reasons, not all African countries would be able to benefit from such enhanced partnerships. The focus in the long run should be to move all countries to the enhanced partnership group.

He went on to highlight the impact of HIV/AIDS on the development of African countries. Funding to address HIV/AIDS should be additional to regular development assistance. Also, the issue of the debt of middle-income countries
was not adequately addressed in the final document. There was also a need for qualitative improvement in the relations between African countries and their donors. He noted that the Uruguay round of trade discussions was a net loss for Africa since it did not take into account their interests. He urged that the Doha round be beneficial for African countries.

MERVAT TALLAWY, Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA), highlighted some of the factors which negatively impacted the financing of development in her region, including armed conflicts, the imposition of international sanctions and external debt. If financing for development was to be increased, the role of regional financing institutions in every part of the world must be strengthened to make them the principal sources of financing for development. Also, the duties of the international financial institutions must be reconsidered. In addition, ODA must be increased and the 0.7 per cent target or the 20/20 initiative must be accepted.

Also, she continued, lending conditions must be reviewed to reduce the debt burden on small and developing countries. In addition, domestic savings must be encouraged in developing countries and better use must be made of insurance funds. Social security networks, especially social insurance, must be strengthened and the improved use of pension funds must be encouraged. Further, radical solutions must be found to international and regional conflicts to release the funds used for military expenditures and redirect them towards development.


Transmission of Monterrey Consensus

The participants then turned their attention to the draft Monterrey Consensus, deciding, by acclamation, to transmit it to the Conference´s ministerial segment.

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