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
2nd meeting (PM)
AT FINANCING FOR DEVELOPMENT CONFERENCE, SPEAKERS PRESS
FOR IMPLEMENTATION OF MILLENNIUM DEVELOPMENT GOALS
The International Conference on Financing for Development wrapped up its opening day as officials of United Nations bodies and intergovernmental organizations pressed for implementation of the Millennium Development Goals as the blueprint for the new global financial architecture. Intergovernmental monetary and trade bodies pledged enhanced cooperation, and business and civil society leaders and parliamentarians urged innovative steps to finance the emerging development paradigm.
"We stand at a pivotal moment for development", Administrator of the United Nations Development Programme (UNDP) Mark Malloch Brown told participants of the Conference, the first devoted exclusively to development financing. He hailed "Monterrey" as an opportunity to forge a new "global deal" built around a partnership of mutual self-interest aimed at building a more equitable world. That was a "big bargain" under which sustained political and economic reform by developing countries was matched by direct support from the rich world in the form of trade, aid and investment and debt relief. The benchmark for that deal was the Millennium Development Goals.
The Minister for Finance of South Africa and Special Envoy of Secretary-General Kofi Annan for the Conference, Trevor Manuel, warned that the international community could not afford to "slip into complacency" or let the development financing process be undermined by a "business as usual" attitude towards development. Good governance and sound policies were a prerequisite for poverty reduction and sustained growth. At the same time, international institutions must consider the effect of their policies and goals on developing countries. Conflicting policies served no one, especially not the poor.
Indeed, among the important provisions of the Monterrey consensus -- the draft outcome text submitted to the Conference for adoption -- was the need to pursue increased and more effective participation of developing countries and transition economies in international economic decision-making and norm-setting, Economic and Social Council President Ivan Simonovic said. A world in which 80 per cent of global income ended in 20 per cent of the pockets was neither just nor stable. Sharing benefits of globalization by all was a fundamental prerequisite for peace, security and well-being.
Financing for development was too complex to be reduced to a one-size-fits-all solution, said Rubens Ricupero, the Secretary-General of the United
Nations Conference on Trade and Development (UNCTAD). The only effective policy actions were those that were mutually reinforcing and involved all actors. The main challenge now was to find a truly coherent, consistent approach to the issues faced. Promoting coherence between trade, debt and finance was at the heart of UNCTAD´s mandate. Continuing reliance by many developing countries on primary commodities and the use of agricultural subsidies by developed nations were among the current serious challenges.
From the outset of the development financing process, civil society and business representatives had been included. Today, the Secretary-General of the International Chamber of Commerce, Maria Livanos Cattaui, reported on the just-ended International Business Forum. The business sector's view could be summed up in one phrase, "let's move from words to action". To do so, participants put together concrete proposals to facilitate capital flows to developing countries, with each one requiring partnerships with international organizations.
The Mayor of Monterrey, Felipe de Jesus Cantu, welcomed participants to his hometown and reported on the Local Authorities Forum. The Forum favoured the comprehensive approach taken by the Conference and supported the development of international financial and commercial frameworks that would be, among other things, equitable and transparent. The Forum stressed the importance of debt relief for the poorest countries and, with respect to the principle task of poverty reduction, sought recognition for the crucial role of local governments.
At the close of this evening's meeting, it was decided that the Monterrey consensus would be transmitted to the summit level of the Conference, due to begin on Thursday. Co-Presidency of the Conference, Jorge G. Castañeda Gutman, thanked those governments that had donated resources to the Financing for Development Trust Fund: Canada, Cape Verde, Denmark, Finland, Israel, Italy, Malaysia, Norway, Philippines, Saudi Arabia, Sweden, Switzerland, Thailand and the United Kingdom. He also expressed appreciation to the Melinda and Bill Gates Foundation.
The Finance Minister of Belgium and Chairman of the G-10 also addressed the Conference, as well as the Minister for Privatization of India, Chairman of the G-20, and the Governor of the Central Bank of Nigeria and Chairman of the G-24.
Representatives from the following additional United Nations bodies and intergovernmental organizations also spoke: Food and Agriculture Organization (FAO); United Nations Children's Fund (UNICEF); International Fund for Agricultural Development (IFAD); World Health Organization (WHO); World Food Programme (WFP); United Nations Environment Programme (UNEP); United Nations Industrial Development Organization (UNIDO); United Nations Population Fund (UNFPA); Global Programme on HIV/AIDS; UN-Habitat; United Nations Development Fund for Women (UNIFEM); and the International Labour Organization (ILO).
The Assistant Secretaries-General of the Organization of African Unity (OAU) and of the Caribbean Community (CARICOM) Secretariat also spoke, as did the Co-Chairpersons of the ministerial seminar of the Global Environmental Facility and the Chairman of the Preparatory Committee for the World Summit for Sustainable Development.
The following regional development banks also participated: Asian Development Bank; Islamic Development Bank; and the Council of Europe's Development Bank.
Also speaking this afternoon were representatives of the Organization for Economic Cooperation and Development (OECD), Commonwealth Secretariat, Organisation Internationale de la Francophonie, Common Fund for Commodities, Parlamento Latina Americana; and the Bank for International Settlements and Chairman of the Financial Stability Forum. Reports were delivered on the civil society and parliamentarians forums.
The International Conference on Financing for Development will meet again at 9 a.m. on Thursday, 21 March, to begin its high-level summit segment.
The International Conference on Financing for Development met to continue its general exchange of views this afternoon among high officials. Statements were expected on behalf of intergovernmental economic, financial, monetary and trade bodies and regional development banks. Representatives of United Nations bodies and intergovernmental organizations were also scheduled to speak, and representatives of the business and civil society forums, parliamentarians and local authorities were expected to present their reports.
JORGE G. CASTAÑEDA GUTMAN, Minister for Foreign Affairs of Mexico, Conference Co-President, said the Conference might be a milestone in the struggle for development and eradication of poverty in the world. The fact that there was already a consensus document and the high level of participation augured well. The Conference would establish the basis to move forward and was an important part of the financing for development process. Mexico was proud to have made its contribution.
TREVOR MANUEL, Minister for Finance of South Africa, Chairman of the Development Committee, said the international community was meeting in Monterrey to ensure that more people participated in the benefits of globalization. The issues of development must be approached differently. During the preparatory process, a consensus had emerged that enhanced partnership between stakeholders, based on clearly defined responsibilities, was needed.
The international community could not afford to slip into complacency, he said. The efforts of developing countries must be complemented by those of developed countries and international financial institutions in areas such as trade, official development assistance (ODA) and capacity-building. Globalization was not an end in itself -- it did not lead in and of itself to poverty reduction. Greater openness to trade and capital flows was essential.
International institutions must consider how their policies and goals affected developing countries, he said. Conflicting policies served no one, especially not the poor. Reform of international financial arrangements was essential. The consensus on enhanced cooperation could not be met with reluctance to change. Political will, increased flexibility, increased market access and stronger commitments on ODA were all key elements. The Monterrey consensus must have the support of all stakeholders. A concerted effort must be made to ensure that the poor reaped the benefits. The Development Committee stood ready to play its part.
IVAN SIMONOVIC, President of the Economic and Social Council, said that in the twenty-first century, sharing benefits of globalization by all was a fundamental prerequisite for peace and security and well-being. A world in which 80 per cent of global income ended in 20 per cent of the pockets was neither just nor stable.
One of the achievements of the Monterrey consensus, he said, was its agreement on efforts for an increased and more effective participation of developing countries and countries with economies in transition in international economic decision-making and norm-setting. Another achievement was that it welcomed the consideration of an international debt work-out mechanism engaging debtors and creditors to restructure unsustainable debt in a timely and efficient manner. Support for increased concessionality of development financing, greater use of grants and measures to reduce the transaction costs of aid were among its other important aspects.
"Monterrey is not an end in itself, but just a beginning", he said. Underlying the call for "staying engaged" in the consensus was the need to build on the cooperation developed in the preparatory process among all stakeholders. Monterrey would put the Economic and Social Council at the forefront of those efforts. With its annual policy dialogue with heads of financial and trade institutions, the Council had provided an innovative forum where a climate of trust and cooperation among institutions had been developing over the years.
DIDIER REYNDERS, Finance Minister of Belgium and Chairman of the Group of 10 [The G-10 is comprised of central bankers from the world's largest developed economies], said that the Group had served as a forum for major new ideas. In the years since its establishment, a number of new international groupings had come into existence, which had in common a shared desire to improve the international economic system. The specific G-10 contribution in that regard was to play its active role in the financial management of liquidity crises and offer the very broad and deep expertise of its financial markets and institutions. While "wholesale reform" was not possible at once, a series of concrete steps involving even closer cooperation among international financial institutions would help improve global economic cooperation. Further complementary, and not overlapping, agendas should be developed, and joint efforts should be undertaken.
He said that, in the coming year, the G-10 would be looking at how to improve the resolution of international financial crises and how to increase the robustness of the international financial system. By exploring that jointly with others, the analysis would be more relevant; the work would be more efficient; and the conclusions would have greater legitimacy. Such joint undertakings could presage further steps that would make the process of international cooperation smoother, simpler and more efficient. The G-10, as a grouping of creditors with good experience in the financial management of institutions, markets and liquidity crises, must, in close collaboration with other forums, go further. Also, new efforts must be made to communicate with the developing world to organize new consultation mechanisms on the regional level.
ARUN SHOURIE, Minister for Privatization of India, spoke for the Group of 20 [The G-20, established in the wake of financial crises in 1997-1998, is comprised of a selection of developing and developed countries]. He said the Group's significance lay in the fact that it represented an operational microcosm of stakeholders in the North-South dialogue. It brought together the Group of Seven industrialized countries, the developing countries, and the Bretton Woods institutions. The Group was committed to working to promote policies that would make globalization meaningful. It had noted an emerging consensus to, among other things, further improve the effectiveness of international institutions that were fundamental to a strong and stable global financial system; implement policies that would reduce the vulnerability of countries to financial crises; and create more favourable conditions for the Heavily Indebted Poor Countries (HIPC) debt initiative into the global economy.
He said the Group had focused on ways to reduce the frequency and the severity of financial crises. An exchange rate regime must be supported by appropriate macroeconomic policies and sound financial institutions. The need for a comprehensive strategy to reduce vulnerability to financial crises required, among other things, attention to liability management, including effective management of public-sector liabilities. Weaknesses in financial sector regulation and supervision, in corporate governance, in the disclosure of economic and financial data, and in the transparency of macroeconomic policies had also played their part in recent financial crises in some parts of the world. That had highlighted the importance of promoting international codes and standards to address those weaknesses.
"Help those who are willing and enable those in want -- perhaps that sums up the efforts of the G-20", he said. The international community must ensure that benefits of globalization translated into tangible benefits in terms of faster growth and development. All stakeholders must work together.
JOSEPH SANUSI, Governor of the Central Bank of Nigeria and Chairman of the Intergovernmental Group of 24 for International Monetary and Financial Affairs and Development, said the Conference had provided an opportunity to devise mechanisms and agreements to reduce the shortcomings of globalization and to build up the benefits it could provide. While accepting that improving governance, reducing corruption, maintaining macroeconomic stability, introducing effective regulation and supervision of the financial sector were necessary conditions, they would not prove to be sufficient conditions for success without effective complementary support for developing countries from the international community. The severity of restrictions imposed by developed countries served as significant impediments for developing countries to fully participate in the international economic system.
Additional efforts were required, he said, to overcome the shortcomings of the HIPC initiative. A more realistic assessment should be made of the amount of debt reduction needed for most countries to stay on a sustainable path of growth and poverty reduction. Also, it should be recognized that debt relief was not enough to overcome the conditions that led to the debt overhang in the first place. It must be complemented with extra resources and an improved performance in the recipient countries to induce development.
ANDREW CROCKETT, General Manager of the Bank for International Settlements and Chairman of the Financial Stability Forum, said he wished to explain how the recently created Forum could lend impetus to the Monterrey consensus. International financial systems had become increasingly market-led and if the intermediaries and capital markets functioned well, then the process would be advanced. Otherwise, there would be a costly crisis like the many experienced in recent years. Reforming the international financial architecture meant reducing the vulnerability of capital markets and financial systems and developing mechanisms to deal with them when they occurred. A key element in that process was aimed at reducing vulnerability through the development of standards and codes. That would create standards of sound practice that could act as a benchmark for all countries seeking to improve and strengthen their financial systems.
He said that the Forum was an institutional mechanism that helped promote the efficiency of financial markets, the organization and dissemination of standards and codes, and the avoidance of instability. It was created in 1999 as an instrument to bring together senior political figures, bankers and regulators from the principal capital market countries with international standard setters, such as the International Accounting Standards Committee, and also to involve the principal international organizations, namely, the International Monetary Fund (IMF) and the World Bank. As originally designed, the Forum was not complete, but needed the involvement of countries that were intimately involved in standards and codes and practices to reduce vulnerability to financial crisis. He was determined to promote the greater involvement of all those countries affected by financial inefficiency and instability. The Forum had developed the means, through regional meetings involving finance ministers, Central Banks officials and regulatory authorities.
MYOUNG-HO SHIN, Vice President, Asian Development Bank, said that, while the Asia and Pacific region as a whole had achieved unprecedented growth in recent decades, almost two thirds of the world´s poor lived there. The actual number of poor people had increased since 1997 in South-East Asia, he noted. The Bank was a multilateral financial institution dedicated to reducing poverty in the region. In an effort to remain effective and relevant, it had continuously adapted itself to changes in the region´s situation. It was now a full-fledged development institution.
Sustainable economic growth and good governance were among the areas that must be addressed in the fight against poverty, he said. Regional cooperation and environmental sustainability were also essential. The fight against poverty would require the mobilization of considerable financial resources over the next 15 years and robust sustainable growth would be necessary. The development experience of the region had shown that the private sector could play an important role in the process. The Bank would strive to remain a premier development institution in the region and would continue to work with development partners.
EMIL SALIM (Indonesia), Chairman of the Preparatory Committee for the World Summit on Sustainable Development, briefed delegates on the preparations for the Summit, which would seek to review progress in the implementation of the commitments undertaken in Rio in 1992. The focus of the agenda for the Summit included issues such as changing unsustainable patterns of consumption and production, sustainable development in a globalizing world, health and sustainable development and sustainable development in small island developing States.
He hoped in the next session of the Preparatory Committee, set to begin next week, to discuss sustainable development governance and begin negotiations for the final documents of the Summit, which would be based on both the Doha and Monterrey deliberations. The Committee hoped to finalize the major outcomes of the Summit at the fourth session of the Preparatory Committee, to be held in May in Bali, Indonesia. He hoped the development agenda would cover environmental, economic and social development.
CLAIRE SHORT, Co-Chair of the ministerial seminar of the Global Environmental Facility, said that in the past there had been too many conferences and grand declarations and not enough implementation. Everyone must keep to the Millennium Development Goals and move from the Millennium Assembly to agreements reached here on development financing onto Johannesburg, where the world was assured that poverty eradication was seen as the heart of sustainability for the future of the planet.
She urged working through the new and improved development paradigm, where poverty reduction was in the driver's seat and countries brought together macroeconomic policies and plans to encourage the private sector, with their plans to sustain environmental resources and improve the lives of the poor who so depended on those resources. Official development assistance must be used in a way that invested in competent modern States and ensured that the environmental agenda was "spliced into all of that" and was not additional or separate.
Indeed, better quality and quantity of ODA was needed, along with the replenishment of global environmental facility, she went on. That did not fall to any one country; improved trade laws were needed, as well as international and private sector contributions to technology transfers and poverty reduction. Future meetings must drive forward the Millennium Development Goals in order to have a planet with less poverty that was sustainable, "so we could hang onto our grandchildren", she said.
VALLI MOOSA, Co-Chair of the ministerial seminar of the Global Environment Facility, said governments should be urged to ensure that a cross-cutting dialogue involving all the development pillars took place between now and the World Summit at Johannesburg. The emphasis at the Summit would be on "actionable" plans. Taking that into account, the round-table discussion had taken up ODA, replenishing the various development funds, and the elaboration of an economic platform that would contribute to growth in underdeveloped countries. The importance of improving market access and increasing foreign direct investment (FDI) were also discussed.
Arising from the round table was the sense that, after the Conference, the considerable intellectual resources of the international community would be mobilized to assure that there would be a detailed programme of action for the World Summit. All wished to give the world a real message of hope -- one that would say, for example, to women in developing countries: this is exactly what we are going to do to improve your situation.
SYED JAAFA AZNAM, Vice-President of the Islamic Development Bank, said all members of the Bank were developing countries, many of which faced serious resource constraints in financing their development. Therefore, it was timely to have a constructive review of the present global economic architecture. The Bank was established 27 years ago to promote economic development and social progress. It fully supported the call to enhance ODA to developing and least developed countries. He was concerned that concessional funding to the Bank's member countries had been on a consistent decline.
Regarding the role of international trade, the Bank associated itself with the ongoing trade liberalization measures within the context of the World Trade Organization (WTO), he said. In the last three decades, Islamic banking had grown steadily, and it might be desirable to recognize the role that could be played by Islamic banking in economic development. The Bank would, as an international economic institution, remain an open and transparent member of the global development community.
APOLONIO RUIZ LIGERO, Vice-Governor of the Council of Europe's Development Bank, said that, since its inception, the Bank's prime objective had been to respond to emergencies and provide financial assistance to those who found themselves victims of such situations. The scope of the Bank's actions had widened over the years. For example, it had evolved important agreements with multilateral organizations, in order to synergize the priority goals of the Monterrey Conference. The Bank was also involved in refugees and immigrants, and victims of ecological disasters. Its capacity for action had widened to include other sociological spheres, and a number of new priorities had been defined, including actions aimed at creating and preserving jobs in small and medium enterprises, vocational training, housing, health, education and the overall improvement of living conditions in disadvantaged areas. It had also sought to protect the environment and rehabilitate history landmarks.
MARK MALLOCH BROWN, Administrator, United Nations Development Programme (UNDP), said "we stand at a pivotal moment for development". Monterrey provided a real opportunity to forge a new "Global Deal", built around a partnership of mutual self-interest aimed at building a safer, more prosperous and more equitable world. That was a "big bargain" under which sustained political and economic reform that allowed higher growth, more social spending and private investment, and better governance by developing countries was matched by direct support from the rich world in the form of trade, aid and investment and debt relief. The benchmark for that deal was the Millennium Development Goals.
He said that the Goals were clear, time-bound targets for achieving rapid, measurable improvements in the lives of the world's poorest citizens, from enrolling children in schools to tackling "killer diseases" such as HIV/AIDS
and malaria, to promoting women's rights and eradicating hunger. Agreement by 189 countries at the Millennium Summit in New York made the battle against poverty a collective responsibility. The historic Millennium Declaration spelled out very clearly how those advances should be achieved. That hinged on mutual recognition that there was no substitute for internally led, bold reform in developing countries. "Aid cannot buy answers when governments and their citizens are not ready, or lack the institutions and capacity to take on change themselves", he added.
At the same time, he continued, the developing world was not sitting and waiting for help. Initiatives like the New African Partnership for Development (NEPAD) showed how governments were increasingly building on the promise of the Millennium Declaration. The burden now rested squarely on the world to support those good faith efforts. For its part, the UNDP would soon launch a three-pronged strategy encompassing a "Millennium Project" research initiative to cost the Goals and develop action plans and partnerships to achieve them. A "Millennium Campaign" would help raise awareness about them, and "Millennium Reports", at both global and country levels, would monitor progress. For those countries that lacked the policy environment and human capital to use assistance well, a strategy would be devised to help them "get a first foot on the ladder of results", and, hence, larger aid flows.
RUBENS RICUPERO, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), said financing for development was not an abstract matter -- it was something that could improve life for millions, as could be seen in the tragedy currently afflicting Argentina. The Conference should focus on coherence among socio-economic policy actions and finding better ways to deal with financial crises.
Financing for development was too complex to be reduced to a one-size-fits-all solution. The only effective policy actions were those that were mutually reinforcing and involved all actors. The main challenge now was to find a truly coherent, consistent approach to the issues faced. Promoting coherence between trade, debt and finance was at the heart of UNCTAD´s mandate. The continuing reliance of many developing countries on primary commodities was one of the many issues being faced. The use of agricultural subsidies by developed nations represented a major distortion in financing of development and exacerbated the effects of shrinking ODA.
It was imperative to increase the size of ODA flows, he stressed. That was especially true in the case of least developed countries. Appropriate policies were important. This Conference should be considered the beginning of an orderly process based on a solid and balanced agenda. As the United Nations focal point on trade and development, UNCTAD was ready to make its contribution to the follow- up process.
LENNART BAGE, President of the International Fund for Agricultural Development (IFAD), said that development cooperation, if it was to achieve poverty reduction, must focus on where the poor were -- the rural areas. The substance of development assistance was as critical as its direction. Investments in health and education were vital, particularly in light of the AIDS pandemic. However, since the bulk of the poor and vulnerable were in rural areas, the bulk of social sector expenditure should also be in rural areas, especially for primary health and education.
Between 1988 and 1999, he continued, the share of ODA allocated to the rural sector had declined sharply, and the volume of ODA for agriculture had fallen by nearly 50 per cent. By Organization for Economic Cooperation and Development (OECD) estimates, ODA to agriculture now represented only about 8 per cent of the total. Did it make sense that 8 per cent of ODA went towards supporting the livelihood of three quarters of the poor? he asked. It had been stated that to achieve the Millennium Summit goals, current levels of ODA would need to be doubled. As three quarters of the poor were in rural areas, a comparable proportion of those resources should be channelled to the rural sector.
CAROL BELLAMY, Executive Director of the United Nations Children's Fund (UNICEF), urged developing countries to move strongly against poverty, including by mobilizing domestic resources and stamping out corruption wherever it was found. The developed world needed to formulate supporting policies on trade and investment and external debt. The work in Monterrey was of crucial importance, for the outcome would help determine the scale of the twenty-first century for children. The General Assembly would take up that subject on 8 May at its special session on children. Not since 1990 would the international community have a more promising opportunity to lay the groundwork for a world that was better fit for children, as contributors and beneficiaries.
She said that children were the engine of development and the future was theirs to inherit. The upcoming special session on children was a natural bridge between the Monterrey Conference and the World Summit on Sustainable Development. The economic benefits of investing in children had been substantially documented, and it was disappointing, therefore, that that had not appeared in the outcome text. After all, the physical, emotional and intellectual impairment that poverty inflicted on children could mean a lifetime of suffering and want, and a legacy for the next generation. The Convention on the Rights of the Child had committed States parties to ensure the survival, protection, and full development of every child.
Some 56 years ago, UNICEF had been entrusted with that goal on an emergency basis, yet, today, that emergency still existed, she said. Presently, hundreds of millions of children were suffering from extreme poverty and inequity, HIV/AIDS, natural disasters and terrorism, among other circumstances. Under age five, children were dying at rate of more than 11 million per year. Nearly 120 million children, some 60 per cent of them girls, had never seen the inside of a school, and more than 500,000 women of childbearing age died each year. The development question could be altered by shifting investments to favour the well-being of children. The involvement of all participants in the Conference was crucial to unlocking those necessary resources.
KLAUS TOEPFER, Executive Director of the United Nations Environment Programme (UNEP), noted that UNEP was headquartered in Nairobi and said it was important for an environment programme to be linked to the most toxic element in the world -- poverty. The fight against poverty was linked to the fight for the environment. Development was based on the three pillars of financial capital, good governance and environment capital. It was good that the environment had been integrated in the Millennium Declaration.
Economic development, social equity and environmental sustainability were inextricably linked, he said. For example, pollution of coastal waters was decreasing productivity and affecting developing countries. Climate change and energy were also issues that must be addressed in the development context. The consumption pattern of developed countries must be considered, and the finalization of the relevant conventions and protocols must be achieved. Supporting biodiversity, an asset of the developing world, was also key. An integrated approach to the challenges of financing for development was essential, he stressed.
CARLOS A. MAGARIÑOS, Director-General of the United Nations Industrial Development Organization (UNIDO), said that the development financing process was about connecting -- or reconnecting -- developing countries to globalized trade and investment flows. Taking seriously the commitment to halve the number of people living in absolute poverty by 2015 meant finding effective ways to facilitate that integration of developing countries into the world economy. UNIDO's integrated programmes, which had been formulated for nearly 50 countries, worked towards the same objective by combining policy advice, investment promotion and capacity-building focusing on competitiveness and development of productive capacity.
He said that mobilizing domestic resources and developing an enabling environment at the domestic level were of central importance. The global community's external contribution should centre on facilitating trade and promoting private sector investment and technology flows. UNIDO's contribution to development financing had focused, therefore, on developing the institutional infrastructure required for full participation in international trade and the promotion of private sector equity capital flows into developing economies. The UNDO approach to trade facilitation was consistent with its general strategy: to enhance export capacities and strengthen developing economies in a way that was compatible with social development and environmental protection -- the two other dimensions of sustainable development.
In order to fully participate in international trade, he said countries needed an institutional body to define standards -- a recognized system to test and certify products, an accreditation system to ensure that certification was checked and accepted globally, and a metrology system to ensure that all measures were correct. His approach to trade facilitation incorporated the following elements, among others: identifying what was needed to overcome challenges and develop appropriate programmes; implementing and rapidly establishing essential capacities and infrastructure, including at the subregional levels; and designing and implementing complementary programmes at the country level to develop productive capacities in sectors with high export potential.
THORAYA A. OBAID, Executive Director of the United Nations Population Fund (UNFPA), said that action to end poverty was more than a matter of mere survival. It was a matter of morality. It was simply unacceptable that one fifth of humanity commanded more than four fifths of the world's resources, while more than a billion people subsisted on a dollar a day.
Eight years ago in Cairo, she said, governments agreed to take a giant step forward and provide universal access to reproductive health services by the year 2015. They also agreed on goals in the area of infant and maternal mortality and on education. Governments also explicitly agreed on costs. So far, the Cairo goal of mobilizing $17 billion in 2000 for population activities had only resulted just over $11 billion in 2000. The developed countries had not reached 50 per cent of the required $5.7 billion in 2000, while the developing countries had reached about 80 per cent of the required $11.3 million in domestic funding.
Now was the time for developed countries to act on their commitments and raise development assistance in line with the Cairo agreement, she said. Commitments to fight poverty and inequality must be matched by resources. The decline in ODA must be reversed. Failure to meet agreed financial targets was derailing the achievement of international development goals, especially in the poorest countries.
SEIICHI KONDO, Deputy Secretary-General of the Organization for Economic Cooperation and Development (OECD), said that there was potentially enough capital, goods, knowledge and technology for the development of the whole world. The challenge was to overcome barriers and impediments to mobilizing those elements for developing countries in sufficient volumes needed to overcome persistent poverty.
He went on to cite four particular needs: first, to build capacity to mobilize and assemble those factors efficiently; second, to remove existing trade-distorting measures; and third, to strengthen policy coherence of development-related policies. While aid and development cooperation policies were important, they did not and could not operate in a vacuum. Official development assistance in the year 2000 totalled $50 billion. Developing countries' cumulative benefits from more open trade (from removal of barriers to access and from greater productivity), if realized, are estimated in the order of $500 billion. If the development, trade and investment policy communities were better able to link up their policies in mutually reinforcing ways, the contribution to development and to meeting the millennium development goals would be vastly superior.
A fourth need was to enhance partnerships among all stakeholders -- States, business, civil society and international organizations -- to ensure that progress could be made in mutually reinforcing ways.
The OECD, at its annual ministerial meeting in May, expected to set the broad lines of its future development agenda, he said. Key issues to be addressed included strengthening the development dimension of OECD work, and showing how it would contribute to capacity-building, improvements in OECD countries' own development-related policies and overall policy coherence for development.
VIJAY S. MAKHAN, Assistant Secretary-General of the Organization of African Unity (OAU), noted that 34 of the least developed countries were in Africa. Up to 50 per cent of the population lived in absolute poverty, and the infant mortality rate was extremely high. The growing ravages of deadly diseases, including malaria and tuberculosis, were on the increase, as was HIV/AIDS.
The deepening crisis in Africa was paradoxically occurring in a period of rising global productivity, he noted. Africa had, to a large extent, been excluded from the benefits of globalization. The global system must become more inclusive, and the Conference offered a unique opportunity to help it do so. Resolving obstacles in the contemporary context required action by Africans themselves, as well as by their development partners. A good policy environment had been put in place in most countries in the region, he noted. However, African efforts had not been sufficiently complemented by the international community. Rates of ODA and FDI had declined. That was part of why the Conference was so welcome by Africa -- it offered an opportunity to rectify the situation.
BYRON BLAKE, Assistant Secretary-General, Caribbean Community (CARICOM) Secretariat, said the Conference faced a monumental challenge -- it sought to address the critical issue of the means to development in a spirit of partnership. Development gaps were widening exponentially, and control over the means of development was becoming increasingly concentrated in a few countries, corporations and individuals. Critical gaps existed in human development, technology, knowledge and information, production and trade. Development required a narrowing of those gaps. The Conference must, therefore, identify and facilitate the organization of resources in a manner which would begin to close the gaps and raise the level of development.
One question to be asked was whether the Monterrey consensus identified and secured access to a level of resources for the majority of countries that could begin to address their development challenges, he said. He said CARICOM States were particularly vulnerable to volatility in export earnings and to natural disasters which often reduced the life of otherwise long-term infra-structural investments to less than five years, creating the need for repeated outlays. Yet those States were among small States which the international community considered not to be in need of any special categorization for development resources and were often candidates for graduation from the concessionary resources of the international financial institutions. This Conference must address those issues squarely. While the small States in the Caribbean recognized the need for international cooperation, they also acknowledged their own responsibility to address the challenges and constraints to their development, he added.
BISHAKHA MUKHERJEE, Chief Economist of the Commonwealth Secretariat, said Monterrey must make a difference. Globalization was a double-edged sword. Poor countries needed more globalization, not less. The more poor countries opened their economies, the more likely they were to grow rich. If globalization was to fulfil its promise, it must work for the benefit of the many, not the few. It must be more inclusive. Developing countries must have the capacity to seize the opportunities created by the global trade system and lift themselves out of poverty. For that to happen, everyone must play by the same rules. International trade rules were notoriously complex, but some imbalances were obvious enough. Trade barriers on manufactured products had been repeatedly lowered and now stood at an average of 4 per cent, while barriers for agricultural exports had remained very high: they averaged 40 per cent worldwide. Rich countries must open their markets to exports from developing countries -- they must level the playing field.
The Commonwealth had played a role in promoting awareness of the issues facing small States, she said. Experts had been provided to assist such States in international trade negotiations. The Commonwealth had also helped them to make their voices heard in international forums. Too few controlled too much, and too many had too little -- that must change. The world was increasingly interconnected. By improving the lives of the worst off, the prospects of the world community as a whole could be improved. Monterrey must generate concrete outcomes.
RIDHA BOUABID, Organisation Internationale de la Francophonie, said that the French-speaking community welcomed the fact that the preparatory work included international financial institutions, including the World Bank, the IMF and the WTO. Such an alliance was the only one that would allow the international community to reach the millennium development goals. It was important that developed countries take specific measures to ensure that 0.7 per cent of their gross national product (GNP) was devoted to help developing countries. It was imperative for developed countries to abide by the commitments they made at the Third United Nations Conference on Least Developed Countries.
It was necessary to ensure lasting financing for development, taking into account economic, social and environment goals, he said. The elimination of poverty was crucial in that regard. Since each country had the primary responsibility for its socio-economic development, there was a need for good governance. It was also necessary to ensure a favourable international economic environment, more equitable distribution of resources, the harmonization of international monetary, financial and trade institutions and increased ODA. It was necessary to cooperate with all organizations active in the economic sphere.
ROLF BOEHNKE, Managing Director of the Common Fund for Commodities, said the Conference was an important step towards addressing the imbalance in the current international economic system. All members of the international community had been brought together in partnership, he noted. The Conference provided an opportunity to achieve poverty alleviation and growth in developing countries, which were often dependent on commodities. More than 1 billion people depended on export commodities. Many developing countries were endowed with rich natural and human resources, which could be harnessed. Success stories of a number of countries affirmed that success could be achieved through the development of the commodities sector. The vast potential in resources must be unlocked.
Financing for development raised the challenge of providing sufficient external funds and ensuring that they were efficiently employed, he said. Among the issues to be addressed in the commodities sector were supply-side constraints and horizontal diversification. Technical assistance and capacity-building were also key in that context. The Fund had been established to provide financial support for commodity development and enhancing competitiveness. It aspired to play an innovative role and to be a catalyst for growth and would continue to cooperate with all relevant organizations.
BEATRIZ PAREDES, Latin American Parliament, stressed categorically that current financing strategies were not sufficient for widespread development and poverty reduction. She hoped the Conference would find common ground to find controls in the international financing system. Among other things, she proposed the establishment of mechanisms, which would include the representation of parliamentarians taking into account the role of legislators. Also, she proposed the establishment of measures allowing greater participation of developing countries in the decision-making processes of institutions, such as the World Bank and the IMF.
In addition, she proposed a zero rate of financing which could be combined with other forms of financing to promote the economic empowerment of women. It was necessary to ensure that international aid for development was stable and predictable. It was also important to promote the access of developing countries to capital markets. She proposed that the agenda of the Conference be accompanied by an agenda to move towards a fair and equitable global trading system.
ANNA TIBAIJUKA, Executive Director, United Nations Human Settlements Programme (UN-Habitat), said she was delighted to find in the draft outcome text much that supported her work in implementing the recent decisions of the General Assembly concerning human settlements development. The emphasis on poverty reduction and the goals and targets of the Millennium Declaration was particularly welcome. Achieving the Declaration's target with respect to slum dwellers, which now lay at the heart of UN-Habitat's activities, would require mobilization of significant amounts of financial resources, both domestic and international. That was precisely what UN-Habitat and the World Bank had started doing through their joint "Cities Alliance" programme.
She said that the Global Campaign for Secure Tenure, launched by UN-Habitat last year, was promising to be an effective entry point for slum upgrading, in particular, and for addressing issues of urban poverty reduction, in general. She was also pleased to note the inclusion of infrastructure development in several paragraphs of the draft consensus, as well as recognition of the need to create opportunities for development-oriented investment, including housing, as well as the need to reinforce national efforts in capacity-building, including in the area of mortgage finance. The emphasis on good governance at all levels throughout the text was also gratifying. The UN-Habitat would play its full part in keeping the development financing process in the human settlements agenda, as requested in the outcome text.
Its immediate focus, she said, was to strengthen its role as a significant global source of housing and infrastructure development finance, as well as enhancing investment in housing and strengthening of housing finance institutions. It would strive to upgrade slums and reduce urban poverty, focusing on improving the security of residential tenure among the urban poor. Finally, it would promote good urban governance, including improved mobilization of municipal financial resources through more effective land and property taxation, service charges and other local taxes and levies. She would also vigorously pursue partnerships among the public, private and non-governmental sectors in addressing all concerns.
MARIA LIVANOS CATTAUI, Secretary-General of the International Chamber of Commerce, reported on the International Business Forum. She said that the business sector had just held its forum, which could be summed up in one phrase, "let's move from words to action". To do so, participants put together concrete proposals to facilitate capital flows to developing countries. Each one had required partnerships with international organizations. Among the proposals was a call for a global information clearinghouse aimed at strengthening information and analytics in the global financial system, as an independent information initiative with a focus on bridging the costly gaps between investors and governments.
She highlighted indigenous domestic capital formation as the key to attracting foreign capital; micro-credit could serve a key role in start-ups. An omnibus venture capital fund, partly held by governments, was another proposal. It had been agreed that economic development required ongoing access to private sector capital. The Business Council had invited leading professionals in investment finance to present proposals for mechanisms, strategies and partnerships that included innovative methods of enhancing access to clean water, among others. There was a suggestion to create an independent advisory group to enhance access to debt markets and lower the cost of capital for developing countries. From the International Chamber of Commerce had come the joint project with UNCTAD for stimulating investment in the least developed countries.
LAURA FRADE, President of Alcadeco (Mexico), reported on the Civil Society Forum. She said the Monterrey consensus did not offer mechanisms to mobilize new financial resources to meet the Millennium Development Goals. For that reason, the organization's participating in the Global Forum were not part of the Monterrey consensus. The Forum's declaration was a review of the negative, economic, social and environmental impact of current neo-liberal policies.
The full enjoyment of human rights should be the objective of a new model for sustainable development, she said. The World Bank, IMF and the WTO should be accountable to the United Nations Commission on Human Rights. The framework of any financial support should include the principles of accountability and transparency. Trade was a means of development -- not an end in itself. Decision-making should be democratized so that Parliaments and Congresses could approve the decisions that were currently taken behind closed doors.
The debt of the countries of the South should be cancelled, she said.
She called for the immediate implementation of the fulfilment of the goal of
0.7 per cent for ODA. She also called for the end of speculative activities that negatively impacted on people. Foreign investment must not denationalize economies or destroy national heritages. There should be a universal minimum wage. Conservation of biological diversity and protection of internal markets were also essential. She called for a new stable global economic system. People must be placed at the centre of development.
NATIVIDAD GONZALEZ PARAS, Senator (Mexico), presented the report of the Parliamentarians Forum. He said that the great objective of nations was to eradicate poverty, create a more inclusive global economic system and reduce the gap between rich and poor countries. Structural reforms had helped to improve macroeconomic variables, but had not led to increasing standards of living or a greater generation of work. In fact, in many countries, public debt had increased, threatening political and economic stability. Globalization had meant that developing countries had lost their competitive advantage in light of the capital of developed nations.
The parliamentarians called for the establishment of efficient and equitable fiscal systems and public policies, which took into account diversity, supported vulnerable groups, supported national interest in public investment and combated corruption. Industrialized countries must increase their ODA, grant education the highest priority in combating poverty, and establish financial support to reduce external debt and establish a more transparent criteria for negotiating debt. Also, international trade must be transformed into a true engine for development. Parliamentarians had made the commitment to follow-up on the consensus and promote the recommendations of the Conference in their work.
FELIPE DE JESUS CANTU, Mayor of Monterrey, reported on the Local Authorities Forum. He said the Forum welcomed the comprehensive approach taken by the Conference and supported the development of international financial and commercial frameworks that would be, among other things, equitable and transparent. The Forum stressed the importance of debt relief for the poorest countries. The resultant funds could be, in part, channeled through local authorities.
The Forum participants considered poverty reduction one of their principal tasks and asked that the crucial role of local governments be recognized in the financing for development process. Local governments had a great ability to be catalysts for economic development. The institutional capacity of local governments must be strengthened, given the important role they had to play. He asked that the records of the Conference include the document approved by the Forum.
HARTWIG DE HEAN, speaking on behalf of the Director-General of the Food and Agriculture Organization (FAO), JACQUES DIOUF, stressed that agricultural productivity in developing countries must be increased, especially among small farmers, to bring about a massive and sustainable reduction in poverty and hunger. At the same time, steps must be taken to eliminate hunger to enable people to respond to employment opportunities and allow livelihood improvement through rural development. Achieving those aims would contribute to significant improvements in both individual and global well-being. Therefore, it was in the interest of all countries to take up the fight against hunger as a basis for the necessary progress in health and education to ensure economic and social development.
He welcomed the calls in the Monterrey consensus for substantial increases in ODA for rural development and food security. However, to ensure that the pledge would be adhered to, it was necessary to think beyond current modalities for resource mobilization. There were no easy answers and no shortcuts to development. The steps taken must be targeted, concrete, determined and swift. Access to food must be improved for those most in need by allowing them "to fish instead of receiving fish", so that they could participate in economic life and the development process.
JEAN-JACQUES GRAISSE, Deputy Executive Director of the World Food Programme (WFP), said that the Millennium Development Goals were far from being reached, as nearly 800 million people went hungry each day. For the WFP and its sister organizations in Rome -- FAO and IFAD -- the common message to the Conference was simple: reducing hunger and poverty in accordance with the Millennium Development Goals required a reversal of the downward trend in funding for rural and food aid development programmes. For the poorest of the poor, chronic hunger threatened their physical capacity to use their own labour to take advantage of development opportunities to escape the cycle of hunger and poverty.
He said that when it came to fighting hunger and rural poverty, it was a false debate to ask whether it was too little investment or too little development assistance. The truth was that both were needed. All must work together to obtain adequate resources. The WFP, FAO and IFAD favoured a two-track approach: direct action to target the hungry poor with immediate assistance; and long-term investment in pro-poor agricultural investment. They urged all participants to join them in supporting that approach. In terms of direct action to help the hungry poor, food aid was a small portion of total development aid, but that was still significant. One lesson from the Monterrey consensus was that no potential source of development financing should be ignored; the solution to past concerns was to make food aid better, not abandon it.
NOELEEN HEYZER, Executive Director of the United Nations Development Fund for Women (UNIFEM), said she had just returned from Afghanistan in an extraordinary consultation with Afghan women who were helping to rebuild their communities and country. Their task was enormous; the level of devastation and poverty was immense, but Afghan women were determined to show the world the need to break from "gender blindness" in the approach to development and resource allocation. Throughout the Conference, participants should be ever aware that the people with the most at stake in the economic and financial decisions made at the highest levels were often not at the table. "There is a terrible cost to their exclusion", she added.
The Conference could make a difference if it reflected gender equality as a "core" development goal, she said. It should provide the financial framework to back the Millennium Declaration's "resolve to promote gender equality and the empowerment of women as effective ways to combat poverty, hunger and disease and to stimulate development that is truly sustainable". Gender inequalities inhibited a country's development by imposing a high cost on a nation's quality of living, resulting from constrained productivity, effectiveness and progress. Any meaningful development required the removal of major sources of "unfreedom", including institutional arrangements that denied people the means of expanding their opportunities and increasing their capabilities.
She highlighted the priority outcomes for women, as follows: improving women's skills and expanding their access to and control over productive resources; reassessing benefits and costs resulting from domestic and international policies; and increasing participation in economic decision-making. Women affirmed the Conference's support for gender budget analyses, and also affirmed that ODA was a powerful tool to promote sustainable development, gender equality and human rights. Women were also calling for a "rethinking" of the conditions for trade and foreign investment as a contribution to development goals. Women asked that debt cancellation for highly indebted poor countries proceed with human development as a precondition for development, and gender equality as a central component of human development.
JOHN LANGMORE, International Labour Organization (ILO), said one of the central facts that justified the Conference was that the financial flows required for broad-based and equitable development in the global economy were not being adequately generated. That was true of both ODA and private flows such as foreign direct investment (FDI), portfolio investments and export earnings. Wealth and resources remained concentrated in the richest countries, and many developing countries remained trapped in poverty and exclusion, being further marginalized from the global economy. Globalization's opportunities must be shared and used much more effectively to deal with the growing problems of poverty, insecurity and exclusion.
One of the significant achievements of Monterrey would be the mobilization of international action to create mechanisms to generate increased and more widely shared flows of development finance, he said. There was an urgent need to strengthen global capacity to promote social objectives alongside economic ones. "We need dialogue, consensus and partnership for globalization to deliver what working people and their families everywhere aspire to -- a decent job, security and a voice in the decision-making process", he said. The ILO, with its unique tripartite structure bringing together employers, workers and governments, could contribute to building bridges and to the collective and coherent action required to meet the urgent goal of making adequate financing for the developmental needs of all countries a reality.
ANDREW CASSELS, Director of Strategy, Office of the Director-General, World Health Organization (WHO), said that health, particularly that of poor people, were crucial to the achievement of the Millennium Development Goals. It was now known that better health was not just the outcome of economic development and poverty reduction, but also a means of achieving them. The health sector had long been under-funded. The potential pay-off for increased investment in better health was enormous -- 8 million lives saved.
The experience from the health sector offered lessons for other areas of development, he said. First, it was necessary to set verifiable goals and to then determine estimates for achieving those goals. Also, performance must be measured very closely. In addition, it was necessary to coordinate aid from all donors so that receiving governments could make one consolidated report to donors instead of hundreds to various donors. Further, developing countries should devote an additional 1 per cent of gross domestic product (GDP) to the health sector. However, even then, the gap between what was happening and what should happen would still persist. Global funding mechanisms, such as the Global Fund for HIV/AIDS and the Global Vaccine Initiative, had focused the debate on priorities.
MARIKA FALHEN, Director of the Global Programme on HIV/AIDS, said it was heartening that the Monterrey consensus was taking steps towards creating an equitable global economic system. However, none of the goals could be achieved without taking steps to address HIV/AIDS. The disease cut across national frontiers, social and gender divides. Epidemics usually arrived, devastated and disappeared, but this was an epidemic without a remedy. In the declaration of commitment on HIV/AIDS at last year's United Nations summit on HIV/AIDS, Member States had recognized that the epidemic constituted a global emergency that undermined socio-economic development throughout the world.
More than 60 million people had been infected by the disease, she said. It was the worst epidemic in human history, with more than 13 million children orphaned because of it. It continued to move rapidly -- over 5 million people had become infected with HIV in 2001, and 3 million had died during the year. It was the leading cause of death in sub-Saharan Africa and the fourth biggest killer in the world. Business coalitions, the United Nations Conference on Least Developed Countries and the OAU Summit were among the venues that had taken up HIV/AIDS.
She said per capita GDP growth might fall by as much as 8 per cent in some of the hardest hit countries by 2010. Agriculture suffered greatly because of the disease. Education was one of the worst-hit sectors. Innovative responses and financial mechanisms with the engagement of a much broader range of actors were needed. Such efforts could help turn the tide. She hoped the outcome of the Monterrey consensus would confirm such a commitment. Poverty bred the disease and the disease deepened poverty, she noted. The flow of ODA must be increased to help in the fight. AIDS was on track to single-handedly wipe out 50 years of development gains in some developing countries, she noted. Concerted action by a range of partners was needed.