His Excellency Mr. Miguel Ángel Rodriguez Echeverria
President of the Republic of Costa Rica

at the 
International Conference on Financing for Development

Monterrey, Mexico 
21st March 2002

Proceeding from the commitment achieved at the Millennium Summit that this will be the century of development of All and, trusting in our own promises to reduce extreme poverty by half by 2015, we Heads of State and Government from all corners of the world have come to this Conference to take a decisive step in that direction in the search for solutions to national and international problems of Financing for Development. The countries of the Rio Group recognize that in the task of raising the quality of life of our peoples and families nothing can take the place of responsible work done within each country. Strengthening democracy and the rule of law, fiscal and monetary discipline, rational use of natural resources and investment in infrastructure and human capital in a setting of freedom, healthy competition, responsibility and solidarity. This is the agenda that must be pursued by responsible Governments in their fight against poverty and the vicious circle that engenders it.

Although that is the first and most important step, it is not, nor will it be, sufficient if it is not accompanied by opportunities afforded by the opening up of markets and financial support for the creation of capacities of human development for our people. We view with concern how export subsidies damage the competitiveness of developing countries, as we were reminded by Peru this morning, and increasingly impoverishes them by forcing them to compete with artificially low prices. We view with concern how tariffs subject to the exports of the poorest countries are, according to World Bank data, virtually twice those which are applied on average to the rest of the nations of the world.

The countries of the Rio Group will redouble their efforts so that the final results of the Doha Agenda, with the launching of this large round of multilateral trade negotiations, may recognize the interest of the developing countries, especially with regard to    important areas of this agricultural trade and labour-intensive goods.

So that our entry into the world economy will be full-fledged and truly profitable for our families, we must ensure that capital flows freely and transparently in search of the best opportunities for investment under optimal regulations and machinery for crisis prevention in such a way as to give greater vigour to production, employment and the well-being that we are seeking.

However, the Latin American region has been prepared in recent years, according to ECLAC, to face fluctuating external flows of financing and it has faced unequal access to capital markets, foreign direct investment and resources with which to prevent systemic crises.

Insufficient levels of official development assistance have limited the development of projects having a high social benefit in countries that face pressing needs. Given this picture, reactivating official development assistance has become vital. Successful experience has shown that when a company invests sufficiently in a sustained and effective manner in universal education, health, basic services and humanitarian    programmes, one can break the vicious circle of poverty, and the means can be generated to continue advancing on one’s own footing.

We therefore look with gratitude and optimism upon the recent decisions of the European Union and the United States. It is the task of all to unleash a virtuous circle in developing countries. The rich countries must provide at least the agreed level of financial support, as well as opportunities for growth through the opening of markets. The poor and developing countries must continue doing things right internally, with a sense of responsibility and making use of financial assistance efficiently and equitably in areas that generate capacities for human development and families.

Forgiveness of external debt to highly indebted poor countries would be another show of international solidarity that would release resources for development. However, that initiative should be assumed primarily by the developed countries without affecting small poor countries that are creditors of the recipient countries, because forgiveness of debt, which for a rich country can be easily absorbed, can do major damage to a poor country like Costa Rica.

In the present situation, without our participation in decisions, Costa Rica has been asked to accept a loan agreement that would amount to $101 per person, whereas England and the United States agreed to $5.30 and $7.70 per dollar respectively. That would be unacceptable and highly prejudicial. This inequity in the international financial structure is one that must be promptly corrected. We believe that a system of emergency loans entrusted to the World Bank would resolve many of the liquidity difficulties faced by small countries during periods of international crisis. At the time of an international crisis, which they do not provoke, they then find that they neither have access to the personnel at financial institutions nor to the resources that have already been used. We might also have a system of guarantees by the World Bank and the regional development banks for the issuance of bonds with adequate monetary policies in order to guarantee in those circumstances better resources under better conditions. Through creating a fund with small resources from the International Monetary Fund, central banks could have immediate access with which to face crises of confidence affecting their currencies.

When we speak of opportunities for support, resources and the international financial structure, we are speaking of necessary conditions, so that between us all we can put an end to misery and overcome the crisis of hunger, lack of education and disease that         our countries. In this regard, our generation, as Jeffrey Sachs, the well-known economist, has said, could liberate mankind from the shackles of poverty. The rich countries could ensure that the poorest of the poor could escape poverty, only by providing a very small fraction of their annual income or even their military expenditure to overcome the crisis of hunger, education and disease. That aid, combined with market-based economic growth, could put an end to extreme poverty.

Allow me to conclude with a very personal comment. In a few days, the mandate with which I have been honoured by Costa Rican democracy will come to an end. In my four years of Government I have been able to participate in the Millennium Summit, in summits dealing with the opening of trade, poverty, growth and unemployment. Here in Monterrey, thanks to the warm welcome of our Mexican brothers, we are now endorsing a technically correct policy declaration. But the Food and Agriculture Organization tells us that we are not moving ahead quickly enough towards the goal established in 1996 to reduce the number of hungry families by half by 2015. The Secretary-General tells us that with present levels of development aid and efforts by the developing countries, we will not in 2015 reach the goals of the Millennium Summit. Rich and poor countries know well what we must do in order to attain human development. Moreover, since 11 September we are living in a world without walls. It is clear that we are all morally responsible for the well-being of all and that we must be concerned about the conditions under which all others live. 

We face political problems in our democracies that sometimes are due to the wrong focus of information given to our citizens and shortsighted interests and dictatorships where power is corruptly exercised. We must mobilize public opinion in every nation in favour of economic rationality, personal responsibility and social solidarity, nationally and internationally. Achieving that is the key to human development. Let us assume our commitments as political leaders. Let us commit our lives to making it politically possible to fulfil our moral obligation: change for human development. If this summit is a beginning in making those changes, we will have successfully launched the Monterrey Consensus and spirit referred to this morning by President Fox.

* The text of this statement has been transcribed from audio recordings as the original was not submitted to the Secretariat.

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