Ms. Heidemarie Wieczorek-Zeul (MP)
Federal Minister for Economic Cooperation and Development

at the International Conference on Financing for Development

Monterrey, Mexico
18th-22th March 2002

First of all, I.thank our host, the Mexican Government for having provided a platform for constructive debates and for having organized this conference so skillfully.

Six months after the atrocious terrorist acts of September 11, we, the delegates from around the world have met at a time when the world is confronted with huge challenges. Our debate has to focus on how to shape globalization to serve the people and especially the poor - and thus to secure peace and stability.

The world is at a crossroads. The alternatives are either to build on progress achieved in many regions towards a more just world order - or a "world disorder" of violence and war, of terror and misery. This year offers a unique chance for making headway on fulfilling the Millennium Development Goals, here in Monterrey and later on in Johannesburg. Let us take steps towards a better world.

The challenges of eradicating poverty, shaping globalization, and securing peace demand a true partnership with shared responsibility.

Partnership requires a better representation of developing countries in international economic and political decision making processes and fairer trade rules. All selfprivileging elements which the world trade system contains need to be dismantled. Asking developing countries to further liberalize their economies is only legitimate if the industrial countries themselves refrain from applying double standards to the disadvantage of developing countries.

With free access to the market for products from the least developed countries under the "Everything-But-Arms" initiative last year, the European Union set a positive example.

Germany advocates moving forward with the "Doha Development Agenda". The Doha Declaration provides for a substantial reduction in trade distortions and the phasing out of all forms of export subsidies for agricultural products. This should be achieved as speedily as possible. Subsidizing agricultural products at the current levels runs counter to our development goals and lacks justification.

Economic globalization has outpaced political globalization. In my view the establishment of a high level Global Council is a worthwhile proposal to overcome the current inadequate representation of developing countries in international fora. Such a Global Council could discuss major economic and financial issues and chart out coherent political strategies.

This proposal made in the Zedillo Report will remain high on the political agenda.

Ladies and Gentlemen,
The financial resources available for development are too low by far to reach the Millennium Development Goals. The Monterrey Consensus sets out ways and means of mobilizing funds from private and public, as well as from national and international sources. Trade and investment are crucial for development financing. However, especially for the least developed countries and countries only marginally integrated in the world trade system, increased Official Development Assistance is indispensable.

An additional amount of some 50 billion US $ in ODA each year is needed to halve the number of people living in absolute poverty. The Member States of the European Union just committed themselves to reach an average of 0.39 percent of ODA as a proportion of its Gross National Income by 2006. It is a concrete step towards achieving the 0.7% target, to which the German government is also firmly committed. Further steps will have to follow within the foreseeable future. The European Union's decision will translate into an increase of the annual amount of ODA from currently 25 billion US $ to 32 billion US $ in 2006, an additional 7 billion US $.

In view of the enormous demand for financial resources, an open and transparent discussion on innovative sources of financing and global public goods is necessary, as outlined in the Monterry Consensus.

In this context, the German Development Ministry has presented a feasibility study on a tax on foreign exchange transactions. The study shows how such a tax could work in practice. Developing countries would benefit through reduced volatility of financial flows and more stable financial markets. Speculative transactions could be fought off.

In addition, the tax would generate significant resources to be used for development purposes.

Ladies and Gentlemen,
The Monterrey Consensus has been criticized by some stakeholders. However, I am of the view that the Monterrey Consensus contains a comprehensive agenda of policies for financing sustainable development. If the proposals are fully . implemented, substantially more resources can be mobilized for development. Presently, huge amounts of funds are often mobilized for military actions without delay. Why should this not be possible in fighting the world's greatest enemy, absolute poverty? It must be achieved. Only partnerships for global development will guarantee common security in the 21St century.

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