His Excellency Mr. Alfredo Mantica
Vice-Minister for Foreign Affairs, the Italian Republic

at the 
International Conference on Financing for Development

Monterrey, Mexico 
22nd March 2002

The slow-down in world economic growth observed in 2001 and the impact of the tragic events of 11 September have had negative repercussions on pursuit of the objectives of the Millennium Declaration. What we need to do today is to find innovative and more effective forms of resource mobilization in order to address the situation of the poorest countries, and in particular certain regions such as sub-Saharan Africa. At the same time, we reaffirm the close link that exists between peace, democracy and combating poverty. Italy regards diplomatic action and maintenance of peace of peace as interrelated with development cooperation. This is fully in keeping with the proposal of a Marshall Plan for Palestine.

The Group of Eight (G-8) Summit in Genoa underscores the importance of an integrated strategy on the part of the international community to stimulate economic growth, which will be more robust and eliminate poverty in developing countries. The support given to the New Partnership for Africa’s Development initiative (NEPAD), which was strongly boosted at Genoa by the launching of an African plan of action, is an example of partnership in which Italy will be playing a leading role. 

Here at Monterrey every institutional private actor is called upon to define its commitment in the context of a common vision. We must first of all ensure that donor countries increase official development assistance. The Italian Government, in keeping with the decisions of the Council of the European Union in Goteborg and Laeken, intends to pursue the objective of 0.7 percent of gross national product by means of the progressive increase in the assistance agreed at the European Union Council meeting in Barcelona as described by Prime Minister Aznar on behalf of the European Union. 

By the same logic, we need to work to foster the growth of the private sector. Italian cooperation can draw on solid experience in support of small- and medium-sized enterprises in developing countries. In rural areas, the spread of microcredit schemes becomes of key importance in stimulating the emergence of the informal economy. A solid private sector is essential in order to stimulate sustainable development. It is a decisive factor in making it possible to take full advantage of the opportunities of the process of the internationalization of production and services.

As far as debt write-off is concerned, the Italian Government takes the view that something more and something better could be done. The creditor countries as well as the debtor countries must do everything necessary to achieve the targets set by the enhanced initiative of the Heavily Indebted Poor Countries (HIPC). The debtor countries that are undergoing conflict should arrive at a peaceful settlement of their disputes. Those that have not yet reached the decision point should rapidly draw up efficient and lasting policies, improve governance, bolster initiatives related to productivity and growth and work together with civil society to prepare the poverty reduction strategy papers.

Creditor countries accordingly should uphold their commitments with regard to debt write-off. In this respect, Italy has adopted provisions for the poorest and highly indebted countries, which will enable it to go beyond the agreements concluded on the multilateral level and write off all these loans. Italy could furthermore sign debt conversion agreements concerning assistance, loans and programmes that have a social and environmental impact. We therefore call on all creditor countries to do their utmost on a bilateral level so as to fully realize the goal of ridding all these countries of the burden of debt once and for all. 

The Italian Government is also pursuing new forms of resource mobilization in order to increase flows of assistance and at the same time bolster the support of public opinion for international solidarity. In this regard, I would note the proposal of the Italian Ministry of the Economy for an innovative mechanism called ‘de-tax’, which would allocate resources to the financing of African initiatives in support of development projects or programmes. This de-tax system is based on voluntary decisions of consumers and commercial circles to devote one per cent of the value of purchases to development projects. While the State at the same time undertakes to exempt such contributions from direct and indirect taxation, the new element in this mechanism is the fact that it involves the private sector on a completely basis. By contrast with other kinds of international taxation that have been proposed, de-tax does not require any multilateral approach, because it can in fact be introduced individually by any country wishing to do so.

Technological innovation must also play a key role. Through appropriate initiatives, it is possible not only to narrow the digital divide, which is likely otherwise to exclude two thirds of humanity from progress, but also to take advantage of the opportunities offered by e-government. For this reason, Italy, in cooperation with the United Nations, will be organizing an international conference at Palermo on 10 and 11 April to promote the use of computer technologies to enhance efficiency and transparency in the administrations of developing countries and in general to bolster participatory and democratic structures. 

In order to support the development of the poorest countries, it is not enough to raise the level of resources. We must also raise the level of the quality and efficiency of that assistance. Without respect for human rights, the rule of law and good governance, the Millennium Declaration goals will not be achieved. These are universal principles and not a Eurocentric approach. It is incumbent on the Governments of developing countries to create an economic and institutional context capable of encouraging growth, the efficient use of assistance and attracting private investment. According to a recent World Bank study, countries applying appropriate policies have a growth rate in foreign investment approximately ten times that of those adopting less sound policies. Moreover, democracy is the best way of preventing conflicts. Approximately 90 per cent of current conflicts arise within States where there is a lack of democratic structures. 

The Monterrey Consensus document, which we fully endorse, falls within the approach of a new partnership among industrialized and developing countries, United Nations agencies, international financial institutions, the private sector and civil society. It sets out to strengthen the coherence of the policies that influence the development of the countries concerned.

Official development assistance is increasingly a catalyst in qualitative terms, rather than in quantitative terms. We need to concentrate our action to a greater extent on areas such as reform of the finance and banking sector of developing countries, the debt write-off process and market openness. In this respect, the new trading round launched by the Doha conference should lead to extensive and balanced negotiations to bring about a growing liberalization of markets, with specific measures designed to give access to developing countries. Italy, together with its partners in the European Union is ready to make available the financial and human resources of its own countries’ system in order to give effect to the conclusions of this Conference. In order to speed up our advance towards equitable development, Monterrey sends three clear messages: strengthen commitment; enhance coherence; and heighten the capacity for innovation.

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

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