Mr. Bosse Ringholm
Minister of Finance

at the
International Conference on Financing for Development

Monterrey, Mexico
21st. March, 2002

Ladies and Gentlemen,

It is a pleasure for me to address you here in Monterrey. This gathering is a unique opportunity to take steps toward the goal of reducing poverty by half by the year 2015.

Raised living standards in developing countries presupposes more equitable economic conditions both domestically and internationally. The main responsibility for the mobilisation of resources for development rests with the developing countries themselves.

The key to stability and growth, and to reduce poverty, is sound and predictable macroeconomic and structural policies. I am encouraged by the commitment to domestic resource mobilisation contained in the Monterrey Consensus. This commitment must be mirrored by a commitment from us in the rich countries.

The problem in the world today is not that there is too much economic integration. On the contrary, many parts of the world participate too little in international trade and investments. The global economy still does not involve all. Globalisation must be more global and more pro poor.

We need more trade and less subsidies and tariffs. A great contribution that we can make to the economic development of our partner countries is to eliminate tariffs on their exports. Also, we must abolish trade-distorting subsidies that disadvantage poorer countries. Further trade liberalisation is also needed between developing countries themselves. The European Union's Common Agricultural Policy should be reformed in ways that benefit developing countries.

We also need to strengthen the international cooperation in areas of particular significance for resource mobilisation. One important example is improved coordination of our efforts to deal with harmful tax practices.

Rich countries should take their responsibility and increase ODA. I urge all donors, individually and collectively, to set timetables for attaining an ODA volume of 0.7 per cent of GNP well in advance of 2015. An intermediate target for all countries should be to reach at least the 0.33 level by 2006. European leaders in Barcelona have already stood up to this challenge. By 2006 EU's joint ODA will reach 0.39% to GNP, delivering an additional 7 billion USD a year. This will accumulate to 20 billion USD over the next couple of years. Sweden has for a long period of time been a member of the far too exclusive 0.7 group. Still we have set an ambitious target for ourselves - to reach the 1 % level. Furthermore, donors should, in order to make ODA more effective, step up work on harmonisation of procedures and further untying of aid.

Developing countries must be empowered! By focusing more on supporting capacity building, developing countries will be able to effectively utilise and mobilise resources. Furthermore, we must support developing countries to participate in and reap the benefits of globalisation in general. We must strengthen their voices at the negotiating tables.

Support for capacity building is needed in several areas. Let me mention four areas where Sweden is ready to support poor countries efforts to create an enabling environment for development:

Firstly, Many developing countries, and in particular the poorest, need trade related support for capacity building in order to be able to take part in and influence the WTO work to their benefit. We also need to support poor countries to develop their productive capacity, eliminate supply side constraints, and build institutions that are necessary for a well functioning trade.

Secondly, capacity building support in public finance management is crucial to our efforts to implement the Monterrey Consensus. Strong public expenditure management is key to mobilizing and using domestic resources efficiently. It is the basis for implementing sound pro poor macro economic policies. It is also key to utilizing resources freed by debt cancellation under the HIPC Initiative. If donors are to shift to more general budget support we must be comfortable with the quality of and effectiveness of the public expenditure system.

I am happy to announce that Sweden and the World Bank this morning signed an agreement for a capacity building programme for Public Expenditure Management for the African countries that participate in the HIPC initiative.

Thirdly, building the capacity for macroeconomic management is a key component to reduce poverty. I strongly welcome the recent launching of the IMF Africa Capacity Building Initiative.

Fourthly, capacity building is also crucial in debt management. The Monterrey Document correctly underlines the importance for all heavily indebted countries of attaining a sustainable external debt. We must also focus on debt management. Sound management of debt service payments and new borrowing can go a long way in securing resources for development.

We are prepared to go further in all these areas. We urge others to make similar commitments.

Mr. Chairman, I would like to point to another area in which I believe that we must make urgent progress. Important studies have recently been carried out on global public goods such as the environment and control of infectious diseases. A global public goods Task Force should be set up to provide suggestions on definitions and priorities, and provide recommendations for action. Sweden and France are willing to lead the work together with partners as an outcome of this Conference.

With strong political leadership, I am convinced that we will be able to grasp the existing momentum. The best way to start is to implement what we have agreed upon here in Monterrey and involve all stakeholders. Member countries must also ensure that their policies in different fields are mutually reinforcing.

The goal of the Millennium Declaration, to reduce poverty by half by the year 2015, requires immediate action. Our task is truly challenging but not unrealistic. I am convinced that this conference will serve as a good starting point for our renewed efforts which are essential for a more equitable global economy.

Thank You.

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