Mr. Carlos Magariños

at the 
International Conference on Financing for Development

Monterrey, Mexico 
18th March 2002

It gives me great pleasure to have the opportunity to address this gathering today. I will use the minutes available for me and the United Nations Industrial DevelopmentOrganization (UNIDO) to inform you about our contribution to financing for development. The financing for development process has merit as one of the most focused international exercises to date with regard to the pre-eminent issue of our time: globalization and its unevenly spread benefits. 

Various aspects of globalization – such as fair and open trading rules, cross-border flows of investment capital and information technology – could offer avenues towards eradicating poverty and bolstering prosperity in the developing countries. So far, however, they have led to an enhanced marginalization of large numbers of people of an entire continent. In addition, runaway financial volatility jeopardizes economic well-being and political stability around the globe.

In my view, the financing for development process is about connecting or reconnecting developing countries to globalized trade and investment flows. This can only be done by helping productivity improvements in the developing world. If we want to take seriously the commitments of the Millenium Declaration of cutting in half, by 2015, the number of people living in absolute poverty, it is essential that we find effective ways to facilitate this integration of developing countries into the world economy. This is the way we see the role of industry and sustainable industrial development in the twenty-first century. That is why UNIDO´s integrated programs – formulated for almost 50 countries - work towards the same objective by combining policy advice, investment promotion and capacity-building that focuses on competitiveness and development of productive capacity.

Mobilizing domestic resources and developing an enabling environment at the domestic level are obviously of central importance. The international community’s external contribution, in our view, has to centre on facilitating trade and promoting private sector investment as well as technology flows.

Our contribution to financing for development has therefore focused on developing the institutional infrastructure required for full participation in international trade and on promoting private sector equity capital flows into developing economies. 

At a side event tomorrow afternoon – to which I would like to invite you very cordially – we will explore our trade-related initiative in more detail. Tomorrow morning, during roundtable A1, I will present UNIDO’s model of cooperating with private sector equity investors to make it easier for them to invest in small- and medium-scale enterprises in developing countries. Because the shortage of equity is most serious in Africa, we are initially focussing this initiative on that continent.

Let me take a few moments to explain our trade-related initiative. In order to fully participate in international trade, countries need the necessary physical and institutional infrastructure and capacity to satisfy the technical requirements of the global trading system. This includes an institutional body to define standards, a recognized system to test and certify products, an accreditation system to ensure that testing and certification activities are checked and accepted internationally and a metrology system to ensure that all tests and measurements are correct. Further, to inform actual and potential exporters of requirements and help them meet these, technical support and information services need to be available.

As part of the capacity-building in developing countries it is a also important to ensure that they can participate actively in the international organizations working in standards, accreditation, metrology and other fields. Currently such organizations mainly work as clubs of developed country specialists.

The UNIDO approach to trade facilitation is consistent with UNIDO’s general strategy: to enhance export capacities and hence strengthen the economy of developing countries in a way compatible with social development and environmental protection, the two other dimensions of sustainable development. 

In order to considerably increase the volume of our activities in this important area, we have decided to create a trust fund and make available an initial amount of $1 million from UNIDO’s own resources. We are confident as we were informed that the first donors will come forward during this conference to announce contributions to this trust fund. I would also like to report that this initiative is fully in line with the efforts undertaken around the United Nations system, and this is probably one of the first examples I can report of programmatic coordination of the High-Level Committee on Programmes that I have the honour to chair, which was recently established by the Secretary-General to enhance coordination throughout the United Nations system.

My organization, UNIDO, contributed actively to the financing for development preparatory process. We are gratified that the delegates consider that the Monterrey Consensus should contain a strong recognition of the importance of overcoming supply-side constraints and promoting developing countries’ productive capacities, in particular in the manufacturing sector, so that developing countries become able to produce products that are competitive in globalized markets.

There are a number of remarkable features about this conference. It has been initiated by developing countries and emphasizes the great importance of the policies and governance of the countries themselves. It reaffirms the role of the United Nations in macroeconomic and financial matters. It recognizes that it is high time to reassess the scope of development cooperation vis-à-vis international trade and investment flows. Finally, Monterrey is an important building block of the international community´s endeavours to forge a consensus on what is necessary to implement the Millenium Declaration Goals. These endeavours have yielded an important result already at Doha and will hopefully culminate in a renewed political resolve at Johannesburg.

That the financing for development process was able to mobilize, in addition to Governments, many of the other important stakeholders - in particular the international financial institutions, but also the private sector - makes me hope that the many side events and encounters will generate concrete cooperation activities above and beyond what is contained in the Monterrey Consensus.

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

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