ECOSOC MEETS WITH BRETTON WOODS INSTITUTIONS, WORLD TRADE ORGANIZATION; AIMS AT ‘POLICY COHERENCE’ IN IMPLEMENTING MONTERREY COMMITMENTS
ECOSOC MEETS WITH BRETTON WOODS INSTITUTIONS, WORLD TRADE ORGANIZATION; AIMS AT ‘POLICY COHERENCE’ IN IMPLEMENTING MONTERREY COMMITMENTS
Economic and Social Council
Special High-Level Meeting
7th & 8th Meetings (AM & PM)
ECOSOC MEETS WITH BRETTON WOODS INSTITUTIONS, WORLD TRADE ORGANIZATION;
AIMS AT ‘POLICY COHERENCE’ IN IMPLEMENTING MONTERREY COMMITMENTS
Secretary-General Says UN Natural Home for Needed
Discussion among Governments, Institutions on How They Can Work Together
As the United Nations Economic and Social Council convened its special high-level meeting with the Bretton Woods institutions and the World Trade Organization today, Secretary-General Kofi Annan told the gathering that the annual discussions had contributed to a large degree of convergence in thinking about the world’s problems and the required solutions, and today’s meeting was setting off in a new direction -– aimed at “policy coherence”.
In a speech read on his behalf by Deputy Secretary-General Louise Fréchette, he said such coherence would determine how governments, institutions and non-governmental participants could best pull together the many distinct strands of economic policy into a clear framework for action to promote development; and how they could work together, rather than against each other, in fulfilling the commitments made at last year’s Monterrey International Conference on Financing for Development.
At Monterrey, he recalled, heads of State and government, as well as senior officials, had pledged to stay engaged and to use the United Nations as a forum for dialogue. The Monterrey Consensus had identified a major gap in global governance: there was no convenient way for the key specialized multilateral institutions in the fields of monetary, financial, trade and development issues to explore ways to work with each other and reinforce each other’s actions. The United Nations was the natural home for that discussion, and today’s meeting was an attempt to provide precisely such an opportunity.
Today’s meeting was convened as an opportunity to take stock and maintain the political momentum for implementing the agreements reached at Monterrey, Mexico, in March 2001. Briefing reporters on Friday, Nitin Desai, Under-Secretary-General for Economic and Social Affairs, described the meeting as a formally mandated part of the follow-up to the Conference and part of the General Assembly decisions on how to follow up on Monterrey.
Economic and Social Council President Gert Rosenthal (Guatemala) highlighted the exceptional nature of today’s gathering, noting that unlike the Council’s previous meetings with the Bretton Woods institutions, today was the first time
the stakeholders were gathered in response to the specific mandates contained in the Monterrey Consensus. The main participating multilateral organizations were present, represented at both the intergovernmental and management levels. He especially welcomed the presence of the World Trade Organization (WTO), which was attending for the first time as a full member.
Describing the meeting’s purpose as a means to stay engaged in order to secure the full implementation of the Monterrey Consensus, he recalled that during the preparatory process for the Conference, and the Conference itself, progress had been made in building bridges at all levels. Today’s meeting would seek to build on initiatives to develop international financial monetary committees, aimed at advancing implementation of the Monterrey Consensus. He hoped today’s meeting would clarify means for mutual reinforcement in implementing the Monterrey Consensus and attaining the Millennium Development Goals.
General Assembly President Jan Kavan (Czech Republic) said that building a community of cooperation was at the heart of Monterrey’s success. The Assembly had been dealing with the issue of how the work of the United Nations at all levels supported the implementation of all conference outcomes, including Monterrey. Over the past decade, numerous United Nations conferences and summits had clarified and set development goals and now the Organization must prove its effectiveness in mobilizing political will for their implementation. There was an urgent need to set up the most effective mechanisms for monitoring and reviewing such progress, he said.
The meeting heard reports on some of the meetings of the Bretton Woods institutions that were held in Washington, D.C., over the weekend. Trevor Manuel, Minister of Finance of South Africa, reported on proceedings in the meeting of the Development Committee [a joint ministerial body of the boards of governors of the World Bank and the International Monetary Fund (IMF)], which he chairs, and Fouad Siniora, Minister of Finance of Lebanon, delivered a report on the meeting of the Group of 24 developing countries concerned with trade, finance and development policy issues.
Also addressing the meeting were Heidemarie Wieczorek-Zeul, Minister for Economic Cooperation and Development of Germany; Mary Whelan, Chair of the Trade Policy Review Body of the WTO; Eduardo Aninat, Deputy Managing Director of the IMF; Zhengman Zhang, Managing Director of the World Bank Group; and Francisco Thompson-Flores, Deputy Director-General of the WTO.
Following the morning plenary session, the meeting broke up into four round tables, the first of which was co-chaired by Mr. Manuel and Ms. Fréchette, and the second by Hilde Frafjord Johnson, Minister for International Development of Norway, and Mr. Thompson-Flores. Ms. Whelan and Mr. Zhang co-chaired the third round table, while Fathallah Oualalou, Minister of Finance of Morocco, and
Mr. Aninat co-chaired the fourth.
In the afternoon session, the co-chairs of the respective round tables reported on their discussions before the meeting held a dialogue among intergovernmental and institutional participants.
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Other speakers this afternoon included the representatives of Morocco (on behalf of the “Group of 77” developing countries and China); Greece (on behalf of the European Union and associated States), Andorra, Mexico, Finland, Peru, Portugal, Brazil, United States, United Kingdom, and Argentina. The observer for the Holy See also made a statement.
Also participating in the afternoon discussion were the Dean of the World Bank’s Executive Board; representatives of Commonwealth Secretariat, the Business Council of the United Nations, the United Nations Industrial Development Organization, the International Labour Organization (ILO); and representatives of non-governmental organizations.
The Economic and Social Council (ECOSOC) met today in a special high-level meeting with the Bretton Woods institutions and the World Trade Organization (WTO) to consider implementation of the Monterrey Consensus of the International Conference on Financing for Development, one year later. The meeting will bring the ECOSOC and the Bretton Woods institutions together in the first major public occasion to review the implementation of agreements reached at last year’s Conference.
Nitin Desai, Under-Secretary-General for Economic and Social Affairs, briefing correspondents on Friday, said that the meeting’s primary purpose was to take stock and to maintain the political momentum for implementing what had come out of the Conference. Previous meetings between the Council and the Bretton Woods institutions had been held over the past three years on an essentially ad hoc basis, and served more as a familiarization exercise rather than occasions with a clear and specific purpose.
Monday’s meeting was a formally mandated part of the follow-up to the International Conference and part of the decisions taken by the General Assembly on how to follow up on Monterrey, he said. The key point was whether the sense of partnership and dialogue built up between the Bretton Woods institutions and the United Nations development agencies -– not merely at the secretariat level, but especially at the intergovernmental level -– could be maintained.
The Council had before it a note of the Secretary-General (document E/2003/50), which provides background information and raises a number of questions for consideration at the special high-level meeting. In view of the theme chosen for the meeting by the Council on 30 January, the note focuses on increasing the coherence of economic policy for the implementation of the Monterrey Consensus through more effective coordination and cooperation at national, regional and global levels.
Recalling that the financing for development process, launched by the United Nations five years ago, reached a milestone last year at the Conference in Monterrey, Mexico, the Secretary-General’s note says that the process had taken up the challenge of raising the mobilization of financial resources for development to a prominent place in the global agenda. It opened up new spaces for intergovernmental and inter-institutional dialogue on financial, trade and development issues. It sought to involve all relevant stakeholders in multiple facets of the process and create a mechanism for jointly considering the issues involved in an interrelated manner.
The Conference itself, with its adoption of the Monterrey Consensus at the summit level, had demonstrated that a new partnership based on consensus-building and a holistic approach to the issues under consideration was achievable, the note states. The Conference’s outcome did not meet all the aspirations of the participants, but the strategy of “patient confidence building” and a commitment to strive for consensus produced a milestone outcome. It was now incumbent upon all stakeholders to see it implemented “fully and promptly”, it urges.
The present meeting, by bringing together participants from the major specialized intergovernmental forums on international monetary, financial, trade and development policies, provides a unique opportunity to forge greater convergence among the efforts under way in the respective forums and institutions to support and accelerate implementation of that Consensus, the note says. The General Assembly decided (resolution 57/250) that the biennial high-level dialogue, to be held at a ministerial level, is to be the intergovernmental focal point for the general follow-up. The present meeting may also be seen as a bridge to the first high-level dialogue on financing for development, which is to be held at the end of October 2003.
Also included in the note are sections on: the need to stay engaged; enhancing coherence in the implementation of the Monterrey Consensus, including domestic policies, international action, international trade and development, and financial cooperation and debt; and systemic issues. In those areas, the Secretary-General submits the following questions: How can the Common Country Assessments and other reports be used to promote deeper understanding of policy needs by the general public in developing countries? how can article IV consultations by the International Monetary Fund (IMF) be more effective in strengthening the coherence of macroeconomic, trade and financial policies in developed countries with global development goals? and what opportunities are embodied in the Trade Policy Reviews of the WTO for enhancing coherence of member policies with domestic and global development objectives?
Also: How can it be ensured that the upcoming WTO ministerial meetings in Cancun, Mexico, move forward the “Doha Development Agenda”? how can market access for developing countries and countries with economies in transition be meaningfully improved in sectors and areas of priority interest to them? how can it be ensured that the Doha work programme maintains coherence with the development goals of the Millennium Declaration, the Monterrey Consensus and the World Summit on Sustainable Development? how can greater predictability be inserted into the trade policies of partner countries so that promising investments to expand exports are not soured by new trade barriers? and how can the perception of heightened investment risk in developing countries be attenuated?
And: How can cooperation be intensified with low-income countries specialized in commodity exports with poor medium-term trade prospects? is it time to reconsider “low conditionality” international mechanisms, as were used in the 1970s to ameliorate the temporary financial distress of commodity-exporting countries during downturns, taking account of the low debt-servicing capacity of poor countries?
Regarding official development assistance (ODA): How should the international community bring about higher ODA levels and effectively ensure, not only that the Heavily Indebted Poor Countries (HIPC) Initiative is fully funded, but that there is sufficient grant funding for these poorest countries to assist them in reaching the Millennium Development Goals, while still maintaining debt sustainability? is there room for more expansion of multilateral lending, as in a counter-cyclical context? are donors making enough progress to harmonize procedures to reduce the excessive transaction cost of aid? and is some sharp break with past policy, such as the proposed International Finance Facility, required to raise ODA levels needed to reach the Goals?
On systemic issues, the Secretary-General, noting that there has been a proliferation of ad hoc, limited-membership bodies, asks: What should be the relationship between the ad hoc forums and the global institutions, which neither created nor oversee them? how are the commitments to strengthen the participation of developing countries and countries with economies in transition in governance of the global economic system being realized in the major international institutions? does the experience of the present meeting suggest how it might help key intergovernmental bodies in the economic, financial and trade areas to strengthen through dialogue their coherence with the development goals of the international community?
Also: Would informal preparatory meetings with participants drawn from relevant stakeholders on specific topics that might be identified help to prepare the discussion next year; in what ways might the financing for development process be further developed so as to reach the aspirations of the Monterrey Consensus? and what implications does the present exercise have or should it have for the broader purpose of reforming and revitalizing the United Nations in the economic and social areas?
President of the Economic and Social Council GERT ROSENTHAL (Guatemala) highlighted the exceptional nature of today’s gathering. Although there had been several meetings with the Bretton Woods institutions, today was the first time the stakeholders were gathered in response to the specific mandates contained in the Monterrey Consensus. The four main participating multilateral organizations were present, represented at both the intergovernmental level and the level of management. He especially welcomed the presence of the World Trade Organization (WTO), which joined for the first time as a full member of that gathering. He also welcomed the presence of numerous members of the executive boards of the World Bank and the International Monetary Fund (IMF), as well as the diversity of national actors representing the member governments.
He said that the purpose of the meeting was to stay engaged, in order to secure the full implementation of the Monterrey Consensus. During the preparatory process of the Conference, and the Conference itself, progress had occurred in building bridges at all levels. Today’s meeting would seek to build on the initiatives to develop international financial monetary committees, aimed at advancing implementation of the Monterrey Consensus. He hoped the meeting would clarify the ways in which everyone could mutually reinforce each other in implementing the Monterrey Consensus and attaining the Millennium Development Goals.
LOUISE FRÉCHETTE, Deputy Secretary-General of the United Nations, delivered the statement of Secretary-General Kofi Annan, explaining that he was unable to attend because he had lost his voice. Noting that the annual discussion between the Council and the Bretton Woods institutions had contributed to a large degree of convergence in thinking about the world’s problems and the required solutions, she said there had also been a greater, and long overdue, appreciation of strengths and expertise.
Building on past discussions and joint efforts, today’s meeting was setting a new direction, she said. Its formal focus was “policy coherence”: how governments, institutions and non-governmental participants could best pull together the many distinct strands of economic policy into a clear framework for action to promote development? and how they could work together, rather than against each other, in fulfilling the commitments made at Monterrey?
Referring to the current difficult international environment, she expressed serious concern about the economic impact of the conflict in Iraq, particularly on developing countries. The world economy continued to recover weakly from the slowdown of 2001, its largest setback in a decade. Unemployment had risen significantly around the world. Households and entrepreneurs almost everywhere were concerned about their future and hesitant to make long-term decisions.
Describing the new round of trade negotiations launched at Doha as one of the pressing current tests, that opportunity was in jeopardy of being squandered, she emphasized. In the central areas of public health and agriculture, governments had failed to meet their Doha deadlines. The area of agriculture was especially critical, not only because it was central to the success of the Doha negotiations themselves, but also because it was a litmus test of the coherence of developed countries’ development policies.
She pointed out that, for many years, developing countries had been encouraged to eliminate subsidies as a basic step in getting their fiscal houses in order, which, in turn, would help create the necessary conditions for growth. Yet, the developed countries persisted with agricultural subsidies and tariffs of their own against the export of developing countries, offsetting or even undoing the benefits of other forms of cooperation with those same countries. Dramatically reducing agricultural subsidies without delay would help the world economy and remove domestic and international trade distortions.
At Monterrey, heads of State and government, as well as senior officials had pledged to stay engaged and to use the United Nations as a forum for dialogue, she recalled. The Monterrey Consensus had identified a major gap in global governance: there was no convenient way for the key specialized multilateral institutions in the fields of monetary, financial, trade and development issues to explore ways to work with each other and reinforce each other’s actions. The United Nations was the natural home for that discussion, and today’s meeting was an attempt to provide precisely such an opportunity.
(For the full text of the statement, see Press Release SG/SM/8666-ECOSOC/6042, issued today.)
JAN KAVAN (Czech Republic), General Assembly President, said that building a community of cooperation was at the heart of the success of the Monterrey Conference. The participation of the major special intergovernmental forums gathered today provided hope for the accelerated implementation of the Conference and, through it, for much more profound progress in achieving the Millennium Development Goals. Today’s meeting was a vital step in staying engaged in following up the Monterrey process. It was an opportunity to take stock of progress made towards implementation and to pinpoint the areas where an accelerated pace was needed, in order for the follow-up to become much more efficient and coherent.
He said that the General Assembly had been dealing with the issue of how the United Nations’ work at all levels supported implementation of all Conference outcomes, the Monterrey Conference, among them. Over the past decade, numerous United Nations conferences and summits had clarified and set development goals. Now, the United Nations must prove its effectiveness in mobilizing political will for their implementation. The utmost should be done to support implementation at the country level. There was an urgent need to set up the most effective mechanisms for monitoring and reviewing such progress.
Also important, he said, was to look at how to carry the process forward, in the United Nations, in the spirit that had emerged in the preparatory process of the Monterrey Conference and how to keep building the political will and momentum for action. The Assembly’s ad hoc working group on integrated follow-up to the major conferences had been dealing with those issues. That would hopefully result in concrete recommendations to strengthen the pursuit of development goals. He wished to stress the link between today’s meeting and the high-level dialogue to be held by the Assembly at the end of October. As envisaged by the Monterrey outcomes, the General Assembly and ECOSOC each played an important role in ensuring that all participants stayed engaged. Indeed, both were doing their part in a complementary manner.
TREVOR MANUEL, Chair of the Development Committee and Minister for Finance of South Africa, said that the Committee’s weekend meeting held in Washington, D.C., had recognized the tremendous challenges of meeting the Millennium Development Goals. Today’s meeting was aimed at reviewing the progress in implementing the strategies, partnerships and actions agreed at Monterrey and at the Johannesburg World Summit on Sustainable Development, and to consider ways to enhance the voice and participation of developing and transition countries.
He noted that the war in Iraq was exacerbating uncertainty in the Middle East and in the world more generally. That conflict, as well as slower economic growth and the failure to make more substantive progress on the Doha development agenda, added to the challenge of implementing the global development agenda. The Committee had strongly reaffirmed its commitment to efforts needed to reduce poverty and to concrete steps aimed at accelerating development.
Underlining the importance of monitoring such efforts, he said the Development Committee had welcomed the progress on developing a global monitoring framework to allow it to regularly assess progress and reinforce accountabilities among the developing and developed countries, as well as institutional partners. Such efforts would require strong cooperation between the United Nations and the Bretton Woods institutions, as well as the WTO.
He stressed the need for policies by both developed and developing countries to generate stronger economic growth. For developing countries, three interrelated areas, in particular, required strengthened efforts: improving the environment for investment and private sector activity, including macroeconomic stability and supporting infrastructure; strengthening governance, including public financial management and capacity in the public and private sectors; and increasing human capital through broader and more effective delivery of basic and social services to the poor.
Such stronger reform efforts by developing countries would lay the foundation for enhanced growth, he said. They should be matched with stronger support from the developed countries, particularly through increased market access for developing-country exports, debt relief, and increases in the volume, predictability and effectiveness of development aid. Recalling that Development Committee members representing European countries had asked that the Millennium Goals should not be treated separately, he noted that efforts to achieve them must be accompanied by actions that would enable the uprooting of poverty on a sustainable basis.
HEIDEMARIE WIECZOREK-ZEUL, Minister for Economic Cooperation and Development of Germany, said that the common vision for fostering sustainable human development and peace for all required that everything possible be done to put those topics back to the top of the international agenda. In the present circumstances, the original task for which the United Nations was founded, namely, to save mankind from the scourge of war, was more important than ever.
She asked how it was possible that billions of United States dollars could be mobilized easily for war, whereas for the fight against the biggest enemy -– poverty -– not even millions could be mobilized. Everyone supported implementation of Security Council 1441 (2002), which concerned the disarmament of Iraq. She also called for implementation of United Nations resolution 55/2, by which world leaders committed to halving by 2015 the number of people living in abject poverty.
The international community must now focus on assisting the needy population of Iraq and on the country’s reconstruction and development, leading to the establishment of a stable, democratic and peaceful order there. A Security Council resolution was needed to give the United Nations a clear mandate for the reconstruction process. Also, any lending by the World Bank should be subjected to such a resolution, as the Bank’s governors had made perfectly clear. She was concerned about the impact of the war in Iraq on the region and on the world’s economy. Developing countries would suffer the most from the further decline of economic growth and from weak, low levels of foreign investment.
Continuing, she said that the highly indebted poor countries were facing even more difficulties in developing the ambitious programmes needed, in order to reap the benefits of debt relief. There should be a “topping out” for those highly indebted poorest countries suffering from external shocks. There was a pronounced fear of a new arms race, and there had already been a rise in arms expenditures, including in the United States. The world must concentrate all of its efforts on reaching the Millennium Development Goals and fighting poverty. A just war was the one against hunger and poverty, disease, illiteracy and exclusion, and injustice.
That battle against want and fear was the essence of the Millennium Summit outcomes, the Monterrey Consensus and the Johannesburg Plan of Action. The compass had been pointed clearly at development. Her Government was firmly committed to the principles of multilateralism and the peaceful resolution of crises, as well as enhanced development efforts. Sustainable development and international solidarity were high on its agenda. In line with the commitments it made at Monterrey to significantly increase ODA, her Government had already taken the necessary steps and would do its utmost to ensure that the European Union would continue to play a positive role in that regard. If everyone lived up to their commitments, overall ODA would increase by 30 per cent by 2006. Still, an additional $50 billion would be needed to reach the agreed targets.
She said she hoped that, in the years to come, Doha would be remembered as the birthplace of a true development round. The world’s attention was upon us. “At the end of the day, our children and grandchildren would judge us on whether we have shaped world affairs in a just manner and shaped a just world order”, she stressed. That meant returning to the development principle of the Millennium Declaration, and the outcomes of the Monterrey and Johannesburg Conferences.
MARY WHELAN, Chair of the Trade Policy Review Committee of the World Trade Organization (WTO), said the Doha round of trade negotiations had differed from others in its efforts to ensure that the concerns of developing countries were embedded in the negotiating process and were a central feature of its outcome. There was a much deeper understanding now across all multilateral institutions of the role trade played in development. On the one hand, those institutions had moved away from the simplistic notion that rapid trade liberalization across all sectors was always beneficial. On the other, they had a greater understanding of the costs associated with high levels of protectionism.
The Doha Development Agenda was an ambitious round with a very demanding time scale, she continued. A negotiating machinery had been quickly established, encompassing the structure and chairs of negotiating bodies. A programme of meetings had been established to consider the needs of smaller delegations, although there were difficulties at times in covering the range of meetings taking place. Efforts had been made to meet the call in Monterrey “to ensure that any consultation was representative of the full WTO membership”. However, there were areas where progress must be made before the September meeting in Cancun. Those included agriculture, operationalizing special and differential treatment for developing countries, access to medicines and the Singapore issues. Political will existed to address those issues, but the difficulty arose in giving practical expression to that will.
The Secretary-General had highlighted the potential of the WTO’s trade policy reviews for enhancing coherence, which was a proposal deserving further consideration, she continued. The trade policy review mechanism was intended to provide a regular collective appreciation and evaluation of a member’s trade policies and practices. It was not intended to impose new policy commitments on members. As more and more developing countries incorporated a trade dimension into nationally owned Poverty Reduction Strategies, the WTO’s trade policy review could provide an opportunity to consider national trade policy in the wider context of overall national planning and poverty reduction. Later this month, the WTO would conduct a trade policy review of the Southern African Customs Union. That would provide a further opportunity to understand the contribution that a strong regional trade framework could make to economic growth and sustainable development.
Trade-capacity building, she noted, was another issue that should drive forward coherence between multilateral organizations, bilateral donors and developing-country partners. She was struck by the proliferation of trade capacity-building initiatives under way and the number of international organizations in the field. While the Integrated Framework had brought much coherence to the situation, and was fostering real cooperation among key bodies, it was still a relatively modest programme focused on a limited number of least developed countries. Consideration could be given to a review of the implementation of the outcome of the October 1997 WTO High-Level Meeting on the integration of least developed countries into the global economy, which gave rise to the Integrated Framework.
FOUAD SINIORA, Chair of the Group of 24 and Minister FOR Finance of Lebanon, said the Group had met last Friday to discuss challenges and difficulties facing the global economy and developing countries in particular. The world economy had weakened significantly since last September 2002, in addition to problems associated with the conflict in Iraq, which would affect the entire Middle East region and the world as a whole.
Stressing that it was essential to strengthen cooperation, he said its major purpose was to establish a stable international economic and financial environment to achieve the Millennium Goals and promote the multilateral agreements of the Doha round. The multilateral system that had characterized world affairs was now under stress after supporting global development for the past 60 years, and it was now more important ever to support that system.
In the era of globalization, he said, the system had allowed countries to weather severe problems, but at the cost of slower development and increased social pressures. The plight of low-income countries had worsened, particularly those in sub-Saharan Africa, which were faced with the continued decline of commodity prices and affected by drought, HIV/AIDS and other epidemics.
Some of those countries had made remarkable strides, but their general progress had been disappointing, standing at only one third of the global standard, he said. Many had taken bold and politically difficult steps to open their markets and it was time for the developed countries to take the long-overdue step of showing equal boldness in opening their own markets and in eliminating subsidies and non-tariff barriers. International capital was flowing from low-income to developed countries and, as long as that continued, the Millennium Goals would clearly not be achieved, he added.
EDUARDO ANINAT, Deputy Managing Director of the International Monetary Fund (IMF), said that the International Monetary and Financial Committee had held its seventh meeting yesterday in Washington, D.C., at which it renewed the commitment to address the difficult challenges facing the global economy, which had been further complicated by the war in Iraq. The Committee had called on the IMF to closely monitor the war and stand ready to provide the necessary support. It stressed that concerted action was needed in all countries to foster strong and balanced economies, reduce reaction to external shocks and make more likely the attainment of the Millennium Development Goals.
He said that the Committee had noted that the present situation in Iraq posed significant challenges, with an urgent need to restore security, relieve human suffering and promote economic growth and poverty reduction. It supported a further Security Council resolution, and noted further that engagement by the international community, including the Bretton Woods institutions, would be essential for sustained economic, social and political development in Iraq. The IMF and the World Bank stood ready to play their normal role in Iraq’s redevelopment at the appropriate time.
In the present economic uncertainty, the Committee reaffirmed its commitment to close international cooperation to strengthen confidence and support the global recovery, he said. It underscored the importance of continued vigilance. With a readiness to adjust policies as needed and determine further action on the structural front, the world economy had the prospect of strengthened growth and renewed prosperity. Substantial and concrete progress with multilateral trade liberalization was a key priority for the coming months.
The Committee’s communiqué had suggested that although the global economy was expected to recover from its present weakness, there remained risks and areas of uncertainty. Safeguarding global growth prospects required continued attention to certain policies and the ability to adjust as required. That included further structural reforms across the membership to restore confidence and strengthen prospects for global growth. Policy stimulus was needed to foster rapid recovery, including monetary policy if that proved necessary. In many countries, however, key structural reforms would enhance a process of sustained recovery and restore global confidence.
Emerging market countries should strengthen their policies for macroeconomic stability and structural reforms and, through that, their resilience to adverse global developments. In countries facing external financing constraints, efforts to sustain macroeconomic stability would continue to be key to restoring confidence. For all countries, the continued implementation of reforms to strengthen the banking and corporate sectors and underpin growth remained a priority. The IMF had a key role to play in supporting those efforts.
He said that several countries, especially in Latin America, had increased their resilience by adopting sound economic policies, including more sustainable exchange rate policies. Those countries had built up their margins to continue to respond flexibly to external shocks; others should redouble their efforts to sustain such shocks, as key to restoring confidence. The Committee had recognized the need to support emerging economies and underpin their growth through private investment.
As a group, low-income countries had made important strides, which put them in a better position to deal with the effects of the global slowdown, he went on. Many had also used debt relief under the HIPC Initiative to substantially increase their poverty-reduction spending. Most of them, however, remained vulnerable to shocks. A concerted international effort was needed to accelerate progress under the Millennium Development Goals through national policies, additional financial and technical assistance from developed countries, and improved access to low-income countries. Timely progress towards multilateral trade under the Doha agenda would send a strong signal of an international commitment to multilateralism.
Further, he said, the Committee underscored the urgency of concrete progress towards multilateral trade liberalization under the Doha round through the continued commitment of the international community. That would be critical in supporting higher economic growth and poverty reduction, and enabling developing countries to participate more fully in the benefits of globalization. The Committee, accordingly, called on industrial, emerging, and developing countries to play their part in renewed efforts to address obstacles to further progress in advance of the ministerial meeting of the WTO in Cancun, Mexico, next September.
He called for urgent progress in a number of areas, including agriculture, where better market access and lower trade distorting subsidies were particularly important for developing countries, he said. The IMF, in collaboration with other international institutions, stood ready to support members’ closer regional cooperation, in the context of deeper integration into the world markets.
ZHENGMAN ZHANG, Managing Director of the World Bank, said that the Bank and the IMF agreed that only by allowing countries to shape their own strategies would coherence be achieved in development policy. At the institutional level, good progress had been made in enhancing cooperation between and among institutions, as well as stakeholders.
There had also been a continued strengthening of cooperation between the World Bank and the IMF, as well as between the Bretton Woods institutions and the United Nations system. The Bank had taken many practical steps to strengthen that cooperation, as evidenced by the presence of many of its Board members at today’s meeting. However, there was no room for complacency, and the Bank would continue to look out for areas where it could improve performance and eliminate overlapping efforts.
Pointing out that the Monterrey Consensus called for increased cooperation between and among all countries, he said that the global monitoring framework discussed in yesterday’s meeting, although still at an initial stage, was an attempt to build on the monitoring efforts of the United Nations and a means to meet the need for a more systematic monitoring mechanism. The very good foundation established between the Bank and the IMF, as well as with other entities, would further strengthen it. However, it had been recognized that much more remained to be done in terms of actual implementation and concrete results, above all at the country level.
FRANCISCO THOMPSON-FLORES, Deputy Director General of the World Trade Organization (WTO), said that since the Doha development agenda was formulated more than one year ago, world economic and political development had been marked by slow growth and uncertainty, and now conflict, which had affected the achievement of a positive outcome in that trade talks round. In five months, the ministers would review the situation and then conclude negotiations by the end of 2004. In many areas, the picture today was encouraging, such as in service market access negotiations, with ambitious proposals on the table. Progress had also been made in discussing the rules of the system, among other areas. Useful work had also been done to clarify national positions with respect to transparency in government procurement.
He said that those gains had been overshadowed by difficulties elsewhere in the round. Positions were far apart in such crucial areas as bridging the differences on public health and on special treatment for developing countries, as well as with regard to their experiences in implementing existing WTO rules. Entrenched positions existed on those key issues, which had led to missed deadlines, and raised questions about the overall pace of the round. Among the key challenges on the road to Cancun was the need to start growing a positive linkage on a range of issues. Difficult political decisions would have to be made fairly quickly to inject forward momentum.
The temptation by governments to put those off was understandable, but that must be resisted. The Doha development agenda was too complex for a balanced deal to be put together at the last moment. Trust should be maintained with developing countries, which had turned to development trade and had agreed to the launch of a new round because they had been persuaded that the Doha agenda would address their development concerns. Also needed was continued united and political commitment from the major players. For more than 50 years, the United States and Europe had been at the forefront of the multilateral system. Political resolve was needed to the emergence of more flexible positions and all members should realize that they had a shared interest in strengthening the WTO system.
At the same time, he continued, participants should be realistic about the process and put the current situation in context. The current state of negotiations was not unprecedented. As the discussion moved from process to substance, it was normal that difficulties would increase. Everyone should be realistic about the challenge of the present, as that was not only one of most ambitious, but also among the most wide-ranging of trade talks. Apart from the usual topics, for example, the present talks encompassed health and environment issues. The round also involved some 140 economies, including powerful newcomers like China.
He said that countries had also been presented with tremendous opportunity, including the welfare gains from the elimination of trade barriers. That could amount to $250 billion annually, with as much as half accruing for developing countries. A successful round would underpin the global economy at a time of instability and uncertainty, and renew the commitment to multilateral cooperation at a time when multilateralism seemed under threat. The WTO had to succeed; there was no growth or development, or poverty reduction without trade, and no other way to reduce the marginalization of some nations. If the round collapsed, a fragmented world of isolated trading blocks would emerge, along with uncertainty and isolation, which the world rejected after the Second World War. Multilateralism could be slow and frustrating, but that was indispensable for managing the interdependent world economy.
Reports of Round Table Chairs
Mr. MANUEL, Minister for Finance of South Africa, reporting on the discussion of round table 1, said Ms. Fréchette had co-chaired the discussion, which had focused primarily on the systemic issues. In that context, it dealt with three themes: coherence; implementation; and voice. Participants identified three other issues, which probably cut across all round tables. The first related to trying to define the raison d’être of each of the multilateral institutions -- who did what, who implemented what, and who monitored. The second was to understand that implementation occurred at the national level. Also, unless it was possible to measure what needed to be done and what had been done, it would not be possible to manage the process of change.
He highlighted several points raised on coherence. Among them was the need to understand that the ability of countries to report was inversely proportionate to their per capita gross domestic product (GDP). So, the round table appealed to both donors and the multilateral institutions to “keep it simple and reduce it to the barest minimum”. The second issue concerned the need for acceptance by all of the principle of multilateralism as part of a system of global governance. The group applauded the decision taken by some non-governmental organizations, Global Watch in particular, to develop an index of coherence, or report card, which would “name and shame” countries.
Also underscored was the need for donors to be sensitive and responsive to the needs of recipients, he said. For example, the needs of poor people in poor countries needed to have far greater weight. Everyone agreed on the importance of the Millennium Development Goals, which should be seen in the context of concrete improvements towards advancing democracy, such as better roads.
He said that five more issues were addressed with regard to implementation. Participants expressed a strong abhorrence to the “one size fits all” approach, given the world’s domestic realities and diversities. They also advocated an unequivocal commitment to access to goods from developing countries, setting aside past preferences. Also important was the way in which institutions selected their leaders. In that regard, participants sought transparency and consideration of all parties in key positions. It was also critical for parties to live out their agreements, and to give due consideration to the marginally slower capacity of developing countries on issues relating to debt or implementation rules.
On voice, he said that speakers sought a rebirth in anticipation of the United Nations’ sixtieth birthday and a redistribution in the way decisions were taken, although the round table could not advise the way in which votes should be redistributed. It was felt that a better voice could only be provided if the size and complexity of the bureaucracy were reduced. And, when countries took risks there must be a parallel reward in the improved quality of life for its poorest people. Finally amplifying the voice could be aided by the coming together of countries in regional or other groups.
HILDE FRAFJORD JOHNSON, Minister for International Development of Norway, said that participants in the second round table had focused on ODA. Participants had agreed on the need to increase ODA and to find new and innovative ways to disburse it. Amid calls to improve the quality of ODA and complaints about waste, developing-country participants had emphasized the need to reform the manner in which such funds were focused and utilized.
She said there had also been concerns about the proliferation of separate mechanisms and funds for disbursing assistance in the health sector and about their overall impact, with particular regard to reducing the efficacy of ODA. Participants had also discussed the importance of public-private partnerships, trade and coherence, with special emphasis on the need for trade and aid policies to be mutually supportive, rather than one being used to bail out the other.
Regarding debt, she said participants had referred to the HIPC Initiative, noting that many countries that were performing well, nevertheless, saw their efforts impeded by crippling debt-servicing obligations. Participants had also proposed the establishment of a development policy review mechanism to be set up along the lines of existing trade policy review mechanisms. That was a proposal worth reflecting on, she concluded.
Ms. WHELAN, Chairperson of the Trade Policy Review Body of the WTO and chair of round table 3, said the group discussed policy coherence in the area of trade and investment, with the focus mainly on trade. The Doha process was regarded both as the glass half full, and half empty. Expectations were high for Cancun, and for the round in general. Participants suggested that key to a successful outcome to the WTO negotiations depended upon improved market access. There was agreement that tariff peaks and escalations must be eradicated and not replaced by non-tariff barriers.
She said that agriculture subsidies were identified as a particular concern for developing countries, as was the slow pace of negotiations in general. On the issue of compatibility between environmental agreements and WTO policies, the need to avoid double standards and refrain from introducing protectionist measures was emphasized. The view was also expressed that the Singapore issues should be “unbundled” and dealt with separately. One issue on which everyone agreed was that the common objective was the creation of an environment conducive to development for all countries, particularly developing ones.
FATHALLAH OUALALOU, Minister of Finance of Morocco, reporting on discussions in the fourth round table, said that participants had agreed on the need to translate the partnership envisaged at Monterrey from the commitment level to that of implementation. Participants had noted that the quality of dialogue was essential for the coherence of national policies, particularly those with both domestic and international dimensions. It was also essential to overcome the lack of coherence between and among international bodies, so that they could cover gaps in the trade and other fields.
Describing the New Partnership for Africa’s Development (NEPAD) as a bold initiative by which African countries committed themselves to the improvement of their economic policies, he said participants in the fourth round table had discussed the need to complement the struggle against corruption with ways to improve the investment environment. The discussion had also focused on the need for developing countries to make progress towards mastering macroeconomic policies, particularly by introducing sound policies to increase savings and reduce interest rates.
He said the participants had also focused on policies involving reform and creating more dynamic systems that would have a dramatic impact on policy. They had also highlighted the negative impact of agricultural subsidies paid to farmers in the developed world. He noted the importance of regional cooperation as a vehicle for improved economic policies.
Also speaking on behalf of the “Group of 77” developing countries and China, Mr. Oualalou stressed that it was essential to proceed to the immediate implementation of commitments. Members had been encouraged by the efforts of the Bretton Woods institutions towards achieving the Millennium Development Goals. Also encouraging had been the efforts to set up indicators and the means to evaluate implementation globally, both by developing and developed countries. If developing countries had the primary responsibility for their own development, then developed countries must see to it that the international environment favoured development, and that their national policies were compatible with the achievement of the development objectives.
He said that, while developing countries had sought to improve their macroeconomic situation, little progress had been achieved globally, especially in the area of trade, protectionism and subsidies. The Group wondered whether the remaining time before the meeting in Cancun would be enough to correct that situation. The Group was also frustrated by the attitude of its developed partners in the trade talks. On ODA, despite progress at Monterrey, the trend towards the reduction of ODA had persisted. Regarding debt reduction, the Group measures to reduce the debt of the poorest countries must be implemented urgently.
The Monterrey Consensus had acknowledged the urgency of improving the IMF system to support the development efforts of developing countries, he recalled. Among other measures, the Group appealed for support of NEPAD, without which the hopes of the African nations could not be realized. Also of critical importance for the developing world, particularly for Africa, was the stabilization of income revenues and commodities. Those were among the Group’s main concerns. Overall, it underscored the urgent need to turn the commitments of Monterrey into reality, to overcome the scourge of poverty and to promote durable economic growth and development.
ADAMANTIOS TH. VASSILAKIS (Greece), speaking on behalf of the European Union, said the Union was committed to helping developing countries benefit from trade, providing trade-related assistance through economic partnership agreements with African, Caribbean and Pacific countries. Union members were increasing ODA and were committed to funnelling on average 3.9 per cent of GDP to ODA by 2006, and eventually the targeted rate of 0.7 per cent of GDP.
More effective and accountable ODA-financed programmes, as well as more harmonized donor policies, must accompany significant increases in ODA, he said. In that regard, the Union would take steps by May towards greater policy coordination and procedural harmonization. The Union was also actively assessing alternative financing instruments and further clarifying issues related to Global Public Goods, important components in development financing. While lauding the HIPC debt-relief initiative progress thus far, he said much remained to be done to enable more nations, particularly faltering low-income countries not in the HIPC programme, to achieve debt sustainability.
Mr. MINOVES-TRIQUELL (Andorra) said he looked forward to a new Security Council resolution on Iraq, which responded to the humanitarian needs resulting from the war. Andorra was a small State without an army or weapons, or geopolitical clout, but it would recall its 700-year history of uninterrupted peace. Iraq needed a new government to ensure order and security. It also needed an organized transition to democracy and the will to face the development challenges being debated today. The new political and economic development of Iraq, with the administration of its own resources, must be guided by the Iraqi people, with the United Nations, the Security Council and all others playing their respective roles.
He said that, although attention was turned to Iraq, the millions who daily were threatened by hunger and disease should not be forgotten. Participants were gathered here to reaffirm the principles adopted at Monterrey and at the Millennium Summit. The developed countries must increase ODA and cure the distribution problems. At the same time, recipients must ensure its efficient use. The multilateral financial institutions must develop and coordinate policies that worked for all nations and took into account their unique characteristics. In that connection, small economies should not be forgotten. The Andorran people were engaged in development efforts to ensure a future in which there were opportunities and justice for all.
Mr. PASSACANTANDO, the Dean of the Executive Board of the World Bank, said that the institution took its interaction with the United Nations system very seriously, as indicated by the size of its delegation in today’s meeting, as well as its more active role compared to previous years. He suggested that future meetings devote more time to round-table discussions to allow greater interaction by participants with ambassadors and ministers.
He said the World Bank was committed to working through existing institutions to carry forward the decisions made at Monterrey. The boards of the Bretton Woods institutions had discussed the need to introduce new mechanisms to improve transparency and were working on the need to improve the voice and participation of developing countries. Progress could also be made on improving the current meetings between the Economic and Social Council and the Bretton Woods institutions.
Mr. SIMON (Mexico) called for the daily strengthening of the multilateral system as it was the most important forum for international dialogue. Regarding next September’s fifth ministerial conference of the WTO, to be held at Cancun, Mexico, he said it would be a crucial meeting for the conclusion of the Doha development negotiations. It was, therefore, essential to work hard in the short remaining time for a fitting conclusion to the development round.
He said ODA must be increased considerably and that the developed countries must establish a programme to cooperate with the developing world in ensuring increased flows of development assistance. Mexico was a recipient, as well as a donor, of ODA and had been a founder member of the Panama Plan for Development in Central America, which aimed to help implement the Monterrey Consensus in that subregion.
Mr. MAJANEN (Finland) said that the voice of developing countries was a question of rights, and voting power and influence. It was also a question of capacities and capabilities; rights did not make sense if countries did not have the required capacities and capabilities to exercise them. Partnership was also a question of attitudes, and required new approaches in terms of reciprocity and equality of the relationship. A partnership must really be a two-way street. The partnership review undertaken by Finland’s research institute for social development had been truly informative. Similarly, the Helsinki process had enabled fruitful dialogue and amplified the voice of the South.
Mr. SCHYDLOWSKY (Peru) called for more effective implementation of the Monterrey outcome. There was general agreement that more resources should be earmarked for development. There was also a consensus that part of that must come from private capital markets, as well as from privatization of national assets. In implementing those two sources of financing, he drew attention to a serious operational problem, namely, that States were often prevented from restructuring their assets and compensating debts with new assets. For example, if Peru sold a power company for $200 million and then wished to build a highway with those funds, that new spending would increase the deficit, rather than be funded by the sell-off of the power company. That situation prevented States from restructuring their assets.
Mr. COX, representative of the Commonwealth Secretariat, said that the Commonwealth felt it could contribute to political and corporate governance in terms of legal systems, the building of democracy and avoidance of exclusion. Its work resonated in that regard with that of other institutions, and it could benefit from its interaction with the widest range of international partners.
He said a second area of concentration was capacity-building. Many developing-country Commonwealth members were severely hampered by a lack of the required human resources and other constraints in a complex and multifaceted world. Concentration on building trade capacity and the negotiation of trade agreements, as in the WTO and other bodies, were areas of tremendous demand and had great potential for promoting the achievement of the Millennium Goals and the realization of the Monterrey Consensus.
GONÇALO AIRES DE SANTA CLARA GOMES (Portugal), associating himself with the European Union statement, referred to a group of developing countries with which his country had a special relationship. It was difficult for those countries to attain their development goals, because the governments of some of them were so fragile that they were unable to participate in or benefit from international cooperation. It was not enough for them to have a minimum of capacities, but it was also vital that they have a national development capacity to ensure fruitful cooperation. The developed countries could survive their mistakes, while the poorest developing countries had no room for error. He called for efforts to make the international system accessible and favourable to the poorest countries, noting that international rules, while making provisions for most developing countries, did not cater to the least developed.
MARIA LUIZA RIBEIRO VIOTTI (Brazil) drew attention to a paradox. On the one hand, there appeared to be an unprecedented degree of international consensus on what needed to be done to promote development and attain the Millennium Development Goals. On the other hand, that consensus had not yet evolved a dynamic that was capable of introducing the practical changes needed to ensure that the process was moving forward. On the contrary, in certain areas, such as trade, there was growing frustration, particularly among the developing countries, about the slow pace of the negotiations. In that context, he underscored the importance of today’s dialogue, aimed at bringing to fruition the objectives set at Monterrey and at other relevant recent global conferences.
Ms. DEILY (United States) said that several countries had asked today about the progress being made towards implementing the Millennium Development Goals, particularly the financial support being provided. The United States was emphasizing the importance of, first, focusing assistance on countries with strong policy performance, and then on measuring the concrete results of that assistance, and strengthened management of public resources. Financially, President Bush’s Millennium Challenge Account was requesting $1.3 billion from Congress, which would ramp up to $5 billion in three years. The Account also provided a detailed action plan on operationalizing the Monterrey Consensus.
Similarly, she said that President Bush had requested from Congress a commitment of $15 billion, nearly $10 billion, which would be new money to combat the global AIDS epidemic. On the trade agenda, the technical assistance being provided to countries would be key to their success. The WTO last year established a global trust fund to provide financial assistance and training to enable countries to participate fully as negotiators in the trade discussions. That had been complemented by tremendous bilateral support by several countries around the globe. The United States last year committed $638 million in technical assistance to trade issues and training, underscoring the importance of technical assistance as a bridge to poverty alleviation.
Mr. GRANT (United Kingdom) said his country was increasing its official development assistance. It was currently involved in discussing an innovative scheme to achieve the Millennium Goals through the creation of an international financial facility that would issue bonds to finance assistance and make up the shortfall in funding required to achieve the goal of halving poverty by 2015.
ALBERTO PEDRO D’ALOTTO (Argentina) expressed his country’s concern about the international panorama one year after Monterrey. Not only had the threat of recession not disappeared, but the hope and promise of 2002 embodied by Monterrey had faded amid resurgent protectionism.
He stressed that his country did not intend to be isolated from the international financial community, and that it hoped to heal its economy on its own. Following Argentina’s political and economic collapse at the end of 2001, it now had an economy that, although still fragile, held the signs of recovery. Lack of control over its fiscal policy had led to the collapse and that situation should not be repeated. Despite the decisions taken in Washington, Argentina insisted that uniform strategies could not work. Each country must be considered on its individual merits and, hopefully, a happy median could be reached that would not threaten Argentina’s incipient recovery.
Mr. PIEDRA, observer for the Holy See, emphasized that progress in the equitable integration of the poorest countries into the global market would only be achieved through an integral approach. Trade integration was not an end in itself and, while fair trade relations were a central element, they constituted only one aspect of all economic activities. Trade integration must be pursued in concert with other aspects, particularly the promotion of human rights. The economy was made for man’s well-being and not vice-versa. The well-being of the entire human family must be at the centre of development, he added.
ROSA LIZARDE, Interim Facilitating Group for the Follow-up to Monterrey, said that the Group was comprised of international and regional civil society networks with a broad and diverse global reach. Those networks were committed to sharing their accumulated experience in monitoring the Monterrey process and the policies of the stakeholder institutions. She said that the considerable momentum generated last year in Monterrey had not been maintained. Stalling and backtracking on resource mobilization for development were clearly evident. At the same time, massive amounts of resources were being diverted into military spending and the waging of armed conflicts, followed by the need for new resources for massive reconstruction projects.
Asserting that the real development agenda was being sidelined, she said that new ODA disbursements were not coming on-stream. Deadlines for trade commitments had not been respected either. Talks on new mechanisms for debt relief had stalled and the world was currently witnessing a disabling environment, which was further exacerbating feminized poverty, social instability and human insecurity. Clearly, the development and peace agendas were inextricably linked. Pursuit of a global agenda on financing for sustainable development depended on the normative multilateral framework outlined in the United Nations Charter.
The search for policy coherence required the establishment of mutually reinforcing policies between ECOSOC and the Security Council, in order to promote economic and political security in an enabling environment of peace. She appealed for Security Council unity and for a recommitment to upholding its mandate under the Charter to develop effective measures to conflict prevention and resolution, for peace-building and to support the protection of human rights and gender equality, and the inalienable right of self-determination by all nations. Peace was unquestionably a precondition for sustainable and equitable development.
She urged the United Nations and its Member States, as well as the official institutional stakeholders, to take concrete steps to implement commitments made at Monterrey, thereby advancing development and human security. In terms of new approaches to debt relief, she advocated cancelling the debt of poor countries and reshaping existing debt sustainability criteria around capacity to achieve the Millennium Development Goals. On trade and development, she suggested building trade rules that were rooted in development and that would maximize employment in decent conditions, increase local capital flows, ensure food security and, consistent with the policy approach, integrate the WTO into the United Nations system.
Reforming global governance required that it be democratized to allow for the meaningful and equitable participation of developing countries in international decision-making. Lack of progress in reversing the HIV/AIDS pandemic was a glaring failure of global governance. Also, the structure of the Bretton Woods institutions should be reformed to make them more accountable, participatory and transparent, and the democratization of the IMF and World Bank policy-formulation and implementation at the national level should be promoted. ODA pledges made at Monterrey must be honoured and a timetable consistent with the deadline for achieving the Millennium Development Goals should be set. To improve policy coherence, a global commodity policy or agreement could be formulated as a means of increasing the incomes of indebted countries through price improvement and stabilization of export commodities.
PAUL UNDERWOOD, Business Council of the United Nations, said he was struck that the architects of the Monterrey process had recognized the importance of private sector capital in achieving the Goals, while indicating a general lack of interest to work with the private sector to mobilize capital nationally and internationally. He was also struck by the continuation of dialogue and consensus building without much progress or real traction in building mechanisms and moving forward. He had been working closely with the financing for development secretariat and had devised a work programme, which had offered some analysis and recommendations to overcome the development financing impediments
He said that proposal had dealt with the ability of countries to get the right analysis, and to communicate country opportunities, risks and investment transaction services. Those were designed to improve the access of developing countries to private investment. Coordination of the public and private sectors in implementing the Monterrey Consensus was crucial. He thanked the European Union for recognizing the critical role of the private sector. He also acknowledged the participation, at a significant level, of the IMF and World Bank.
There was a systemic gap in the process, he said. When talking about development, the private sector was generally ignored. Yet, based on IMF figures, between 1996 and 2003, the private sector would have contributed $660 billion in net capital flows to developing countries, which was more than three times that provided by the official sector. Even in the geographical area with the lowest net flows, Africa, the private sector would have provided $79 billion in net capital flows, or more than 10 times that of the official sector. In the year since Monterrey, there had been insufficient forward movement.
He said that the challenge of today’s global economic and political turmoil compelled the stakeholders to translate the political commitments made at Monterrey into concrete actions with meaningful benefits for developing countries. The initiatives put forward there were potentially important contributions, but those could only be successful with the full and active participation and support of national governments and their international and regional organizations. Success in implementation of the Monterrey Consensus required sharing responsibility, overcoming systemic impediments, creating systemic enhancements, and establishing a dynamic implementation process for collaboration.
IRENE FREUDENSCHUSS-REICHL, Assistant Director-General for United Nations Affairs, United Nations Industrial Development Organization (UNIDO), said that UNIDO had presented two specific initiatives in response to two chapters in the Monterrey Consensus. Under the chapter entitled “International trade as an engine for development”, UNIDO had presented the initiative “Enabling developing countries to participate in international trade -– Strengthening the supply capacity”. The initiative combined strengthening and upgrading productive capacities with the establishment of standards, quality, accreditation and certification capacities in developing countries.
She said that the initiative was a key requirement for participation in international trade and a commitment under the Uruguay round agreements related to the problem of technical barriers to trade. In Monterrey, UNIDO announced the creation of a trust fund for smaller and urgent activities, with a contribution of $1 million. Since then, four countries had made initial contributions and the first activities under the fund were being developed. In addition, as foreseen, several larger projects to implement parts of the initiative at the country level had been designed at the request of countries for special purpose contributions from donors, and implementation had begun on some.
Under the chapter “Mobilizing international resources for development: Foreign direct investment and other private flows”, a pilot initiative on venture capital had been launched. The initiative covered a pilot operation in Nigeria and combined a private sector equity investment organization, aimed at investment in small- and medium-scale enterprises, with grant-funded UNIDO-managed technical support. That pilot operation had been slow to take off, however, due to the serious deterioration in the international investment climate. But, sector analytical work to identify opportunities was now under way, as well as the first investments, and expansion of the pilot operation to other countries was envisaged.
JOHN LANGMORE, International Labour Organization (ILO), said he was encouraged by the statement made by the representative of Finland, as well as by reports from several countries on actions to increase ODA. Nevertheless, the promises made still fell far short of the necessary increase, as estimated by the World Bank, to stimulate economic and employment growth and achieve the Millennium Development Goals. The proposal by the United Kingdom to establish an international facility was worth exploring. A second possibility was to render special drawing rights free of interest and reduce the operating cost of holding currencies in reserves. The current extended period of slow global economic growth was as good a time as any to increase liquidity and support for domestic revenue collection. There was an urgent need to reduce tax evasion opportunities by strengthening the capacity of national tax authorities for efficient and equitable tax administration.
NITIN DESAI, Under-Secretary-General for Economic and Social Affairs, said many participants today had recognized the lack of coherence in the policies of the developed countries. But, he urged developing countries to recognize that they also had a problem of coherence, which was lacking at the domestic level, in that they could not be sure that their finance, trade and planning ministers were always speaking the same language.
There was also an issue of coherence at the global level, he said. There was a need to be coherent around the whole issue of achieving the goals identified at the Millennium Summit and other United Nations conferences, particularly the Millennium Development Goals. The Millennium Goals were not simply a matter of finding money, but must be considered in several relevant contexts.
Regarding the question of civil society, he said there was a need to look at the longer-terms goals of non-governmental organizations, who sometimes felt they had no role. However, a forum such as today’s created an opportunity for them to play a part. Without their participation, there would be even less progress. The challenge was to get a conversation going between and among different cultures. The future of such meetings was to create space for a conversation involving the public and private sectors, as well as civil society.
Mr. ROSENTHAL (Guatemala), President of the Economic and Social Council, said in his concluding remarks that today marked the first time that there had been such a large presence of executive directors of the Bretton Woods institutions. When there was an opportunity to transmit concerns to one another, there was no way to avoid an exchange among all the cultures mentioned by
He said that today’s dialogue involved three elements. The first related to the Millennium Gals and the feeling that progress towards achieving them was in trouble, characterized as it was by flat growth, declining trade terms and negative resource flows. The second element was the bringing together of the four multilateral institutional stakeholders, each with its own priorities and its own ways of relating to its membership. Coherence had many expressions, but today those institutions were reading from the same page, if not always singing in total harmony.
The third element of today’s meeting lay in its role as a follow-up to the Monterrey Conference, he said. There was a need for greater focus, and this morning’s snap decision by the chairs of the four round tables to focus on specific issues had turned up some very specific ideas, which could serve as the minutes of today’s gathering. They could also be used as inputs for the high-level session of the General Assembly. Today’s high-level meeting had also built upon the annual spring meetings of the Bretton Woods institutions, he added.
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