Fifty-eighth General Assembly
Ministerial Round Table 3
PROGRESS IN ACHIEVING COHERENCE, CONSISTENCY IN INTERNATIONAL FINANCIAL,
TRADING SYSTEMS MIXED, ACCORDING TO SPEAKERS IN HIGH-LEVEL ROUND TABLE
Progress in achieving coherence and consistency in international financial and trading systems had been mixed, and in many cases was still lacking, speakers stressed this morning in one of eight ministerial round tables at the High-level Dialogue on Financing for Development.
Participants were addressing Ministerial Round Table 3 on “coherence and consistency of the international monetary, financial and trading systems in support of development”, which was co-chaired by Luisa Diogo, Minister for Planning and Finance of Mozambique, and Ian Goldin, Vice-President for External and United Nations Affairs of the World Bank.
Mr. Goldin said the international community must take an “honest stocktaking” in overcoming major obstacles to achieving the Millennium Development Goals. Progress had been mixed, reflecting uneven donor commitments to harmonize policies and practices, particularly for trade and aid. The question now was how the international community could combine forces more effectively in speeding up the daunting development agenda.
The European Commission’s Director General for Trade, Pierre Defraigne, stressed that coherence was especially needed between what the international community taught and what it actually practiced. In particular, the global community must fulfil the Monterrey commitment to harmonize and coordinate aid by 2004, and to open up its markets and reduce agricultural subsidies. Capacities must also be built up in developing countries, so that the supply side could seize trade opportunities when they came.
Noting that trade liberalization led to job losses in the short run, Noble Laureate Joseph Stiglitz, stressed the importance of increased investment as well as low-rate credit, so that developing countries could create jobs and fully benefit from increased market access. He also pointed to various examples of inconsistency in international financial and trade institution policies, including those on inflation, capital market liberalization and economic stability.
Other speakers stressed the importance of internal coherence between economic and social development, emphasizing that nations must balance fiscal adjustment and monetary stability with social policies and programmes. France’s representative commented that the international community was not just financing development, but sustainable development in all dimensions, and must also remain vigilant in maintaining coherence among international norms and standards. Trade policies, for example, must be compatible with social and environmental standards.
Representatives of the business sector highlighted efforts they had made to forge partnerships and enhance coherence between private entities and governments. The International Chamber of Commerce, for example, had worked with the New Partnership for Africa’s Development (NEPAD) in bringing businesses and governments together in creating business-friendly environments that would attract investment.
Several speakers stressed the vital role of the private sector in driving economic growth, as well as the role of governments in digging up the investment to spur on that growth. Others emphasized the need to open up markets, reduce subsidies, and invest in rural areas to even out the economic playing field.
Participants also noted that many developing countries had made substantial developmental progress, having arrived at the second or third generation of reforms, and questioned whether the developed world would catch up in making difficult choices. Some also pointed out the need for all Bretton Woods institutions to share in the drive for coherence, and enhance its partnerships with the United Nations system.
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