WORLD SUMMIT EXAMINES PROGRESS IN MEETING DEVELOPMENT FINANCING COMMITMENTS MADE FIVE YEARS AGO IN MONTERREY

14 September 2005
GA/10381

WORLD SUMMIT EXAMINES PROGRESS IN MEETING DEVELOPMENT FINANCING COMMITMENTS MADE FIVE YEARS AGO IN MONTERREY

14/09/2005
General Assembly
GA/10381
Department of Public Information • News and Media Division • New York

Sixtieth General Assembly

Plenary

3rd Meeting (AM)

WORLD SUMMIT EXAMINES PROGRESS IN MEETING DEVELOPMENT FINANCING COMMITMENTS

MADE FIVE YEARS AGO IN MONTERREY

As world leaders met today to assess the progress made since a landmark conference on development financing, held five years ago in Mexico, Swedish Prime Minister Göran Persson told those gathered that the outcome of the 2005 World Summit should be the end of poverty.

The International Conference on Financing for Development (Monterrey, 2002) brought together various stakeholders, including Governments, international financial institutions and the private sector, to review the full range of financing options for providing international support to help developing countries meet the Millennium Development Goals, an ambitious set of targets adopted by world leaders at the 2000 Millennium Summit.

Mr. Persson, who is also Co-Chair of the General Assembly’s High-Level Plenary, said world leaders at the World Summit had an opportunity and a responsibility to change the world right now.  Development, security and respect for human rights were inseparable and vital for global well-being.  Impressive progress in achieving the Millennium Goals had been made in some areas but not in others.  The Group of Eight’s debt relief initiatives were important contributions to development, but further efforts were required, especially in the areas of trade and agriculture.

United Nations Secretary-General Kofi Annan noted that while dramatic reductions in extreme poverty had been made in the past 25 years, international solidarity still fell well short of need.  The progress made to redeem pledges made at the Monterrey Conference and to achieve the Millennium Goals included increased aid, the establishment by the European Union of a timetable to reach the 0.7 per cent official development assistance (ODA) target by 2015, and the Group of Eight’s debt relief initiative.  In addition, promising new ideas, such as the International Finance Facility, were being explored.

However, he added, there was an enormous backlog of deprivation.  The draft outcome document of the World Summit was not all that had been hoped for, but the Summit had served as a catalyst to galvanize development advances in the planning for many years.  The draft outcome was a map to an effective global partnership for development, enshrining the principles of mutual accountability and responsibility that were the essence of the Monterrey Consensus.

The President of the host country for the 2002 Monterrey Conference, Vicente Fox of Mexico, emphasized the need for donors to harmonize aid procedures, and match aid with recipient country priorities with a focus on eliminating poverty.  Developed countries’ markets must be opened to exports and new goals for countries such as his should aim at gender equality and higher goals in health and education.  Further measures should be implemented for reducing the debt burden of developing nations, such as the recent action by the Group of Eight to forgive the debts of 18 poor countries.

Pervez Musharraf, President of Pakistan, the country holding the current Presidency of the Economic and Social Council, called for the political will to end global poverty through substantial and specific steps.  He said there was already broad agreement on development policies and goals and on the financial and technological resources to achieve them.  They could be achieved with political will.

Among the proposals mentioned during the meeting for spreading the wealth of globalization to benefit the poor was the first-ever international solidarity levy on airline tickets, to go into effect next year.  Elaborating on that, French Prime Minister Dominique de Villepin said the plan would provide an ongoing source of fresh financing for development without impeding progress in air transport.  His country would urge that priority in allocating those funds be placed on fighting diseases such as HIV/AIDS.  Among the countries supporting that initiative were Algeria, Brazil, Chile, Germany and Spain.

Endorsing the plan, Qatar’s Emir, Sheikh Hamad Bin Khalif Al-Thani, said efforts to fight poverty and promote a more equitable distribution of the benefits of global growth were investments in peace and security.  His country had hosted the Fourth World Trade Organization (WTO) Ministerial Meeting, which adopted the Doha agenda and demonstrated that trade liberalization through multilateral negotiations boosted development.  Qatar would also host the first follow-up conference to Monterrey in 2007, on a date of the Assembly’s choosing.

Thailand’s Prime Minister, Thaksin Shinawatra, said pledges for aid and debt cancellation were welcome but developing countries could relapse into the vicious circle of poverty without a sound economic foundation.  Two pressing challenges faced developing countries at once now, the rise in global oil prices and the lack of investment funds.  The hike in oil prices was a clear call for alternative energy sources.  The profits from oil hedging should contribute more to the global economy and South-South cooperation should be seen as equal to that of North-South, as had been seen in his region since the 1997 crisis.

Botswana’s President, Festus Mogae, said the experience of the Southern African Development Community (SADC) was typical of other developing world regions.  Improvements were uneven and wide gaps remained in levels of development both within and between countries.  More efforts needed to go into policy reforms, institution-building and working toward a fairer international trading system.  Financial aid must go beyond strategies that burdened the poor.

Also addressing the meeting was the Summit’s other Co-Chair and President of Gabon, El Hadj Omar Bongo Ondimba, as well as the Heads of State or Government and other high-level officials of Jamaica (on behalf of the “Group of 77” developing countries and China), Nigeria (on behalf of the African Union), United Kingdom (on behalf of the European Union), Benin (in his capacity as Chairman of the Coordinating Bureau of the Least Developed Countries), Argentina (on behalf of the Rio Group), Mauritius (on behalf of the Alliance of Small Island States), Saint Kitts and Nevis (on behalf of the Caribbean Community), Lao People’s Democratic Republic (on behalf of the Landlocked Developing Countries), Nicaragua (on behalf of the Central American Integration System), Peru, Chile, Croatia, Indonesia, China, Uganda, Malaysia, the Netherlands (also on behalf of Denmark, Luxembourg, Norway and Sweden), Spain, Brazil, Bangladesh, Egypt, United States, Germany, Japan and Venezuela.

In addition, senior officials of the World Bank, the International Monetary Fund (IMF), the European Commission, the World Trade Organization (WTO), Social Watch and McKinsey and Company, Inc. also made statements.

Background

The General Assembly this morning, following the opening of the World Summit, held a separate meeting to follow-up on the outcome of the International Conference on Financing for Development, held in Monterrey in 2002.

For its consideration, the Assembly had before it the Secretary-General’s report on follow-up and implementation of the outcome of the International Conference on Financing for Development (document A/60/289), which provides updated information on the implementation of the Monterrey Consensus.  The report also reaffirms the policy actions prepared for the dialogue on financing held between the Economic and Social Council and the Bretton Woods institutions, the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD).  Overall, the report reflects the role of the Monterrey Consensus in providing the broad framework for pursuit of the internationally agreed development goals and the Millennium Development Goals.

The Assembly President’s summary of the High-Level Dialogue on Financing for Development (Headquarters, 27-28 June) (document A/60/219) is also before the meeting.  The report indicates that 28 ministers, 11 vice-ministers, and high-level officials from 80 governments made statements at the plenary meetings.  Senior managers of major institutional stakeholders, including the World Bank, the International Monetary Fund (IMF) and the United Nations Development Programme (UNDP) took part.  Multi-stakeholder round tables were held on issues such as foreign direct investment and other private flows.  The themes explored included the relationship between development and international security, the link between poverty and terrorism and the urgency of furthering development.

Statements

EL HADJ OMAR BONGO ONDIMBA, President of Gabon and Co-Chair of the High-Level Plenary, said the development goals that had been set out in the Millennium Declaration and at Monterrey were far from achieved.  Some new mechanisms for funding development had, however, been identified.  More such measures should be identified and created with a concerted commitment to implementation.

GÖRAN PERSSON, Prime Minister of Sweden and Co-Chair of the High-Level Plenary, said development, security and respect for human rights were inseparable.  They were all necessary for global well-being.  Poverty was a common challenge requiring action by all parties.  Impressive progress had been made in some areas regarding the Millennium Development Goals, but not in others.  Progress had been unevenly distributed.  Africa lagged behind but so did other areas.  Prosperity did not necessarily translate into the language of the poorest.

Only five countries had reached the 0.7 per cent official development assistance (ODA) target, he noted.  Sweden would reach 1 per cent in a short while.  The Group of Eight’s debt relief initiatives were important contributions to development, but efforts to increase the level of aid must be increased, primarily by developing the kinds of measures that would strengthen ownership.  Trade and agriculture impacted most directly on growth and development.  His country had adopted a policy to work development into its practices in those areas.

The leaders of the world had an opportunity to change the world right now, he concluded.  They also had a responsibility.  The outcome of the Summit should lead to the end of poverty.

VICENTE FOX QUESADA, President of Mexico, began by offering his country’s condolences to the people and Government of the United States for the loss of life and damage caused by Hurricane Katrina.  He then reaffirmed Mexico’s commitment to the Monterrey Consensus and invited all nations to work even harder to achieve the global development agenda laid out in 2002 as soon as possible.  The existence of small islands of prosperity surrounded by seas of poverty created instability and threatened global peace and security.  He called the prompt execution of existing development agreements an essential part of achieving the Millennium Development Goals.

He identified improving the effectiveness of aid as a core issue and called on donors to harmonize their giving procedures, matching aid with each recipient country’s priorities and focusing it on eliminating poverty.  He singled out the opening of developed countries’ markets to exports from developing countries as one of the best ways to fight poverty.  He also proposed new goals aimed at countries with a level of development similar to Mexico’s.  Those included greater ambition in the pursuit of gender equality, and setting higher goals for health and education.  While congratulating the Group of Eight for recently forgiving the debts of 18 poor countries, he also called for reducing the debt burden for other developing nations.

He noted that several developed countries had either achieved or were on their way to achieving the goal of allocating 0.7 per cent of their gross national product (GNP) to development aid.  He added, however, that even once all of the countries reached that goal, world poverty would not be eradicated.  He called for a renewed commitment to the Doha Development Agenda and to achieving the full participation of developing countries in the decision-making process in international economic institutions.

KOFI ANNAN, Secretary-General of the United Nations, said the past quarter-century had seen the most dramatic reduction in extreme poverty the world had ever experienced.  Yet, international solidarity had still fallen well short of need.  Important progress had been made to redeem pledges made at the International Conference on Financing for Development and to achieve the Millennium Development Goals.

Aid had increased significantly, he noted.  The European Union had set a timetable to reach the 0.7 per cent aid target by 2015.  The Group of Eight (G-8) countries had agreed on substantial debt relief for a number of countries.  Promising new ideas, such as the International Finance Facility, were being explored.  Many developing countries were investing in their people, promoting democracy and the rule of law, tackling corruption and welcoming the private sector as a partner.

There remained, however, an enormous backlog of deprivation, he said.  The challenge was not to transform the breakthroughs of the past few years into a “Monterrey-based MDG performance pact”.  At the national level, States must practise good governance and mobilize domestic resources.  The international community, for its part, must support those steps through wide-ranging global reforms:  more and better aid; fair trade policies; more investment in the world’s poorest countries; and opening up institutions to allow the developing world to have a greater voice.  The General Assembly and the Economic and Social Council must play a stronger role in monitoring performance, offering advice and, when needed, issuing warnings.  Global public opinion would also be a key force in getting the job done.

He said the draft outcome document of the World Summit was not all that had been hoped for, but it was safe to say that the Summit had served as a real catalyst for development advances that had been sought for many years.  The Summit declaration mapped the path to an effective global partnership for development.  It enshrined the principles of mutual accountability and responsibility that were the essence of the Monterrey Consensus.  It also embodied the notion of national ownership that was at the heart of development.

He concluded by saying, “What the world needs now is leadership that will see this Summit’s development decisions implemented fully and without delay.  This is a matter of morality, security and enlightened self-interest.  We have an opportunity to save tens of millions of lives over the next decade, and to lift hundreds of millions of people out of poverty.  We must not disappoint them.”

PERVEZ MUSHARRAF, President of Pakistan, which held the current Presidency of the Economic and Social Council, said it was possible to create the political will to end global poverty but that substantial and specific steps still needed to be taken.  There was already broad agreement on development policies and goals, as well as on the financial and technological resources necessary to achieve them.  Laying out a road map for action, he stressed the need for sound national policies and governance.  He cited the example of Pakistan, where such policies had created economic growth of 8.4 per cent this year, one of the fastest rates in Asia.

He said another essential part of development was adequate financing.  Domestic resources made up a key part of that, but alone were not enough to spur rapid development.  That required significant external financing, in the form of loans, grants, foreign direct investment and export earnings.  Also, an open and equitable international trading system was indispensable for sustained growth and development.  Existing policies like agricultural subsidies, high duties and tariff escalations choked off the trade potential of developing nations.  He called for the achievement of the Doha objectives, and encouraged foreign direct investment in a larger number of developing countries.

Finally, he called for supplementing good national governance with good global governance, which included equity in international economic policymaking.  He said United Nations reforms would be hollow as long as wars continued and mass poverty and inequality remained widespread.  The Summit must act to eliminate those inequities and the deprivation suffered by the majority of the world’s peoples.

PAUL WOLFOWITZ, President of the World Bank, called the Millennium Goals a vital tool for measuring progress, but added that measurement alone would not bring results.  He noted that many countries were on track to meet the Goals, but that many of the poorest countries, especially in sub-Saharan Africa, would not meet the targets on time.  Realistic plans were necessary to get them on track.  He called for developing countries to improve performance and for developed countries to fulfil their promises to increase aid, dismantle trade barriers and eliminate subsidies that hurt farmers and small businesses.

He told the story of a Rwandan woman who had returned home from a comfortable life in the West to start a flower-growing business, one that ultimately employed nearly 200 rural women.  He said her biggest obstacle to creating more jobs was not a lack of skilled workers but a weak infrastructure that made electricity unreliable and transportation unaffordable.  Rwanda had come a long way, however.  The country’s economy had grown more than 6 per cent annually for the last seven years, and the World Bank recently cited Rwanda as a model for reforming business regulations in Africa.

He said the responsibility for doing more could not be left to the developing world alone.  Last week, the World Bank’s Board discussed an Africa Action Plan to help every country accelerate growth and move closer to the Millennium Goals.  The Plan set forth 25 initiatives over three years with measurable outcomes.  Among the goals was the achievement of free primary education in 15 countries, as well as the building of roads and the improvement of infrastructure.

RODRIGO DE RATO, Managing Director of the International Monetary Fund, said the international community needed to create policies in low-income countries that promoted economic growth –- the main engine that drove development.  To achieve economic growth, countries needed three things:  economic and financial stability; structural policies that helped the private sector to flourish; and a supportive external environment.  The Fund’s policy advice to low-income countries would continue to support stability and growth as its technical assistance focused on developing the key economic institutions of those nations.

The Fund, he said, would continue to support trade liberalization through its policy advice and provide financing to offset the short-term balance of payments costs of trade liberalization.  He also urged the use of smarter and more effective aid that would be predictable and aligned with the recipient country’s priorities.  The Fund’s Poverty Reduction and Growth Facility (PRGF) would remain its primary instrument for helping low-income nations.  He added that the Fund remained an advocate of debt relief and its Executive Board focused on how the recent G-8 debt forgiveness proposal could free up resources to help each country meet the Millennium Goals.

P.J. PATTERSON, Prime Minister of Jamaica, speaking on behalf of the “Group of 77” developing countries and China, expressed disappointment about the current state of financing for developing nations.  He noted that the objectives of all of the development summits and conferences, as well as most of the Millennium Goals, were not on track to being met, largely due to limitations on financing.  Developing countries continued to transfer more funds than they received, noting that since the Millennium Summit, those transfers had totalled more than $1,174.3 billion.  That occurred in spite of the commitment by developed countries to increase ODA, reduce debt and debt-service payments, and open their markets to products from developing countries.

He hailed recent commitments to substantial increases in ODA and the establishment of timetables by European Union countries to allocate 0.7 per cent of their GNP to development aid.  He urged other developed nations to establish similar timetables.  He noted that average foreign investment in developing countries had more than tripled between the period 1998-2002 and 2004, but that it was concentrated in a few large developing nations, while regions like West Asia and Latin America and the Caribbean had experienced a drop-off in investment.

He said developing countries had increased their domestic resources, but that a large part of those resources had been used for debt servicing and, therefore, were not available for developmental investments.  Debt relief initiatives had led to improvements in the debt levels of developing countries that were part of the Heavily Indebted Poor Countries (HIPC) Debt Initiative, but there was no real initiative to address the heavy debt burdens of non-HIPC developing countries.

He also noted there had been no progress in the Doha Development Round, and thus far, consultations had not yielded any fundamental instructions for the Hong Kong Ministerial Meeting in November.  He called for not just setting targets but for making sure they were implemented in a timely manner.  “We cannot cross this development financing chasm by any series of small steps”, he said.  “We need to make a giant step.”

OLUSEGUN OBASANJO, President of Nigeria, speaking on behalf of the African Union, said the Summit was a fitting complement to the review of the implementation of the Millennium Declaration, as well as the outcomes of other major United Nations conferences and summits in the economic, social and related fields.  Nations in Africa recognized the need to assume primary responsibility for addressing their development challenges, and had taken practical steps through the adoption of the New Partnership for Africa’s Development (NEPAD) as the main framework to pursue sustainable development.

Since Monterrey, he continued, there had been commendable developments, especially regarding the increase in the volume of ODA to developing countries, particularly Africa; the decision of the G-8 to cancel the multilateral debts of 18 highly indebted poor countries; and the announcement of a target date by the European Union to reach the 0.7 per cent ODA disbursement in fulfilment of a long-standing commitment.  It was also imperative that negotiations on the Doha Development Agenda be concluded on time and with substantial outcomes that promoted development.  He reminded Member States of the commitments they had made, including in Monterrey, and called on all parties to fulfil their commitments in a spirit of partnership and mutual interdependence.

HILARY BENN, Secretary of State for International Development of the United Kingdom, speaking on behalf of the European Union, said last year AIDS, tuberculosis and malaria had killed 6 million people.  Today, 100 million children were not where they were supposed to be -- in school -- and millions of people would go to bed hungry.  Those were three reasons to act now.

In June, European Heads of State and Government had taken the historic step to double aid between now and 2010 and to achieve the 0.7 per cent aid target by 2015, he said.  In Gleneagles, in July, the G-8 countries had agreed on, among other things, getting AIDS treatment to all who needed it by 2010.  The G-8 and the European Union were determined to cancel 100 per cent of the debt of the world’s poorest countries.  Action on innovative financing was also vital, as was action on trade at Hong Kong.  The time was short to reach a deal.

Finally, action was needed to promote peace, stability, democracy, and good governance, he said.  Governments must be able to respond to the people.  It was a responsibility of all to the people who had died, to the children who did not go to school, to each hungry being, to accept the responsibility to change the world for the better.

MATHIEU KEREKOU, President of Benin, speaking in his capacity as Chairman of the Coordinating Bureau of the Least Developed Countries (LDCs), said those countries needed help to achieve development goals and the best form of that assistance was through partnerships.  The LDC economies continued to be marginalized and trade deficits remained unmanageable.  To take advantage of the opportunities offered by their partners, LDCs must tirelessly pursue measures to combat corruption and advance the rule of law.

Innovative ways to help LDCs were greatly appreciated but the international community must not be distracted from commitments already made.  He recalled that goals had been set at Monterrey.  Bold new actions would have to be taken to relieve all multilateral and bilateral debt.  Agricultural subsidies, particularly in relation to cotton, must be removed.

Recalling that this year had been designated the International Year of Microcredit, he said that form of financing was an important tool for LDCs to raise their level of income.  Similar mechanisms must be developed if effective action was to be taken to combat destitution and disease.  Deliberations during the Summit should result in realistic next steps.

RAFAEL BIELSA, Minister of Foreign Affairs of Argentina, speaking on behalf of the Rio Group, said that the Group had both witnessed and played a main role in the process of sustaining and consolidating democracy in Latin America, and believed that democracy was a basic requirement for development.  The Group had achieved much better results after democratic rule was reinstated in its countries.  Nevertheless, the Group’s democracies had not been able yet to address social demands that were evident today in its territories, such as hunger and the lack of jobs and protection.

The Rio Group believed that an increase in the growth rate was not related to development if its benefits were enjoyed only by a few and if the gap between countries and societies widened.  An understanding of development must include the idea of fairness, because without it, development would become just an economic indicator with no relation to social reality.  The Group was concerned about the conditions within the international system that restrained Member States from creating a favourable environment.  That not only delayed development, but also created pessimism regarding the achievement of the Millennium Development Goals.  As such, the Group supported the need to reform the current financial infrastructure, which it considered outdated and inefficient.

It was necessary to create a new system, he said, which would be governed by values such as transparency and responsibility.  Under the new system, those values would be accepted and proclaimed, and would be the basic pillars for building a more democratic and fair international system.  He also mentioned the role of multilateral lending bodies in the development possibilities of assisted countries, and cited the International Monetary Fund for irresponsibly putting forward and pressing for policies that had plunged the economies and social conditions of developing countries into deeper poverty.  He added that creating work to alleviate poverty and strengthen democratic government in the least developing countries was beneficial to developed countries because social instability and environmental degradation would increase illegal migration and hamper global stability.

NAVINCHANDRA RAMGOOLAM, Prime Minister of Mauritius, speaking on behalf of the Alliance of Small Island States (AOSIS), said that small island developing States (SIDS) faced a number of constraints unique to them, such as small and narrow resource bases that did not allow for economies of scale, limited market access, fragile natural environments and vulnerability to natural disasters, high costs of energy, poor infrastructure, and lack of adequate transportation and communication.

They were also vulnerable to exogenous environmental and economic events such as the dramatic increase in fuel prices which impeded their opportunities for development, he continued.  Their structural weakness constrained their competitiveness and ability to participate effectively in the international economic and trading system, while the process of globalization compounded the risks of their marginalization.

“For these reasons, AOSIS held the view that while addressing the needs of all developing countries, particular attention needs to be paid to SIDS on the basis that the one-size-fits-all approach would not address these specific needs and concerns”, he stated.  In that context, he asked for continued access to official development assistance; concessional financing arrangements; reduction of debt servicing and debt stock; access to private capital flows; establishment of a normative and legal framework for the conduct of foreign investors; and improved access to markets and improved terms of trade for developing countries.

DENZIL DOUGLAS, Prime Minister of Saint Kitts and Nevis, speaking on behalf of the Caribbean Community (CARICOM), said that CARICOM Member States remained supportive of a pro-development, rules-based, global trading system and reiterated their call for special and differential treatment to extend beyond mere transition periods, derogations, waivers, reservations and exceptions but which included both technical assistance and a full-fledged integration fund for adjustment purposes.  He urged the developed countries to adopt the measures proposed in the report by the Secretary-General with respect to the achievement of the ODA target.  The CARICOM recognized the Paris Declaration on Aid Effectiveness as a useful blueprint for implementation by both donors and recipients.

The Community, he continued, was supportive of the calls for greater coordination among the institutions, which comprised the international monetary, financial and trading systems, and endorsed the new proposals in that regard.  It also advocated the adoption of more proactive measures to ensure the active participation of developing countries, and small States in particular, in the decision-making processes of the international financial and trading institutions.

He said Saint Kitts and Nevis, one of the tiniest sovereign nations in the entire world, provided a good example of the plight of many Caribbean nations.  It had been battered by hurricanes; been starved of resources through the premature graduation from the use of soft resources of the international financial institutions; and been deprived of its sugar industry that employed 10 per cent of its labour force.  Yet, the resources for reconstruction and economic transition were barely trickling in; public debt had skyrocketed; and the country’s significant social progress was at risk.

SOMSAVAT LENGSAVAD, Deputy Prime Minister and Minister for Foreign Affairs of the Lao People’s Democratic Republic, speaking on behalf of the Group of Landlocked Developing Countries, said that mobilizing financial resources remained vital for the Group to meet its special development needs. However, due to the poor socio-economic development records of landlocked developing countries, as well as an insignificant increase in ODA over the last decade, the efforts undertaken by landlocked developing countries in raising funds for development had been far from satisfactory.  He reaffirmed the need for the international community to provide sufficient ODA to enable landlocked developing countries to meet their special development needs.

Although not an end in itself, he said that trade could serve as an engine for sustained growth and development.  The Group, therefore, expected to see an open, universal, equitable, rule-based and development-oriented multilateral trading system.  Given the difficulties and constraints facing landlocked developing countries today, he added that the objective of the Almaty Programme of Action would be unattainable without adequate financial and technical assistance from the international community.  He appealed to all stakeholders and development partners, particularly the donor community, to live up to their respective commitments as outlined in the Programme of Action.

NORMAN JOSE CALDERA CARDENAL, Minister for Foreign Affairs of Nicaragua, speaking on behalf of the Central American Integration System, drew attention to the existence of a regional strategy that could complement the Millennium Development Goals, and a model for democratic security.  The regional strategy recognized countries’ own responsibility for development but was also aware of the major problems to be overcome.  Most developed countries still did not comply with their ODA commitments.

He said the present rates of growth in the Central American countries were not sufficient to achieve the Millennium Development Goals.  Financial transfers and technological support were needed.  Also, cost reduction of transactions and ending financial restrictions were necessary and markets must be liberalized.  He placed hope in the successful conclusion of the Doha Round and welcomed initiatives on debt cancellation.  Central America was investing in strengthening democracy and peace, as well as strengthening the rule of law in order to end corruption and promote good governance.

ALEJANDRO TOLEDO, President of Peru, said that his country was firmly dedicated to the advancement of the Millennium Goals and the Monterrey Consensus.  But he stressed that democracy and equity could not be fully achieved when fundamental freedoms were excluded from the global market.  Citing the extreme conditions of poverty within his own country, he said that only sustained economic growth that increased income and decent employment opportunities, and social programmes for income redistribution, would lead to the eradication of poverty.  The only way to end poverty in Peru was for all parties in his country to commit to those goals.

The Monterrey Consensus called for developed countries to mobilize international resources for developing countries, open their markets, increase financial and technical cooperation, and to relieve debt.  Calling for new financial mechanisms to reduce poverty, he said that infrastructure in developing countries must be improved to give those countries a competitive start and the ability to generate employment.  The way to do that was to give a “broader fiscal space that allows the development of projects that directly benefit the population”.

Mentioning the recent completion of the Interoceanic Highway between Peru, Brazil and Bolivia as an example, he noted that what developing countries needed were infrastructure projects that were not included in their budgets and common expenses.  He also suggested other specific measures such as the design of counter-cyclical measures, which he said helped ease the difficulty of recessional periods and other potential external risks, such as the establishment of a modality of loans which were indexed to the increases in GNP.  He added that the support of developed countries and international financial institutions was vital in assisting middle-income developing countries to reduce high levels of poverty.

RICARDO LAGOS, President of Chile, said that development was a prerequisite for building international security.  Latin American countries regarded development as a shared global obligation for both developing and developed States.  Nations must display maximum imagination and resources regarding poverty.  The task was not easy, and it was not sure whether the United Nations proposal to double official assistance from $50 billion to $100 billion would be implemented.  The Monterrey Conference set guidelines for achieving goals on poverty, but progress was proving very slow, he said.

He believed that the main answer lay in public policy development.  In addition to internal efforts in each country, there was a necessity for international support.  Now was not the time for excuses, but the time for developed countries to give.  The poorest countries, however, must demonstrate that the resources were used and that definite progress was being made.  Another main goal was to receive access to markets, which Chile hoped for.  Agricultural subsidies were also important.  He added that if trade barriers were lifted, developing countries would generate necessary profits to achieve the Millennium Development Goals.

SHEIKH HAMAD BIN KHALIFA AL-THANI, Emir of Qatar, said Qatar was a staunch advocate of international initiatives to finance development -- especially efforts that helped fight poverty and promoted a more equitable distribution of the benefits of global growth.  He added that those efforts would, in turn, help maintain international peace and security.  Qatar was the host of the Fourth WTO Ministerial Meeting, which adopted the Doha agenda and demonstrated how trade liberalization through multilateral negotiations could boost development.

He said Qatar also hosted the Second Summit of the South last June, during which it submitted an initiative to establish “The Fund of the South for Development and Humanitarian Emergencies”.  Qatar had also affirmed its commitment to provide the designated percentage of GNP as development assistance, of which 15 per cent would be earmarked for the least developed countries as of 2006.  In addition, Qatar would be honoured to host the first follow-up conference of the International Conference on Financing for Development, as provided for in the Monterrey Consensus.  He proposed the conference be convened during 2007 at a time set by the General Assembly.

STJEPAN MESIC, President of Croatia, said the international community was inclined to see terrorism as the most urgent global issue.  However, terrorism could not be dealt with effectively if the development issue was neglected.  Uneven global development involved a destructive potential that negatively impacted international relations and the global order.  Underdevelopment, poverty, starvation and the lack of even basic education created the environment in which terrorists were bred and recruited.  Underdevelopment was, first of all, the underpinning of political dependence and helplessness, then the source of personal hopelessness, and, thereby, the pool from which potential terrorists were drawn.

He said that what the world needed was well-balanced development, not development in which some countries would develop at the expense of others.  Globalization was seen as inevitable.  However, he was not convinced that the negative effects of globalization were also inevitable.  Development must become a global process.

FESTUS MOGAE, President of Botswana, said more progress needed to be made on the challenges already identified five years ago.  The experience of the Southern African Development Community (SADC) was not different from that of other parts of the developing world.  While improvements had been made in sanitation and gender disparities in education, wide gaps remained in levels of development both within and between countries.

The SADC needed to continue making progress in national and international policy reforms, he continued.  It needed to improve efforts for institution building in seeking a fairer international trading system.  The international community, meanwhile, could accelerate the development of measures such as the International Finance Facility to support immediate front-loading of ODA to achieve the 0.7 target by 2015.  Also, financial aid must go beyond strategies such as the HIPC Initiative, which resulted in a debt-servicing scheme that placed a burden on impoverished people.  Finally, developing countries that made progress through good governance and sound macro-economic policies must not be punished for becoming middle-income countries.

SUSILO BAMBANG YUDHOYONO, President of Indonesia, said there was no question that developing nations must mobilize domestic financial resources, strive for good governance, fight corruption and find creative ways to raise money to finance development.  But that was never enough.  International cooperation was an imperative for development.  While developing countries were strengthening good governance, combating corruption and taking other steps, such issues should not be used as conditionalities.

He said financial flows for development must be generated through a meaningful trade regime with strong development dimensions.  He endorsed timetables for developed countries to fulfil the commitment of the 0.7 per cent aid target.  He recommended the adoption of a debt swap mechanism that would enable developing countries to make use of resources that normally flowed out to creditor countries.  He added that the outcome document had not turned out to be a balanced one, and it imposed many conditionalities on developing countries before they qualified for financial flows for development.  The obligations of developed countries, on the other hand, were worded in the vaguest terms.  The document also left out many issues relevant to international trade.

HU JINTAO, President of China, said the most pressing task that countries faced was the strengthening of international cooperation on development, narrowing of the North-South gap, and ensuring the realization of the Millennium Development Goals.  The question of international development “remains a long uphill journey”.  He called for further reforms of the global economic system, including the improvement of the international financial system through the empowerment of developing countries by giving them a greater say in international financial institutions.  He also called for improvement of international trade through the cultivation of a sound trading environment for developing countries, and a successful conclusion of the Doha Round in 2006.

Speaking about the plight of developing countries, he stressed that the key to successful development “lies in a country’s independent choice of the path and mode of development suited to its national conditions”.  He also called on the international community, especially developed countries, to forgive the heavy debt burdens of the least developed countries, which prevented them from achieving economic growth.  The United Nations, for its part, must be empowered to play a stronger role in promoting international cooperation.

Turning to China’s role in promoting development, he said his country was working hard to raise its standards of living by “opening up to the outside world”, through the building of a more open market system and keeping its WTO commitments by continuing to lower tariffs.  He cited specifically China’s efforts to support developing countries through the lowering of tariffs for 30 LDCs while reducing or cancelling some of their debts.  Looking ahead, he said that China planned a number of new measures to improve the lot of developing countries including more tariff reduction, expanding aid and debt forgiveness.

YOWERI KAGUTA MUSEVENI, President of Uganda, said development financing should focus on increasing national capacities to develop.  Three questions needed to be addressed when considering development financing relative to the private sector, where real growth occurred:  what areas needed financing, to what purpose would the financing be turned and what sources of financing were appropriate?  Development of the private sector called for development funds to be put into national financing mechanisms in the first place.  Financing then was needed to build up national capacities in service, research, telecommunications and other infrastructural components.

Over the long run, he said development assistance could contribute to a nation’s gross domestic product (GDP).  It could help a nation increase its market reach and most of all to create employment so the country could sustain its development.  In his country, for example, 64 per cent of adults were underemployed, not so much unemployed, since the country’s wealth enabled employment, but access to those resources needed to be expanded.  Increasing access called for expansion of the tax base, which brought up questions about extending assistance through grants or loans.  The best form of assistance was through budget support, which should transpire through banks, which encouraged domestic savings on the part of people who earned good wages.

ABDULLAH AHMAD BADAWI, Prime Minister of Malaysia, said that the achievement of the goals of the Monterrey Consensus seemed to be far away.  The political will of Member States needed to be strengthened.  It was certainly heartening, however, that in many initiatives, such as those regarding hunger and world solidarity, there was progress.  The issue of market access for goods was extremely important, as a failure to work on that situation might result in more poverty and a regression in those countries that had seen progress.

He implored all countries -— both developed and developing -— to fulfil the obligations contained in the Monterrey Consensus.  If Member States did not do so, there would be no realistic expectation of meeting the Millennium Development Goals, including the eradication of poverty from the face of the earth.

JAN PETER BALKENENDE, Prime Minister of the Netherlands, speaking also on behalf of Denmark, Luxembourg, Norway and Sweden, said that those five countries had allocated more than the 0.7 per cent target to official development assistance, proving that it was possible to reach that target and contribute to the well-being of the populations in the developing world.  But that was not enough.  Unless everyone picked up speed, most of the Millennium Goals would not be met by 2015.  No less than an extra $50 billion to $60 billion must be raised every year to achieve the Goals.

On the policy side, a great deal had been learned about increasing the effectiveness of aid and about what it took for poverty reduction to be sustainable.  The Goals would not be met unless human rights were respected, women and men were given equal opportunities and democracy was integrated into policymaking.  It was also crucial to improve the business and investment climate.

In order to reduce poverty, he stressed the need to ensure coherence in policymaking.  Developed countries should provide better market access, including access to financial services.  Developing countries needed to be able to increase earnings from exports.  Trade distorting subsidies like the ones for cotton and sugar needed to be addressed.  “If we want developing countries to be able to catch their own fish, we need to ensure a successful meeting in Hong Kong.”  Also needed was to be better prepared for humanitarian crises.  Humanitarian funding could and should be improved through the setting up of a humanitarian fund which was rapidly actionable and adequately funded.

JOSE LUIS RODRIGUEZ ZAPATERO, President of Spain, said that the people of Spain had traditionally demonstrated deeply rooted feelings of international solidarity, which had grown stronger in recent times.  His Government had made development cooperation one of its hallmarks and a paramount value guiding its policies.   Spain had undertaken to double its official development assistance (ODA) in four years, and was on target.  However, he said that increasing the amount and quality of aid was not enough in itself, and that innovative and complementary financing mechanisms needed to be found.  That was the reasoning behind the Initiative against Hunger and Poverty.

His country had also adopted measures regarding foreign debt that would enable the country to participate actively in multilateral debt relief initiatives with Heavily Indebted Poor Countries.   Spain was also becoming involved in projects to swap debt for public investment in key areas of sustainable human development, such as education, the environment and infrastructures, with specific emphasis on heavily indebted middle-income countries.  Measures aimed at consolidating progress in middle-income countries and preventing any weakening of achievements were extremely important, he said.  The international community should reward, not penalize, the efforts of those who were gradually consolidating a certain level of development.  The Spanish people, he added, believed it was possible to build a world free of poverty, and that the fight against hunger and poverty was the most noble war that humanity could wage.

LUIZ INACIO LULA DA SILVA, President of Brazil, said, “Hunger is a scourge of our own making inflicted on our own kind.”  The fight against hunger was his Government’s priority.  A year ago, Brazil, together with France, Chile and Spain, had organized a high-level meeting in New York to promote an International Action against Hunger and Poverty.  The debate on innovative mechanisms to finance development was no longer a taboo.  He firmly supported France’s proposal for a solidarity contribution to be collected on airline tickets.  In the Assembly, a draft agreement was being tabled to reduce the cost of international money remittances for migrant workers.

Describing Brazil’s national efforts to combat hunger, he said his country was also helping to overcome poverty and inequality, as it actively fostered discussions on the need for more balanced and fair international trade.  Yearly subsidies to farmers in industrialized countries were six times greater than the additional $50 billion needed annually to meet the Millennium Development Goals.  “In a world beset by instability, I am convinced that the eradication of poverty was a sine qua non condition for the emergence of a more stable and peaceful international order.  The time to act is now.”

THAKSIN SHINAWATRA, Prime Minister of Thailand, applauded greater pledges for aid and debt cancellation, but said that without sound economic fundamentals and efforts to seek additional earnings, developing countries could easily relapse into the vicious circle of poverty, debt and borrowing once aid dried up.  A strong economic foundation was as essential as short-term flows of aid and debt cancellation in order to achieve sustainable growth.  In the current climate, developing countries were facing two pressing challenges:  rising global oil prices and the lack or investment funds.  The sustained hike in global oil prices was a loud and clear call to consider alternative energy sources.  Oil hedging did not only raise oil prices but resulted in huge cash reserves in oil producing countries.  A way must be found whereby those extra profits could contribute more productively to the global economy.

He said that since the financial crisis in 1997, Asia had learned the need to strengthen the international financial architecture.  There was ever-growing support for an Asian bond market, something he had put forth in 2001.  Asians were among the most prudent savers in the world, and if those savings stayed in the region, they could provide a resource for further development.  Since 2003, Asian central banks had established two Asian Bond Funds with a total capital of $3 billion.  The next step was to issue regional currency denominated bonds.  Thus, Asian bonds were mechanisms for financing for development that also promoted greater regional economic stability.  Moreover, help in eradicating poverty could also come from within the developing world, as South-South cooperation was as good as North-South cooperation.

DOMINIQUE DE VILLEPIN, Prime Minister of France, said that while the world had never been more prosperous, never had inequities been greater than they were today.  Five years ago, world leaders had decided to break previous patterns of dependence and aid and to instead set up a new international partnership for development-based responsibility.  But clearly, there was still a long way to go to achieve the Millennium Development Goals, particularly in Africa.

He said that even though civil society and non-governmental organizations had urged States to increase their ODA, increased financing, though necessary, fell far short of what was needed.  “The time has come to create new mechanisms.  We must draw on the wealth created by globalization to raise stable, sustained resources to benefit the poorest countries.  Justice, stability and peace require that we do this”, he said.   France had joined Algeria, Brazil, Chile, Germany and Spain in calling on the international community to take up and implement that idea.

Next year, a pioneering group of countries would be introducing the first international solidarity levy on airline tickets, which would provide an ongoing source of fresh financing without impeding the development of air transport.   France would also propose that priority be given in allocating those resources to the fight against HIV/AIDS, tuberculosis and malaria.

Drawing the Assembly’s attention next to a new emergency, he called for greater action against avian influenza.  “We must all -- the United Nations Food and Agricultural Organization (FAO), World Organization for Animal Health, national public health authorities, and the pharmaceutical industry –- come together marshalling our forces in order to pragmatically and efficiently stem the spread of the disease among animal populations and mitigate the economic impact on poor countries”, he said.  Failure to take that and other actions, including setting up an emergency stockpile of antiviral drugs, so as to immediately contain any outbreak of infection in humans, exposed all countries to the disease, he said.

M. SAIFUR RAHMAN, Minister for Finance and Planning of Bangladesh, said the world had been changing rapidly in the three years since Monterrey.  Though wealth and resources were ever-expanding, they were unequally spread, which resulted in a huge gap between the rich and the poor.  Compared to its liabilities, the world had abundant resources, and it was crucial to establish a healthy mechanism for ensuring a fair distribution of it and creating an environment for unlocking potentials.  He believed that aid by itself was unlikely to achieve the desired degree of development.  The governance of the aid, and the manner in which it was used, was most important.

Development could only be achieved, he continued, against a backdrop of pluralism, democracy, good governance, rule of law and gender sensitivity.  Effective tools to achieve the Millennium Development Goals included greater domestic resource mobilization; action against corruption; sound policies to encourage private sector participation; dynamic administration; fiscal and monetary reforms; increased domestic capacity; better management of expenditures; and prioritization of projects.  He added that a true partnership that included all stakeholders would be the key that could bring about a real change.

AHMED ABOUL GHEIT, Foreign Minister of Egypt, said the plenary was of particular importance, given the urgent need to assess the progress of national and international commitments in financing for development.  He said that if efforts were not intensified and unified, people in developing countries, particularly in Africa, would remain locked in an endless cycle of poverty, hunger and disease.  He stressed the importance of granting Africa the highest priority on the international development agenda.

He noted developing countries had made progress in creating national economic environments that were conducive to development, while developed nations had expressed a readiness to meet their commitments.  That progress should be combined with concrete steps to implement the Monterrey Consensus, particularly in reaching agreed ODA targets.  He stressed the importance of all Member States addressing issues of international trade and sending a clear message that the Doha Round be implemented.

He also touched on the importance of agreeing on additional and innovative sources of financing, as well as resolving the massive external debts of developing countries, particularly in Africa.  He renewed his country’s previous proposal for the consideration of its experience in “Debt Swaps for Development” as an effective tool.

ANDREW NATSIOS, Administrator of the Agency for International Development of the United States, said that the United States had increased its ODA even beyond President Bush’s 2002 Monterrey pledge.  Since 2000, American assistance had nearly doubled, rising from $10 billion to $19 billion in 2004.  That constituted one quarter of the ODA from the 30 industrialized member countries of the Organisation for Economic Cooperation and Development (OECD).  History had shown, however, that no amount of financial assistance would ensure development unless it was used effectively.  Better donor coordination could help, but even more important were the recipient Government’s policies and commitment to eliminate corruption.

The Agency had tried to take advantage of new sources of development assistance in recent years, joining forces with socially responsible private sector organizations in the Global Development Alliance.  Using traditional development assistance in new ways, the Agency had invested $1.1 billion in 290 public-private alliances in 98 countries since 2002, while private sector partners contributed more than $3.7 billion to those programmes.  The United States was also helping African economies seize trade opportunities.  Through United States trade capacity-building initiatives, it was also helping countries create the conditions to be successful.  He added that without trade, there could be no sustained economic growth.

HEIDEMARIE WIECZOREK-ZEUL, Federal Minister for Economic Cooperation and Development of Germany, said attempts to weaken the United Nations had failed.  She welcomed the fact that in the outcome document the Millennium Development Goals had been reaffirmed and momentum had been added to efforts to reach the Goals in a timely and effective manner, in particular the 0.7 per cent ODA target.  Good governance and targeted support had resulted in very practical progress.  In those heavily indebted countries that had reached decision point under the debt relief initiative, social spending had risen from $5.8 billion to $9.1 billion between 1999 and 2003.  The scandal was, however, that 30,000 children died from avoidable diseases every day.

She said external support would bear fruit only if it was accompanied by ownership and good governance in developing countries.  The industrialized countries must reduce trade barriers and agricultural export subsidies.  As the high oil price was a heavy burden on the poorest developing countries, it was necessary to rely on renewable energy to a greater degree than ever before.  Greater transparency and action in oil markets must be sought as well.  Global tasks such as poverty reduction and the preservation of the natural environment must be solved on a global scale.  Worldwide disarmament was also needed, she stated, adding that it was obscene that global spending on armaments had now reached more that $1 trillion, while global expenditure on development cooperation was only $78 billion.

MACHIMURA NOBUTAKA, Minister for Foreign Affairs of Japan, said that his country, in line with the Monterrey agreement and as the top donor country over the past decade, would strive to achieve a strategic expansion of its ODA volume.  Japan intended to increase its ODA volume by $10 billion in aggregate over the next five years and double aid to Africa over the next three years.  Its ODA quality and effectiveness was also being improved, based on the action plan for implementing the Paris Declaration.

He said human security was also important for development.  Realization of the Millennium Development Goals had to be accompanied by successful efforts to ensure that people everywhere were able to live their lives in freedom and dignity.  Also important for development was South-South cooperation, which his country had actively promoted.  The New Asia-Africa Strategic Partnership, adopted in Indonesia in April 2004, was a milestone in that area.  In that connection, Japan was currently exploring the concept of an Asian African Development University Network.

ALI RODRIGUEZ ARAQUE, Minister for Foreign Affairs of Venezuela, said that since Monterrey, the outlook for the global financing for development agenda was not very hopeful, particularly with poverty, child mortality and indebtedness spreading throughout the world.  Far from reaping the benefits of meagre efforts to promote equitable income distribution and debt relief, developing countries were facing more challenges than ever.

For its part, Venezuela had striven to ensure economic progress and political stabilization.  That had made it possible for the country to drastically improve its education and health systems.  More children were entering and staying in school than ever.  Venezuela had also made strides in putting its oil revenues to good use for development-focused initiatives.  Those promising programmes also aimed to boost South-South cooperation.  While the political and economic aspects of financing for development were most often discussed, he urged the Assembly to also focus on the social aspects of that agenda.

JOSE MANUEL BARROSO, President of the European Commission, said that the European Union accounted for 55 per cent of all official development aid provided worldwide.  This summer, the Union went further, agreeing to nearly double overseas aid between 2004 and 2010.  At least 50 per cent of that increase would be targeted to Africa.  It had done that because the longstanding 0.7 per cent ODA target was an achievable target, not a goal to aspire to.  But it was also about offering better and more effective aid, policy coherence, improved delivery and untying aid.  In those areas, the Union had shown its determination to turn worthy aspirations into action.

However, he continued, no developing country ever became a developed country on aid alone.  International trade was an incredibly powerful engine for sustainable development.  A 1 per cent increase in Africa’s share of global trade would deliver four or five times more income every year than the continent currently received in aid.  That was why Europe’s Everything But Arms initiative allowed all goods imported from the world’s least developed countries except munitions to enter the European Union completely free of duties or quotas.

But neither aid nor trade would be sufficient if developing country Governments did not assume their responsibility for a self-sustained development process, by creating an enabling environment for private business, he added.  The aid provided by the European Union supported Governments in their efforts to mobilize domestic resources, implement effective national development policies, put in place accountable governance structures, and uphold human rights and the rule of law.

KIPKORIR ALY AZAD RANA, Deputy Director-General of the World Trade Organization, said Member States had heard many speakers discussing international trade, which was one of the main targets of the Millennium Development Goals and figured prominently in the Monterrey Consensus.  As everyone knew, however, the potential for international trade to contribute to development had not yet been fulfilled.  The current round of negotiations presented an opportunity to rectify that problem and translate words into action.  The present rate of progress remained far from sufficient to ensure that deadlines would be met.  Many problems still confronted the negotiators, although some progress had been made in such areas as agriculture and non-agriculture markets.

That progress, he continued, was nowhere near sufficient.  There seemed to be a renewed sense of blockage and frustration, and there needed to be negotiations on substance.  Very little of the political support shown at ministerial meetings had turned into progress in the negotiating groups.  He said that when it came to specifics, the familiar defensive positions took over.  It was of the utmost importance to reenergize the momentum, although intensive work would have to be done this year to see any positive results.

LENOR BRIONES, Director of Social Watch, speaking on behalf of civil society and the International Facilitating Group (GCAP), said that the consensus of international civil society was that the Millennium Development Goals would not be reached by 2015.  Indeed, the broad promises of the Millennium Declaration were not being fulfilled and the funds that were to have been generated in the wake of Monterrey were not materializing.  Billions of people still lived in poverty, millions of girls were not entering school, child and maternal mortality remained high and global agreements on aid, debt and trade remained unfulfilled.

She recounted the staggering number of promises the international community had made to alleviate the suffering of the poor but which remained shamefully unfulfilled.  From proposals to substantially increase ODA to truly and comprehensively undertaking actions to provide debt relief, such promises had failed to yield concrete actions.  She urged the Assembly to do more this year than make promises. “It is time to fulfil old and new promises.  The poor of the world, especially the women and children cannot wait until 2015.  Keep your promises”, she declared.

RAJAT KUMAR GUPTA, Senior Partner Worldwide of McKinsey and Company, Inc., said he believed that economic growth and the ambitions for the eradication of poverty depended on the energy and drive of business and commerce.  If Member States were to examine where development had succeeded, business had been the engine.  There was no hope for development without business and, in the long term, there was no business without development.

The very vitality of the business sector was growth, and that was what inspired workers and management.  He urged Member States to have higher expectations of business.  He also urged Member States and business leaders to embrace opportunities and work together in the spirit of real partnership.

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For information media • not an official record
For information media. Not an official record.