GENERAL ASSEMBLY OPENS HIGH-LEVEL DIALOGUE ON FINANCING FOR DEVELOPMENT, AIMS TO SET STAGE FOR NEXT YEAR’S REVIEW OF 2002 ‘MONTERREY CONSENSUS’
GENERAL ASSEMBLY OPENS HIGH-LEVEL DIALOGUE ON FINANCING FOR DEVELOPMENT, AIMS TO SET STAGE FOR NEXT YEAR’S REVIEW OF 2002 ‘MONTERREY CONSENSUS’
|Department of Public Information • News and Media Division • New York|
Sixty-second General Assembly
31st & 32nd Meetings (AM & PM)
GENERAL ASSEMBLY OPENS HIGH-LEVEL DIALOGUE ON FINANCING FOR DEVELOPMENT,
AIMS TO SET STAGE FOR NEXT YEAR’S REVIEW OF 2002 ‘ MONTERREY CONSENSUS’
Secretary-General Hopes Discussion Rekindles ‘Spirit of Monterrey’;
President Says Goals of Great ‘Anti-Poverty Partnership’ Not Yet Met;
Warning that millions of lives were hanging in the balance, General Assembly President Srgjan Kerim today urged finance ministers, senior officials from the Bretton Woods institutions and other stakeholders gathered in New York for a two-day development financing summit, to reinvigorate a five-year-old pledge by rich and poor countries to create the investment opportunities, institutions and policies that would make sustainable development possible for all.
“We have reached a critical juncture in the [development financing] agenda. While there have been some successes, many of the objectives set in 2002 have not yet been met”, said Mr. Kerim, opening the General Assembly’s High-level Dialogue to assess worldwide implementation of the landmark consensus adopted by 50 Heads of State and Government attending the first International Conference on Financing for Development, reached five years ago in Monterrey, Mexico.
In the Monterrey Consensus, developing countries took primary responsibility for their own development and for mobilizing domestic resources, while developed countries agreed to provide assistance and promote an international environment conducive to development. Mr. Kerim, of the former Yugoslav Republic of Macedonia, convened the special meeting to build political momentum ahead of a United Nations review conference to be held next year in Doha, Qatar.
The Consensus covers six major thematic areas: mobilizing domestic financial resources; mobilizing international resources such as foreign direct investment and other private flows; international trade; international financial and technical cooperation for development; external debt; and systemic issues, such as the coherence of the international monetary and trading systems in support of development.
He said developing countries needed to develop credible long-term investment plans, strengthen good governance and continue to fight corruption to encourage sustainable economic growth and an attractive environment for business. To maintain the credibility of their commitments, donors should accelerate their plans to scale up assistance; and issue specific timelines for increasing aid, so that partner Governments could prepare supporting macroeconomic frameworks.
“Time is running out to make the needed practical investments”, Mr. Kerim warned, stressing that the focus must now be squarely on implementation. Promises must be urgently translated into practical plans with systematic follow-through by all parties. “If this -- the greatest anti-poverty partnership in history -- is insufficient to break from ‘business as usual’, many developing countries and campaigners around the world will be left without hope. Global trust will be irredeemably undermined”, he declared.
If implemented, existing commitments to finance development were enough to achieve the Millennium Development Goals, even in Africa. But each side of the partnership must deliver. “This is the spirit of the Monterrey Consensus”, he said, adding that, as developing countries adopted comprehensive national strategies, then donors must deliver on commitments to provide additional assistance to enable them to succeed.
In his opening remarks, Secretary-General Ban Ki-moon told the Assembly that progress in implementing the Monterrey Consensus had been “mixed”. Many developing and low-income countries had experienced stronger economic growth, he said, and official development assistance (ODA) had improved, but the “sustained increase” in assistance needed to meet the targets agreed in Monterrey has not materialized. “Closing the funding gap is essential if we are to alleviate extreme poverty, fight diseases and achieve the other development targets”, Mr. Ban said.
The Secretary-General called on developing countries to adopt policies that support sustained economic growth and job creation, while developed countries must increase capital flows, especially to low-income countries. He called for a swift, development-oriented conclusion to the Doha trade negotiations, a sustainable path of debt repayment for low-income countries, and greater participation by developing countries in international financial institutions.
“Let us begin here, in this High-level Dialogue, to rekindle that ‘ Monterrey spirit’. Let us renew our commitment to free our fellow human beings from the abject and dehumanizing conditions of poverty and inequality”, he said. A strong and sustained effort now could mean the difference between the success and failure of the international community’s collective endeavour to create a better, more peaceful and more prosperous world for all.
Among the nearly 30 speakers taking the floor, Pakistan’s Minister for Economic Affairs, Hina Rabbani Khar, who spoke on behalf of the “Group of 77” developing countries and China, said that the Monterrey Consensus suffered from a “serious implementation deficit”. While some developing countries had exhibited dynamic economic performance, many countries remained mired in a vicious circle of poverty, far from achieving the Millennium Goals.
Despite improved debt management strategies and intense international cooperation on debt relief, the total external debt of developing countries had increased and the conditions that led to the global debt crisis still existed, she said. Low levels of official development assistance, the current impasse in the World Trade Organization’s Doha Round, and the global economic slowdown were also bad signs. Taken together, all this pointed weak implementation of the Consensus and the issues that Monterrey was unable to adequately address.
In the future, the international community should redouble its efforts to enhance ODA and to secure additional resources for developing countries. Aid should be delivered more effectively and be more responsive to the needs of recipient nations, she said. The United Nations should increase the ability of poor and vulnerable economies to attract private and multilateral investments and,overall, the Member States should do more to help solve the external debt problems of developing countries.
Picking up that thread, A.B. Mirza Azizul Islam, Financial Adviser for Bangladesh, who spoke on behalf of the least developed countries, said that such countries could not effectively gain from trade due to a wide array of harmful subsidies, non-tariff-restrictions and artificial standards imposed by importing countries. He called on such countries to provide “duty-free and quota-free market access” for all products from least developed countries.
Further, he said that, while the Multilateral Debt Relief Initiative and the Heavily Indebted Poor Countries (HIPC) Initiative had yielded some positive results, the overall external debt in least developed countries was troublesome and required full cancellation of all of their outstanding debt, both bilateral and multilateral. New and innovative sources of financing could supplement existing sources, with the goal in mind to meet the resource gap in the least developed countries. The idea of establishing an institutional arrangement under the auspices of the Assembly for follow-up of the development financing process deserved consideration, he added.
Carlos Manuel Costa Pina, Secretary of State of Portugal, speaking on behalf of the European Union and affiliated countries, said that every country had the primary responsibility for its own development, and the role of good governance, sound policies and national development strategies could not be overemphasized in the achievement of sustainable development. He said that ODA should complement effective and sustainable domestic resource mobilization, as well as other sources of financing for development. The increasingly relevant role some developing countries were having in shaping the world economy should be encouraged, along with other innovative sources of financing.
Foreign direct investment was also an important complement to domestic investments, he said. Transparent, stable and predictable investment climate was necessary to strengthen investment flow, and public-private partnerships should be used to promote foreign investment, while encouraging good corporate governance and citizenship. Despite dire forecasts, the Doha development round had made progress. “Aid for Trade” was critical in supporting the integration of developing countries into the world trading system and to use trade more effectively to reduce poverty.
Danny M. Leipziger, Vice President and Head of Network, Poverty Reduction and Economic Management of the World Bank, said that since 2002, donors delivered in large part on their commitments, with 32 countries benefiting from total relief of over $90 billion in debt in “2006 terms”, with the International Development Association being the single biggest provider. However, debt sustainability was not guaranteed by forgiving past debt; it required careful borrowing in the future, export diversification and growth.
High indebtedness was more likely to have been a symptom of weak policies, which was why the Bank had worked closely with the International Monetary Fund (IMF) in the context of the Debt Sustainability Framework. The Bank’s approach asked for a harmonization effort from other creditors and focused on helping countries both diagnose weakness and build debt management strategies. He said that developing countries had improved the quality of poverty-reduction strategies and boosted their institutional frameworks for public financial management, administration and governance. Such improvements opened important opportunities for “scaling up” across a wide set of countries, including fragile States.
At the same time, donors remained “far short” on their commitments to improve the quality and quantity of aid, he continued, noting that most of the increase in official development assistance since 2004 had been driven by debt relief. The results of efforts to improve the quality of aid had been mixed, and while aid flows to better-performing countries had increased since 2000, that trend was far from uniform. The Bank was seeking to contribute $3.5 billion to the fifteenth replenishment of the International Development Association, more than double the 2005 pledge.
Valentine Rugwabiza, Deputy Director-General of the World Trade Organization (WTO), said the agencies challenge now and for years to come was to ensure that new opportunities resulting from the Doha development agenda -— such as duty-free and quota-free market access, and sharp reductions in agriculture subsidies in developed countries -— would translate into trade realities for least developed countries and many developing countries.
She urged world political leaders to rise above doubts and difficulties over inevitable details and to focus on “big picture” gains that would derive from this round and the ensuing development agenda. “No WTO member need fear coming out of this negotiation a loser”, she said. “There is enough flexibility built into the agenda to ensure that there will be gains for everyone.”
Turning to “Aid for Trade”, she said last month the WTO organized regional meetings resulting in key messages, which were that trade ministers must work more closely with finance and development ministers to succeed in attracting additional Aid for Trade; developing countries must agree on two or three national priorities they believed would impact most on their trade growth; and the private sector had a vital role to play, since Aid for Trade strategies would succeed only if driven by on-the-ground business experience and needs. The next step was to build on progress made at those meetings and the forthcoming Global Review to be held in the WTO General Council 20 to 21 November.
The Chairman of the Economic and Social Council also spoke today, as did the Chairman of the Council of Ministers of Bosnia and Herzegovina. Also taking the floor were the ministers from Germany, Antigua and Barbuda, Botswana, Iran, Netherlands, Ghana, Zimbabwe, Montenegro, Nigeria, Guinea, Guyana, Haiti, Bahamas, Cape Verde and the United Kingdom.
Senior finance and development ministers from Guatemala, Bolivia, Egypt, Russian Federation, Norway, Denmark, Indonesia, Hungary, Namibia, United Republic of Tanzania and the Republic of Korea also addressed the Assembly, as did a senator from the Philippines.
A representative of the International Monetary Fund also spoke, as well as representatives of the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Development Programme (UNDP).
The General Assembly will reconvene tomorrow at 10 a.m., Wednesday, 24 October, to continue and conclude the High-level Dialogue on International Financing for Development.
The General Assembly today convened a High-Level Dialogue to assess worldwide implementation of the landmark Consensus on development financing reached in Monterrey in 2002. The two-day High-Level Dialogue on Financing for Development will involve all relevant participants in the financing for development process -- governments, business, civil society and multilateral financial institutions, and will contribute to the preparation of the follow-up International Conference on Financing for Development to be held in Doha, Qatar, in the second half of 2008.
Statement by General Assembly President
Assembly President SRGJAN KERIM (the former Yugoslav Republic of Macedonia), said that the Assembly’s two-day dialogue would begin the intergovernmental follow-up process to review the implementation of the 2002 Monterrey Consensus and assess the challenges ahead. He encouraged government delegations and other stakeholders to engage in a frank, inclusive and open exchange of views in order to make a substantive contribution to the follow-up Conference in Doha, Qatar, next year.
Touching briefly on yesterday’s informal hearings with civil society, he said the overall message had been clear: the international community had reached a critical juncture in the development financing agenda, progress had been slower in some areas, despite promises made, and many of the development finance objectives set in 2002 had not been met at all.
At Monterrey, developing countries had acknowledged primary responsibility for their own development, and had committed to creating sound fiscal, economic and social policies to that end. In return, donors agreed to support them through more and better aid, debt relief and fairer trade, and give them a more equal voice in the international system. He said that the Consensus embodied the mutual responsibilities of both developed and developing countries in six areas: domestic resource mobilization; private capital flows; international trade; official aid; external debt; and systemic issues.
While noting that there had been progress in some of those areas, he stressed that more needed to be done to: encourage investment flows in developing countries; forge an open, non-discriminatory and equitable multilateral trading system; and increase the voice of developing countries, particularly in the international financial institutions. He added that putting all low-income countries on the path to debt sustainability and poverty reduction remained a challenge.
He said that, since its adoption in 2002, the Monterrey Consensus had remained at the heart of the United Nations development debate, and had been reaffirmed by world leaders at the Assembly’s 2005 Summit. That same year, at Gleneagles, the Group of Eight leaders had agreed to make progress on trade and provide an extra $50 billion in extra aid, with $25 billion to Africa by 2010. They had also set new targets for access for all to HIV/AIDS treatment, free basic education and health care. Those same leaders, in Heiligendamm this past summer, recommitted to increasing development assistance, among other things.
“If implemented, existing commitments to finance development are enough to achieve the Millennium Development Goals, even in Africa. But each side of the partnership must deliver,” he said. “This is the spirit of Monterrey.” He said that, as developed countries adopted comprehensive national strategies, then donors must deliver on commitments to provide additional assistance to enable them to succeed. At the same time, bad governance and corruption would undermine efforts to provide long-term financing. But, lack of progress should not be an excuse for additional conditionality or delaying increases in official development assistance (ODA).
“Developing countries need to develop credible long-term investment plans, strengthen good governance and continue to fight corruption, to encourage sustainable economic growth and an attractive environment for business,” he said. To maintain credibility, donors, for their part, should accelerate plans to scale up assistance, and issue country-by-country timelines for increased aid, so that partner governments could prepare supporting macroeconomic frameworks.
“Time is running out to make the needed practical investments,” he warned, adding that the focus must now be squarely on implementation. Promises must be urgently translated into practical plans with systematic follow-through by all parties. “Developing countries need to know when additional resources will arrive so they can begin to plan,” he said.
He went on to say that success at the upcoming Doha follow-up conference would depend on the consensus reached during the Assembly’s consultation process during the current session. Assembly delegations could lay the ground over the next couple of days. “We need to judge progress made so far and assess future challenges, including support to developing countries to adapt and mitigate the effects of climate change,” he said.
While the United Nations faced “huge challenges” ahead, hope could be taken from progress made thus far, he said, noting, among other things, that in the past 40 years, life expectancy in the developing world had increased by 25 years. In the past 30 years, illiteracy had fallen by half. And in the past 20 years, 400 million people had been lifted out of absolute poverty. In addition, the debt of over 20 countries –- some $81 billion -- had been erased, helping some to provide free health care and build new classrooms.
“Progress is possible,” he said. “Above all we must demonstrate the political will. Millions of lives quite literally hang in the balance.” He stressed that if the Monterrey Consensus –- “the greatest anti-poverty partnership in history” –- was insufficient to break from “business as usual”, many developing countries and campaigners around the world would be left without hope. “Global trust will be irredeemably undermined,” he warned, adding: “To avoid this, to establish greater trust and renew confidence in the multilateral system, it is critical that we all live up to our promises and commitments.”
He called on the international community to move beyond the simplistic division of the world into “North and South” that had dominated the development debate in the past. The world today was far more complex, with new emerging economic powers, as well as donors and private philanthropy in all regions of the world. It was incumbent upon leaders from all those groups and stakeholders to demonstrate leadership and concerted action. “Otherwise, by 2015, there will be more people struggling in poverty. Millions of people will not realize the basic promises of the Millennium Development Goals in their lives,” he asserted.
Opening Remarks by Secretary-General
BAN KI-MOON, United Nations Secretary-General, said that the International Conference on Financing for Development held in Monterrey five years ago had marked a turning point in the international community’s quest for economic and social progress. At that meeting, developed and developing countries alike came together, under United Nations auspices, to forge a bold new partnership for development; and they made clear their determination to end poverty once and for all. With the Monterrey Consensus, developing countries took primary responsibility for their development, and for mobilizing domestic resources. Developed countries, in turn, agreed to provide assistance and promote an enabling international environment for development.
He said that the Consensus was a landmark agreement in that it reiterated that poor and economically distressed people should be welcomed as partners in the development process. And it affirmed the importance of substantially increased and predictable ODA to achieve development objectives, including the Millennium Development Goals.
“Just past the midpoint in the global effort to achieve these Goals by 2015, our scorecard is uneven. Some regions –- particularly sub-Saharan Africa -– are clearly not on track,” he said, adding: “This should worry every single one of us.” After all, reaching the Goals was not only vital to building better, healthier and decent lives for millions of people around the world, it was also essential to global peace and security, he asserted.
Now, more than ever, he said, achieving the Millennium Development Goals –- and, indeed, all the internationally agreed development targets –- depended fundamentally on the substance, vitality and credibility of the global partnership. “We know we can reach the Goals, but only if we share responsibility and honour our commitments,” he said.
So far, progress on the Monterrey Consensus had also been mixed. Many developing nations, including many lower middle-income countries, had experienced stronger economic growth. Since 2002, levels of ODA, including new commitments, had risen, only to fall off since last year. More importantly, the sustained increase required to meet targets agreed to decades ago, and reiterated in 2002 and 2005, had not materialized. Closing that funding gap was essential if the international community was to eliminate extreme poverty, fight diseases and achieve the other development targets. “The challenge is even greater now, with the need to mitigate and adapt to climate change, while striving to reduce the huge and growing economic divergences,” he added.
Emphasizing that all this could only happen when donors met their ODA commitment targets, and channelled more resources through national budgets, he said, at the same time, that more effort was required to improve aid effectiveness. The additional financing needs for climate change must also be addressed. He went on to note that, while significant steps had been taken on debt relief, there too, much more was needed. Putting all low-income countries on a sustainable path of debt repayment must be a priority.
“And immediate action is needed to increase the voice and participation of developing countries in international decision-making, particularly in the international financial institutions,” he said, stressing that that particular goal was essential for the legitimacy, credibility and, ultimately, the effectiveness of those institutions.
At the national level, implementation posed its own challenges, he said. In many cases, prudent macroeconomic management and increased social spending had not generated the results required to achieve the Millennium Development Goals. National development strategies needed to give priority to macroeconomic and other policies that supported sustained economic growth and decent employment. Net international capital flows had actually flowed away from most developing countries over the last decades. Much more must be done to increase stable capital flows to low-income countries and to enhance their development impact.
“We also need more inclusive multilateral coordination of macroeconomic policies,” he said, noting that that was particularly urgent in the face of the large global imbalances, volatile international capital flows and the threats to sustaining development posed by financial turmoil. Significant challenges remained in realizing the development dimension of the Doha trade negotiations. Concluding the talks quickly, with meaningful and equitable development implications, should be the principal focus of the negotiators. “Aid for trade should be made operational,” he said.
With all that in mind, he said that the International Review Conference on Financing for Development, to be held in Doha next year, offered a golden opportunity for all stakeholders to consolidate the gains made and to achieve new breakthroughs. It was an opportunity to strengthen the solidarity and partnership between rich and poor countries that was created five years ago in Monterrey.
“Let us begin here, in this High-level Dialogue, to rekindle that ‘ Monterrey spirit’”, he said, calling on the international community to renew its commitment to “free our fellow human beings from the abject and dehumanizing conditions of poverty and inequality”. A strong and sustained effort now could mean the difference between the success and failure of the collective endeavour to create a better, more peaceful and more prosperous world for all.
“I urge the international community to do its utmost to fulfil the commitments made at Monterrey, so that all countries, and all people, especially the poorest, can benefit,” he said, calling for fresh ideas on specific actions that could be taken in Doha to deliver fully on the global partnership for development.
DALIUS CEKUOLIS, President of the Economic and Social Council, said that the third High-Level Dialogue on Financing for Development was an important occasion for the United Nations and all its partners to advance the United Nations development agenda. The Economic and Social Council had expanded its functions for promoting social and economic development, and now provided three major forums to follow up on the Monterrey process: the annual spring meeting with the Bretton Woods Institutions, the World Trade Organization (WTO) and United Nations Conference on Trade and Development (UNCTAD); and two new forums: the Annual Ministerial Review; and the Development Cooperation Forum. Those institutions enhanced the Council’s capacity for coordination, follow-up and assuring implementation of the United Nations development agenda.
He said the spring meeting would be focused on specific issues and planning would be finalized well in advance to help ensure that it would help lead to the success of the next meeting in Doha. The Annual Ministerial Review enhanced the Economic and Social Council’s role as a central coordinating body. In future, it should make recommendations to Member States for concrete steps to overcome challenges to meeting the international agreed development goals and the Millennium Development Goals. The Development Cooperation Forum was an important reminder that all stakeholders must be accountable to one another. The Monterrey Consensus called for comprehensive national and international policy actions to achieve internationally agreed development goals. The international community must work together and make full use of all existing forums and mechanisms to succeed.
DANNY M. LEIPZIGER, Vice President and Head of Network, Poverty Reduction and Economic Management, World Bank, noted that the 2002 International Conference on Financing for Development at Monterrey had laid out a mutual accountability framework that included actions for donors and partner countries anchored in the country-based development model. Five years later, he commended ongoing United Nations efforts to take stock of progress and discussed three areas in which the Bank had been involved: debt relief, aid “scaling up” around the country-based model, and trade reform.
On debt relief, he said donors had delivered in large part on their commitments, with 32 countries benefiting from total relief of over $90 billion in “2006 terms”, with the International Development Association (IDA) being the single biggest provider. However, debt sustainability was not guaranteed by forgiving past debt; it required careful borrowing in the future, export diversification and growth. High indebtedness was more likely to have been a symptom of weak policies, which was why the Bank had worked closely with the International Monetary Fund (IMF) in the context of the Debt Sustainability Framework. The Bank’s approach asked for a harmonization effort from other creditors and focused on helping countries both diagnose weakness and build debt management strategies. Turning to developing country efforts to manage aid flows, he said developing countries had improved the quality of poverty reduction strategies; strengthened their institutional frameworks for public financial management, public administration and governance; and bolstered the quality of their growth policies. Those improvements had opened important opportunities for “scaling up” across a wide set of countries, including fragile States, he said.
Donors remained far short on their commitments to improve the quality and quantity of aid, he continued, noting that most of the increase in ODA since 2004 had been driven by debt relief. The results of efforts to improve the quality of aid had been mixed, and while aid flows to better-performing countries had increased since 2000, that trend was far from uniform. The Bank was seeking to contribute $3.5 billion to the fifteenth replenishment of IDA, more than double the 2005 pledge. Regarding efforts to make the global trade system more “development friendly”, he stressed the importance of successfully concluding the Doha Round as a key goal. The costs of failure should not be underestimated. Regardless of the outcome of those talks, a substantial increase in “aid for trade” to help the poorest countries harness global markets should remain a priority. He concluded by highlighting three additional areas for action to help promote implementation of the Monterrey Consensus: identifying innovative sources of development finance; increasing support for poverty reduction strategy implementation; and strengthening the development focus around global and regional public goods.
MURILO PORTUGAL, Deputy Managing Director of the International Monetary Fund (IMF), said that the Fund was a committed partner in the global community’s efforts to help developing countries reduce poverty and reach the Millennium Goals. Opening his statement with a snapshot of the economic outlook for the developing world, he said that there had been remarkable improvements in the macroeconomic performance of some developing countries in the past few years and that the positive trends had been witnessed in all major regions.
Sub-Saharan Africa, in particular, was experiencing its strongest growth and lowest inflation in over 30 years, and growth there should reach more than 6 per cent this year. In developing Asia, growth was expected to reach 10 per cent this year, he said, adding that thus far, developing countries had for the most part weathered the recent turbulence in the financial markets that had rocked the developed world. Still, some emerging economies with more integrated markets or with high external vulnerabilities had felt ripple effects, but even those episodes had been more muted than in the past.
Overall, the outlook for the developing world remained “favourable”, albeit with some increased worries about downside risks related to tightening credit conditions or further delays in concluding the Doha WTO Round. The Fund’s positive view was largely driven by the fact that developing countries were in a better position than they had been decades ago, having reaped the benefits of the economic reforms and improved macroeconomic policies they had pursued. In addition, many countries had been able to build up considerable foreign exchange reserves and were better prepared to weather unexpected shocks.
He said that South and East Asia and Latin America seemed to be on track to meet the income targets of the Millennium Goals by 2015, while emerging Europe, Central Asia, the Middle East and North Africa had largely eliminated extreme poverty. The picture was different for sub-Saharan Africa, however. In that region, only a handful of countries were positioned to meet the income poverty goals, despite considerable progress made so far.
He said that while it would be fair to say that developing counties were living up to their side of the understandings reached at Monterrey, there was a need for the donor community to adhere more closely to the commitments made at that conference, as well as later, at the Group of Eight Summit in Gleneagles. Among other things, developing countries needed more financial assistance, especially since most of the growth in ODA over the past decade could be attributed to debt relief measures, not wider development initiatives. While several positive signs were emerging, with several donor countries making efforts to raise their aid budgets, much remained to be done.
At the same time, the Fund welcomed the emergence of a variety of players in the donor community, including non-traditional bilateral donors, global funds and private foundations. Those stakeholders could make a real difference to the development effort, as their own experiences allowed them to bring a fresh perspective to the table. For its part, the IMF was taking a careful look at its macroeconomic and fiscal policy advice to low-income countries to see how to make the best use of scaled-up inflows. Touching on some of the early conclusions of that review, he said the Fund must continue to help countries create and maintain sound macroeconomic environments in which they could use aid “fully and well”.
Further, countries and their partners had to plan ahead, and over time countries should strengthen their own revenue efforts to become less dependent on aid flows. Key policies in that regard included broadening the tax base and strengthening revenue administration. The Fund was providing technical assistance to help domestic resource mobilization. He said that, to be effective in the common endeavour to reach the Millennium Goals, the IMF realized that it must remain credible in the eyes of all its members, including developing countries. To that end, there was broad recognition that the “quota and voice” reforms should lead to an increase in the voting share of developing countries as a whole.
VALENTINE RUGWABIZA, Deputy Director-General of the World Trade Organization (WTO), said, while progress had been made toward the Millennium Goals, some regions, notably Africa, had lagged behind and imbalances existed regarding trade growth. Greater political resolve was needed to follow up on the Monterrey Consensus. The WTO’s challenge now and for years to come was to ensure that new opportunities resulting from the Doha Development Agenda -— such as duty-free and quota-free market access, and sharp reductions in agriculture subsidies in developed countries -— would translate into trade realities for least developed countries and many developing countries.
She emphasized the need for political leaders to rise above doubts and difficulties over inevitable details and to focus on “big picture” gains that would derive from this round and the ensuing development agenda. “No WTO member need fear coming out of this negotiation a loser,” she said. “There is enough flexibility built into the agenda to ensure that there will be gains for everyone.”
Regarding Aid for Trade, last month the WTO organized regional meetings resulting in key messages, which were that trade ministers must work more closely with finance and development ministers to succeed in attracting additional Aid for Trade; it was of critical importance to maintain a focused and sustained commitment to trade-led growth as a development priority; developing countries must agree on two or three national priorities they believed would impact most on their trade growth; and the private sector had a vital role to play, since Aid for Trade strategies would succeed only if driven by on-the-ground business experience and needs. The next step was to build on progress made at those meetings and the forthcoming Global Review to be held in the WTO General Council 20 to 21 November.
CHEICK SIDI DIARRA, High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, delivering a statement on behalf of Supachai Panitchpadki, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), said that the Monterrey Consensus had highlighted the role of internal conditions for mobilizing domestic resources, both public and private, to sustain adequate levels of productive investment. Indeed, harnessing domestic financial resources was important for accelerating growth, as well as less dependence on ODA and associated conditionality, thereby increasing ownership in the development process.
He went on to say that the emergence of some developing countries as regional engines of trade and growth, along with sustained South-South cooperation were some of the positive trends that were concealing many disparities within and among countries, especially the least developed, landlocked and small island States, where economies were vulnerable, poverty was endemic and participation in international trade was negligible. Priority areas to be addressed in the coming period included redressing asymmetries in the multilateral trading system by delivering on the development aims of the Doha WTO talks, and, among others, ensuring development coherence between the global trading system and the proliferation of regional arrangements.
On the vital importance of increased –- and predictable –- ODA, he highlighted the emergence of South-South development finance coordination, which widened the field of assistance sources and offered an opportunity for developing-country borrowers and aid recipients to benefit from diverse and less invasive development paradigms. He said that UNCTAD remained concerned at the overall debt burden of many developing countries and believed that, until a more comprehensive system was developed, it was best that debt sustainability for development purposes be addressed on a case-by-case basis.
Finally, he said that the situation in which the accumulation of reserves and reverse net capital flows meant that the developing world was effectively lending to advanced economies was one of the systemic issues which, if not coherently addressed, would make the task of financing development more elusive. In addition, some developing countries found the adjustment policies introduced in the wake of the financial crises of the late 1990s had been “intrusive in the sphere of governance and often ineffective”. Such countries had since adopted pre-emptive policies aimed at minimizing the need for reliance on international bailout in case of future crisis. He said that such a situation risked marginalizing the international financial institutions and could lead to the adoption of second-best policies. That highlighted the need for a truly cooperative global monetary system, and reform of the international financial architecture to increase ownership of the policy prescriptions they advocated.
AD MELKERT, Under-Secretary-General and United Nations Development Programme (UNDP) Associate Administrator, said “at the halfway point in the global campaign to address the unacceptable divide between rich and poor”, time was running out. Half the population of the developing world still lacked access to basic sanitation and about 2 billion people still had no regular access to reliable energy services. Were those reasons for despair? On the contrary, many successful interventions led by developing countries and supported by targeted donor contributions had shown that social and economic exclusion was often human-made and could be tackled by “putting brains, organization and resources together with the determination to make poverty history”.
The Monterrey Consensus was crucial to creating inclusive growth and meeting existing commitments of support, he said. Next year’s meeting in Doha should build on Monterrey and provide: a clear and consistent Millennium Development Goals commitment as part of national development strategies; recognition of the financing needs of the Millennium Goals; debt relief combined with human development investment strategies; stronger domestic resource mobilization; better aid predictability and coordination; a global trade system turned in favour of the poorest countries; and recognition of the need for the priority of support to women and girls as the ultimate key to unlocking the door to achieving the Millennium Goals. Unlike Monterrey, the international community should ensure that Doha results in operational plans and commitments that are precisely tailored, distinct multi-year breakdowns of resource plans, and the “twinning” of economic growth and human development in macroeconomic and public expenditure frameworks.
NIKOLA ŠPIRIĆ ( Bosnia and Herzegovina) said the United Nations was the best forum to discuss financing for development, in order to demonstrate political will and to find common ground to resolve important issues, including global economic development, poverty reduction, combating HIV/AIDS and protecting the environment. Ensuring a satisfactory level of financing for development required a comprehensive approach, including mobilizing resources and developing trade and investments.
He said that there was an obligation to influence deeply rooted spending habits and change existing consumer behaviour, which was not beneficial to the environment. Free trade must also be among the key elements of development policies. Bosnia and Herzegovina was proud to report that it had one of the most liberal trade regimes in the subregion and made efforts to set up bilateral trade agreements. Climate change issues must be addressed, and economic development and environmental protection must be harmonized. He appealed for the mobilization of resources to contribute to sustainable development.
HINA RABBANI KHAR, Minister for Economic Affairs of Pakistan, speaking on behalf of the Group of 77 developing countries and China, said Monterrey suffered from a “serious implementation deficit”. While some developing countries had exhibited dynamic economic performance, many countries remained mired in a vicious circle of poverty, far from achieving the Millennium Development Goals. Despite improved debt management strategies and intense international cooperation on debt relief, the total external debt of developing countries had increased and the conditions that led to the global debt crisis were still in existence. The low levels of ODA, the current impasse in the Doha Round, and the global economic slowdown were also bad signs. Taken together, they pointed to both a deficit of implementation of the Monterrey Consensus and the issues that Monterrey was unable to adequately address.
In the future, she said the international community should redouble its efforts to enhance ODA and to secure additional resources for developing countries. Aid should be delivered more effectively and be more responsive to the needs of recipient nations. The United Nations should increase the ability of poor and vulnerable economies to attract private and multilateral investments and, overall, the Member States should do more to help solve the external debt problems of developing countries. Comprehensive reform of the international financial architecture, including enhancement in the voting powers of developing countries, was also necessary, though that alone would not resolve the fundamental problems of instability and unavailability of liquidity for developing countries.
A strategic consensus on the comprehensive reform of the international financial and monetary system was imperative, she said. Innovative and complex financial products developed and introduced in advanced countries should be regulated to temper their impact on developing countries. She concluded with a call to break the current impasse in the Doha Round and reiterated her commitment to its timely and positive completion.
CARLOS MANUEL COSTA PINA, Secretary of State for Treasury and Finance of Portugal, speaking on behalf of the European Union and affiliated countries, said there had been significant regional progress in achieving the Millennium Development Goals in Latin America, China and India, but progress in Africa remained far too slow. The Monterrey Consensus reflected a broad-based development approach and served as the foundation for a global partnership to achieve internationally agreed development goals. The European Union was committed to fully implementing the Monterrey agreement and had already achieved its 2006 intermediate collective target for ODA. New, ambitious targets for aid had already been set and a new Code of Conduct for Development Cooperation to increase complementarities and division of labour in development policy was being implemented.
“Every country has the primary responsibility for its own development and the role of good governance, sound policies and national development strategies cannot be overemphasized in the achievement of sustainable development,” he said. ODA should complement effective and sustainable domestic resource mobilization, as well as other sources of financing for development. The increasingly relevant role some developing countries were having in shaping the world economy should be encouraged, along with other innovative sources of financing. Foreign direct investment was also an important complement to domestic investments. Transparent, stable and predictable investment climates were necessary to strengthen investment flow and public-private partnerships should be used to promote foreign investment, while encouraging good corporate governance and citizenship. Despite dire forecasts, the Doha Development Round had made progress. Aid for Trade was critical in supporting the integration of developing countries into the world trading system and to use trade more effectively to reduce poverty.
Turning to debt relief, he said the Heavily Indebted Poor Countries (HIPC) Initiative could be qualified as a success. However, debt sustainability remained a challenge for low-income countries and both creditor and debtor countries had a responsibility to ensure long-term debt sustainability. The World Bank and the IMF provided important guidance in that regard and their ongoing governance reform would help them become even more effective. Those reforms should ensure that the distribution of quotas adequately reflected the economic weight of member countries, their role in the global economy, and their ability to contribute financially. Finally, he said a ministerial-level conference in the Monterrey format would be useful and would help to “ramp up our efforts in the true spirit of partnership enshrined in the Monterrey Consensus to overcome our common obstacles and reach our common goals”.
A.B. MIRZA AZIZUL ISLAM ( Bangladesh), speaking on behalf of the least developed countries, said the international community must bolster efforts to meet financing commitments reflected in the Monterrey Consensus, as well as ODA pledges. For least developed countries to fully join the world economy, developed countries and developing countries in a position to do so should provide duty-free and quota-free market access without restrictions, and the Aid for Trade initiative should be operationalized, with sufficient funding. In addition, the reform of world’s monetary, financial and trading systems must ensure increased voting power for least developed countries.
The Multilateral Debt Relief Initiative and the HIPC Initiative had yielded some positive results. But, since overall external debt in least developed countries was troublesome, he called for full cancellation of all of their outstanding debt, both bilateral and multilateral. New and innovative sources of financing could supplement existing sources, with the goal in mind to meet the resource gap in the least developed countries. The idea of establishing an institutional arrangement under the auspices of the General Assembly for intergovernmental follow-up of the financing for development process deserved favourable consideration.
HEIDEMARIE WIECZOREK-ZEUL, Federal Minister for Economic Cooperation and Development for Germany, said, on development, it was time to look back at international achievements and plot a future course. Through the 2002 Millennium Development Summit in Monterrey, Member States had developed a fundamentally new understanding of development cooperation, significantly increasing funding for it. Through debt relief, a total of $90 billion in debt had been cancelled, freeing up funds for poverty alleviation, health and education -– an additional 20 million children could now go to school, giving them a chance for a better life. And at the replenishment conference for the Global Fund in Berlin last summer, Germany launched the D2H Initiative, thereby turning debt relief into investment for health. Finally, $10 million had been added to the Global Fund.
Despite those huge successes, she continued, the international community needed to realize work was far from finished. For the first time ever, fewer than one billion people lived in poverty, but the number of those starving remained intolerably high. Though education had improved, 77 million children still weren’t attending school. And finally, Africa had made huge progress on economic and political terms, but the continent needed to fight hard to achieve the Millennium Development Goals –- that required more international solidarity. However, only common actions could resolve those global challenges and Member States needed to work their way through the open points on the Monterrey agenda. Those included: further reforming the international financial system, which included the regulation of hedge funds; sticking to the plan for gradually increasing ODA -– no one should say the funds cannot be found; exhausting the potential for finding innovative financial instruments through the Leading Group; and signalling that the halt of climate change and the millennium agenda belonged together.
ERROL CORT, Minister of Finance and Economy of Antigua and Barbuda, said foreign direct investment was the bedrock source of development financing. For that investment to lead to development, much depended on broadening the focus beyond the bottom line to include job creation and revenue generation and thus create better standards of living. Foreign direct investment must be put within the broader context of sustainable development. The international system should help small island States and other small, vulnerable economies manage risk by lowering the risks of investing in physical infrastructure projects and by providing capacity-building support to create the necessary regulatory framework. Declining flows of ODA to the Caribbean over the last decade had compounded the region’s development dilemma. Small, vulnerable economies had few options to achieve infrastructure development to support trade diversification as an engine for growth. The unfair trading practices of major Powers had frustrated Antigua and Barbuda’s efforts to bridge the financing gap through diversification in the services sector. The persistent failure of the international trading system forced small, vulnerable countries to look inward and rely increasingly on bilateral and regional trading arrangements.
Antigua and Barbuda’s greatest international finance challenge was reducing the country’s external debt to a sustainable level, he said, stressing the difficulty in making mid-term and long-term development plans backed by sound economic growth forecast, as well as in accurately forecasting social spending beyond the short-term. Woefully insufficient attention had been paid to the unsustainable debt burden of middle-income countries, putting them at risk of becoming low-income countries. He called on the international financial community to be more aware and sensitive to the debt challenges of middle-income countries, particularly in the Caribbean, where they did not qualify for ODA but faced significant development challenges. Any serious review of the Monterrey Consensus must address the technology gap by calling for more technology transfer to developing countries.
BALEDZI GAOLATHE, Minister of Finance and Development Planning of Botswana, said that, at Monterrey, States had pledged to eradicate poverty and promote sustainable development in the context of creating an inclusive world order. They had also emphasized the importance of internally mobilizing savings in the public and private sectors in order to enhance capacity-building. Given that, Botswana had ensured prudent macroeconomic management and consistently allocated more than 20 per cent of its budget for educational and training expenditure.
At Monterrey, developed and developing countries had also committed themselves to ensuring the effectiveness of ODA, he said. Today, it was important to seriously take stock of progress, as there were signs that many developing countries, particularly in sub-Saharan Africa, would have difficulty meeting the Millennium Development Goals and other development objectives. While commending States that had met the 0.7 per cent target for ODA, he encouraged others to do so, as it was essential to substantially increase the level of assistance. International cooperation was also critical for poverty eradication and anti-terrorism efforts, as there was no room for abject poverty and opulence to exist side by side.
Botswana was not simply advocating an increase in resource flows, but rather more effective ODA, he explained, adding that his country was committed to implementing the Paris Declaration on Aid Effectiveness. On trade, he said the Aid for Trade initiative deserved predictable resources to help countries such as Botswana overcome adjustment challenges. As each country was responsible for its own development, Botswana’s long-term vision of “Prosperity for All by 2016” was a testament to that commitment. Botswana’s progress had allowed it to be reclassified in the upper middle-income category of developing countries. With continued international assistance, it could consolidate achievements. The upgrading of any country to an upper middle-income bracket should not automatically preclude it from concessionary funding, adding that Botswana had been abandoned by the donor community at a critical transformation stage. While welcoming the first and second international conferences on middle-income countries held recently in Spain and El Salvador, he said it was important that next year’s conference at Doha address the special challenges of middle-income countries.
DAVOOD DANESH-JAFARI, Minister for Financial and Economic Affairs of Iran, said that to achieve the Millennium Development Goals, much work remained for national governments and the international community in terms of financing for development. Developing countries urgently needed a global environment to pursue their development goals, and he discussed several parameters that affected development activities. On ODA, he called on developed countries that had not yet done so to allocate 0.7 per cent of their gross national income to that effort. He was concerned that, despite commitments, ODA had declined between 2005 and 2006, and was expected to fall slightly in 2007.
Taking up trade, he said slow negotiating progress and a lack of multilateral agreements would not help poverty eradication efforts, and added that strengthening bilateral and regional cooperation, especially among developing countries, remained a viable solution. Although trade among developing countries had increased over 10 years to $1.7 trillion in 2005, a three-fold increase, North-South and triangular cooperation remained crucial to improving the world economy. He urged all States, especially developed countries, to successfully conclude trade negotiations. Also, as international financial institutions had not yet introduced effective plans to help developing countries tackle economic problems, he called for adequate financial and technical assistance to be provided to recipient countries.
He said Iran firmly supported structural reform of Bretton Woods Institutions, particularly by increasing developing countries’ voting power in decision-making processes. His Government welcomed proposals to identify innovative sources of financing for development, but stressed that they should not undermine developing countries’ interests. As stable financing at national and international levels remained a prerequisite for development, he said next year’s conference in Doha should consider ways and means for ensuring the timely implementation of Monterrey commitments, particularly that to reach the 0.7 per cent target of gross national income for ODA. Iran had made considerable financial and technical contributions to developing countries and was an active member of the Organization of the Petroleum Exporting Countries (OPEC) Fund for Development. In closing, he noted that Iran had also pledged $100 million to the Fund for Poverty Alleviation at the recent 32nd Annual Meeting of the Board of Governors of the Islamic Development Bank.
BERT KOENDERS, Minister for Development Cooperation of the Netherlands, noting that many countries still lagged behind in reaching the Millennium Development Goals and that many donors had not come up with additional finance, said serious work was ahead for all. Today, the world was witnessing growing inequality between and within States. Poverty was linked to unequal wealth distribution, climate change and unequal security distribution. Those interlinkages were complex and efforts to deal with them required urgent action.
He said countries that were off track in meeting the Goals must take measures in such areas as progressive taxation, democratic accountability and transparency. International efforts must support those measures and include the transfer of funds and political dialogue. He called on the international community to implement the Monterrey agreement, as meeting the Goals required achieving those targets. Turning to enhancing the quality of official development spending, he said funding decisions and budget allocations were increasingly linked to performance -- a positive development. However, challenges remained in improving effective ownership, lowering transaction costs and decreasing bureaucracy. He called on United Nations agencies to decrease paperwork, and said his country would increase the amount of multi-year core funding for United Nations organizations that performed well.
On trade, he said integration into the world economy was an essential precondition for economic development, adding that the poorest countries must be allowed to protect their markets from sometimes unfair competition that impacted vulnerable sectors. On global security and climate change issues, he called for a re-thinking of financing mechanisms. Indeed, as climate change was fundamental to the Monterrey review, he hoped to see a constructive attitude transformed into action at the upcoming Climate Change Conference in Bali. Effective assistance to fragile States was also still lacking, which was unacceptable. Emerging issues, such as innovative finance and South-South cooperation, must be carefully studied in Doha, and the Netherlands remained committed to participating in the financing for development process.
KWADWO BAAH-WIREDU, Minister of Finance and Economic Planning for Ghana, said the Consensus built at Monterrey in 2001 on eradicating poverty, achieving sustained economic growth and promoting sustainable development was built on a partnership between developed and developing countries. Developing countries needed to accept primary responsibility, including strengthening governance, and developed countries held the responsibility of supporting them through debt relief, development assistance and a development-oriented trade system.
Much had been done, but challenges remained, he continued. The world still faced drastic social and economic inequalities -– sub-Saharan Africa would not likely achieve the Millennium Development Goals by 2015 -– and ODA had declined significantly.
In May, he continued, Ghana hosted the second Financing for Development Conference under the theme “Infrastructure for Growth -– the Energy Challenge”. The discussions resulted in 15 concrete action points for the international community to address the challenge of increasing access of energy for the poor and ensuring the reliable functioning of the existing energy structure. These included: governments strengthening planning frameworks to accelerate the completion of regional power pools and gas pipeline projects; international partners scaling up aid to the energy sector; and financial institutions developing new financing, such as infrastructure bonds. Those action points should be implemented by all stakeholders to advance development on the continent.
Moving to trade, he said fair international trade marked one sure way for Africa to finance its own development. It was, therefore, imperative for countries to enable the conclusion of current trade talks.
Finally, on tax exemptions, he said most of the aid developing countries received was tax exempt. The tax exemptions had assumed such proportions, making them unsustainable. Development partners needed to revisit this policy
SAMUEL MUMBENGEGWI, Minister of Finance for Zimbabwe, said his country, like other developing countries, was making every effort to achieve the Millennium Development Goals by 2015 by investing in agriculture, infrastructure development, health and education. However, rising poverty remained a challenge. Recurrent droughts, sanctions imposed on Zimbabwe and the HIV/AIDS pandemic continued to slow the country’s economic development. Despite such challenges, the Government continued to implement strategies aimed at steering the economy toward sustained growth. Five years after Monterrey, the remedies the international community agreed to had not been fully implemented. Developed countries must fulfil their promise of giving 0.7 per cent of gross domestic product (GDP) for ODA to developing countries. Such assistance must be adequate, predictable and continuous in order to have a meaningful impact. It was also important to analyze the volume of aid and its effectiveness on the ground. Aid earmarked for specific programmes, most of which were not developmental in nature, very often failed to have the desired impact.
He also called for concerted efforts to address developing countries’ unsustainable external debt. He recognized the Multilateral Debt Relief Initiative and other debt-reduction schemes, but said the overall debt-reduction process was too slow and did not cover all countries. The real solution was full debt cancellation. Including debt relief in aid statistics could be very misleading since debt relief did not make available new resources for development. All aid to developing countries should be unconditional and tailored to the recipient country’s development priorities. He also rejected the use of coercive economic measures as a tool to ensure political compliance to the whims of those countries that thought of themselves as powerful. Such malicious acts undermined development cooperation and increased poverty.
IGOR LUKŠIĆ, Minister of Finance of Montenegro, said his country signed the Stabilization and Association Agreement with the European Union on 15 October 2007, which further provided a framework for the promotion of sustainable development and poverty reduction. In recent years, Montenegro had achieved macroeconomic stability and the prospect of growth remained strong. Government officials expected real GDP growth to average 7 per cent in the last three years, a budgetary surplus of about four percent in the last two years and a moderate level of public debt of 35 per cent. Furthermore, the country had championed foreign direct investment inflows in the region and encouraged other developing countries to attract foreign direct investment in a way that maximized its contribution to long-term development.
He continued, saying that, as a small Mediterranean country in the last stage of transition, officials understood that mobilizing domestic resources and foreign investments remained of particular importance. Infrastructural bottlenecks imposed the greatest challenge in stimulating growth and development. Investors knew how to allocate resources, but the Government needed to commit energy to make decisions on the basis of a solid infrastructure.
Finally, he stressed the particular relevance of the international financial institutions and their technical support. Montenegro supported the World Bank’s decision to cut interest rates and, at the same time, called for the allocation of the international financial institutions’ net income to infrastructure projects.
ALHAJI TIJJANI YAHAYA KAURA ( Nigeria) said the international community’s most pressing preoccupation was how to assist developing countries in achieving the Millennium Goals. But, development and growth were not fairly distributed, and this “wake-up call” for the international community to assist developing countries would need to come in the form of a massive infusion of foreign direct investment, fair equitable trade, access to markets, decreased agricultural subsidies, debt relief and improved ODA tailored towards the development aspirations of recipient countries.
Nigeria was pleased to report successful economic reforms, strong macroeconomic performance, a rising GDP, and increased foreign direct investment levels, he said. But infrastructure deficiencies, especially in power, water, railways and roads, would need additional investment of $6 to $9 billion to sustain economic growth. Most developing countries viewed greater market access and institutional capacity-building as the best way to ensure sustained economic growth. But, to make ODA more in tune with Nigeria’s development strategies, the Government had introduced an Official Development Assistance Policy to avoid situations where a substantial part of the grant was used to pay experts from the donor countries. Nigeria reiterated its support for the newly launched Development Cooperation Forum to be a mechanism in providing international oversight on development assistance.
Developing countries, such as Nigeria, had worked against the odds to implement their commitments to devise national development strategies, improve governance and create a macroeconomic climate conducive to growth, trade and investment. Development partners, on the other hand, had not fulfilled their promises of development assistance and financing, trade, technology transfer and other areas of cooperation. Nigeria believed the time had come for the international community to take concerted and time-bound steps to ensure the implementation of all commitments, and hoped that current reforms in the Bretton Woods Institutions would go far enough to ensure more voting rights and greater representation for developing countries, particularly Africa, in the World Bank and the IMF.
SANGARE MAIMOUNA BAH, Minister of Public Health of Guinea, said that financing for development was one of the most complex and important items on the international community’s agenda. The United Nations took on an arduous task in adopting the Millennium Development Goals, which could only be achieved through cooperation. Among the greatest challenges was financing development. Despite numerous United Nations initiatives and meetings, it was clear that development aid at current levels was insufficient to meet development goals. Progress had been made in providing ongoing, predictable and stable contributions, through such measures as taxing airline tickets and long-term budgetary contributions from the United Nations and other international entities.
As one of the least advanced countries, facing serious economic reform, Guinea was dependent on outside assistance, for up to 80 per cent of its public investment, he said. Its interests, therefore, lay with innovative financing, effective assistance and the rational use of that assistance. To that end it was convening a national forum on innovative financial mechanisms and would present the position of the African Pilot Group for Cooperation for Development at the Doha Summit in 2008. That meeting should be a turning point in the will of the international community to provide the necessary financing to achieve the Millennium Development Goals by 2015. He appealed to Member States to participate in the Pilot Group’s activities.
He said that there were several factors limiting Guinea’s ability to utilize aid efficiently, among them the complex and diverse procedures necessary to receive assistance. Those procedures should be made consistent. He called for the following measures to improve the efficacy of development assistance: cancellation of debt for the poorest countries; mobilization of financial and technical resources to support infrastructure and growth sectors, reinforce institutions and add value to human resources; promotion of a subregional environment conducive to development and regional economic integration predicated on peace, security and stability; formation of new kinds of partnerships; fighting corruption and facilitating good governance; and, establishing a lasting dialogue between Guinea and its development partners.
PATRICIA ORANTES ( Guatemala) said the International Conference on Financing for Development was among the most successful gatherings in the history of the United Nations, having generated global awareness of the critical role of international cooperation as a complement to national efforts. Because of the Monterrey Consensus, negative ODA trends, debt relief and access to private capital markets had been reversed.
In Guatemala, the peace accords were a legacy to promote South-South cooperation and were a turning point in the mobilization of internal and external financial resources, and important progress had been achieved on fiscal distribution and budget equity. Among Central American countries, Guatemala allocated the highest percentage of its budget to social investments, a position reflected in a national commitment to achieving the majority of the Millennium Goals. Strengthening the role of the Government, developing State policies and achieving the sustained development of democratic institutions had made it possible to consolidate macroeconomic indicators, reaching the highest rates of economic growth and exports Guatemala had seen in 20 years. The implementation of new innovative mechanisms of international cooperation had also played a central role in the advancement of the pending development agenda of countries such as Guatemala.
S.R. INSANALLY, Minister of Foreign Affairs of Guyana, calling the Monterrey Consensus a “milestone” in the search for more predictable financing to satisfy global development needs, said accomplishments since 2002 had been mixed. While recent reports had pointed to improved per capita incomes in some parts of the world, the growing trend toward a higher concentration of wealth might yet signal increasing inequalities and further marginalization of the poor. The continued failure of donor countries to honour their Monterrey and other commitments risked jeopardizing the international development agenda, and it was imperative that a recent reduction in ODA be reversed.
He called on countries to meet the 0.7 per cent of gross national income target and direct ODA flows to priority areas that would optimize their development impact, such as agriculture and rural development. Investment in that area was crucial to ensuring food security. Guyana welcomed the recent World Development Report 2007, which called attention to agriculture’s role in achieving the Millennium Development Goals. Investment in agriculture and food security should, therefore, be increased. Turning to climate change, he said the phenomenon had serious negative implications for small and developing countries, and he reiterated the call to mobilize financial resources to support those countries through common frameworks.
To ensure sustainable development, increased resource flows must go hand in hand with greater coherence in global economic and trade policies, he said, calling for significant new and additional resources to modernize productive sectors. In looking forward to next year’s conference in Doha, he was reminded that trade negotiations had not yet been fulfilled. The “new road to Doha” offered an opportunity to ensure that mechanisms were created to place development at the centre of the international trade agenda. The special challenges of small States must be addressed in that framework. In closing, he called for the creation of a monitoring mechanism to assess the implementation of the Monterrey Consensus.
MAGUY DURCE, Minister of Commerce and Industry of Haiti, associating herself with Pakistan’s statement on behalf of the Group of 77 and China, said Haiti had never been more attached to the current process to translate the Millennium Development Goals into reality. Nonetheless, as a least developed country, Haiti did not have access to all the available development opportunities. Initiatives to increase productivity required solidarity with the most vulnerable countries, and it was necessary to find a formula for reducing differences.
Noting the presence of representatives from international financial institutions, she said today’s dialogue was an ideal forum for considering development activities that would allow local populations to live with dignity and without discrimination. In that context, she appealed to the Bretton Woods Institutions to pay attention to the Secretary-General’s report, which noted a disparity between filled and unfulfilled donor commitments for development assistance. ODA had fallen in 2006, and many countries had not attained their target of 0.7 per cent. She said all energies must be guided to mobilizing resources to meet the development challenge of the 21st century.
She said that, despite its status as the only least developed country in the Caribbean, Haiti had attained macroeconomic stabilization. Furthermore, Haiti was combating drugs and trafficking, which was an expression of the Haitian President’s political will and the administrative rigour practiced daily to provide for a stable socio-political climate. On industry efforts, she said Haiti, in the 2007 to 2008 period, had intensified microproduction and microservice industries. The country had also undertaken infrastructure reform and institutionalized public-private partnerships. Turning to trade, she expected trade assistance activities would enable her country to have access to external markets. In closing, she said all States had the responsibility for creating conditions to improve peace and security.
ZHIVARGO LAING, Minister of State for Finance of the Bahamas, said that, of the six policy actions highlighted at Monterrey, the Bahamas identified most closely with those that called for mobilizing domestic and international financial resources, namely foreign direct investment and private flows, as well as increasing international and technical cooperation for development. Lacking wealth-producing natural resources such as oil, carbon, gold and diamonds, the Bahamas had invested in education, health and social services to help it establish a comparative and competitive advantage in several international service industries. By laying a solid foundation for the rule of law, with private property rights coupled with sound macroeconomic policies and a commitment to political stability based on democratic ideals, the Bahamas had been able to attract billions of dollars in foreign direct investment for growth and development. Developing countries needed increased international and technical cooperation to achieve sustainable economic growth.
Over the next five years, his Government intended to continue economic expansion by introducing sound policies to increase employment, entrepreneurship and local ownership in the economy, create balanced economic growth, expedite investments in social infrastructure and safeguard the environment, he continued. It was critical to reform global economic governance in order to strengthen the voice and participation of developing countries in international economic decision-making and norm-setting. More concrete steps were needed to ensure effective, permanent representation of developing countries, particularly small ones, in international economic, trade and financial institutions. He lauded the 2006 resolution adopted by the IMF Board of Governors on quota and voice reform, and the World Bank’s governance reform process.
CRISTINA DUARTE, Minister of Finance of Cape Verde, said that to achieve the Millennium Development Goals, the donor community must honour, and even go beyond, its commitments on trade, debt relief and increasing ODA. Despite developing countries’ growth in per capita GDP and improvement in macroeconomic management, inefficiencies in their financial sectors and insufficient international support prevented sustainable development. Last year, ODA declined. Further assistance was not equitably distributed, but unfairly concentrated in particular countries and regions, thus undermining achievement of the Millennium Development Goals in other regions.
Cape Verde was working to respond to national development needs in innovative ways, she said. The challenge was to ensure adequate and predictable resources to support economic, social and environment projects, as well as the capability to invest in infrastructures for sustainable development. She commended donor countries that had met commitments to the official target of 0.7 per cent, and called on those who had not done so to meet their commitments. She said that debt relief offered to the heavily indebted poor countries, which allowed them to give scarce resources to development, should be extended to middle-income countries in need.
Cape Verde saw good governance and the principles of accountability and transparency as the best way to achieve the Millennium Development Goals, she said. To that end, it was undertaking reforms in both public and private sectors. In 2006 the country experienced 10.8 per cent growth and averaged 7 per cent from 2004 to 2007. Literacy grew to 78.7 per cent, access to health services to 73.5 per cent and access to elementary education to 70 per cent. Despite those successes, there was still a need to build trade capacity. She said that developing countries needed access to markets and that export subsidies that distorted the balance of trade must be eliminated. She said it was imperative to reform the financial system, so that those most in need could be heard.
EDGARDO J. ANGARA, Senator of the Philippines, said that, as the Secretary-General’s report highlighted, while there had been an increase in ODA since the Monterrey Consensus, those flows were marked with selectivity and uncertainty. Many low-income countries received very little aid, but a few experienced surges. For instance, ODA to the Philippines had decreased 29 per cent over the past seven years. Nevertheless, in the first quarter of 2007, the country’s GDP grew at a rate of 6.9 per cent -– the highest since 1990.
Furthermore, he continued, inflation in the Philippines remained on the downtrend, registering 2.2 per cent in March 2007 –- the lowest in two decades –- and the peso had appreciated in value. Employment averaged more than 91 per cent for the past three years. The budget deficit decreased from $4.8 billion in 2002 to $1.5 billion and market interest rates were dropping, enabling the stimulation of investment. But, the Philippines could not afford complacency.
Consistent with the Secretary-General’s report, he said the Philippines would continue to: increase foreign exchange earnings capacity through diversifying and improving its exports; implement fiscal reforms that mobilized taxes and shrank fiscal deficits; and elicit external development assistance from the domestic business sector in public-private and global partnerships. The Philippines, however, urged the United Nations, the international financial institutions and developed countries to: uphold the principles of the Paris Declaration that did away with tied aid and donor-driven projects; change debt sustainability from traditional capacity-to-pay to the concept of preventing debt payments from hindering countries; support South-South cooperation with developing countries; and increase ODA commitments to developing countries who sign and ratify the United Nations Convention against Corruption.
JOSÉ CAMARGO, Deputy Minister for Public Investments and External Finances for Bolivia, said at the beginning of the year, President Evo Morales Ayma incited a profound transformation in Bolivia’s national strategy for development with a firm focus on benefiting the poor and the marginalized. Called “Living Well”, the new format offered a humanized, collective process that allowed culturally diverse and indigenous actors to actively participate in development objectives, rather than receive guidelines from up high. Bolivia was a dignified, productive, democratic and united State, requiring the construction of a new economic model that complemented public and private organizations, national and international enterprises, and its internal and external markets.
Further, he said Bolivia recognized every country’s responsibility for its own social and economic development. However, foreign trade and international markets were pillars of Bolivia’s development plan. International financing bodies remained key partners in Bolivia’s attempt to enhance its productivity and highly developed countries were potential markets for the country’s products. Bolivia had a vast natural wealth and it offered guarantees to foreign investment, provided those investors provided respect for Bolivia’s ideals.
Finally, he said Bolivia had used more of its internal resources for development, but the country still needed an increase in international aid if it was to meet sustainable development goals. Also, the Doha talks remained an important agenda item -– countries must remove the barriers to international trade.
TALAAT ABDEL MALEK, Deputy Minister for International Cooperation of Egypt, said attaining progress in addressing development issues required strong political will on the national and international levels. Developing countries had made great progress during recent years on political, economic and social reform, which, in turn, imposed obligations on developed countries to fulfil their commitments.
He continued, highlighting those commitments. The first called on Member States to create an international environment that complemented the national efforts of developing countries to sustain their own development capacities, including enhancing their human resources and granting them room to balance between international commitments and national policies. Second, the international community needed to expand the scope of foreign direct investment in the greatest number of developing countries, as well as intensify technical assistance in setting up their infrastructure and foreign investment laws. Finally, successful development required a breakthrough in the Doha talks and intensified trade-related aid directed to developing countries in the service sector.
SERGEY A. STORCHAK ( Russian Federation) noted that middle- and low-income countries had grown at a rate of 5 per cent annually over the last five years and, if that level of growth could be sustained, the world would be a different place in just a few decades. He said that the meeting in Doha was one of the key elements in ensuring implementation of the principles of global partnership. Among other objectives, that meeting should identify bottlenecks in the implementation of the post-Monterrey agenda and measures to overcome them.
The Doha Conference should affirm the importance of mobilization of resources for development at the national level and formulate proposals on how the international community could enhance the efforts of recipient countries, he said. Such innovative approaches to mobilize resources for development as the International Finance Facility for Immunization or voluntary contributions on air tickets to fight infectious disease should also be evaluated. The efforts of “new donors” in providing development assistance must be coordinated with those of traditional donors. Also, the means must be found to avoid the recurrence of debt accrual by recipients.
The Russian Federation intended to increase its contributions to international development assistance as part of the global partnership and to streamline how it provided that assistance. In June 2007 a concept for the country’s participation in international development assistance was adopted, which would ensure a systemic approach to the activities of Russian ministries and agencies to create an effective system for providing assistance to the poorest countries and achieve the desired economic effect in recipient countries. He reiterated the Russian Federation’s commitment to financing for development and expressed the hope that the Doha Conference would be a turning point in poverty eradication and achievement of the Millennium Development Goals.
ANNE STENHAMMER, State Secretary of Norway, said a key issue to be addressed was how all nations could best work together to eradicate poverty. That was a complex task and Norway attached great importance to the six core areas of the Monterrey Consensus. Good governance was the single most important requirement for strong economic growth and sustainable development and it required more than creating formal democracy and sound macroeconomic management. A strong, transparent and non-corrupt State was vital, and she called for political will among national elites to impose taxes to pay for a sound public sector.
Further, she said countries needed an active and ambitious policy for entrepreneurship, investment and growth, as well as a focus on fair distribution and equal opportunity. Indeed, the provision of decent work was the single most important factor in fighting poverty. Job creation and the protection of workers’ rights were vital, in that respect. Finally, good governance would not be possible unless gender equality was made an explicit goal. As Norway’s experience had shown, promoting gender equality was a matter of human rights. Women constituted the majority of the world’s poor. Financing for gender equality and women’s empowerment was a key aspect of development that must be kept in mind during discussion of the broader financing for development agenda.
Norway had been among the first to acknowledge the importance of international assistance, she said. For years, her country had exceeded the development assistance target of 0.7 per cent of gross national income and planned to achieve 0.98 per cent in 2008. Norway gave special priority to Millennium Development Goals aimed at reducing child mortality and improving maternal health. Her country was also promoting better cooperation among and within international institutions, she said. The Paris Declaration could best be achieved when developing countries took responsibility for their development, and aid providers respected their leadership. In closing, she added that Norway was promoting a more coherent relationship between the United Nations and other organizations. She welcomed initiatives taken in relation to international policy coherence, including the recent collaboration between the International Labour Organization (ILO) and World Trade Organization.
IB PETERSEN, State Secretary for Foreign Affairs of Denmark, said that all major regions were on track to reduce by 2015 the proportion of people living in extreme poverty to below the 1990 rate, except sub-Saharan Africa. Overall progress was too slow. Developing and donor countries must both work harder. Denmark had surpassed the agreed international target of 0.7 per cent of GDP as ODA, one of only five countries to have achieved it. More countries must join that group, but the quality of aid and its harmonization must also be improved.
While undertaking those improvements, it must be remembered that every country had primary responsibility for its own development through good governance, sound policies and sound national development strategies, he said. Poverty could not be eradicated without the economic empowerment of women. Denmark was planning a series of activities towards that end in 2008, called “Women Mean Business”. Further, he said that climate change disproportionately affected the poorest developing countries, despite the fact that they contributed least to the phenomenon. Those countries must be provided assistance and technology to help them adapt and prevent further global warming. Joint efforts must be made, based on common but differentiated responsibilities. Adaptation to, and mitigation of, climate change was expensive, he said, but doing nothing would be more so.
SHRITI VADERA, Development Minister for the United Kingdom, said the exceptionally high levels of debt relief in 2005 meant that global ODA fell in 2006 and 2007, but the international community should not allow sceptics use that technical decrease to obfuscate the underlying 30 per cent increase of aid since Monterrey in 2002. Nevertheless, the global community needed to redouble its efforts. On 10 October, the United Kingdom announced that, by 2011, its ODA would increase to 0.56 per cent of gross national income, equivalent to $18 billion per year. As the Secretary-General said two weeks ago, the Millennium Development Goals required “urgent concerted action”.
Turning to the Secretary-General’s Millennium Development Goals Africa Steering Group, she said the United Kingdom agreed with three of its main proposals: implementing effective instruments for health, education, agriculture, food security, infrastructure and statistical systems; long-term predictable aid –- an absolute priority to enable partner countries to build effective and permanent systems to reach the Millennium Development Goals; and donor coordination –- pulling separate projects together into one coherent programme and supporting the strategies of partner governments.
Finally, on trade and climate change, she said no country had reduced poverty in the last 30 years without increasing trade. Member States needed to deliver on the promise of the Doha Trade Round –- poor countries needed a good deal on trade and they needed it now. And the world could not continue to ignore climate change, whose effects low-emitting poor countries felt disproportionately. Those countries were living the daily reality of water shortages, crop failures, floods and diseases. If the international community failed to tackle the issue, it would ensure a future of poverty for those countries.
RAHMAT WALUYANTO, Senior Vice Minister and Director General for Debt Management in the Ministry of Finance of Indonesia, aligned himself with Pakistan’s statement on behalf of the Group of 77 and China. Noting that his country had always placed a high importance on attaining the Millennium Development Goals, he said the Secretary-General’s report had highlighted the need for more progress in implementing the Monterrey Consensus. Such progress was important for helping developing countries break the cycle of poverty and reducing their vulnerability to external economic and financial shocks. A lack of capacity in managing external debt continued to weigh down fiscal efforts and trade had yet to play its inherent role of alleviating poverty.
If the Goals were to be met in the specified timeframe, countries must implement their commitments and generate development, so that the international community could truly engage in a global partnership. He called on States to develop domestic capacities that would generate the necessary resources to finance development. To effectively mobilize domestic savings and attract private capital, countries must foster a sound institutional framework.
By empowering domestic bond markets, countries could generate their own sources for development, he said, also stressing the importance of a sound capital market as an alternative financing source. To build a workable domestic bond market, developing countries needed support to improve governance regulations and build a clear legal framework for resolving disputes and facilitating cross-border trading. As global trade intensified, individual economies had an interest in fostering the economic stability of others. Ignoring that could increase the risks of a negative “spillover” effect. In that context, he called on countries to develop early warning systems and improve communication. On climate change, he urged international support for developing countries to help them address that threat. His country was confident that results from today’s dialogue would add value to the upcoming discussions in Doha.
LÁSZLÓ VÁRKONYI, State Secretary for Foreign Affairs for Hungary, said Hungary had been making efforts to increase the volume of aid to the developing world –- in 2006 it allocated 0.13 percent of its gross national income for ODA. However, elevating the level of the development funds would not by itself help countries reach the Millennium Development Goals. It was necessary for countries to use those amounts effectively –- and effectiveness required visibility of both donor and partner countries. Member States also needed to pay special attention to donor coordination, policy coherence and adjusting enlarged aid packages to the countries’ realistic needs.
Turning to trade, he said trade -– especially ever-increasing South-South commerce based on predictable multilateral rules and regulations -– was the engine that drove economic growth. A number of studies had also supported the importance of trade among developing countries and the advantages gained from the reduction of tariff and non-tariff barriers to trade. However, granting opportunities for market access alone was not sufficient. Developing countries needed assistance in building adequate producing capacities and commercial infrastructure. “Aid for Trade” served that cause and, together with other European Union member States, Hungary had pledged to increase the volume of trade assistance by 1 billion euros. In order to achieve that target, Hungary intended to allocate a significant fund from its 2008 budget for development, through multilateral and bilateral assistance.
TJEKERO TWEYA, Deputy Minister of Finance of Namibia, said Namibia’s economy grew 4.6 per cent in 2006, which though commendable, was far short of the 7 per cent required to achieve the Millennium Development Goals by 2015 and the country’s long-term development plan “Vision 2030”. For the second consecutive year since gaining independence, Namibia registered a surplus in fiscal 2007-2008. Revenue collection had improved in recent years. Those policies, coupled with investment in infrastructure and social services, had significantly helped reduce poverty, which fell to 3.9 per cent in fiscal 2003-2004. The Government aimed to eradicate poverty by 2012.
Despite investor-friendly policies such as freedom to repatriate profits and tax incentives, foreign direct investment in Namibia had been slow, he said. While Namibia had experienced some increase in trade, notably in minerals and agricultural products, it still posted a trade deficit. The current impasse in the Doha Development Round and accompanying insufficient funding, as well as the slow pace in implementing the “Aid for Trade” initiative, had dampened Namibia’s hopes of addressing supply-side constraints. Developed countries’ trade-distorting agricultural subsidies also made it difficult to compete in developed markets.
International financial and technical cooperation for development continued to decline steadily from $110 per capita in the 1990s to $60 per capita in 2005, he continued. Namibia’s development partners also fell to 17 in 2006, and there were indications that another three would leave the country in 2008. The continuous decline in ODA could negatively impact Namibia’s efforts to fight poverty and achieve the millennium targets over the long term. Limited capacity for service delivery was a basic obstacle to the country’s economic growth and development. The international community could help Namibia meet its human resource requirements with financial and technical assistance. Namibia would prefer budgetary support, as it offered flexibility in resource allocation and predictability. He expressed hope that the High-Level Dialogue would set the stage for next year’s Review Conference to address the lack of implementation of commitments made and how the international community could support middle-income countries’ development efforts.
CYRIL CHAMI, Deputy Minister for Foreign Affairs and International Cooperation of the United Republic of Tanzania, recalling the importance of the Monterrey Consensus and other international initiatives, said progress on achieving the Millennium Development Goals had been mixed. His country had taken various measures to implement its obligations. He explained that the National Vision for 2025 for Mainland Tanzania and Vision 2020 for Zanzibar aimed at improving livelihoods and good governance. The more recent national strategy for growth and reduction of poverty was committed to achieving the Goals by 2015.
While the United Republic of Tanzania was working to meet its pledges for good governance, macroeconomic reform and domestic resource mobilization, he said challenges such as inadequate energy, poor education and health facilities and undeveloped infrastructure persisted. His country had allocated a substantial portion of its national budget for education and infrastructure projects, and was grateful to its development partners and the donor community for having improved the quality of assistance.
He said ongoing domestic reforms had led to substantial economic growth over the past five years, an achievement attributed, in part, to a sound macroeconomic policy framework, progress on structural reforms and private sector involvement. Nonetheless, his country’s debt burden was a serious drawback to development efforts, despite the relief provided under the HIPC Initiative and other efforts. Although talks to reduce that burden were ongoing, he said that if the international community was serious about reducing poverty, the solution for developing countries was to cancel multilateral debt. In that context, he also called on developing countries to accelerate domestic resource mobilization. On trade, he said his country was still diversifying its exports to meet unfolding market opportunities, as that was necessary for increasing growth beyond the 6 per cent annual growth rate. He also called for a swift conclusion to World Trade Organization negotiations.
PARK IN-KOOK, Deputy Minister for International Organizations and Global Issues for the Republic of Korea, said this conference came at a moment when international political and economic conditions had never been more favourable for the achievement of development goals and specifically the Millennium Development Goals by 2015. To begin with, the international community had increased ODA from $53 billion in 2000, to more than $100 billion last year. Another sign was the remarkable increase in the number of donor countries.
In 2000, only the donors in the Organization for Economic Cooperation and Development (OECD) Development Assistance Committee participated. Now, a number of other countries with strong economies had scaled up their ODA, including his own country, which had an annual GDP nearing $1 trillion. Those emerging donors, having once been recipient countries, could provide practical advice and guidelines for today’s recipient countries. His country intended to expand its ODA to $1 billion by 2009.
He continued, saying that given the diversity of economic growth among and within developing countries, there could be no one-size-fits-all development strategy; rather the international community needed a tailored approach. The Republic of Korea, a country without significant natural resources, for example, recognized that the accumulation of foreign currency and development of human resources were key components of development. Furthermore, to maximize the efficiency of international resources, recipients of aid needed to establish financial regulations and mechanisms to facilitate stable capital flows, which would align them with broader long-term sustainable development objectives. Finally, he said, to scale up the volume of multilateral aid and heighten the efficiency of the organizations delivering it, his country planned to hold policy dialogues with donors and multilateral bodies.
* *** *