High-Level Dialogue Hears Call for Reinvigorated Development Partnerships to Reverse Impact of Global Economic Crisis
High-Level Dialogue Hears Call for Reinvigorated Development Partnerships to Reverse Impact of Global Economic Crisis
|Department of Public Information • News and Media Division • New York|
Sixty-fourth General Assembly
76th & 77th Meetings (AM & PM)
High-Level Dialogue Hears Call for Reinvigorated Development Partnerships
to Reverse Impact of Global Economic Crisis
Secretary-General, General Assembly President Call
Attention to Suffering in Poor Countries Despite Nascent Economic Recovery
High-level officials representing international organizations and Member States called today for a reinvigoration of development partnerships to reverse the effects of the world economic crisis and meet the impending deadlines for attaining internationally-agreed development goals.
Opening the fourth High-level Dialogue on Financing for Development this morning, United Nations Secretary-General Ban Ki-moon and General Assembly President Ali Abdussalam Treki stressed that many developing countries were still suffering despite a the global economic recovery, emphasizing the importance of strengthening aid strategies in preparation for the September summit on achieving the Millennium Development Goals by 2015.
“We know that it is possible –- the world has seen MDG successes in numerous countries, including some of the poorest,” Mr. Ban said at the beginning of the two-day event. “We also know what it takes: the right policies, adequate investment and international support”. A true partnership for development could only be achieved through a combination of investment, trade, aid, debt relief and global economic governance reforms, he added.
In those efforts, the 2002 Monterrey Consensus and the 2008 Doha Declaration on Financing for Development were central, the Secretary-General emphasized, adding that the rethinking triggered by the economic crisis provided the international community with a rare opportunity for ambitious structural reforms that could ensure more stable growth, job creation and sustainable development.
Mr. Treki said that despite the recovery, growth rates and investment were expected to remain low in developing countries. The quality and quantity of development assistance must, therefore, not only be maintained, but increased, and structural problems in trade as well as debt reduction seriously addressed. He also called for reform of international financial institutions so they could meet the new realities of the twenty-first century.
Also speaking at the opening of the Dialogue was Prime Minister Oqil Oqilov of Tajikistan, who said: “The current financial and economic crisis makes us review the principles of global economic management by which we were guided in the last decade.” Surveying his country’s efforts to weather the economic crisis, he called for a fairer, more transparent and efficient global economic architecture that guaranteed access to essential resources and advanced technologies, in order to minimize the risks of recurring crises and achieve the Millennium Goals. For those purposes official development assistance remained of the utmost importance, the Prime Minister affirmed, calling for a doubling of aid, assurances of its predictability, and an expansion of debt relief.
Before other delegations took the floor, representatives of international development and trade organizations also addressed the Assembly. Rebeca Grynspan, Associate Administrator of the United Nations Development Programme (UNDP), called for adequate, coherent and immediate assistance for development lest hard-won gains be lost, noting that recouping them would require many years due to the estimated $635 million shortfall in external finances now faced by developing countries. Otaviano Canuto of the World Bank stressed that development financing should not be seen as charity, but as both profitable investment and a way to rebalance global growth in a more sustainable way.
Petko Dragonov of the United Nations Conference on Trade and Development (UNCTAD) stressed that investing in developing countries must be refocused to increase their productive capacity to provide employment and other development needs. Looking forward to the completion of the Doha Development Round of World Trade Organization trade negotiations, that body’s representative, Shishir Priyadarshi, urged an increase in Aid for Trade initiatives so as to allow developing countries to benefit from the trade access they hoped to gain through the Doha talks.
In the ensuing discussion, representatives of Member States agreed that the Monterrey Consensus remained a solid framework, but called for intensified work and more innovative strategies in a variety of areas in order to meet development goals and lay the groundwork for sustainable growth.
Developing countries, for the most part, stressed the crucial need for the fulfilment of official development assistance commitments, as well as for debt relief and fair trade policies. At the same time, many acknowledged their responsibility for their own development, and for that reason, their need for “policy space” to pursue it. Nepal’s representative, speaking on behalf of the Least Developed Countries, said that resources to meet even the basic needs of “grinding mass poverty” were often in acute short supply, occasioning the need for a strong and enabling international environment, with genuine international partnership.
Spain’s representative, speaking for the European Union, agreed that there was a need for donor countries to fulfil their official development assistance commitments. He stressed, however, the importance of private investment, saying that the private sectors of partner countries and the mobilization of domestic resources remained among the best formulas to increase assets for development in a sustainable manner. Similarly, the representative of the United States highlighted the need to leverage existing flows of funds to support investment and good governance.
Also delivering statements today were Ministers from Samoa, Portugal and Egypt, as well as other high-level Government officials from Slovakia, Venezuela.
Other speakers today were the representatives of Yemen (on behalf of the “Group of 77” developing countries and China), Chile (on behalf of the Rio Group), Equatorial Guinea (on behalf of the African Group), Paraguay (on behalf of the Group of Landlocked Developing Countries), Saint Vincent and the Grenadines (on behalf of the Caribbean Community), Australia (on behalf of CANZ –- Canada, Australia and New Zealand), Ghana, Germany, France, Kazakhstan, Japan, China, Cameroon, Switzerland, Algeria, Republic of Korea, Indonesia, Libya, Viet Nam, Peru, Iran, Jordan, Brazil, Mexico, Philippines, Russian Federation, Turkey and Guatemala.
The fourth High-level Dialogue on Financing for Development will continue at 10 a.m. tomorrow, 24 March, with additional presentations of country views as well as thematic round table discussions.
The General Assembly today met to convene its fourth High-level Dialogue on Financing for Development. Held in accordance with General Assembly decision 64/551 of 23 February 2010, the overall theme of the two-day Dialogue is “The Monterrey Consensus and Doha Declaration on Financing for Development: status of implementation and tasks ahead”.
The first day of the Dialogue will consist of plenary meetings chaired by the President of the General Assembly, with ministers and high-level officials making formal statements. The second day will be devoted to three interactive multi-stakeholder round tables followed by an informal interactive dialogue with the participation of all relevant stakeholders.
The Dialogue is expected to result in a summary by the President of the General Assembly as an input to the preparation of the High-level Plenary Meeting of the General Assembly on the Millennium Development Goals, scheduled to be held at Headquarters in New York from 20 to 22 September 2010.
ALI ABDUSSALAM TREKI, President of the General Assembly, said that developing countries were paying a high price for the world economic downturn, even as the international economy was slowly recovering. The necessary resources must be mobilized under the Monterrey Consensus and the Doha Declaration to assist them.
The recovery must be nurtured in a sustainable and equitable manner, he said. As it stood, growth rates and investment were expected to remain low in developing countries, causing continued suffering. To meet those challenges, the quality and quantity of development assistance must not only be maintained, it must be increased. Developed countries must live up to their commitments, meeting the 0.7 per cent rate of official development assistance promised. Developed countries also need assistance with structural problems in trade and debt reduction.
In addition, he said the international economic institutions still needed to be reformed to meet the new realities of the twenty-first century. He urged participants to make this high-level dialogue work to eradicate the poverty that was inflicting misery on the world’s most vulnerable people, and to contribute to the upcoming summit on the achievement of the Millennium Development Goals.
BAN KI-MOON, Secretary-General of the United Nations, said that as the world economy showed signs of fragile recovery, the human cost of the financial crisis remained high in all regions. Much more needed to be done by donors and international institutions to mitigate the suffering of the most vulnerable.
In those efforts, the achievement of the Millennium Development Goals remained at the top of the United Nations agenda, particularly in the period leading to the upcoming summit that will decide on a plan of action to meet the 2015 deadline.
“We know that it is possible -- the world has seen MDG successes in numerous countries, including some of the poorest. We also know what it takes: the right policies, adequate investment and international support,” he said.
A true partnership for development could only be achieved through a combination of investment, trade, aid debt relief and global economic governance reforms. In those efforts, the Monterrey Consensus and Doha Declaration on Financing for Development were central.
He said that the fundamental rethinking triggered by the economic and financial crisis provided the international community with a rare opportunity for reform that could ensure more stable growth, job creation and sustainable development. Adequate policy space was required for developing countries, so they could take primary responsibility for their own development.
“These reforms should be ambitious and timely,” he said. “And they should significantly enhance the voice and participation of developing countries.”
OQIL OQILOV, Prime Minister of Tajikistan, said globalization had helped spread the effects of the financial crisis and economic downturn to every country in the world, threatening broad achievement of the Millennium Development Goals. Tajikistan had been no different, and as the crisis had taken hold there, serious problems had been exposed, including its excessive dependence of the economy on the export of raw materials and its weak financial market. It was clear that it was more urgent than ever to develop a number of basic market institutions and, above all, a competitive environment.
Before the crisis, Tajikistan’s annual gross domestic product (GDP) had been up about 9 per cent and inflation had dropped to the low single digits, he said. Between 2003 and 2009, the poverty rate had drooped from 72 per cent to 49.3 per cent. It was expected to drop another 8 points by 2012. The country had a stable economic system and had created a favourable environment for expanding economic reforms, implementing economic programmes and large-scale measures suited to Tajikistan’s current stage of development.
However, by 2009, like other countries, Tajikistan’s growth rate slowed considerably, even as the Government had managed to “keep up the positive dynamics of development”, due to a number of measures, including implementation of a plan of additional short-term anti-crisis actions. The anti-crisis policy was aimed at supporting domestic demand, social protection, and job creation. “Today, we are working to create a platform of post-crisis development,” he said, adding that the priorities included creating a favourable business environment, promoting competition, and implementing infrastructure projects in energy, mining, agriculture and transportation, among other areas.
He went on to say that one of the major prerequisites for dynamic development was creating a favourable environment for the private sector to blossom, and Tajikistan was targeting investors and increasing the share of private services. To diminish the risks associated with investment and entrepreneurial activities, Tajikistan had also been working to improve mechanisms to protect property rights and simplify the procedures for granting and acquiring licenses and permits. Tajikistan was also trying to improve the climate for investors, including bolstering tax incentives and customs regimes so that they met the requirements of modern markets.
As a land-locked country, Tajikistan, whose transportation-transit and trade policy was largely dependent on a harmonized regional trading system, believed that modernizing its transit infrastructure was a major priority. Indeed, it was virtually impossible to establish close trade and economic ties with other countries without highways and railroads that met international standards. Creating reliable, cost-effective transportation corridors and transforming them into “economic corridors” would provide an opportunity for Tajikistan to boost its economic growth rate. He added that Tajikistan also believed in strengthening multilateral trade rules and regimes backed by the World Trade Organization, and also believed that such systems should take into account the needs and interests of developing countries.
He said that official development assistance remained of the utmost importance and his Government supported the call for doubling such aid and ensuring its predictability within the financing for development framework. In addition, while the international community had made considerable progress regarding debt relief in a limited number of countries, more efforts should be taken to find ways to expand such relief. That would be critical in the years following the crisis, and the international community should follow the path laid out in the Millennium Declaration, which called for an integrated approach to providing debt relief, with the aim of ensuring, in the long-term, an acceptable level of indebtedness of the developing countries.
“The current financial and economic crisis makes us review the principles of global economic management by which we were guided in the last decade,” he said, noting that, given bitter recent experience, Member States must work together to shape a fairer, more transparent and more efficient global economic architecture. To that end, all nations should have guaranteed access to all life sustaining resources, advanced technologies and sources of development. It would, therefore, be necessary to develop guarantees so countries could minimize the risks of recurring crises. “All decisions that we intend to make should not only be relevant to the current situation, but should also take into account the need of a new, post-crisis world,” he said.
OTAVIANO CANUTO, Vice-President and Head of Poverty Reduction and Economic Management Network of the World Bank, said that evidence from past crises confirmed that even mild downturns could have costly and long-lasting effects -- which were sometimes irreversible on human welfare -- as families with few alternative employment opportunities and little access to credit were forced to reduce food intake, even for very young children, or pull children out of school. The billion people on the planet who began the crisis in extreme poverty still remained there. Indeed, the crisis compounded, but did not replace the traditional development agenda on which progress had been so difficult for decades.
Multilateral cooperation was needed to meet the Millennium Development Goals and ensure inclusive and sustainable globalization, he said, underlining that the mutual accountability framework laid down in Monterrey, if adapted and extended to reflect the changing global environment, still provided a sold foundation on which to build a more comprehensive framework to address global issues. That expanded contract should reaffirm the role that international institutions must play as public good providers to address market failures, and to assist developing countries with technical and financial support.
He said that during the last 18 months, the World Bank Group had provided global leadership. Cumulative World Bank commitments for its fiscal year 2008 to 2009 reached $87.6 billion and would likely go beyond $100 billion by the end of April. The World Bank crisis response provided a snapshot of the Bank’s potential to address the challenges and opportunities of the post-crisis world. Accomplishing these results required extensive work to modernize the Banks corporate governance and enhance the voice of transition and developing countries in decision-making. It had launched a series of internal reforms to tailor its financial and non-financial instruments to client needs. The Bank was also reorganizing the way it responded and delivered client services.
He stressed that the issues of aid, debt relief and multilateral assistance could not be framed around charity or Monterrey commitments to achieve the Millennium Development Goals. Developing countries offered abundant opportunities for high-return investments and help for rebalancing global growth towards a more sustainable configuration. Promotion of multiple poles of growth in developing countries would make an important contribution to balancing. Thus, it should be seen not as a handout, but as an investment in global economic growth.
REBECA GRYNSPAN, Associate Administrator of the United Nations Development Programme (UNDP), said that developing countries were faced with painful choices, as the need for services increased and the funds to pay for them diminished. The decrease of services such as education could have negative effects for a long time, so it was crucial that the international community fulfil its commitments to assure achievement of the Millennium Development Goals through an increase in the quality and quantity of aid.
With adequate financing and well-planned interventions, the Millennium Development Goals could be met, she said, but development assistance would have to be mobilized quickly for both the short- and long-term. International attention must be focussed on concrete strategies for that purpose, and it was crucial to build climate-change risk into all such planning.
Financial support, trade reform, debt relief and coherence and predictability of aid and all other initiatives must be carried on simultaneously, she said, for efforts to be successful. “If we stop investing now, we risk losing hard-fought development gains,” she said, adding that in the five short years left for the achievement of the Millennium Development Goals, the world must rise to the occasion.
PETKO DRAGANOV, Deputy Secretary-General of the United Nations Conference on Trade and Development, said the financial crisis had re-ordered the economic role of States. Too often, the financing of investments had been a by-product of casino activities, which had led to an enormous waste of resources that could have been used for development. It was, thus, vital to refocus financial activities, which, for developing countries, meant catalyzing physical and human investments and decent job creation. The development and diversity of production capacities was essential, not only to attain the Millennium Development Goals, but to ensure that progress was sustainable. It was important to recognize that true international competition would not happen if least developed countries’ productive capacities were nipped in the bud.
Also, the creation of productive capacities needed a favourable macroeconomic and commercial environment, he said. Developed countries must honour their public aid commitments, while foreign direct investment could also make an important contribution. For their part, Governments could establish a regulatory and macroeconomic framework that discouraged undesirable capital and channelled other resources towards productive investment. But, such efforts alone would not liberalize markets.
He said the lure of immediate gains discouraged financing investments, rendering them less attractive for the entrepreneur. As such, Governments, through their macroeconomic and revenue policies, had the opportunity to provide enterprises with prospects for stable demand growth. Also, through their investments in physical and social infrastructure, they could provide the necessary conditions for private investment and encourage private financial institutions to grant investment credits at reduced levels.
To mobilize resources for investment, the entire development framework was essential, he said. Saving was endogenous to growth and resulted in increased revenues for companies, households and the State. As for multilateral financial bodies, he welcomed changes in their global financial governance, as long as it discouraged speculative movements and rebalanced decision-making power in the Bretton Woods institutions. The crisis had revealed a desire to increase their financing capacity, but he cautioned that their resources must be directed to countries that were really in need, without reverting to counterproductive politics. The recent allocation of special drawing rights was, from that perspective, ambivalent -– while it was a positive financing mechanism, it must not be distributed according to actual quotas.
SHISHIR PRIYADARSHI, Director of the Development Division, World Trade Organization, said that the economic downturn had not left any sectors of the world economy untouched. However, the multilateral trading system had prevented the worst possibilities from occurring and a recovery was taking place. Right now, a deal on the Doha Round of trade talks would be most beneficial, but it was essential that developing countries mainstream trade into their development plans.
In addition, he maintained that significant Aid for Trade was needed to allow developing countries to benefit from the trade access that they hope to get. He said that efforts to mobilize resources for Aid for Trade had so far been successful, but it was important to look at the challenges ahead, including the pressure on donors, which was increasing, and the unequal recovery of countries from the financial crisis. He called for more and better aid for Aid for Trade, since it was a strategy that was working. Further progress should be built on what had already been achieved.
NICKEL LEE HANG, Minister of Finance of Samoa, said his country viewed the Monterrey Consensus and the Doha Declaration as reaffirmation of genuine partnerships and the need “to put one’s house in order first”. Durable and lasting economic and social development could only occur if they were country-owned, country-driven and built resilience to exogenous shocks. While the economic and financial crisis had spared no country, its effects continued to impact disproportionately on the least developed countries and the small island developing States. Samoa was a member of both groups and continued to be acutely affected by the crisis, as well as the September 2009 tsunami. That event undercut prospects for a quick recovery by saddling the Government with massive private and public sector reconstruction and building costs.
Nevertheless, the Government was committed to maintaining macroeconomic stability through its structural reform programme, he said. A Debt Policy and Aid and Development Cooperation Framework was being formulated. These frameworks had highlighted how budget support was the preferred modality for donor support and Samoa had strengthened its donor coordination frameworks to ensure the Government drove the whole development process. Sector-wide approaches ensured that the sector priorities and ministries took full responsibility. Samoa was also committed to the debt management strategy and aimed to adhere to its announced debt ceiling for net public debt and fiscal deficit of 40 per cent of GDP and 3.5 per cent of GDP, respectively. It was also working towards a better understanding of the needs of the most vulnerable in its communities and was focusing on further infrastructural development. Its request to extend the transitional period beyond December 2010 before graduating from the least developed country category was an integral part of Samoa’s efforts to generate growth in the medium to long-term.
JOÃO GOMES CRAVINHO, Secretary of State for Foreign Affairs and Cooperation of Portugal, cautioned against losing sight of the responsibility to fight poverty and promote development worldwide. “We can strive for better aid coordination and coherence among countries and organizations,” he said. But, such efforts would be of little use unless development was incorporated as a horizontal issue in all policies and strategies at the national, regional and global levels. Keeping promises was both a moral and ethical quest in a globalized world, where prosperity, security and well being were inseparable from what occurred within and outside borders.
The crisis had created new opportunities to embark on paths of sustainable economic growth, he said, and Portugal was committed to creating a competitive, knowledge-based and inclusive economy. Efforts would focus on innovative actions like promoting green jobs and renewable energies. As a European Union Member, Portugal associated itself with the Copenhagen Accord, which was a step towards the conclusion of a comprehensive global legal framework. His Government was committed to helping implement adaptation and mitigation actions in small island developing States, least developed countries and Africa in the “fast start” financing framework.
Domestic resource mobilization was a key element of Portugal’s global partnership on financing for development, he said, also reminding donors that there were no “one size fits all” solutions. Issues like tax administration and good governance were vital, as they allowed developing countries to be less dependent on official development assistance. In many countries, tax reforms, for years, would be insufficient for raising the required levels of development funding. In considering new challenges, like the funding of global public goods connected to climate change or health, special attention was owed to the situation of least developed countries and small island developing States, which had been harshly affected by the crises of food, fuel and finance. Portugal looked forward to the General Assembly meeting in September to debate the five-year review of the Mauritius Strategy.
Moreover, States had to coherently combine various processes under way this year within the development agenda, he said, and strive for more efficiency at the operational level. Portugal was strongly committed to responding to difficult situations in fragile States and preventing conflict, and a renewed focus on the challenges faced by some African States was, thus, critical. “When resources are scarce and the needs are pressing, our response must be global, coordinated and fast,” he said, noting that the aid architecture was rightly evolving to include contributions from the “emerging powers”. In that process, it was important to listen to poorer countries, especially in the Group of 20, and on issues like the reform of international financial institutions. At the World Bank, Portugal supported the creation of an additional chair for sub-Saharan Africa. Finally, a stronger United Nations was needed, and it was important to promote more coherence within the Organization’s development system, and complementarity between United Nations bodies with different mandates.
MOHAMED EL ORABY, Deputy Minister of Foreign Affairs for International Economic Affairs and Cooperation of Egypt, associating his delegation with statements to be made on behalf of the African Group and on behalf of the “Group of 77” and China, said he viewed the review process as being founded on three central, interlinked and complementary parameters. The first parameter was the current international economic environment, particularly the world economic and financial crisis and its multiple effects on developing countries and their international and domestic sources of finance. Despite the emergence of signs of recovery from the crisis, its effects on developing countries continued, and in some cases, were increasing. The crisis still remained a cross-cutting challenge to the six chapters of the Financing for Development process. Addressing the central challenge required that developed countries implement their existing commitments honestly and fully. That should be carried out in tandem with the mobilization of new and additional resources in support of financing for development, and in a manner that strengthened the ability of developing countries to deal with the effects of the other challenges and crises being faced in energy and food security, as well as the grave dangers posed by climate change.
The second parameter related to the contribution of the Financing for Development process to achieving the Millennium Development Goals. It was necessary to look into the best means to capitalize on the link between the financing for development agenda -- which provided instruments of finance -- and the Goals -- which formed a socio-economic framework at the global level to assess the level of development, in the context of a global partnership for development. In addition, special attention should be given to the African continent, as all statistics indicated that it was not on pace to achieve the Goals by 2015.
Further, he said that the broader context of the internationally agreed development goals constituted the third parameter. Implementation of the financing for development agenda needed to flow in harmony and consistently with the wider and broader international development agenda. Efforts to implement the financing for development agenda should reinforce the chances of implementing the greater agenda, and vice versa. Efforts at the domestic level must be complemented by adherence to good governance at the international level. He added that the upcoming period would undoubtedly require initiating consultations on the need to convene another follow-up conference on financing for development by 2013. That would require examining how it could contribute to a comprehensive review of what had been achieved in the financing for development agenda five years after the Doha Conference, in addition to what it could provide as an assessment of the broad international development situation as the year 2015 approached.
JOSE W. FERNANDEZ, Assistant Secretary of State for Economic, Energy and Business Affairs of the United States, reaffirmed his country’s support for the Monterrey Consensus, stressing how, after eight years, the principles of that agreement continued to guide the global community’s development efforts. The financing for development dialogue had encouraged the world to think outside the development assistance framework by looking beyond official development assistance to embrace a broad range of investment flows. It was a priority of the United States to encourage economic growth in the developing world. But, even as signs of recovery were being seen, it was clear that the crisis had dampened the possibility for, and rate of, economic growth around the world. As a result, development financing should be surveyed to see how finance dollars could be stretched further.
Saying the United States joined all Member States in moving towards shared long-term development goals, he underlined how today’s discussion provided an opportunity to solidify consensus. Among other things, the Financing for Development dialogue underscored the role of free trade and private capital flow. The private sector was, and would remain, a crucial part of development strategies. Further, no country would grow where broad and inclusive economic growth was not the goal of its leaders. The work to ensure responsible governance must be rooted at home and should be constantly promoted. The commitment to improve access to resources for the poor was one example of how resources could be expanded. The billions of dollars that flowed from the developed world to the developing one in the form of remittances also held unrealized potential and should be leveraged for growth. Given the continuing need to strengthen the dialogue on, and sources for, development, the current meeting should highlight the central role of good governance in its effort to promote economic growth.
OLGA ALGAYEROVA, State Secretary of the Ministry of Foreign Affairs, Slovakia, said the international community must manage the global economic recovery, environmental sustainability and climate change. It must preserve progress thus far and revamp global institutional frameworks. The dialogue was taking place at an opportune time. Despite formidable challenges, progress was taking place across regions. With strong leadership and resilience, increased effectiveness, and accountability on all sides, the international community could be successful. With only five years left until the 2015 target date for achieving the Millennium Development Goals, the United Nations should increase its role to create greater political momentum and resources towards that end, particularly on the goals concerning hunger, education, and maternal and child health.
She reiterated Slovakia’s commitment to implement the Monterrey Consensus and the Doha Declaration. Domestic and global financial resources for development were needed for implementation. She supported improved public financial management; sound, effective tax and customs systems; and strengthened international tax cooperation. Official development assistance was an important source of financing for development and donors must provide enough of the right quality of it. Slovakia continued to make every effort to meet its official development assistance obligations and, as a new donor, it worked to strengthen its assistance delivery capacity and aid effectiveness. He supported meaningful reform of global economic and financial institutions, creation of the flexible credit line, modification of the International Monetary Fund (IMF) concessional lending facilities and review of the Debt Sustainability Framework. Slovakia would act within the European Union Climate and Energy Package and its emission trading system to raise funds for mitigation and adaptation to climate change in developing countries.
JORGE VALERO, Deputy Foreign Minister for North America and Multilateral Affairs of Venezuela, associating his delegation with the statements to be made on behalf of the “Group of 77” and China and on behalf of the Rio Group, said the dialogue was taking place at a time when the countries of the South were being severely hit by the economic and financial crisis, and the world felt the adverse impact of climate change. Those processes hindered development and influenced the growth of poverty, as well as increased inequality and injustice in many countries, and in North-South relations. Financing for development, however, was not a handout; it was also not an opportunity to do business by exploiting the needs of other countries. It was a moral obligation to compensate for centuries of irrational exploitation of both the peoples of the South and of nature. It was clear that developing countries were not responsible for the structural nature of the economic and financial crisis, nor were they responsible for the ecological crisis.
Highlighting the importance of Financing for Development in reaching the Millennium Development Goals, he said that, in order to achieve the Goals, it was necessary to implement the commitments made in Monterrey and Doha. In the current reality of global capitalism there was a clear predominance of financial economics over the real economy, and of speculation over the production of goods and services. In that context, global unemployment had exceeded 200 million people, the movements of capital to the South had fallen, poverty had increased by millions, and thousands died of hunger daily.
The developed countries, in line with the Monterrey Consensus and the Doha Declaration, should reduce the debt and the payment of debt service of developing countries, open their markets to their products, and encourage foreign investment flows directly to the South, guaranteeing the social and environmental sustainability of those investments. He stressed the need for radical reform of the international financial and economic system, with close regulation of the functioning of the international financial system and a strengthening of the financial architecture at the regional and subregional levels. It was also necessary to generate liquidity for the South, so that it could pursue countercyclical policies, rather than the budget adjustments that led to reduced social expenditures, devaluation and price adjustments -- processes that stimulated inflation. In conclusion, he said that financing for development was a commitment with humanity and the planet.
JUAN LÓPEZ-DORIGA, Director General for Planning and Evaluation of Development Policies, Ministry for Foreign Affairs and Cooperation of Spain, speaking on behalf of the European Union, said it was time to move forward towards the achievement of the Millennium Development Goals during this crucial moment -- six months ahead of September’s High-Level Plenary Meeting on the Millennium Development Goals and within the last five years to the target date for their achievement. Since the adoption of the Monterrey Consensus in 2002, the financing for development agenda was strongly linked to the achievement of the Goals. The review of the financing for development agenda during the Doha Conference in November 2008 took place in the context of the financial and economic crisis. That crisis not only worsened the food crisis that developing countries had been suffering from since 2007, but also exacerbated the negative effects of the energy crisis, environmental damage and climate change.
In that context, he said it was essential to honour the commitments made and foster debate on new financing sources for development. The European Union reaffirmed its commitment to developing countries, particularly in terms of the volume and quality of its development assistance and of policy coherence for development. For the period 2010-2015, the European Union and its member States believed that a renewed mobilization of all resources for development from all sources, as well as the implementation of policy coherence, was more necessary than ever. It was of paramount importance to reaffirm official development assistance commitments and progress in honouring aid effectiveness principles through the implementation of the Accra Agenda and the reform of the global architecture for aid. The European Union continued to demand the conclusion of the Doha Development Round with an ambitious, successful and balanced outcome for developing countries.
It was also necessary to analyse in more detail innovative sources of financing for development, he said. The European Union was committed to promoting policies and instruments that supported private investment and the expansion of the private sectors of partner countries in support of inclusive and sustainable economic growth. Against that background, the mobilization of domestic resources remained one of the best formulas to increase the assets for development in a sustainable manner. From an institutional perspective, the crisis had also revealed the necessity for better coordination, both inside the United Nations system and between the United Nations and the Bretton Woods institutions, with an ongoing reform process aimed at achieving more inclusive and efficient institutions. In conclusion, he said that the European Union had always been in the front line of the development agenda, and kept its firm commitment to support developing countries in their struggle to achieve the Goals by 2015.
ABDULLAH MOHAMED ALSAIDI (Yemen), speaking on behalf of the “Group of 77” developing countries and China, said that, despite analysts’ assurances that the world economy might be showing signs of recovery, unemployment and underemployment were on the rise worldwide, affecting the livelihood of millions of people in developing countries. If the international community failed to contain the effect of the crisis and address its root causes, the world would face unimaginable and immeasurable consequences. The Monterrey Consensus was an important step in developing a working partnership between the United Nations and multilateral financial institutions. But, that had since eroded. There was a need for a robust follow-up mechanism that went beyond official meetings.
The Group actively participated last week in the meeting of the Economic and Social Council with the Bretton Woods institutions, the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization, he said. Despite significant progress, more interactive discussions, and unanimous agreement for sustained engagement, the level of representation signalled that gaps still existed between New York and Washington. Developing countries had been forced to invest significant resources to service and reduce debt, and to protect their currencies in an unsupportive and unstable international monetary and financial environment. He reaffirmed the need for donors to fulfil their commitment to allocate 0.7 per cent of their gross domestic product to developing countries.
He expected the United Nations to play a fundamental role in reforming the global governance structure. He stressed the importance of the Assembly’s Ad hoc Open-ended Working Group to follow up on issues listed in the outcome document of the Conference of the World Financial and Economic Crisis and its Impact on Development. He was committed to continuing discussions on follow up mechanisms for financing for development. A more effective intergovernmental inclusive process to carry out that follow up was vital. He called for concluding the Doha Round to prevent future crises and to preserve pre-crisis development gains. At last week’s Economic and Social Council meeting, it was suggested that the voting power of developing and transition countries in international financial institutions be increased by at least 3 per cent. But, many developing countries wanted a minimum 7 per cent increase. Reforms were essential and development must be put at the centre of the work and processes of such institutions.
EDUARDO GÁLVEZ Chile, speaking on behalf of the Rio Group, said the implementation of the commitments made in Monterrey and Doha was especially important, particularly for the developing countries, which were suffering most acutely from the devastating consequences of an international economic and financial crisis that had endangered the livelihood of the poorest and most vulnerable in society. The crisis had been characterized by, among other factors, the decline in international trade, the sudden change in direction of private capital flows, the drop in commodity prices, and the reduction in remittance flows to the poorest countries, as well as the loss of income and jobs to the shrinking of economic activity globally.
He said it was the Rio Group’s belief that each country was responsible for its own economic development, so that domestic resource mobilization was essential in order to win the fight against hunger and poverty and to achieve full employment. Those resources, already scarce and diminished by an unfavourable international economic situation, needed to be complemented by financial resources from abroad. Hence, international cooperation, free from conditionalities, should allow developing countries the design of the public policies that each country decided in exercise of its sovereignty, in the light of its own needs and in accordance with its internal democratic processes.
Additionally, developing countries needed a favourable international economic climate if their national development policies and programmes were to succeed. In that connection, the Monterrey Consensus provided the United Nations with a framework for promoting an economic climate favourable to development financing in its national, international and systematic aspects. However, the greatest challenge, eight years after entering into those commitments, continued to be its implementation, he said. To that end, the Rio Group reiterated again that the follow-up mechanism to the commitments assumed in Monterrey and reiterated in Doha had not given the desired results, particularly the lack of coordination between distinct stakeholders interested in financing for development. The Group, therefore, appealed for an ongoing exploration of alternatives that would show the best way to implement those commitments and, in that context, drew attention to the contribution of the Group and others which should continue to be studied to resolve, among other matters, the systemic problems worsened by the crisis.
On the reform of the international monetary and financial system and its implications for development, he said the Rio Group had consistently reiterated the need for an ample international dialogue with a view to building a new financial architecture that guaranteed the democratization and transparency of financial management and the strengthening of regulation mechanisms. Such a move would establish effective instruments of governance and prevention and enable immediate response to future crises. Towards that goal, he urged for movement towards a far-reaching democratization of the international financial institutions, which would significantly increase the voice, representation and voting power of developing countries and ensure that the development dimension became the focus of their action.
Commenting on the impact of the current financial crisis on foreign direct investment and other private flows, external debt and international trade, he noted that all available reports indicated a sharp decline in direct investment flows, and expressed the Group’s hope that, with the support of the international financial community, that trend would shortly be reversed, as the decline had severely impacted the plans and programmes of the region’s countries to fight poverty and their efforts to attain the Millennium Development Goals. Similarly, he stressed the role of international financial and technical cooperation, including South-South and triangular cooperation, in leveraging the mobilization of domestic and international financial resources for development. The Rio Group believed recipient countries needed to be completely free to define their national development priorities, while external cooperation needed to be supportive of those sovereign decisions.
ANATOLIO NDONG MBA (Equatorial Guinea), speaking on behalf of the African Group and associating his remarks with those made on behalf of the Group of 77 and China, said the countries of Africa were among the hardest hit by the recent multiple crises. The impacts of those crises were already reversing earlier economic gains and progress towards attaining the Millennium Development Goals. Moreover, the impact had been so serious because of the enduring failure to address the systemic imbalances and inequities in the international economic system. Ironically, the delivery gap in commitments made towards Africa was much higher than the worldwide delivery gap and raised questions about the seriousness of commitments made to the continent’s development. He called for the immediate fulfilment of all official development assistance commitments, including the pledge of the Group of Eight industrialized nations to double that assistance by 2010. He also called for an “expeditious process” during the General Assembly’s next session towards the establishment of a monitoring mechanism for all commitments made to Africa.
Along with the fulfilment of these pledges of assistance, he said debt relief measures, increased aid volumes for budget support and the availability of export trade financing would positively impact African economies. The coherence and consistency of international economic governance formed an integral part of the Financing for Development process, but the voice and participation of African countries in international decision-making and norm-setting was essential, and should not be marginalized. The African Group believed the crisis provided a good opportunity to address the long-standing imbalances and fragilities inherent in the present financial and economic architecture. Accordingly, the urgent need for comprehensive reform, coupled with a focus on making the system more democratic, effective and inclusive, had become all the more pressing.
He said the increase in growth rates that resulted from the marked improvement of most African countries in their macroeconomic and fiscal management in the years following Monterrey had been eroded by the crisis. With signs of recovery around the world, however, African countries were determined to restore their pre-crisis growth levels. Africa envisaged an international economic situation that was conducive to its efforts to attain the growth and development targets to which they aspired. Among other things, this required the end of the stalemate over the Doha round of trade negotiations.
GYAN CHANDRA ACHARYA (Nepal), speaking on behalf of the Group of Least Developed Countries and aligning his statement with the remarks made on behalf of the Group of 77 and China, said that since the 2002 adoption of the Monterrey Consensus, the process of globalization had failed to ensure benefits to all in an equitable and judicious way. The gap between the rich and the poor had widened, with the least developed and vulnerable countries increasingly pushed to the margins. Emerging multiple crises and the adverse and uneven impacts of climate change had reversed gains already made. Declining levels of official development assistance, deteriorating terms of trade, loss of export revenue, fluctuating commodity prices, declining foreign direct investment flows, and reduction in earnings from remittances and tourism posed serious challenges to development financing, thus undermining the attainment of the Millennium Development Goals.
He said that, while development was the responsibility of the country concerned, the low productivity, low human development, high poverty rates and the “lower equilibrium” trap that prevailed in least developed countries afforded them little scope to increase their domestic finance. After years of painstaking efforts to broaden tax structures and to adopt macroeconomic prudence, some increase in capital formation was visible. But, resources to meet even the basic needs of the grinding mass poverty and deprivation were in acute short supply, and a strong and enabling international environment was needed.
To this end, he emphasized the need for a genuine international partnership in: fulfilling official development assistance commitments; providing greater market access for least developed countries in developed markets that was not offset by distorting and discriminatory trade practices; and ensuring that the new facilities created by the World Bank and International Monetary Fund were inclusive, substantially financed and easily accessible with less conditionality. He further urged development partners and international financial institutions to encourage private investors to invest in countries where the need for finance was acute. Innovative sources of financing for development should be explored, and a solution to the high debt burdens of poor countries found. Countries emerging from conflicts needed consolidated rehabilitation, reconstruction and recovery packages. The international community must also come forward with additional, substantive and secure funding and technology for climate change adaptation and mitigation measures for the least developed countries.
JULIO CÉSAR ARRIOLA RAMÍREZ (Paraguay), speaking on behalf of the Group of Landlocked Developing Countries, said that securing development financing was essential to efforts to attain the Millennium Development Goals. While that meant living up to the promises made at Monterrey and Doha, it also meant moving urgently to address the special vulnerabilities of landlocked and transition countries, especially in the wake of the recent multiple global crises. Indeed, those crises, especially the recent economic and financial turmoil, had exposed severe gaps in the international financial architecture.
All countries must, therefore, acknowledge that the much-needed correction of that system should go beyond the current emergencies, he said. The necessary reforms must be far-reaching and structural, leading to a complete transformation in the relationship between the Bretton Woods institutions and the developing world. The United Nations would be essential in shepherding such an effort, he stressed.
Noting that the geographical difficulties of landlocked countries had been exacerbated in the wake of the financial crisis by the collapse of international trade and a prolonged period of high food and commodity prices, he said the over-indebtedness of many landlocked and transition countries also made it difficult for them to secure long-term socio-economic growth. While each country was responsible for its own development, including mobilizing domestic resources that would be essential in the struggle against hunger and poverty, it was still important for the international community to promote and support North-South and South-South cooperation initiatives.
CAMILLO GONSALVES (Saint Vincent and the Grenadines), speaking on behalf of the Caribbean Community (CARICOM), and aligning with the Group of 77 developing countries and China, said eight years after the pledges made at Monterrey, most developed countries had fallen woefully short of their official development assistance benchmarks. On the other side, developing nations had taken primary responsibility for their growth. CARICOM exemplified such achievements, with the creation of a single market and progress towards a single economy. However, efforts to integrate into the global economy had been inhibited by a global environment unprepared to consider its needs, and he urged more attention to such issues, bearing in mind the need for differentiated support and targeted assistance for small, highly indebted middle-income developing States and other vulnerable groups.
Describing the situation, he said CARICOM economies were largely in recession, with declining revenues from income and foreign-exchange generating sectors, like tourism, which had led to significant declines in aggregate regional demand, higher unemployment and worsened fiscal positions. Highly indebted middle-income countries that were also vulnerable to external shocks should be granted access to concessionary loans and financing from international financial institutions. Such challenges had been compounded by the imposition of an air passenger duty, which placed the region at a competitive disadvantage and fostered unfair targeting of small, developing country offshore financial services jurisdictions, clearly revealing the incoherence in the global economic system.
Such actions showed a “growing insensitivity” to the needs and concerns of the smallest and most vulnerable members of the international community, who were without a seat and a voice in matters affecting their interests, he said. CARICOM was concerned at the growing tendency of “limited membership groups” assuming decision-making powers on issues affecting the entire international community, without the consent or involvement of that community. That, and the imposition of the Air Passenger Duty, ran counter to the spirit and intent of the global partnership for development envisaged at Monterrey, as well as Millennium Development Goal 8 (global partnership).
With that, he reiterated CARICOM’s call for the timely completion of the Doha Development Round, as delays jeopardized the delivery of development promises. He expected that the development dimension of the Round would include increased market access in areas of export interest to his region; recognition of real asymmetries between developing and developed nations; sensitivity towards the adjustment concerns resulting from trade reforms and liberalization; and adoption of the proposals tabled by the group of small, vulnerable economies.
ANDREW GOLEDZINOWSKI ( Australia), speaking also on behalf of CANZ ( Canada, Australia, New Zealand), said progress towards attainment of the Millennium Development Goals had slowed as a direct consequences of the economic crisis that had followed directly from the food and energy crises. The World Bank estimated the food price crisis alone to have pushed 100 million people deeper into poverty, but despite such setbacks, CANZ wished to address a crucial issue: how developing countries could build long-term resilience to shocks and regain momentum towards achieving the Goals.
From natural disasters to conflict, economic shocks to climate change, the world’s poorest nations faced a range of significant challenges, he said. While the nature of the shocks varied, the common theme was that they hindered progress towards attainment of the Goals. Now, more than ever, urgent, coordinated and decisive action was required to harness all available global resources in building long-term resilience to shocks while financing sustainable development.
He said the key areas needed to build long-term resilience included a focused and coherent G-20 agenda that would follow up on commitments undertaken to foster economic recovery and strong, sustainable and balance growth; honouring aid commitments; and exploring new financing mechanisms and partnerships. It was also necessary to promote broad-based sustainable economic development, as well as to do more on trade and development while making aid more effective, he said.
LESLIE KOJO CHRISTIAN (Ghana), associating himself with the Group of 77 and China, said his country was well endowed with natural resources and depended on the exportation of commodities such as cocoa, coffee, gold, diamonds, timber and other non-traditional products for the bulk of its foreign exchange earnings. Even so, Ghana remained heavily dependent on international financial and technical assistance, he said, noting that commodity exporters faced daunting challenges which affected their ability to mobilize the resources needed to finance development.
He said the major systemic issues that must be addressed in a sustainable way included the supply capacity limitations under which commodity producers operated; the lack of diversification in their production and export base; the absence of effective participation in the value chain; and the need for an enabling international environment, including an equitable and rule-based international trade system. Many developing countries might not achieve the Millennium Goals by 2015 unless concrete and immediate measures were adopted to address the challenges associated with commodity markets, he warned.
Significant improvements were required in international development assistance, he said, stressing that they should target the commodity sector to reverse declining official development assistance for agricultural development. There was also a need to improve the effective participation of commodity producers, especially smallholders, in the value chain, and to design viable strategies for diversification while providing adequate finance to facilitate commodity development and competition, he said.
PETER WITTIG (Germany), associating himself fully with the European Union, said the Millennium Development Goals could only be achieved in global partnership, which required the mobilization of international and domestic resources. At the same time, the effectiveness and efficiency of aid would have to be improved, he stressed, adding that his country remained committed to achieving the 0.7 per cent ODA target by 2015.
However, Germany recognized that sustainable development was never simply a question of international financial resources, he pointed out. Of equal importance was a set of coherent national and international policies, in addition to effective and efficiently delivered aid. The principle of global partnership also applied to efforts to conclude the Doha Round of trade negotiations, and to better integrate developing countries into the world trading system through World Bank voting rights reform, among others, which would shift at least 3 per cent of voting power from advanced economies to developing or transition countries.
Describing climate change as one of the “outstanding cross-cutting issues for financing for development”, he underlined the crucial role of the carbon market, saying that his country intended to use proceeds from the auction of emission allowances to finance adaptation and mitigation activities in developing countries. Donor and developing countries should also support the private sector’s promotion of public-private partnerships and corporate responsibility, he said, noting that the United Nations Global Compact offered a solid and dynamic framework for leveraging the private sector. There was a need to intensify efforts to promote good governance, particularly in the area of taxes, which would increase domestic financing for development. In that regard, Germany’s Ministry of Economic Cooperation had launched the International Tax Compact, he said, adding that consideration should also be given to further refining international mechanisms dealing with the debt crisis.
NICOLAS DE RIVIÈRE (France), associating himself with the European Union, said that since 2002, there had been a common vision around development financing, based on the need for both a global approach and partnerships that included all stakeholders. The Monterrey Consensus and the Doha Declaration were being implemented amid a crisis that particularly impacted the ability of developing States to implement the Millennium Goals, he said, adding that such tragic impacts were compounded by the need for new financing for public goods, climate change, food security and the fight against pandemics. As such, there must be a more inclusive and balanced form of cooperation.
Outlining areas for action, he said there was a need to mobilize national resources, which presupposed the creation of adequate fiscal and tax systems. It was also necessary to increase private financial flows for development, and in that context, to make progress on securing remittances. Additional, stable and predictable financing must be sought, and France was committed to finding innovative development financing. Finally, globalization must be more cooperative, he said, noting that the committed actions of the G-20 had averted a further acceleration of problems, by taking measures to reduce macroeconomic imbalances, for example. There must now be a coordinated tackling of new challenges.
BYRGANYM AITIMOVA (Kazakhstan) said that in light of ongoing reforms at various international financial bodies, her country recognized the critical role of the Bretton Woods institutions in helping countries achieve the Millennium Goals. For its part, the United Nations should adopt a more effective intergovernmental mechanism to provide a more substantive review process while maintaining the Organization’s inclusive multi-stakeholder approach. The unique and comprehensive format of the Monterrey Consensus was helpful in that respect. Calling attention to the special needs of landlocked countries, she urged all interested parties to follow the recommendations of the Almaty Programme of Action and implement the measures adopted at its midterm review.
She said middle-income countries also continued to face significant challenges in eradicating poverty, and their efforts deserved support from the United Nations system, international financial institutions and other stakeholders. There was a need to identify innovative sources of development finance –- including the private sector –- for implementation of the Monterrey Consensus and the Doha Declaration. Maintaining the “open, equitable, rule-based, predictable and non-discriminatory multilateral trading system”, as stipulated in the Millennium Declaration, was also critical. While the financial and economic crisis had affected Kazakhstan’s growth rate, it had failed to stop its development, she said, adding that, this year, the country was implementing a development strategy that would run through 2020, with the goal of realizing steady economic growth through accelerated industrialization and infrastructure development. The Government aimed to increase the size of its National Fund from $50 billion to $90 billion by 2020 in order to ensure socio-economic development.
SHIGEKI SUMI (Japan) said the global economic and financial crisis had threatened the survival of poor people and threatened to erase the hard-won gains towards achieving the millennium targets. The international community must stay focused on the human aspects of the crisis. Based on the human security perspective, attention should be on protecting and empowering the poor and vulnerable through sustained livelihoods and social safety nets. Donor countries should firmly honour their commitments. The focus should be on output and outcome, rather than input, and on how to deliver aid to people most in need. Japanese Prime Minister Yukio Hatoyama said Japan would work in partnership with international organizations and non-governmental organizations, and it would strengthen aid to developing countries. It intended to strengthen the process of the Tokyo International Conference on African Development (TICAD), and efforts to achieve the millennium targets and human security. Japan would fulfil its commitments announced at the Fourth TICAD without fail, including doubling its official development assistance and private investment in Africa by 2012.
Japan, one of the founders of the Global Fund to Fight AIDS, Tuberculosis and Malaria, supported efforts to attract a wider range of donors during the third replenishment meeting in October, he said. He was aware of the wide range of financial resources that had to be mobilized, and in that context Japan was proud to be the next chair of the Leading Group on Innovative Financing for Development and it was considering holding the Group’s next plenary meeting after November. Raising resources to finance the millennium targets should start at home. Domestic funds and foreign direct investment were needed, in addition to official development assistance. Human development was a key priority in that process.
Based on its own experience, Japan understood that free trade was a strong engine for development, economic growth and poverty reduction, he said. Thus, it was committed to an early conclusion of the Doha round. In July, it had announced the 2009 Development Initiative for Trade to provide official development assistance for port and road infrastructure development and training of developing countries’ customs officers. Concerning the international financial institutions, he said they needed reform. The next quota review process of the IMF must be accelerated, so that quota shares appropriately reflect the current global economic reality. Further, Japan will work with other countries to pursue governance and operational effectiveness reform of the World Bank in conjunction with voting reform, with a view to reaching an agreement by the spring meeting.
LI BAODONG ( China) said the world economy was now moving slowly out of deep decline, and had embarked on a more obvious upward trajectory. Developing countries, which had been hit hardest by the financial crisis, were faced with a shortage of resources, environmental degradation and other difficulties. At the present critical moment, there was a special significance in revisiting the global partnership for development established during the Monterrey and Doha conferences, and to focus on solving the financial difficulties of the international development process.
As the most representative and authoritative international organization, he said, the United Nations should continue to take the lead in development financing, while facilitating the establishment of extensive partnerships between Governments and all sectors of society to ensure the coordination and coherence of the relevant international policies. In that connection, the Chinese delegation proposed that efforts be made to galvanize political will, mobilize international resources and push for implementation of the Monterrey Consensus and the Doha Declaration.
It was also necessary to strengthen the coordination of macroeconomic policies, accommodate the interests of various parties, and promote balanced growth in the world economy, he stressed. In addition, there was a need to promote further opening of the market, firmly oppose trade protectionism, improve global governance and effectively increase the representation and voice of developing countries. In particular, improvement of global governance should be achieved under the principle of equal participation, cooperation and tolerance, he said.
MICHEL TOMMO MONTHE ( Cameroon) said that, while the global context had improved, the social consequences of the deep economic crisis persisted. The Monterrey Consensus and the Doha Declaration called for in-depth assessments of the commitments made in 2002, and required stronger action to “make up for lost time” and meet new challenges. Developing countries could not achieve the Millennium Goals by 2015 if negative trends continued, he said, recalling that less than two years ago, the Steering Group for the Implementation of the Millennium Development Goals had recommended mobilizing $72 billion per year to ensure that Africa met the Goals by 2015. Making that recommendation concrete would require boosting development financing, notably by ensuring that developed countries devoted 0.7 per cent of their gross domestic product to official development assistance.
Just as important was the quality of aid, he said, citing the Paris and Accra principles for aid effectiveness, while stressing the importance of results-based management, predictability, harmonization and alignment of efforts with African priorities. Also, the mobilization of resources for development could not be accomplished without the creation of a fairer trade system, he said, emphasizing also the urgent need to build a multilateral, development-centred trade architecture. Global governance efforts must be accelerated to include developing countries in global decision-making bodies. Cameroon had drawn up a strategy for growth and employment, focusing on the development of productive sectors, and had implemented a national governance programme for 2006-2011, with the aim of strengthening transparency in the management of public resources, among other things.
HEIDI GRAU ( Switzerland) said the United Nations stood to make an important contribution to intergovernmental discussions on international macroeconomic affairs, but a key challenge was avoiding duplication with the Bretton Woods institutions. The Organization’s added value was its potential for providing an inclusive platform, she said, adding that an independent, experience-driven ad hoc expert panel on systemic risks would also prove valuable. In addition, Switzerland favoured stronger engagement by the G-20 with the wider United Nations membership, and supported fully the approach outlined in a paper submitted to the Secretary-General on behalf of the Global Governance Group. Full use should also be made of the Economic and Social Council’s three-pillar framework.
Taking up the question of mutual accountability, she said donor countries should ensure predictable and transparent financing, in accordance with national needs, while developing countries must, in turn, establish “proper” good-governance policies that were responsive to the aspirations of their respective peoples. Mutual accountability also applied to the relationship between the State and the private sector, she said, noting that the rule of law was a prerequisite for foreign direct investment and a vibrant private sector. In that area, she encouraged the United Nations Global Compact to assume a more proactive approach. For its own part, Switzerland was extending technical assistance to help partner countries mobilize domestic financing by focusing on fiscal decentralization and local economic development.
MOURAD BENMEHIDI (Algeria) said the Monterrey Consensus and the Doha Declaration provided an outstanding framework for achieving agreed goals in development financing, which was significant in ensuring attainment of other internationally agreed development objectives, including the Millennium Development Goals. However, the main advances on the financing for development agenda had been achieved through national efforts, while progress at the international level had been slow.
The financial and economic crisis had hit developing countries particularly hard, he said, calling on international financial institutions to work harder to provide a more stable and inclusive global economic governance structure. While Algeria considered the steps taken by the Bretton Woods institutions to increase the voice of developing countries to be important “first steps”, much remained to be done in that area. The developed countries must live up to their official development assistance commitments, he said, adding that there was also a need to improve multilateral trade negotiations, including through the completion of the Doha Development Round. It was also important to strengthen interaction between the United Nations, the Bretton Woods institutions and the World Trade Organization.
PARK IN-KOOK ( Republic of Korea), noting that the focus of today’s meeting should be building momentum for the high-level talks on the Millennium Development Goals in September, stressed the primary role of each Government in mobilizing resources for development, even during an economic downturn. At the same time, the efforts of developing countries should be strengthened by outside support, he said, stressing that official development assistance levels should not fall below that of previous commitments. While aid had increased from $53 billion in 2000 to $119.6 billion in 2008, it was still not sufficient to bridge the gaps in implementing the Millennium Development Goals.
The Republic of Korea would increase its aid to $3.2 billion in 2015, notwithstanding the economic crisis, he said, pointing out that Seoul would host the fourth High-Level Forum on Aid Effectiveness in 2011. Encouraged by the development of diverse forms of innovative financing, including MASSIVEGOOD, a mechanism for channelling voluntary “solidarity contributions”, the country had raised $14 million each year since September 2007 through the air ticket “Solidarity Levy”, to be used in fighting HIV/AIDS, tuberculosis, malaria and other diseases through UNITAID.
He said the 2010 Global Compact Leaders Summit would be a crucial opportunity to engage more stakeholders -- such as business leaders -- in the process, expand the role of the private sector and strengthen private-public partnerships for development cooperation. Expressing hope for the successful completion of the Doha Round by year’s end, he said Aid for Trade initiatives should be given a boost. The Republic of Korea was providing duty-free and quota-free access to all least developed countries, while increasing Aid for Trade measures and technical cooperation. At upcoming summits, the country would work to draw attention to pro-developing country actions, he said.
DEWI SAVITRI WAHAB (Indonesia), associating herself with the Group of 77 and China, noted that developing countries had begun instituting policy changes and reforms to create business-friendly conditions. They were also beginning to benefit from debt relief or cancellation, increased aid and investment flows, funds from innovative financing mechanisms and remittances. Rapid South-South growth had also aided progress, despite the failure to conclude the Doha Round, she said.
However, the tide had turned in 2008, she said, adding that the financial crisis had placed most developed economies in a tailspin, reducing the availability of funds for aid and investment, and shifting their focus away from debt relief. Because the crisis was a result of unregulated activities in major financial markets, it would be important to strengthen regulation, supervision and monitoring, she emphasized, calling for greater transparency and integrity in financial markets, as well as an effort to reduce excessive risk-tasking.
She went on to say that the international financial system must be updated to accommodate emerging markets and developing economies in the policymaking and decision-making processes. Indonesia looked forward to the outcome of the Assembly’s ad hoc working group on the financial crisis, though it was concerned about the slow progress of work at the United Nations. Giving the IMF the responsibility of disbursing $750 billion in regular resources was an important first step. Other areas deserving a special investment focus included food security, infrastructure and renewable energy, she said, adding that innovative funding mechanisms, such as Debt2Health and debt-for-nature swaps, should be encouraged.
MOHAMED ALAHRAF (Libya),describing the Monterrey Declaration as a milestone in promoting the global partnership for financing for development, said the Doha Declaration had reaffirmed and strengthened that partnership, which had as its main goal the elimination of poverty and hardship. Given the financial crisis and the consequent drop in remittances and global trade, developing countries were now finding it difficult to invest in development, he said, adding that they were also struggling to curb corruption, while commending the United Nations for its efforts to end capital flight. Still, there was reason to fear that the financial and economic crisis would continue to impede the flow of capital to developing countries and hamper development, he said.
Capacity-building and technology transfer were vital in helping developing countries attain the Millennium Development Goals, he said, noting that many nations could not compete in global trading markets. Because of the trend towards protectionism in some countries, developing countries would have to improve their human resources to mobilize development financing and spur foreign investment. With all that in mind, it was to be hoped that the abiding impasse in the Doha Development Round would soon be broken.
Concerned that 30 per cent of some countries’ income went to servicing debt, he said they needed international cooperation in order to find a sustainable solution to high levels of indebtedness, one of the main obstacles to long-term socio-economic development. Among other challenges was improving the international financial architecture in order to erase imbalances. Libya was committed to participating in Africa-based initiatives to improve the chances of sustainable development on the continent, he said, adding that the Libyan Government had prioritized initiatives in food security as well as mother and child mortality, among other areas.
BUI THE GIANG ( Viet Nam) said that, given the “positive yet limited” achievements regarding implementation of the Monterrey Consensus and the Doha Declaration, it was now crucial to strengthen cooperation and action to that end, especially in light of the global financial and economic crisis, in order to ensure broad attainment of the Millennium Development Goals. Mobilizing more domestic and international resources to promote long-term development throughout the developing world must be at the top of the agenda, he said, adding that official development assistance and foreign direct investment were vital resources for making progress towards that end. Strenuous efforts must also be made to help developing countries attract investors, including by improving their economic environments and capacity-building.
For their part, developing countries must focus on putting appropriate national strategies in place to maximize benefits and minimize investment risks, he said. They must also create and foster home-grown and effective disbursement, monitoring and evaluation mechanisms. At the same time, the Bretton Woods institutions and the United Nations were expected to set up the necessary mechanisms for examining systemic issues and mapping out inclusive and time-bound processes for improving global economic, monetary and financial governance structures. It was also necessary to promote trade as well as an engine for development, which would require a more conducive international environment. Concluding the Doha Development Round would be a “huge” step towards creating a fairer, more equitable multilateral trading system, he said.
GONZALO GUTIÉRREZ (Peru), associating himself with the Rio Group and the Group of 77, said the economic and financial crisis had, without a doubt, affected the economic and social prospects of developing countries. Peru was fortunate that it had been able to produce some economic growth, thanks to good fiscal discipline and development and investment policies. According to the most recent UNDP report, the country’s poverty levels had fallen from 1991 levels, with extreme poverty down from 23 per cent in 1991 to 12 per cent, which meant Peru was close to meeting the Millennium Goal of halving poverty by 2015. In addition, it was about to achieve universal primary education, and had already succeeded in reducing mortality for children under five, he said, emphasizing that its success was due in large measure to increased social spending and greater investment at the regional and municipal levels.
In order successfully to mobilize domestic resources, nations needed a healthy international economic environment, he said. Good conditions were also important for international trade, especially for countries like Peru, which were in the process of diversifying their external markets. Encouraging fellow Member States to avoid falling into a protectionist trend and to conclude the Doha Round, he said better financial and technical cooperation also deserved attention, and was particularly helpful to small- and medium-sized enterprises seeking to join export chains. They also required help in research, technological innovation and human resources development. Financial assistance for climate change adaptation and mitigation was also important, he said, urging countries to pay attention to issues such as environmental degradation.
ESHAGH AL HABIB ( Iran) said that while the role of national policies and development strategies could not be overemphasized, a true partnership for development and the broad achievement of all agreed goals could only be realized in a fully inclusive and equitable global system. The development partnership must go beyond mere donor-recipient relationships, he said, adding that it had become clear that despite their best efforts, developing countries were vulnerable to external shocks beyond their control. Such shocks could not be overcome through traditional official development assistance or humanitarian assistance. What was needed was an equitable, fair and rule-based multilateral international system, he said, stressing that unless such an environment was realized, developing countries would always be vulnerable.
He went on to say that efforts to attain the Millennium Goals should stretch well beyond 2015. Indeed, if the international community reached the poverty target, there would be little room for complacency, since the objective was only to halve the number of abject poor. The commitment of all stakeholders to eradicate poverty and hunger should therefore remain firm. Poverty was the main adversary of development and eradicating it was the key to achieving all the other Millennium Goals, he said, emphasizing, however, that without a fair multilateral system, the international community was bound to miss the 2015 target date.
Concerned that an enabling environment for the attainment of sustainable development targets for all was far from being realized, he pointed out that within two weeks of Wall Street’s near-collapse, nearly $2 trillion had been raised on two sides of the Atlantic to buoy the very institutions that had nearly brought the global economy to a halt, while almost a year later, a mere $2 billion of the resources promised by most of the nations attending the G-8 meeting in L’Aquila, Italy, had yet to be raised. Unless the developed world lived up to its pledges, “a world free from hunger” would remain so only on paper, he said, stressing that while his country supported efforts to identify innovate sources of funding, such sources should remain complementary to traditional financing sources rather than replacing them.
KHALID ABDULLAH KRAYYEM SHAWABKAH (Jordan), associating himself with the Group of 77 and China, said multilateralism served as the irrefutable way forward in addressing development, and the only means to ensure effective action. Thus, the international community must tackle the root causes of the global financial and economic crisis that had severely impacted developing countries. There was an urgent need to reform the international monetary and financial system, and to address the impact of the crisis on international trade, foreign direct investment and external debt.
For its part, Jordan had exercised caution and adopted reform programmes and policies to alleviate the impact of the crisis on the national economy, he said. Its economic reforms reflected a pragmatic approach to promoting and maintaining sustainable development and to becoming an active partner in an increasingly interconnected global economy. Jordan’s foreign trade policy had further stimulated growth and increased opportunities, while its legislative measures had fostered a favourable and mutually beneficial climate for foreign investors.
Turning to international and domestic financial resources for development, he reiterated the need to fulfil the official development assistance commitments made by donor countries, emphasizing also the role of international trade as the “essential mechanism” for eradicating poverty and the primary means for achieving sustainable growth in poorer countries. He also underlined that, as indicated in the Monterrey Consensus, development financing could be tackled holistically from multiple frameworks and resources: governmentally, publicly, privately, domestically and externally.
GUILHERME DE AGUIAR PATRIOTA (Brazil), associating himself with the Group of 77 and the Rio Group, said that assessments of the implementation of the Monterrey Consensus and the Doha Declaration should take into account the recent dialogue between the Economic and Social Council and the Bretton Woods institutions. “We must seize the moment, when much of the established wisdom on international development has become the subject of extensive reconsideration,” he said, noting that a new consensus on the road ahead would require mainstreaming into the United Nations agenda new ideas that had emerged from the financial crisis.
States must work together towards a common view of development cooperation which would not get “bogged down” in rigid concepts like the aid effectiveness agenda of the Organisation for Economic Co-operation and Development (OECD), he said, going on to highlight the need for a concept that made room for South-South and triangular cooperation. It was also necessary to develop a framework benchmarked by measurable outcomes, rather than relying on a list of “one-size-fits-all” policies. Preparing for the 2013 financing for development follow-up conference called for a comprehensive assessment of the global financial and economic systems, and for a consensus-based United Nations cooperation framework.
He said the Monterrey and Doha instruments highlighted the eradication of poverty and hunger as a critical goal, but the developed world’s failure to deliver on its commitments had hampered progress, which, in turn, would impede the fulfilment of other health, education and gender goals. There were technical solutions to overcome implementation gaps, and the United Nations must build on such success stories, he said. As for trade, Brazil was fully committed to a balanced outcome of the Doha Round that provided the means for developing countries to work their way out of poverty. Brazil reaffirmed its commitment to the establishment of transparent regulations to promote predictable private international flows. Indeed, the economic, financial and trading systems needed reform in favour of a regime supportive of global stability. In that context, Brazil supported a stronger United Nations role in monetary, financial and trade talks.
ERENDIRA PAZ CAMPOS ( Mexico), citing the economic recovery that had begun in the last trimester of 2009, said that some developing nations had shown stronger economic growth than that of developed nations. However, that was not the case for most of them and there was still a high level of uncertainty. Available data indicated that 2010 would see slow recovery and that unemployment would remain high. It was natural for the global economy to be concerned with the effects of the crisis on development financing and achievement of the Millennium Development Goals, she said, adding that the Monterrey Consensus contained the minimal commitments needed to create the local and international conditions to allow a mobilization of financial resources.
Regarding private flows to developing nations, she said the freezing of markets in the wake of the financial crisis had had a severe impact, and despite the recent stabilization, conditions for accessing credit markets remained very difficult. It was therefore important that donors honour their commitments, including that of allocating 0.7 per cent of gross domestic product to official development assistance. Furthermore, in designing strategies for middle-income countries, the specifics of the risks they faced in the areas of trade, market accessibility, low-conditioned financing and debt sustainability, among other areas, should be taken into account.
Calling on the global community to continue offering cooperation for development efforts on behalf of middle-income countries, she said trade could and should play a key role in achieving the wealth of nations. Mexico called for resistance against all protectionist pressures as well as acknowledgment of the right of developing nations to apply safeguard mechanisms. Efforts must be made to conclude the Doha Round, she said, adding that, from its firm belief in multilateralism, her country had participated in various regional initiatives and in the G-20, in the search for a common agenda for implementing reforms.
HILARIO G. DAVIDE (Philippines), aligning himself with the Group of 77 and China, said there was “no doubt” that the international monetary and financial system needed reform. The main question was which actors and institutions should carry out and monitor that reform. Over the past year and a half, discussions had taken place in various forums involving “different sets of the same participants”: members of the Group of 8; Group of 20; World Economic Forum; Bretton Woods institutions; and the United Nations. In line with its support for an inclusive, transparent and open process, the Philippines believed that the United Nations should be at the forefront of that reform. Certain groups of countries had taken the lead in discussing those issues, but they should not forget that they were only parts of the greater body. The Philippines believed the views of all stakeholders should be considered before deciding on policies that had global repercussions, especially on developing nations.
Turning to the impact of the crisis on foreign direct investment and other private flows, and on external debt and international trade, he said all those factors had been negatively affected, except perhaps for migrant remittances. The Philippines called for foreign direct investment that was targeted at productive and employment generating endeavours, as opposed to “hot money” that was mostly speculative. It joined others in calling for the conclusion of the Doha Round, and asked that debt alleviation benefit all developing countries, including middle income countries. Debt sustainability should be part of Millennium Development Goal implementation, and so debt-to-Millennium Development Goals swap arrangements should be encouraged. Finally, he recalled the importance of enhancing coherence among the United Nations’ economic, social and environmental policies, stating that development should not be an “either-or proposition” where economic progress was undertaken at the expense of environmental sustainability.
VITALY CHURKIN ( Russian Federation) said that States must provide the impetus and framework to discuss development financing in the context of the Millennium Development Goals, in the run-up to the upcoming meeting on the Goals. Today’s meeting was an opportunity to share experiences regarding macroeconomic and financial policies that were taken in the wake of the crisis and their impact on development. Because it was impossible to ensure sustainable growth without cooperation among States, they should work together to elaborate, on the basis of consensus, rules to regulate the world’s financial policies. States should aim for a just, sustainable and balanced global economy. They also needed to coordinate action in the realm of social policy, especially in terms of social security, access to quality education, health and labour mobility. In that regard, Member States should make use of the United Nations as a forum to debate those issues with the participation of all relevant parties. They should refrain from elaborating strategies and benchmarks, which needed to be discussed within the relevant expert groups.
On joint measures to respond to crisis, he stressed the importance of regional forums as a vehicle for promoting regional integration, which could provide safety net against further crises. The Russian Federation was active in pursuing multilateral cooperation within the Commonwealth of Independent States. Under a new cooperation mechanism, the Russian Federation had $7.5 billion to support low income countries. Under its national development assistance programme, aimed at Commonwealth countries, his country was nurturing commercial and economic ties in the region directed at helping achieve the Millennium Goals. It was working to enhance its capacity as a donor, and had raised its level of official development assistance to $800 million, which was three and a half times higher than in 2008.
He said the international development financing agenda required innovative ways to enhance partnerships, and one which accommodated the growing role played by emerging economies. Those countries had been able to maintain their level of development assistance despite the crisis, even stepping it up in some instances. Expanding their participation in decision-making should be a priority, as States pondered a more efficient international assistance architecture. The Russian Federation had hosted the second conference on partnerships in global finance, whose outcome could be used as input by the Economic and Social Council and the General Assembly.
ERTUĞRUL APAKAN (Turkey) said that, while substantial progress had been made to achieve the Millennium Development Goals, that progress had been uneven, and the high-level General Assembly meeting in September would offer the opportunity to accelerate action for their achievement by 2015. In an environment marked by major crises, it was clear that “business as usual” policies were insufficient for timely achievement of the Goals, and, in that context, the Monterrey Consensus commitments remained valid and crucial. The Consensus had brought about a new compact between developing and developed nations and that spirit must be transformed into action to speed progress on the Goals. To help developing nations on the path towards sustainable development, a focus on their productive capacities, diversification of their export base, and market opportunities were needed.
In that context, he said successful completion of the Doha Trade talks would promote developing nations’ integration into the world economy. It was vital that all key actors in those talks show a spirit of compromise for an equitable and development-oriented outcome. Initiatives such as Aid for Trade could help reduce constraints to supply capacities, including weak trade-related infrastructure. In addition, scaling up and improving the quality of development aid, notably official development assistance, was of paramount importance. Turkey supported the Paris Declaration on Aid Effectiveness and believed that better targeted aid that responded to the needs of poor countries was necessary. Development assistance should be geared towards employment-generating activities. Also, the role of foreign direct investment could not be overemphasized in funding infrastructure projects and work was needed to enhance developing countries’ ability to attract multinational investment. National ownership of development programmes was also crucial. South-South cooperation was also an important strategy to deal with transnational development challenges.
GERT ROSENTHAL(Guatemala), associating himself with the Group of 77 and the Rio Group, said that neither the current Dialogue nor last week’s high-level meeting of the Economic and Social Council with the Bretton Woods institutions, the World Trade Organization and UNCTAD had wholly fulfilled the promise of the Monterrey Consensus, which represented a conceptual advance by, among other things, giving greater content and clarity to the partnership between developed and developing countries, as foreseen in the Millennium Declaration. The conference from which the Consensus had emanated marked a turning point in the volume and character of international cooperation, and given the United Nations a modest place in the world of finance by linking financial flow to development.
Despite that history, however, the achievements of Monterrey and Doha were not being sufficiently capitalized upon, he said. Last week’s meeting of the Economic and Social Council had provided an interesting debate, but it would have been better used as an opportunity to clarify the role of each of the participating institutions in giving greater impetus to the guidelines provided by Monterrey and Doha. The absence of their most senior authorities, as well as the virtual absence of representatives from each Member State’s capital, underlined the under-utilization of such follow-up forums, he said, pointing out the gradual deterioration in the level of representation and the quality of debate since 2002. The role of the United Nations had also been blurred, and it was now imperative to hold a serious introspective examination of whether the Organization was satisfied with such periodic exercises.
* *** *