|Department of Public Information • News and Media Division • New York|
Sixty-sixth General Assembly
77th & 78thMeetings (AM & PM)
‘Time to Get Back to Basics’, Fulfil Commitments of Governments to Development
Financing, General Assembly Hears at Opening of Two-Day High-level Event
Deputy Secretary-General, Noting ‘Fragile, Uneven’ Recovery from Financial
Crisis, Declares ‘Aid is not Charity’, But Smart Investment in Global Economy
Irrespective of the current global financial crisis, it was “time to get back to basics”, the General Assembly heard today, as delegations reaffirmed the mutual responsibilities and obligations of their Governments to fulfil commitments on development financing agreed at the dawn of the new century, and discussed new ways of raising more funds to rescue millions of people from poverty.
Even as economic contraction and belt-tightening squeezed aid budgets, the developed countries must meet their commitments of official development assistance (ODA), Deputy Secretary-General Asha-Rose Migiro said, opening the Assembly’s fifth High-level Dialogue on Financing for Development. The two-day event aims to review the status of the 2002 Monterrey Consensus, widely hailed as the preeminent reference point for international development cooperation, and its follow-up, the Doha Declaration, agreed in 2008.
Noting the “fragile and uneven” recovery from the economic and financial crisis, rising unemployment and persistent poverty, she said that developing countries needed additional help to recover. “Aid is not charity, but instead a smart investment in the global economy,” she continued, calling for innovative new ways to strengthen traditional aid, including more investments in public services, environmental and social protection, as well as a more equitable taxation system. Today’s dialogue, for its part, could enhance the global partnership that was at the heart of efforts to support the world and its people, she said.
Acting President of the General Assembly, Gary Francis Quinlan, of Australia, speaking on behalf of Assembly President, Nassir Abdulaziz Al-Nasser, said the dialogue was taking place at a time of heightened concern, as political divides were hampering action to tackle, among other problems, Europe’s sovereign debt crisis, weaknesses in the global financial sector and volatile food and energy prices. Given that environment, it was critical that developing countries undertook measures to address poverty, expand productive employment opportunities, and finance such measures on a sustained basis.
Yet, while ODA had reached a record level of $128.7 billion, or 0.32 per cent of combined gross national incomes (GNI) in 2010 of the Organization for Economic Cooperation and Development (OECD)/Development Assistance Committee members, many larger donors still remained below the agreed target of 0.7 per cent. There was also an urgent need to increase the volume, quality and reliability of aid flows to achieve the Millennium Development Goals. “There is considerable scope for more decisive and effective action,” he stressed. The present meeting was a chance to further momentum in that direction and pave the way for significant conferences in the future.
When senior Government officials and diplomats took the floor, they pledged commitment to the priority areas of the Monterrey Consensus, including mobilizing domestic and international financial resources for development, bolstering global trade as an engine for development, increasing international financial and technical cooperation, and tackling external debt and systemic issues, through, among others, enhancing the coherence and consistency of the international monetary, financial and trading systems in support of development.
Capturing the mood of many speakers however, Chile’s representative said that what had been a “transcendental agreement” in Monterrey — commitment to a true partnership to urgently address development, trade and debt issues — had languished, as very little action had been taken to promote equitable growth and create sustainable conditions, both environmentally and economically.
Moreover, he said, after 10 years, no dynamic existed for shared work on development financing between the United Nations and other relevant international groupings, such as the G-20. “We need to get back to basics,” he declared, urging decisive action to close such fundamental gaps and deficiencies in the system of global governance. In that regard, Assembly resolution 65/94, on the role of the United Nations in global governance, could provide a road map for the purposes of those discussions, he said, adding that financing for development was critical and must be reflected in the Organization’s development pillar.
With efforts to achieve real “consensus” on meeting agreed financial targets languishing “in the doldrums”, Fazle Hossain Badshah, Member of Parliament of Bangladesh, said it was high time donors sat down with developing countries and agreed on mechanisms to fulfil their ODA commitments. And while everyone understood that mobilizing domestic resources was essential for enhanced national growth, “international support is a must.” Rather than directing “sarcasm” at poorer countries, the international community should ensure their full participation in global decision-making processes, with least developed countries given special consideration.
Minister for International Cooperation of Guinea, Koutoub M. Sano, said that lagging ODA and other negative impacts of the series of global crises on least developed countries — 48 per cent of which were in Africa — meant that the continent might not achieve the Millennium Development Goals by 2015. It was crucial, therefore, to identify regular and sustainable sources of financing for the continent. In that context, he drew the Assembly’s attention to three of his Government’s proposals aimed to increase financing to Africa: holding a conference on development financing; increasing South-South and triangular cooperation; and adopting an Africa-wide declaration on transparency in financial governance.
Highlighting the mutual accountability that characterized the Monterrey Consensus, Mårten Grunditz of Sweden, speaking also on behalf of Denmark, Finland, Iceland and Norway, said that a holistic approach involved mobilizing domestic resources as a core component of financing for development. Each country had the primary responsibility for its own development, and as such, provision of public goods, redistribution of wealth and accountability of Governments required fair, effective and efficient tax systems. Additionally, combating illegal outflows of capital from developing countries could free up resources for investments in development, and United Nations bodies could have a role to play in that arena.
Lazarous Kapambwe, President of the Economic and Social Council delivered opening remarks.
Also participating in the High-level Dialogue were senior Government Ministers from Luxembourg and Spain.
Among the other participants were the representatives of Argentina (on behalf of the Group of 77 developing countries and China), United Republic of Tanzania (on behalf of the Africa Group), Sri Lanka (on behalf of the Group of Fifteen), Indonesia (on behalf of the Association of South-East Asian Nations (ASEAN)), Nepal (on behalf of the least developed countries), Australia, China, Egypt, Chile, Senegal, Colombia, Algeria, United Arab Emirates, Republic of Korea, Jordan, Japan, Qatar, United States, Russian Federation, Liechtenstein, Italy, Malaysia, Jamaica, Switzerland, India, Nigeria, Costa Rica, Iran and Germany.
The Head of the Delegation of the European Union also delivered a statement, as did the Vice-President of the Eurasian Development Bank.
The Assembly will reconvene at 10 a.m. tomorrow, 8 December, to continue and conclude its fifth High-level Dialogue on Financing for Development.
The General Assembly today met to convene its fifth High‑level Dialogue on Financing for Development. Held in accordance with General Assembly resolutions 65/145 (2010) and 65/314 (2011), the overall theme of the two‑day dialogue is “The Monterrey Consensus and Doha Declaration and Financing for Development: Status of implementation and tasks ahead”.
The first day of the Dialogue will consist of plenary meetings chaired by the Acting 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.
Opening the meeting, GARY FRANCIS QUINLAN ( Australia) Acting President of the General Assembly and delivering a statement on behalf of the President, said that the present meeting was taking place at a time of heightened concern over another major global economic downturn. The sovereign debt crisis in Europe, the continuing jobs crisis in developed countries, weaknesses in the financial sector and volatile food and energy prices were among the most pressing challenges confronting the global economy. Moreover, he said, political divides over how to tackle those problems and calls for fiscal austerity were impeding effective and coordinated policy responses. The high‑level meeting provided a timely opportunity to address those serious challenges.
Strong and sustained global economic recovery was necessary for developing countries to effectively mobilize domestic resources for development, he said. Given that environment, it was critical that developing countries undertook measures to address poverty and expand productive employment opportunities; to finance such measures on a sustained basis, however, considerable levels of external assistance would be required. While the last couple of years had witnessed a strong revival in private capital flows to developing countries, that trend showed signs of dampening, if not reversing. Foreign direct investment (FDI) flows to developing countries were likely to be adversely affected in the event of a renewed slowdown in the global community. That was worrisome, he said, as FDI tended to be more stable and long‑term in nature compared to other private flows.
An important trend in recent years had been the growth in South‑South investment flows, which should continue to be encouraged, he continued. Meanwhile, however, the development potential of international trade continued to be limited by a wide range of tariffs and non‑tariff restrictions, as well as agricultural subsidies in developed countries. Consequently, it remained imperative to arrive at a successful conclusion to the Doha round of trade negotiations. Regarding the least developed countries — whose share in world trade remained extremely low, despite almost a decade of multilateral negotiations — it was important that the international community deliver on its promise to provide duty‑free and quota‑free access for all products originating from those countries, and to increase resources for Aid for Trade programmes. Though official development assistance (ODA) had reached a record level of $128.7 billion, or 0.32 per cent of Organisation for Economic Cooperation and Development (OECD)/Development Assistance Committee members’ combined gross national incomes in 2010, many larger donors still remained below the United Nations target 0.7 per cent.
There also remained an urgent need to increase the volume, quality and reliability of aid flows to achieve the Millennium Development Goal targets. There remained concerns about debt sustainability, and the effectiveness of debt sustainability frameworks needed to be re‑examined. Efforts were also needed to design instruments and institutional mechanisms to better deal with debt distress.
Following the world financial and economic crisis, he continued, the issue of international financial stability had increasingly been viewed in the context of global economic governance. It was critical to strengthen macroeconomic policy in that respect, and to ensure greater cooperation between the United Nations, the Group of 20 and other organizations. It was also crucial to reform the major institutions of global economic governance to ensure the greater participation of developing countries. “There is considerable scope for more decisive and effective action”, he stressed. The present meeting was a chance to further momentum in that direction, and would pave the way for other significant conferences in the future, such as UNCTAD XIII and the United Nations Conference on Sustainable Development ( Rio +20).
Deputy Secretary‑General ASHA‑ROSE MIGIRO said that recovery from the world’s economic and financial crisis remained “fragile and uneven”, and unemployment and poverty persisted. In the Horn of Africa, for example, famine still threatened more than 13 million; overall, developing countries needed additional help in recovering from the crises.
However, against that background, developed countries were tightening their belts, she said. It was imperative that those countries fulfil their official development assistance commitments, she stressed, adding, “we cannot allow the economic crisis to deflect us from our commitment to the world’s poorest people”, she said, adding that aid was not charity, but instead a smart investment in the global economy.
Innovative new ways to strengthen traditional aid were needed, she continued. More investments in public services, environmental and social protection, among other areas, were needed, as was a more equitable taxation system. There was a need for a greater investment in sustainable development, including climate change mitigation. She also urged States to conclude an “early harvest” with regards to the Doha Round of trade negotiations. High debts and tariffs were challenges to developing countries, which had once been advised to trade on the international scale, only to now be told to return to smaller, local production. In many cases, she noted, those countries had abandoned small domestic production altogether, and now could not return to that model “even if they wanted to”.
Recalling that the Secretary‑General had called for the better anticipation and management of global risks, including those related to natural hazards, she said that the international community should build on a decade of experience gleaned in the pursuit of the Millennium Development Goals. It also needed to recognize that new development challenges had come to the fore since the inception of those Goals. Today’s dialogue, for its part, could enhance the global partnership that was at the heart of efforts to support the world and its people.
LAZAROUS KAPAMBWE, President of the Economic and Social Council, said that achieving the Millennium Development Goals remained the primary objective and required the full and speedy implementation of the commitments and agreements contained in the Monterrey Consensus and Doha Declaration on Financing for Development. Success rested strongly on a vibrant and functioning global partnership for development, drawing on the comparative advantages and contributions of all stakeholders. The Economic and Social Council had a central role to play in promoting the global partnership for development.
It was imperative that developed countries fulfilled their commitments regarding ODA, he said. A major challenge in achieving long‑term growth in least developed countries was investing from public and private sources in their productive capacities and in the creation of decent jobs. It was also important to address the development needs of middle‑income countries and to better align international support to their national priorities on sustainable development. South‑South cooperation should be an important element of the international development strategy, including infrastructure and industrial projects. In the area of trade, it was necessary to intensify efforts to achieve the development‑oriented outcome of the Doha round of multilateral trade negotiations, to eliminate agricultural subsidies in developed countries, to further strengthen aid for trade and to avoid “green protectionism”.
He went on to say that debt sustainability remained a serious development challenge. In order to overcome the systematic impediments to financing for development, international efforts to reform the international monetary and financial system needed to continue. In the aftermath of the world financial and economic crisis, there was an urgent need for inclusive, transparent and effective multilateral approaches to managing global development challenges. The United Nations system was uniquely placed to promote the international development agenda and serve as a major forum for global economic governance. The biennial Development Cooperation Forum process could help enhance development cooperation and financing for development in various ways. The multi‑stakeholder nature of the DCF and its links with the financing for development process made it a natural centre of gravity, around which solidarity with development countries could take concrete shape. Eventually, it would be the platform to share good practices, explore innovative approaches and promote mutual accountability. As the deadline of the Millennium Development Goals was fast approaching, it was necessary to reinvigorate the global partnership for development and carry on with the formulation and implementation of a post‑2015 development agenda.
MARIE‑JOSÉE JACOBS, Minister for Development Cooperation and Humanitarian Affairs, Luxembourg, aligning with the European Union, said that in times of crisis it was more than ever imperative to continue the discussions on the financing for development. Today was an opportunity to take stock of successes and progress, but also of obstacles and constraints encountered, and to determine which measures must be taken to ensure full implementation of the Monterrey Consensus and the Doha declaration. Luxembourg attached particular importance to the realisation of all commitments in terms of financing for development, and achieving those commitments would fully allow for greatly increased available resources to further the international development agenda.
Over the past 15 years, Luxembourg had committed itself, together with partner countries, to the domain of microcredit, microfinance and inclusive finance as important tools for economic and social development. The potential contribution of microfinance had been recognized in Monterrey and Doha, and she saluted the fact that the Secretary‑General’s report for today’s meeting evoked the access to a wide range of financial services for poor and marginalized population groups and for small and medium‑sized enterprises as salutary for development and domestic resource mobilization. The two fundamental pillars of effective and sustainable inclusive finance in the fight against poverty were, on the one hand, social impact and on the other, economic viability.
She said that whether one spoke of ODA or other sources of financing for development, the focus could not be placed on volume alone. Rather, it was important to talk about the quality and efficiency of aid flows. In that context, she saluted the substance of the outcome document of the Fourth High‑Level Forum held last week in Busan. Further, the attention of the international community must first and foremost go to those countries which were lagging behind the most in terms of achieving the Millennium Development Goals, even if it may seem tempting and sometimes use in terms of communicating results to go for the “low‑hanging fruits” of developing cooperation. It was necessary to work together for a complete realization of the Monterrey Consensus and the Doha Declaration and rely more on the potential of a joint partnership for development. “We must be very clear about this: there will be no sustainable development without sustainable financing for development,” she said.
KOUTOUB M. SANO, Minister for International Cooperation of Guinea, said that the present session was taking place following the Fourth Conference on Least Developed Countries and the Forum on Aid Effectiveness, which had just ended. It was also in the context of a difficult global environment marked by “crisis after crisis”. Among other issues, debts still faced poor countries and climate change was being experienced all over the world, he said; financing for development, therefore, was a perfect illustration of the challenges being faced by the international community. That financing was a major concern for Governments, he said; they were making great efforts to build partnerships for development in line with target 8 of the Millennium Development Goals. With regard to innovative forms of financing, Governments were trying to indentify new forms of taxation and to collect those taxes in order to increase their countries’ financing capacity.
Tackling the achievement of financing objectives in Africa, he said that the negative impact of the series of global crises on least developed countries — 48 per cent of whom were in Africa — showed that the African continent may not achieve the Millennium Development Goals by 2015 owing to the insufficiency of ODA. It was crucial to look at regular and sustainable sources of financing for the continent. It was important to help those countries overcome the structural problems they faced and move towards sustainable development. In that context, Guinea wished to reiterate three of its proposals to the Assembly, aimed to increase financing to Africa: first, to hold a conference on financing; second, to increase South‑South and triangular cooperation; and third, to adopt an Africa‑wide declaration on transparency in financial governance.
With regard to the conference on innovative forms of financing, the aim would be to promote appropriate strategies for harnessing those new forms of financing. Guinea proposed to host that conference during 2012. Turning next to South‑South and triangular cooperation, he proposed to create within a steering group a task force on such cooperation, with the mandate to bring together and capitalize on current initiatives and to build on existing capacity, as well as to identify existing complementarities between the North and the South. Constraints and obstacles that constituted bottlenecks for development should also be identified. There would be a focus on partnerships, the health care and pharmaceutical industries, services and trade, human resources and others, he said. Once again, Guinea proposed to host the first meeting of that task force in the first half of 2012.
He also made comments about the acceleration of the implementation of the Istanbul Programme of Action for Least Developed Countries. That implementation should focus on: more effective harnessing of aid via responsible policies aimed at achieving the Millennium Development Goals, the strengthening of governance, reform, and the matters of capacity and effectiveness. The implementation of that Plan of Action and the achievement of the Goals required aid to be doubled, he stressed. A greater role for the private sector was also needed, as was a strong international architecture for each of the areas he had discussed.
SORAYA RODRIGUEZ, Vice Minister for International Cooperation of Spain, said that the Millennium Declaration of 2000 was, today, a reference for the international community. New goals might need to be established soon, but by that document, a “horizon for working together” had been created. Since then, the international community had been seeking to increase the effectiveness and efficiency of its aid. With regards to innovative financing for development, she noted that, without resources, the strides achieved to date would not make sense; financing was, indeed, the “crucial pillar” of development that needed to be supported.
When the Monterrey Consensus was put in place, the economic environment had been very different. Today, it was at its weakest point in many years. However, she said, countries were grappling the crisis better than expected. Just after the Monterey meeting, in 2005, countries had committed to giving 0.7 per cent of their income to ODA. Spain, for its part, had increased the percentage of its gross national income that was allocated to ODA from 0.23 per cent in 2004 to double that number in 2010. That aid was also provided offered in a sustainable manner as part of its regular budget. Now, with the economic crisis facing the international community, there was a “great pressure to bear” on financing with regards to traditional donors, who were bogged down in fiscal austerity measures of their own. She wished to stress, however, that ODA was a very tiny percentage of national expenditures, and it was important to understand that eliminating it would not help to balance national accounts. Maintaining that assistance, on the other hand, was an investment in the international economy.
“We must maintain the political commitment” as well as budget commitments in the area of increasing the percentage of gross national income earmarked for ODA, she stressed. New financing mechanisms were needed. It would have been unimaginable years ago that hunger would still be rampant in the twenty‑first century, and that, even then, emergency food aid would still be required. But, that aid would not stop the chronic food shortages and malnutrition that many around the world experienced, she warned.
Spain had been part of the Working Group on innovative financing mechanisms, and supported a number of proposals that had been made in that regard, she said. Among those, it backed the proposal of a fee to be levied on financial transactions, which Spain believed would help to collect funds for social policies and other activities for developing countries. Another potential mechanism that Spain supported was a micro‑tax on currency exchanges. Further, Spain had been one of the first countries to forgive debt, and had forgiven some 380 million euros just in the last few years. Finally, with regard to trade, it was necessary to continue working on the Doha round, which was crucial to all countries, not just developing ones. Initiatives should also be adopted to reduce tariffs and trade restrictions, she added.
NATALIA HANDRUJOVICZ (Argentina), speaking on behalf of the “Group of 77” developing countries and China, reiterated serious concern for the ongoing economic and financial crisis and its impact on development. Due to the globalization process, which had further escalated the impact of the international environment on national economies, economic growth was essential for enhancing the mobilization of domestic resources. However, many developing counties were far from reaching the necessary growth rate that could lead to sustainable development. It was imperative to discuss measures leading to an enabling international environment.
The 2010 Millennium Summit had reiterated the critical importance of fulfilling ODA. Likewise, the Istanbul program of action called upon donor countries to implement their ODA commitments and consider further resources for least developed countries. It was high time for donor countries to sit down with developing nations and agree on mechanisms to fulfil their agreements. She underlined that almost all developing countries were facing challenges in one way or another regarding sustainability, and there was a need to undertake a novel approach and solution. International trade was a vital tool to provide long term sustainable growth. In order to fully unearth the potential of trade, it was important that all countries desisted from all protectionist measures, and she called for the fulfilment of all outstanding aid commitments. She reiterated the central role played by the United Nations as a focal point in creating sustainable development, and reaffirmed the need to further intensify the efforts of all stakeholders, including the United Nations, the World Bank, the World Trade Organization (WTO) and the International Monetary Fund (IMF). The Group was of the view that many systemic problems facing the global economy had yet to be resolved, and reform of the financial global architecture was unfinished. All efforts in that area must be intensified.
OMBENI Y. SEFUE (United Republic of Tanzania) speaking on behalf of the African States, aligned his statement with the Group of 77 and China and said that the results of implementing commitments were encouraging. However, he believed that, had there been greater external support, the results would have been even better. Africa’s economic growth had recovered somewhat from the financial crisis, partly because of continued good economic policies and management. However, growth in many countries remained below the average of 7 per cent, and growth had not always meant progress in the ultimate objective of decent work and poverty reduction. In many countries, there had been notable increases in FDI, but the FDI inflows declined from $72 billion in 2008 to $58.6 billion in 2009. Remittances had also declined.
Most of the improvements seen in Africa in terms of economic growth and trade were accounted for by South-South cooperation, and that was something that should be encouraged. Many African governments were working hard to mobilize domestic resources. The recent global economic and financial crisis had negatively impacted the capacity to meet domestic resources obligations, and he called for efforts to remedy that. While aid to Africa increased by 4 percent in 2010, the challenge to meet all commitments made at conferences and summits remained. He urged action on other innovative forms of financing for development. Some African countries had benefited from debt relief, and he appealed for similar relief to those States still waiting for it.
PALITHA T B KOHONA ( Sri Lanka), speaking on behalf of the Group of 15 Developing Countries for South‑South and North‑South Cooperation and Consultation, said the economic crisis had vindicated their calls for restructure and reform of the international financial system and architecture. The Bretton Woods institutions needed to represent developing countries more fairly and equitably, he said, calling for speedy ratification of the IMF quota review, completion of voice and representation reform in the World Bank Group, and a new quota formula more accurately reflecting the size of developing countries in the world economy. He urged support for efforts to account for specific conditions and needs of developing countries and promoted alternative, innovative, democratic and development‑oriented financial institutions and frameworks. Greater coherence was needed between the IMF, the World Bank and the WTO, he said, and the United Nations system’s ability to respond to the economic crisis and its impact on development financing needed improvement, to echo the aspirations of the Monterrey Consensus.
The current economic situation should not be used as an excuse for developed countries to retract from aid commitments, as many had not fulfilled them prior to the crisis, he said, urging timely implementation of existing ODA commitments and the establishment of a permanent follow‑up mechanism. However, given the global credit crunch, he welcomed examination of innovative sources of financing, including South‑South cooperation initiatives, but also stressed that such initiatives should not substitute for traditional forms of financing. Low- and middle‑income countries also faced constraints, because of the crisis, and depended on external trade, FDI and borrowing from the Bretton Woods institutions, because they were beyond ODA thresholds. He, therefore, underlined the importance of trade to development, stressing the significance of the Doha round, and called for unconditional debt relief measures for heavily indebted poor countries.
MÅRTEN GRUNDITZ (Sweden), speaking also on behalf of Denmark, Finland, Iceland, and Norway and aligning his statement with that to be delivered by the representative of the European Union, said that he wished to highlight three key elements of the holistic global partnership that was the Monterrey Consensus. First, it provided for mutual accountability. ODA continued to be a critical source of financing for development, in particular for the least developed countries and those in fragile and conflict situations. Sweden encouraged Member States to live up to their 0.7 per cent of gross national income targets.
It was necessary to ensure that joint efforts produced maximum results and that outcomes could be sustained, as well as that undertakings were transparent and accounted for, he said. The Nordic countries welcomed the principles underpinning the Busan Partnership for Effective Development and Co‑operation. Transparent processes, outcome‑oriented programming, results‑based management and effective monitoring were key elements in that regard. Additionally, he said, innovative mechanisms for financing could make a positive contribution in assisting developing countries to mobilize additional resources for development and combating climate change.
A holistic approach to financing also involved the mobilization of domestic resources as a core component of financing for development. Each country had the primary responsibility for its own development. Provision of public goods, redistribution of wealth, and accountability of Governments required fair, effective and efficient tax systems. The United Nations, for its part, could assist developing countries in broadening their tax base and developing policies to eradicate poverty through a more equitable and responsible allocation of resources. Additionally, combating illegal outflows of capital from developing countries could free up resources for investments in development and United Nations bodies could have a role to play in that arena, as well. Focusing on the need to adapt, he stressed that the United Nations and the international financial institutions had complementary mandates, and encouraged them to coordinate their efforts. Finally, he concluded, civil society and the private sector should play a stronger role in global development.
YUSRA KHAN (Indonesia), speaking on behalf of the Association of Southeast Asian Nations (ASEAN), and aligning with the Group of 77 and China, said development was a primary responsibility of each nation. However, an enabling international environment was critical, without which the prospects for sustained, inclusive and equitable growth and development was greatly diminished. That was particularly true for ASEAN, where international trade was an important source of development finance and where accumulation and mobilization of domestic resources to finance development remained limited.
Today, the world was facing a process of changes that would have great impact on development endeavours. While it was thought that the world could emerge stronger from the global financial crisis and economic crisis of 2008, it was now clear that the same systemic problems of the global economy remained unresolved and the world faced the threat of yet another global crisis due to the financial turmoil in the eurozone. Amidst uncertainties and strains on development efforts, a lot of hope was pinned on international cooperation for development and, therefore, it was imperative to go back and honour the spirit and principles of the Monterrey Consensus.
Underlining five main points for strengthening financing for development and cooperation, he said concrete steps should be taken to strengthen implementation of the six pillars of the Monterey Consensus. International regulation, monitoring and supervision must continue to be strengthened, and reform in the governance of the international financial system also needed to be expedited. He called for the fulfilment of ODA commitments, and stressed that strengthening international trade was critical. The international community must continue to ensure the dynamism of the follow up process of the Monterey Consensus financing for development. The agenda on financing for development was of vital importance, as it safeguarded the stability and sustainability of economic development and had the potential to improve the lives of millions of people.
AMRIT BAHADURM RAI ( Nepal) spoke on behalf of the Group of Least Developed Countries and associated himself with the Group of 77 and China. Least developed countries’ chances of achieving the Millennium Development Goals by 2015 were limited by a growing resource gap, he said, with structural weaknesses meaning they needed international support. Despite the Monterrey Consensus, least developed countries accounted for only 0.33 per cent of global trade, with only half their exports enjoying duty‑free, quota‑free market access, he said, calling for greater product coverage and simplified rules of origin. Implementation of the WTO Hong Kong Ministerial Declaration on duty‑free and quota‑free provisions needed early implementation, and the Doha Round also needed successful conclusion to prevent “weakening the WTO and multilateralism”. Two thirds of aid for trade reached only 10 least developed countries, he said, calling for trade‑related technical assistance, and capacity‑building in line with the Istanbul Programme of Action.
ODA remained least developed countries’ largest source of external finance and a “huge gap” remained between commitment and delivery. OECD Development Assistance Committee contributions remained well below their targets and despite an overall rise in aid to least developed countries, 13 recipient countries faced aid contractions. Least developed countries retained a high debt burden, despite the Heavily Indebted Poor Countries (HIPC) and Multilateral Debt Relief initiatives. Debt servicing took up large chunks of least developed countries’ resources and full cancellation of their debts and renewal of the Heavily Indebted Poor Countries Debt Initiative, in light of the global crises, would help improve debt sustainability.
Developed countries needed to incentivize their companies to invest in diversified and productive sectors to enhance the development impact of FDI which remained low and concentrated in extractive industries, he said, adding calls for further exploration of the impact that remittances and innovative sources of financing could have on development in least developed countries. Substantive and comprehensive reform of the international financial system and architecture was needed to improve least developed countries’ voices in decision‑making and norm‑setting of the Bretton Woods institutions, he said, adding that least developed countries should be recognized as a special category based on the United Nations vulnerability index.
THOMAS MAYR-HARTING of the delegation of the European Union, said developing countries’ state budgets remained the most important source of their development finance. Developing countries held primary responsibility for their own development and needed stronger national tax systems and policy and governance frameworks to create a domestic environment that promoted development. He said a renewal of confidence in global markets would help to stabilize international capital, remittance and FDI flows, which had been volatile for four years, and spoke of considerable progress on innovative financing mechanisms. An open trade and investment policy remained one of the most effective tools for promoting sustained economic recovery, he said, calling on WTO members to advance the multilateral trade negotiations agenda at the Eighth Ministerial Conference in Geneva.
The European Union accounted for 65 per cent of aid increases since 2004, and accounted for half of global aid, he said, adding that despite currently falling short of the 0.7 per cent of gross national product (GNP), the European Union had reaffirmed its commitment to meet the targets by 2015. He welcomed the recently agreed Busan Partnership, which established an agreed framework for aid and development effectiveness, and which embraced the roles of emerging economies, civil society and other development actors, alongside traditional donors. He said development was enshrined as an objective in the Treaties of the European Union, and that the European Commission Policy Coherence for Development work programme for 2010‑2013 focused on the policy challenges most relevant to meeting the Millennium Development Goals.
FAZLE HOSSAIN BADSHAH, Member of Parliament of Bangladesh, said that, ten years after the Monterrey meeting, “the achievement of the consensus is yet staggering in doldrums”. Worse, commitments were now being misinterpreted and consensus itself was being presented in a concocted way. Those unfortunate facts, he added, amounted to “sarcasm” directed at the poorer countries. Describing some of the most pressing developmental challenges facing such countries, he said that it was well understood that the mobilization of domestic resources was essential for enhanced domestic growth. However, many developing countries were still far from reaching the necessary growth rate and investment ratios that could lead to sustainable development. Therefore, in addition to domestic actions, “international support is a must”. It was “high time” for donor countries to sit down with those States and agree on mechanisms to fulfil their commitments concerning ODA, including the commitment to allocate 0.15‑0.2 per cent of their gross domestic product (GDP) to international cooperation.
Turning to debt sustainability — a critical issue involving many developing countries, especially the least developed — he said that there had been a declining trend in export income, and remittances, which were also low due in part to the Arab Spring, were being exhausted in servicing debt. The need and feasibility of new sovereign debt restructuring and debt resolution mechanisms that took into account the multiple dimensions of debt sustainability and its role in the achievement of the Millennium Development Goals was thus of fundamental importance for the existence and thriving of the least developed countries. In that regard, he welcomed consensus in the negotiation of the “Eternal Debt Sustainability and Development” resolution, to discuss the issue and the role of credit rating agencies in the General Assembly, in the short term. On trade, it remained vital, but had so far been “shackled by tariff, non‑tariff and para‑tariff barriers” and other protectionist measures. Market access was still a major obstacle to the exports of developing countries. In order to fully harness trade potential, it was important to uphold a universal, rules‑based, open, non‑discriminatory and equitable multilateral trading system that contributed to growth and development, with the United Nations as central authority. Finally, comprehensive reform of the international economic and financial system must ensure the full participation of the developing countries in the decision‑making processes, with least developed countries given special consideration.
KELVIN THOMSON ( Australia) said the world today faced the possibility of another major economic downturn, which would “reverse hard‑won development gains and once again erase the hopes of hundreds of millions of their chance to escape the cruel cycle of poverty”. Although Australia was doubling the size of its aid program to $9 billion by 2015, he made clear that fostering development also required fair trade policies and innovative ways of thinking about development financing. “If we are to meet the deficit in investments in developing countries, it is also vital to look at the potential of innovative mechanisms, including ‘pull mechanisms’, where donors stimulate demand for new technologies,” he said.
A new target to reduce the cost of global remittances had been set, and it was hoped it would generate an additional $15 billion per year for recipient populations, he said. Australia would also share its mining expertise with resource‑rich developing countries to maximise benefits and assist up to 40 African countries in tax policy and revenue administration, all as part of an effort to build sustainability and prosperity for the future. On a global scale, he said the international community must pursue trade liberalization and reform of the international institutions to make them more inclusive and called on other Member States to join Australia in proving duty‑free, and quota‑fee market access for all least developed countries. Although it was clear that the existing pathway to global trade had reached a deadlock, progress could be possible if the Doha agenda was divided into manageable parts and taken on that way. He stressed the urgent need to do more in least developed countries to create jobs, particularly for women and young people, and support agricultural development. It was also important to continue to assist small island developing States, as they faced specific vulnerabilities.
WANG MIN ( China) said the “wonderful blueprint” envisaged by the Monterey consensus had yet to be translated into reality and China believed the international community should focus its efforts in several areas. First, concerted efforts must be made to create strong, balanced global economic growth to promote development, particularly as the world economy faced severe risks and the market was best with volatility. Countries should strengthen macroeconomic policy coordination. Developed countries in particular should adopt responsible fiscal and monetary policies, properly address their respective debt problems, ensure safe and stable market investments, and refrain from trade protectionism. Developing countries should promote growth by mobilizing domestic resources for their own development. Second, the global community should muster the political will to implement the Monterrey Consensus and the Doha Declaration. Developed countries should not use the financial crisis as an excuse to shirk their development assistance responsibilities. International financial institutions should bolster efforts to mobilize financing for development.
Third, countries should reject trade and investment protectionism and vigorously push the Doha negotiations forward in order to create an equitable, rational and non‑discriminatory global trade system, he said. He called for creation of more rational, transparent pricing and regulation mechanisms for bulk commodities, and for greater supervision of and an end to speculation in order to guarantee global energy and food security. Fourth, he called for further clarifying the relationship between innovative financing and ODA, and simpler application procedures for such financing. Ensuring adequate development funds was the key to enhancing aid effectiveness. For China, development was a top priority at home and in other developing countries. It was doing its part to spur development in the latter through South‑South cooperation. For example, to help African countries cope with this year’s serious drought and food crisis, China donated 533.2 million RMB yuan in emergency food aid to affected countries. At the sixth Group of 20 Summit, China’s President announced he would grant zero‑tariff treatment to 97 per cent of exports from least developed countries that had diplomatic relations with China.
MAGED ABDELAZIZ ( Egypt) said that the current discussion was the main forum in which to revive the progress achieved in implementation of commitments related to financing for development, particularly in view of the huge financial and economic challenges facing the global economy. Those challenges represented a real test of the solidity of the international community’s commitments to the cause of strengthening the global partnership for development and to support the efforts of developing countries to achieve the internationally agreed development goals. The achievement of the Millennium Development Goals by 2015 could only be realized through strengthening the development partnership between the developed and developing countries, and the cooperation among developing countries within the framework of South‑South cooperation.
Extra efforts were being exerted by developing countries to fulfil their commitments under Monterrey and Doha, through mobilizing increasing levels of local resources for the implementation of development strategies. For its part, like other developing countries, Egypt had suffered the burden of mitigating the repercussions of the world financial and economic crisis, as well as the food and energy crisis, which resulted in huge challenges, especially in the field of food security, due to the fact that Egypt was among the net food‑importing developing countries. Despite the current decline in economic activity, Egypt believed that the current steps in the transition towards democracy and strengthening transparency and good governance would positively contribute to improving the economic and investment climate in Egypt. The close link between the financing for development process and the success of efforts to achieve the internationally agreed development goals made strengthening the financing for development follow‑up process indispensible. For its part, Egypt would continue to participate actively in all international efforts and initiatives aimed at strengthening the international development agenda including the Rio+20 and the follow‑up to the Conference of the World Financial and Economic Crisis and its Impact on Development.
EDUARDO GALVEZ Chile said that the Monterrey Consensus had been the result of dialogue and consultations that had lasted more than five years. That “transcendental” agreement was different from others, in that there had been a true commitment on the part of participants to devote themselves to issues of trade, which some countries frequently worried should have been the exclusive domain of the Bretton Woods Institutions. It had also involved those institutions, as well as academic institutes and others — a unique fact which had become one of the most important aspects of the Monterrey process. That process sought to use the unique convening capacity of the United Nations and apply it to the highest level of politics. It was not about assuming the detailed responsibility of the world financial institutions, but instead about the larger political perspective. The meeting’s widely varied participation had made it a truly international conference.
Importantly, the various topics on the Monterrey agenda — trade, financing, sovereign debt — had been approached in a holistic way that addressed their interrelatedness, instead of their separate positions. Moreover, he said, the subject of development would be examined from all relevant points of view. Unfortunately, progress had not been achieved in several areas that the Monterrey meeting had deemed “urgent”, namely promoting equitable growth and creating sustainable conditions, both environmentally and economically. Likewise, there had been failure in some of the most basic areas discussed. After ten years, no dynamic yet existed for shared work between the United Nations and other relevant international groupings, and joint meetings did not seem to be relevant. “We need to get back to basics”, he stressed, adding that the Consensus could not be justified if some of those basic gaps and deficiencies in the international governance system were not addressed. In that regard, Assembly resolution 65/94 (2010) could provide a roadmap for the purposes of those discussions. For Chile, financing for development was fundamental and must be reflected in the Organization’s development pillar.
CHEIKH TIDIANE THIAM ( Senegal), aligned his statement with those made on behalf of the Group of 77 and China, and the Group of African States, respectively. In light of the great hopes it raised, he said the adoption of the Monterrey Consensus had not enabled the southern countries to address their economic imbalances and move towards economic growth, owing to the persistence of the challenges faced. Achievements had not lived up to expectations, owing to a drop in repatriated capital and a drop in FDI, among others. Investment and growth rates had also fallen. Despite the progress seen in some segments, the achievement of the objectives of the Monterey Consensus would require additional effort from all stakeholders. Thus, the international community must play a more proactive role in implementing international commitments, particularly when it came to ODA.
Given that ODA was crucial for strengthening the economies of the least developed countries, the international community must make additional efforts if it was to achieve its objectives of reducing poverty. The adoption of new approaches seeking to guarantee better predictability was of great importance to achieving aid effectiveness, which required partnerships based on support to local development policies. Honouring the promises set forth in the Busan partnership agreement could help to further the cause of such partnerships. Moreover, there ought to be better management of external debt and global reform of economic governance.
JUAN MAURICIO RAMIREZ ( Colombia) said that developing countries, including some in Latin America, were still emerging from a deep economic crisis when the Monterrey Consensus had been signed. In signing it, they had recognized the primary responsibility they had over their own development and had agreed to mobilize resources to that end. Meanwhile, developed countries had agreed to mobilize resources to create an environment conducive to development and to strengthen ODA with a goal of 0.7 per cent of GDP. Today, many Latin American countries “could show that they were doing their homework”. They had reduced poverty, albeit insufficiently, and made other related strides. They had learned that it was essential to promote a reform agenda for fiscal sustainability, and that economic growth driven by the private sector must be the driving force for development. Colombia, for its part, had increased its investment rate from 13 per cent to 27 per cent of GDP, had reduced inflation from 2 to 4 per cent and had reduced poverty by nearly 10 per cent since the signing of the Consensus.
Moreover, he said, Colombia had largely been able to defend itself against the “bashing” of the global financial crisis. Crises were sometimes opportunities, depending on how they were handled. However, in the face of the current crisis, there was a lack of political commitment to recovery. Stronger follow-up mechanisms, similar to those put in place for the Millennium Development Goals, were needed. Additionally, as middle-income countries were receiving large flows of capital — which might have a negative effect on macroeconomic stability — their role in global decision-making must be strengthened. He also called, in that regard, for concrete sustainability mechanisms, knowledge transfer and sustainable economic growth, among other actions.
MOURAD BENMEHIDI (Algeria), aligning with the Group of 77 and China, said the reduction of aid contrasted with the growing needs of developing countries for emergency assistance, given the increase in natural disasters, and for the impetus needed to spur economic and social development. Partners must understand that ODA was an investment that benefited the international community as a whole, including developed countries themselves. The international community must halt aid reduction, as aid was crucial, and donor countries must come close to the promised amount. The economic crisis should not be a reason for countries to abandon their commitments.
Further, countries should consider expanding the allocation of Special Drawing Rights of IMF as a potential source of financing for development, as it was flexible, effective and low-cost. The countries of the South should consider, first and foremost, their own resources, but in most cases, those were not sufficient to provide for the needs of their own people. Many depended heavily on ODA, and continued to undertake streamlining measures for public expenditures, countering the waste of money, improving tax collection and, when possible, increasing the tax basis. Diversifying exports for some countries was of crucial importance, but that required foreign direct investment and technical assistance.
ABDULKALEQ BIN-DHAAER AL-YAFEI ( United Arab Emirates) stressed the need to strengthen global cooperation for development, including North-South and South-South, as well as triangular, cooperation. His country had coped with the current global financial crisis through precautionary financial policies, including measures to develop human resources, implement economic diversification strategies and exploit oil revenues to establish economic development infrastructure. In the area of foreign investment, his Government’s guided initiatives to combat corruption had made the country an attractive environment for investments, resulting in a high investment flow. In turn, the country provided 0.33 per cent — significantly higher than the agreed 0.7 per cent — of its GDP to ODA. It sought innovative ways to finance development in developing countries, in areas such as education and children’s health. It was working with the Bill and Melinda Gates Foundation to implement a vaccination programme for 35 million children in Afghanistan and Pakistan, and it worked with many humanitarian organizations.
He said the United Arab Emirates was focusing on two vital areas in relation to financing for development: sustainable energy and food security. The most important investment in the first of those areas had been the establishment of Masdar City in Abu Dhabi, which was planned to be a global centre for research and the development of renewable and sustainable energy technologies. It had also pledged to support renewable energy projects in small island developing States. In the second area, the country was working to counter water scarcity and investing in agriculture and irrigation in Africa and Asia. In the area of foreign trade, it had entered into trade agreements with many developed and developing countries, in particular, in Africa; additionally, it had supported debt reduction and debt relief strategies, especially for conflict-emerging countries.
KIM SOOK ( Republic of Korea) said that the recent downturn of Government revenue in many developing countries, together with an unpromising outlook for sustained increase of ODA, posed grave concern in terms of mobilizing the development potential of those countries. While the volume of ODA provided by the Organization for Economic Cooperation and Development (OECD) Development Assistance Committee countries hit record highs this year, the outlook for sustained increase of ODA beyond 2010 was not promising. The Republic of Korea welcomed the efforts to mobilize diverse forms of additional resources, through new and innovative modalities like the air-ticket solidarity levy, International Financial facility for Immunization, Diaspora bonds and the Climate Change Adaption Fund.
In the trade area, he said his country shared the concern over protectionist measures that persisted as a reaction to global economic uncertainties. The recent strong revival in private capital flows to developing countries, however, was encouraging. Mobilizing resources was not the final goal, but rather a means to an end and would be meaningless if the international community could not produce tangible development results from the hard-won resources. As for the Busan Meeting, some important messages had emerged, including the agreement to accelerate development cooperation by adopting four shared principles, namely ownership of development priorities by developing countries, a focus on results, inclusive development partnerships, and transparency and accountability. Recognizing that aid was only part of the solution for development, it had also been agreed to broaden the paradigm from aid effectiveness to development effectiveness with a focus on sustainable development results.
DIANA AL-HADID ( Jordan) stressed that the gap in financing for development continued to widen, noting that last year’s aid flow to developing countries fell short of the 0.7 per cent of the GDP aid target. It was vital to deliver on commitments made by the international community in Monterrey and Doha, which included ensuring predicable development assistance, debt relief for developing countries and supporting nationally owned development. She called for innovative financial mechanisms that would generate additional aid delivery to developing countries, while at the same time, recognizing that the primary responsibility for economic and social development lay with each country.
She said that mobilizing domestic savings, sustaining adequate levels of productive investment, and increasing human capacity were critical to the common pursuit of growth, poverty alleviation and sustainable development. While South-South cooperation remained vital for sustainable development, it was not a substitute for North-South cooperation. Furthermore, to strengthen the efficiency of financial markets and implement the financing for development process, it was necessary to reform the international financial system. Reform efforts should be sustained through greater transparency and the effective participation of developing countries in decision-making processes.
JUN YAMAZAKI ( Japan) said the international community must demonstrate clear political will and cooperation among all stakeholders to accelerate on-the-ground results in achieving the Millennium Development Goals. In June, Japan had hosted a follow-up meeting to the 2010 United Nations high-level plenary on the Goals. It had also hosted a ministerial-level event during the Assembly’s 2011 general debate. During those meetings, it had initiated discussions on the so-called “post-MDG” Period. Because financing for development was an essential tool for promoting social progress and better standards of life in larger freedom, donor countries, should remain firm in their assistance commitments, even in the current global economic climate. Moreover, the international community must be results-oriented, focused on outcomes rather than inputs and committed to the effective delivery of resources.
He welcomed the fact that ODA on a global scale had increased in 2010, noting that Japan’s assistance had increased by 11.8 per cent that year. The country would host the fifth Tokyo International Conference on African Development in 2013 and had already provided $12.5 billion of a pledged $15 billion for fast-start financing to developing countries to address climate change through 2012. Japan was also actively engaged in triangular cooperation and maintained partnership programmes with 12 developing countries. It welcomed the Busan Partnership for Effective Development Cooperation, adopted last week, and hoped the international debate on innovative financing would be further enhanced and used in achieving the Goals. Fresh thinking and determination to begin exploring new and credible approaches to trade were also needed regardless of the impasse on the Doha agenda. Finally, he called for continued vigilance on sustainable debt management and welcomed the recent improvements in the lending facilities of international financial institutions.
YOUSEF SULTAN LARAM ( Qatar), aligning his statement with that delivered on behalf of the Group of 77 and China, called the International Conference on Financing for Development a “watershed” on the road of international development cooperation. The special formula under which it had been convened — namely, with the participation of Kings, Heads of State, IMF, civil society and business representatives participating on equal footing — had made it a landmark conference. Moreover, its makeup had given the conference a “pragmatic character”, which the world direly needed to face up to the challenges of globalization.
Nevertheless, he continued, the challenges with which the world was now seized were “far more daunting than anyone would have imagined when the Monterrey Conference concluded its work” in 2002. Among them was the worst financial and economic crisis since the end of the Second World War, if not before. While there had been some signs that the crisis might be relenting, the “spectre of a downturn” still loomed. Against that backdrop, Qatar had hosted a timely Review Conference of the Monterrey Consensus in 2008; the issues that were relevant then were still on the table now and must be addressed. “There is an opportunity to take the necessary measures to protect those who cannot along bear the brunt of adapting to developments,” he stressed, adding that the international community should recognize the important correlation between financing for development and support for trade. In that, States must resist the temptation to defend their domestic economies through trade protectionism. He also called for the affirmation and promotion of the global partnership for development, which had been consecrated at Monterrey, and reiterated Qatar’s commitment to ODA targets agreed there.
JOHN SAMMIS ( United States) said that ODA from Governments and multilateral organizations was no longer the primary driver of economic growth. In the 1960s, ODA accounted for 70 per cent of capital flows to developing countries, but today, because of private-sector growth and increased trade, domestic resources, remittances and capital flows, ODA only accounted for 13 per cent of financial flows to developing countries. The changes seen in development meant that old distinctions like “donor” and “recipient” were less relevant. As Secretary of State Hilary Clinton had said, “we need every provider of assistance at the table, emerging and traditional, public and private. And we need to make sure we get past the old divisions so we can deliver results for everyone.”
He said that ODA remained an important component of financing for development and, when well-targeted, could play an important role in reducing extreme poverty and motivating self-sustaining development. The fact that private-sector flows, including capital flows, trade and remittances were the bulk of development financing today was a positive change. Sustainable and inclusive economic growth required Governments to pursue and maintain the highest standards for accountability and transparency, and continue to fight corruption and illicit financial flows. The dramatic changes in the global economy in recent decades required the international community to take a collective fresh look at the development financing process to ensure its continued relevance. That required breaking down the outdated donor-recipient model and broadening the development financing framework.
VITALY CHURKIN ( Russian Federation) said that the Financing for Development Conference had been central for the coordination of that financing. One of the priorities of the current high-level dialogue was to foster consultation and cooperation between the United Nations and global financial institutions in their respective mandates. It was also a chance to review commitments to, and progress in, the achievement of the Millennium Development Goals and the Monterrey agenda. The meeting could also contribute to the upcoming Rio+20 Conference, slated to take place in Rio de Janeiro in 2012, as well as other significant meetings.
He said the Russian Federation had significantly increased its ODA, even at the height of the financial crisis, in particular, to Central Asian countries. Russia’s ODA exceeded $470 million, in line with the guidelines and indicators, which it had adopted. Current activities in support of development, including the provision of ODA, were important catalysts for development, internationally and domestically. However, more stable funding sources were the internal resources of countries, themselves. The Russian Federation, therefore, supported the strengthening of tax collection and efforts to combat corruption, among other national actions. In line with the spirit of Monterrey, it also supported joint efforts to pursue new sources of development financing globally. However, such activities must be purely voluntary basis, and should never replace traditional forms of aid.
STEFAN BARRIGA ( Liechtenstein) said that the Secretary-General’s report underlined that new resources were needed to complement official development assistance (ODA), particularly in the areas of health, climate change and the environment. In that context, his Government had agreed in 2010 to use the Copenhagen Accord, adopted by the fifteenth session of the Conference of Parties to the United Nations Framework Convention on Climate Change, as a guideline for the development of a pot-Kyoto Protocol agreement. Subsequently, Liechtenstein had agreed on additional climate funding in 2011 and 2012, which would supplement its ODA towards combating and mitigating the effects of climate change in developing countries.
Along with additional and complementary resources, achieving the agreed ODA target of 0.7 per cent of gross national income (GNI) “must remain the centre of our efforts”. Liechtenstein had likely achieved 0.6 per cent in 2010 and had repeatedly stressed that it would meet the agreed ODA target by 2015. “Our policy is to focus on regions that are neglected or forgotten and on areas where Liechtenstein has special expertise,” he said, highlighting his countries efforts to assist least developed countries. Liechtenstein had also committed to implementing international recognized standards of transparency and information exchange, in areas such as taxation matters. Illicit financial outflows were one of the greatest obstacles to development, and it was, therefore, necessary to boost capacity-building to effectively fight corruption, money-laundering and other illegal flows, while at the same time promoting good governance. Liechtenstein supported measures for good governance, such as the anti-corruption programme of the United Nations Development Programme (UNDP), as well as the Global Programme against Money-Laundering. He noted that his Government also made its expertise directly available to those and other programmes.
CESARE MARIA RAGAGLINI ( Italy) said that development financing must be considered in a comprehensive and holistic manner that took into account the full range of available sources, including domestic and external; public and private; traditional and innovative. “At the same time, we must continue to address systemic issues that can impact development, such as coherence and effectiveness of the international monetary, financial and trading systems.” While acknowledging progress that had been made since Monterrey, he said that proper attention must be devoted to other issues, such as good governance, the rule of law, protection and promotion of human rights, gender equality and environmental sustainability. Such factors did not have direct financial implications, but addressing them effectively could free up additional resources and generate positive development returns.
The real challenge, he said, was to ensure that all such components were integrated in a harmonious way. It was also vitally necessary to ensure that aid was predictable and effective. To that end, Italy welcomed the new inclusive and representative Global Partnership for Effective Development Cooperation launched a few days ago in Busan, Republic of Korea. Italy also welcomed the increasing emphasis on country-level implementation, which should allow the United Nations to play a more direct role. His country was currently experiencing a particularly challenging situation that was significantly reducing its fiscal capital. The new Government had recently adopted a package of important economic and budgetary matters, proving Italy’s determination to redress the situation. “As soon as conditions allow, we are determined to return to the level of development cooperation that was originally planned,” he said, adding that, in the meantime, Italy would remain engaged on various development fronts, including in the areas of food security and debt reduction.
HANIFF HUSSEIN ( Malaysia), aligning with the Group of 77 and China, said the mobilization of domestic resources remained the primary source of financing for development. Developing countries, in particular the less developed economies, required the right policies in place to capitalize fully the potential of the domestic resources. It was also necessary to continue undertaking fiscal reforms. He welcomed the greater mobilization of international resources with the strong revival in private capital flows as highlighted by the Secretary-General’s report. Malaysia, as a trading nation, firmly believed that international trade could play a vital role in promoting growth and development, and, therefore, reaffirmed its commitment to uphold a universal, rules-based, open, non-discriminatory and equitable multilateral trading system that could contribute to growth and sustainable development.
He said that aid for trade should only complement and not substitute for the Doha Round or any other negotiations outcome. It was encouraging that debt indicators had improved in many developing countries in 2010, however, improvements were uneven across regions, with 20 countries remaining at high risk or already in distress. The ongoing financial crisis had clearly revealed weaknesses in the global economic governance, and it was within the framework of addressing systemic issues that he reiterated the call for all stakeholders to intensify efforts to prevent further deterioration of the financial system and restore confidence in the global economic governance. Despite increased aid flows, many larger donor contributions remained below the target of 0.7 per cent, and he urged countries to fulfil their ODA commitments.
RAYMOND WOLFE (Jamaica), speaking on behalf of the Caribbean Community (CARICOM), said the persistence of the financial and economic crisis in its various forms had significantly undermined developing countries’ ability to achieve the internationally agreed development goals, including the Millennium Development Goals over the long term; and there could be no doubt that progress towards achievement of those goals had slowed as a result of the world financial and economic crisis, global commodity price volatility and the food crisis, which was particularly acute in the Horn of Africa, and which had eroded some of the gains made in the eradication of poverty. The crisis had also adversely affected the flow of (FDI), international trade volumes and the level of indebtedness of developing countries.
Against that backdrop, he said, it was imperative to engage in frank discussions on development cooperation, and on financing for development in particular, he believed. Further, it was important to remain cognizant of the strong linkages between the commitments undertaken in the context of the development financing process and within the Millennium Development Goals framework, particularly those embodied in Goal 8 — the global partnership for development. The premise of the Monterrey Consensus, which had been advanced in the Doha Declaration, was that the challenges faced in securing financing for development required a global commitment and a response that was rooted in a new “partnership” among developed and developing countries and with the multilateral financial institutions.
A key development challenge for CARICOM Member States, which were primarily small, vulnerable middle-income countries, was the onerous nature of their debt to GDP ratio, which was now, for many of them, at over 100 per cent. He acknowledged that in efforts to mobilize international resources for development, particularly in a context where increased budgetary pressures in developed economies was leading to a reduction in traditional ODA, it was imperative that developing countries adopted new and innovative approaches. Central to addressing international financial systemic and institutional issues was enhancing developing countries’ financing for development follow-up and implementation mechanisms. CARICOM saw that as a necessary step towards a more comprehensive and coherent approach to crucial development issues, as well as towards greater openness, transparency and inclusiveness in global norm-setting and economic decision-making. The achievement of the internationally agreed development goals depended on global partnerships, the fulfilment of ODA commitments, as well as South-South and triangular cooperation as a complement to, and not a substitute for, traditional ODA.
PAUL SEGER ( Switzerland) reiterated his support for the Monterrey Consensus and the Doha Declaration on financing for Development. With traditional financing mechanisms under increasing pressure in the global financial crisis, innovative measures to improve access to finance for developing countries should be explored. Despite the crisis, donors should strive to maintain their ODA commitments, with all partners sharing the burden. The financial crisis had also shown the necessity for better regulation and supervision of the financial system. Global economic governance required open and transparent coordination between the agendas of the G-20, international financial institutions and the work of the United Nations.
He said that, while financial flows were relevant to development processes, the particular role of each flow differed considerably from country to country. And, while foreign direct investment and trade might be crucial in some countries, ODA and debt relief might be more important in others. Coherence and effectiveness were required on a country-level with the recognition that there was no “one-size-fits-all” solution. He called for greater resource mobilization, and stressed that each country had a primary responsibility for its own economic and social development. It was also necessary to address illicit asset flows as those remained a major impediment to development, and, while the quantity of ODA was important, its quality was crucial. He looked forward to Rio+20 as an opportunity to engage on critical issues, such as creating a stronger link between global environmental policy-making and financing and the role of the private sector.
HARDEEP SINGH PURI ( India) said that a key obstacle to developing countries’ efforts to achieve the Millennium Development Goals was the gap in development financing. While lagging aid delivery and external finance had undermined the capacity of those with the greatest needs to meet their aspirations, the global economic crisis had further burdened them with limited growth, higher unemployment, increasing poverty and dwindling domestic resources that could be earmarked for development. And with global output continuing to sputter in 2011, the prospect that developing countries could increase their exports, manage external debt and attract foreign investment was not encouraging.
“It is, therefore, essential that growth-promoting policies are pursued to strengthen the global economic recovery,” he said, adding that such policy-driven growth would in turn allow countries to generate higher revenues. Noting the importance of foreign direct investment and progressive tax policies, he said that international trade was also vital for growth. Yet, lack of market access and a skewed multilateral trading system continued to keep developing countries at a disadvantage. It was necessary, therefore, to ensure a balanced and development-oriented outcome to the Doha Round of trade talks. At the same time, trade-distorting factors, including agricultural subsidies, should be comprehensively addressed. Finally, he stressed that, while innovative sources were necessary to close the resource gap, such financing should not replace traditional ODA. It was necessary, therefore, to have a common understanding of what constituted such innovative sources of financing and to ensure that they were disbursed in accordance with developing country priorities.
P.I. AYEWOH ( Nigeria) aligned his statement with those delivered on behalf of the Group of 77 and China and the African Group. His country believed that building a global financial system that would restore investor confidence required a provision for strong and vigilant regulatory oversight. As developing economies were most affected, it was imperative that timely action be taken to safeguard the financial capacities of both the International Bank for Reconstruction and Development and the International Finance Corporation, in order to sustain scaled-up assistance to client countries. It was critically important for those institutions to honour their previous commitments to the International Development Association; there should also be an enhanced focus on making financing available to fragile and conflict-affected countries that were worst-hit by the financial crisis.
Recalling the Monterrey and Doha conferences, he stressed that Nigeria’s GDP had grown from 7 per cent in 2009 to an estimated 8.1 per cent in 2010. The country’s medium-term prospects were bright, with that growth projected to remain stable. Medium-long term prospects, however, would require addressing key reforms. In that regard, after 30 years of boom-and-bust cycles, Nigeria had introduced a Transformation Agenda that recognized trade and investment as a linchpin of Nigeria’s international engagements. The main thrust of the country’s trade policy was the integration of its economy into the global market system, which entailed the progressive liberalization of trade to enhance competitiveness of domestic industries, as well as effective participation in trade negotiations, the promotion of technology transfer, among other actions. Nigeria was also furthering its economic reforms.
In order to mitigate against credit shocks, Nigeria’s Debt Management Office had developed a debt management framework to map out strategies for external and domestic borrowing by Governments at federal, state and local levels, he said. Furthermore, it had established a Sovereign Wealth Fund to help cushion the effect of a steep drop in value. Nigeria also supported the call for more debt relief, including the outright cancellation of debt for poorer countries. Nigeria urged an expeditious reform of the international financial system, which would enable global developmental lending groups to play their roles more efficiently, effectively and with a higher degree of transparency and accountability. It also called for an improved international surveillance system, both at the bilateral and multilateral levels.
LINYI BAIDAL (Costa Rica), aligning with the Group of 77 and China, said that the implementation of the Monterrey and Doha commitments was essential for developing countries, and she made an “urgent and necessary” call for their fulfilment. Also critical was consensus on the Doha round and its development agenda, including the understanding on dispute settlement. Close and transparent coordination between all stakeholders within and without the United Nations system was crucial if the international community wished to move forward. Each country was responsible for its own economic and social development, but those efforts should be accompanied and complemented by the international community’s support.
She said there were still scant developed countries that were complying with the allocation of 0.7 per cent of their GDP to ODA. Aid should be focused on the most vulnerable countries, but should not exclude middle-income States that had made development strides, but still faced vulnerability. Differentiated treatment should be offered to those countries, and criteria for the allocation for international cooperation modalities should not be mixed, because that only brought about unnecessary competition for international cooperation resources. Instead, true and balanced partnerships should be sought. In that light, it was essential to design development financing mechanisms adapted to the middle-income countries. Resources for development should be constant, verifiable and predictable. Only a small part of resources for development had been put forth, and more was needed. In closing, she stressed the need for transparency and accountability in the use of all resources.
ESHAGH ALHABIB (Iran), aligning with the Group of 77 and China, said that realizing the internationally agreed development goals, particularly those related to addressing poverty and hunger, would mark a great achievement in shaping a world free from want. Eradicating poverty was the gateway towards achieving other development goals. It was alarming, however, that the number of people suffering from hunger now exceeded 1 billion, meaning that the dignity of one sixth of the world’s population now hung in the balance. Most developing countries, despite having undertaken economic reforms and put in place sound economic and financial policies at home, and opened up their economies, were still severely confronted with multiple, interrelated global crises.
He said that domestic reforms and resource mobilization, ODA, humanitarian assistance and increasing South-South cooperation had proven to be insufficient for overcoming the challenges confronting developing countries. Global governance lagged behind the current global trends towards transparency, accountability and democratic representation. The global trade and financial governance needed to work for development, and there was an urgent need to revisit the mandate of the current institutions to put stability and development on top of the agenda. He recognized the importance of exploring new and voluntary innovative resources for development at both national and international levels, as those could supplement development financing and help fight poverty. Meanwhile, the business of war was making huge profits while causing agony, destruction and suffering for the world and its people, and it was high time for those in that “business” to undertake their responsibility for peace and development by imposing a peace and development levy on arms trade.
MIGUEL BERGER (Germany), aligning his statement with that delivered by the representative of the European Union, said that the financing for development agenda tasked developing countries, emerging economies and donor countries alike with mobilizing more funds. While ODA was an important component, domestic resources — public and private — as well as private investments and remittances to developing countries, also played a significant role. Germany, therefore, agreed with the European Union that mobilizing development financing from all available sources was crucial to fighting poverty and achieving the Millennium Development Goals.
He said that an increase in financing was critical, but alone, it was not sufficient; other conditions must also be fulfilled. On the one hand, developing countries must have ownership and must live up to their primary responsibilities for their own development by creating and enabling domestic environments. In that vein, Germany was assisting its partner countries in achieving results, both in technical and financial cooperation. On the other hand, aid and development effectiveness must improve. In that regard, Germany welcomed the results on “Policy Coherence for Development” forged at the Busan conference last week. Commitments to improved division of labour among donor countries, increased efficiency and effectiveness, and the involvement of the private sector were particularly welcome.
Speaking as an observer, IGOR FINOGENOV, Chairman of the Executive Board of the Eurasian Development Bank, said that the Bank fostered sustainable development through projects that aimed to stimulate reciprocal trade flows in the Central Asia region. The Bank’s core capital exceeded $1.5 billion and, over the last three years, it had financed some $3 billion worth of projects; 46 projects were currently under way, and about $8 billion worth of potential new projects were in the pipeline.
Given an example of such a project, he highlighted one involving reciprocal trade flows between the Russian Federation and Kazakhstan in the area of fuel trade. Still, others involved the manufacturing, technology and related sectors. From the point of view of the Bank, it was clear that the consequences of the global economic crisis were easier to overcome with joint action. In that regard, six countries in the region had established “anti-crisis” funds which, together, were managed by the Eurasian Development Bank. An example of that relationship was the recent decision to provide new credit to Belarus, as well as to help that country draw up a package of crucial economic reforms.
He said that the Bank, in order to help guide States’ policies, coordinated its work with IMF and the World Bank. Steps were being taken jointly with those institutions to establish a unified economic region in Central Asia, aiming to improve the region’s investment climate. Finally, touching on its cooperation with the United Nations Economic and Social Council, he said that the Bank supported the Special Programme for the Economies of Central Asia. Of particular note was the impact of climate change on water resources in the region, on which work was under way. Moreover, the Bank stood ready to actively cooperate with organizations seeking to create conditions conducive to the economic development of the region and which drew on its existing potential.
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