TECHNICAL
REPORT OF THE HIGH-LEVEL PANEL
ON FINANCING FOR DEVELOPMENT
This
report was commissioned by the Secretary-General of the United
Nations in December 2000. The members of the Panel endorse the
thrust and principal recommendations of the Report, but they do
not all subscribe to every detail of the argument in the text.
John Williamson (Senior Fellow, Institute for International
Economics) served as Project Director to the Panel. The
Panel was also assisted by a secretariat consisting of Vijaya
Ramachandran (Consultant to the Executive Office of the
Secretary-General) and Javier Guzman (Aide to Mr. Zedillo in
Mexico City).
|
Introduction | Domestic Resource Mobilisation
| Trade |
| Private Capital
Flows | International Development
Co-operation |
| Systemic Issues | Appendix | Tables |
Introduction
The
world has seen faster human and economic development during the
past half century than during any previous 50-year period in
recorded history. Table 1 shows some of the principal
achievements: an historically unparalleled rise in income per
capita, increased life span, a decline in the proportion of the
population living in poverty, higher literacy, lower infant
mortality. Also on the positive side, the demographic
transition—the historical process whereby the decline in death
rates is followed by a falling birth rate, curbing the world
population explosion—is now under way just about everywhere. But
the table also reveals the magnitude of some of the challenges
that remain. Over a fifth of the world’s population still live
in abject poverty (under $1 a day), and about one-half live below
the barely more generous standard of $2 a day. One-quarter of the
population of developing countries are still illiterate. The 2.5
billion people who live in the world’s low-income countries
still have an infant mortality rate of over 100 for every 1,000
live births, compared with just 6 per 1,000 among the 900 million
people in the high-income countries. Illiteracy still averages 40
per cent in low-income countries. Population growth, although
slowing, remains high.
Even
where poverty is declining, globalisation is making the poverty
that remains—and the illiteracy, and the ill
health—increasingly oppressive. (And, sadly, there are parts of
the world where poverty is still on the rise: Africa has seen a
decline in consumption per capita over the past 20 years.) Surely
it was grim enough to be poor and illiterate in a world where the
have-nots knew little about the life-style of the haves. But to be
poor in today’s world, where television and advertising make
even the most destitute aware of the gulf separating them from the
rich, must be even more intolerable. Globalisation has spread to
every poor rural village and urban shantytown the knowledge that
the world offers better possibilities than exist at home; it has
also provided the means to seek them out. That is why one so often
reads tragic newspaper stories of would-be migrants being
shipwrecked or suffocated or frozen when their attempts to smuggle
themselves into the rich world fail. A by-product of globalisation
is increasing polarisation between the global economy’s haves
and its have-nots, and not only because the measured distribution
of world income is becoming more unequal.
This
presents the rich countries with a moral challenge. For too long,
too many of the haves have devoted too much attention to their own
wellbeing, and too little to helping the have-nots help themselves
build a better future. To do better is the pre-eminent moral
imperative of our age.
It
is also a matter of enlightened self-interest. The peoples of the
rich world themselves stand to gain from lifting their fellow
human beings out of poverty. This is not just, or even mostly,
because economic development creates larger markets for the
exports of industrial countries, although that is indeed part of
the promise. The greater dividends will come from containing a
host of problems, driven by poverty and hopelessness, that do not
respect national borders, like contagious diseases, environmental
degradation, religious fanaticism, and terrorism. To imagine that,
in a globalised world, the rich can cocoon themselves away
forever, serenely enjoying the fruits of their advancing
technology while a large proportion of humanity continues to live
in squalor and misery, is a dangerous fantasy.
There
are several hopeful signs that the international community has
begun to acknowledge this reality. The United Nations has held a
series of conferences over the past decade to address the critical
problems facing humanity: the 1992 Earth Summit in Rio de Janeiro,
the 1994 Cairo Population Summit, the 1995 Beijing Summit on Women
and the Copenhagen Summit on Social Development, and the 1996
Summit on Human Settlements in Istanbul. And in September 2000,
the meeting of the U.N. General Assembly concluded on an historic
note, with the largest number of heads of government ever to meet
together adopting the U.N. Millennium Declaration. This
Declaration collectively committed their governments to work to
free the world of extreme poverty. Towards that end, it endorsed
the following International Development Goals for 2015: to cut in
half the proportion of people living in extreme poverty, of those
who are hungry, and of those who lack access to safe drinking
water; to achieve universal primary education and gender equality
in education; to accomplish a three-fourths decline in maternal
mortality and a two-thirds decline in mortality among children
under five; to halt and reverse the spread of HIV/AIDS and to
provide special assistance to AIDS orphans; and to improve the
lives of 100 million slum dwellers.
The
Millennium Declaration also acknowledged the hitherto neglected
task of mobilising the financial resources needed to achieve these
goals, and it looked to the Conference on Financing for
Development, to be held in March 2002, as a crucial event in
agreeing a strategy for that purpose. Much work has already gone
into preparing for that conference. The report issued by the
Secretary-General of the United Nations in December 2000
identified and discussed a large number of the relevant issues,
and a Preparatory Committee of U.N. Ambassadors has already met to
deliberate on that report. The Secretary-General decided that the
conference might also benefit from convening a High-Level Panel to
address, within a more limited group, some of the issues that have
so far remained in dispute. We are honoured to have been invited
to serve on that Panel. The present Report focuses principally on
a limited number of those questions, those where we believe we
have developed a shared collective view that can contribute to
furthering the international debate. The Report also touches on a
number of other issues, in order to place the principal proposals
in focus, but it does not attempt to discuss in depth the vast
range of subjects covered in the Secretary-General’s report.
The
terms of reference assigned to us by the Secretary-General are to
make recommendations regarding
(i) Best practices in policies and institutional
structures for the mobilisation of domestic resources
(ii) Improvements in the volume, pattern, and
effectiveness of bilateral and multilateral official development
assistance (ODA)
(iii) Measures for strengthening the Heavily
Indebted Poor Countries (HIPC) initiative, including the
possibility of instituting a new mechanism to mediate relations
between debtor and creditor countries
(iv) Improvements in market access for exports
from developing and transition economies as a key element in a
resource mobilisation strategy
(v) Instruments and strategies to promote private
capital flows to developing and transition economies on terms
intended to maximise their development potential
(vi) Greater participation of developing and
transition countries in global decisionmaking processes on
financial matters
(vii) proposals for developing new and innovative
sources of funding, both public and private, for development and
poverty eradication, as well as for the financing of global
public goods.
This
Report touches on most of those topics, although in a different
order, and with much more extensive treatment of some topics than
others. It starts exactly where the Secretary-General’s list
does, with the domestic policies and institutions that govern the
mobilisation and use of resources for development. One of the most
welcome features of the discussions that led up to the
Secretary-General’s report was the universal recognition that
investment in developing countries is unlikely to promote rapid
economic or human development if domestic policy fails to attend
to the fundamentals (as discussed in Section1).
But
a country will be far better able to profit from putting its house
in order if it can integrate its economy into the wider world
economy without confronting barriers in its trading partners.
Therefore the Report deals next with trade, in section 2. Further
benefits will accrue from improving the ability of developing
countries to draw on the international capital markets, and so the
Report goes on, in section 3, to discuss private capital flows.
This section also touches on the problems of preventing and
resolving financial crises.
However,
there are certain key tasks on the international agenda that the
private sector cannot or will not handle. These are the topic of
section 4 and include providing sufficient aid to lower-income
countries