Fifty-Ninth General Assembly
Plenary
108th & 109th Meetings (AM & PM)
WORLD COMMUNITY MUST HONOUR -- EVEN GO BEYOND -– COMMITMENTS ON TRADE, DEBT,
FINANCE TO ACHIEVE ANTI-POVERTY GOALS, GENERAL ASSEMBLY TOLD
Progress Implementing 2002 Monterrey Agreement Assessed by More Than
80 Speakers, Six Round-Tables Discussions in Two-Day High-Level Dialogue
The international community must honour, and even go beyond, its commitments on trade and debt relief, and increase official development assistance (ODA) if the Millennium Development Goals were to be achieved, General Assembly President Jean Ping (Gabon) said this afternoon, as that body concluded its High-level Dialogue on Financing for Development.
Summarizing the statements of delegates during the two-day meeting, Mr. Ping stressed the importance of successfully completing the World Trade Organization’s Doha round of trade negotiations, noting the importance of trade for growth, development and the fight against poverty. As for ODA, the recent example set by the European Union to lay down a timetable for reaching the target of 0.7 per cent of gross domestic product (GDP) should encourage those countries that had not yet done so.
Meeting to assess progress in implementing a landmark agreement reached at a 2002 development summit in Monterrey, Mexico, the High-level Dialogue took place as the Assembly negotiates the outcome document for the 2005 World Summit in September, and in the immediate run-up to the Group of 8 (G-8) meeting, where development finance heads the agenda.
It brought together ministers of finance, foreign affairs and development cooperation, as well as leaders of the United Nations, the World Bank, International Monetary Fund (IMF) and the World Trade Organization (WTO).
Participants had also highlighted the huge challenges Africa faced, Mr. Ping stated, emphasizing the key role that the New Partnership for Africa’s Development (NEPAD), as well as other regional organizations, should play in development. Noting that significant progress had been made on debt relief, particularly the recent G-8 proposal to eliminate the debt of heavily indebted poor countries, they had emphasized that that measure should be extended to other nations, including some middle-income countries.
Adding that the Monterrey principles required greater cooperation to better promote and finance development, he said those principles called for greater coherence among States in trade, aid policies and financial decisions. To that end, participants had highlighted the need for developing country participation in international decision-making, and the need to reform the United Nations, as well as the working methods of the Economic and Social Council.
Addressing some of those issues in today’s plenary meeting, the representative of Pakistan noted that current ODA targets, as well as proposed debt relief, seemed inadequate in achieving the Millennium and other agreed development Goals. The September Summit should redefine “debt sustainability” as the level of debt consistent with achieving national development goals, and consider significant debt cancellation for all developing nations, including heavily indebted middle-income countries.
Moreover, foreign direct investment (FDI) should flow to a wider range of developing countries, he added, noting that it facilitated technology transfer, created jobs, boosted productivity, enhanced competitiveness, accelerated economic growth and eliminated poverty. Unfortunately, such flows were a small fraction of global investment flows, and were concentrated in only a few emerging markets. The September Summit should endorse national and international measures to generate domestic, as well as FDI, in low-income countries.
Echoing that concern, Djibouti’s representative observed that FDI had remained geographically concentrated, with certain regions suffering steady declines and others showing signs of weakness in competing for newer and higher quality investments. Africa was likely to show a modest increase in FDI flows, but such investments remained largely concentrated subregionally and sectorally. Least developed countries had fallen further behind in real growth in GDP, sub-Saharan Africa was off track in meeting the Millennium Goals, and the number of people living in absolute poverty in Africa had grown by about 40 per cent in the last decade.
Turkey’s delegate stressed the joint responsibility of both developed and developing countries in mobilizing international resources for sustainable development. Developed countries should design a pro-development international financial system to ensure a global flow of FDI, and developing countries should implement the principles of good governance and the rule of law, and create a strong legal basis for market-friendly institutions to attract that investment. Unfortunately, neither side had yet completely fulfilled those conditions.
Highlighting the need for increased trade to boost development in least developed countries, Bangladesh’s delegate noted that 50 of them were caught in a trap of underdevelopment, poverty and structural weaknesses, continuing to be marginalized and facing a variety of barriers in their major trade markets. He urged the international community to provide immediate duty-free and quota-free market access for all exports of least developed countries, and to direct 0.20 per cent of GDP towards such nations, as committed in the Monterrey Consensus.
Parallel to this morning’s plenary meeting, six round tables were held under the following topics:
-- Round table 1: Mobilizing domestic financial resources for development;
-- Round table 2: Mobilizing international resources for development: foreign direct investment and other private flows;
-- Round table 3: International trade as an engine for development;
-- Round table 4: Increasing international financial and technical cooperation for development;
-- Round table 5: External debt;
-- Round table 6: Addressing systemic issues: enhancing the coherence and consistency of the international monetary, financial and trading systems in support of development.
In addition to this afternoon’s plenary, delegates also attended an informal interactive dialogue on financing for development.
Also speaking today were high-level officials from Spain, Bulgaria, Nicaragua, Serbia and Montenegro, Croatia, Ghana, Paraguay, Lao People’s Democratic Republic (on behalf of landlocked developing countries), Chile, China, Brazil, Russian Federation, United Arab Emirates, Morocco, Republic of Korea, Syria, El Salvador, Romania, Kazakhstan, Thailand, Switzerland, Canada, Zambia, Algeria, Ethiopia, Uganda, Venezuela, Fiji, Netherlands, and the Observer from Palestine.
Statements were also made by representatives of the European Community, the Inter-Parliamentary Union, the International Federation of the Red Cross and Red Crescent Societies, the Commonwealth Secretariat, the International Union for the Conservation of Nature and Natural Resources, the Asian Development Bank, and the International Organization for Migration.
Background
The General Assembly met today to continue its two-day High-Level Dialogue on Financing for Development, assessing the progress made in implementing the Monterrey Consensus, adopted at the 2002 International Conference on Financing for Development, held in Monterrey, Mexico. In addition to today’s plenary meeting, the Dialogue will also feature six high-level round tables and an informal interactive dialogue. (For background on the meeting, see Press Release GA/10362 issued on 24 June.)
Statements
LEIRE PAJ̎ IRAOLA, Secretary of State for International Cooperation of Spain, said that her country was firmly committed to doubling its official development assistance (ODA) in the next four years, with the objective of achieving the target of 0.7 per cent in 2012. It would reinforce its commitment to the least developed countries and to sub-Saharan countries, where it would target at least 20 per cent of its ODA. It would also increase the current flow of ODA to Latin America and North Africa, with a particular emphasis on middle-/lower-income countries.
It was necessary to continue fighting poverty, which was defined as a lack of opportunities, capacities and options in order to maintain a decent standard of life, she said. There was no doubt that those capacities and opportunities were largely determined in great part by the disposable income level, as that determined access to necessary goods and services. High vulnerability, lack of empowerment or representation of women was another indispensable dimension when fighting poverty. Another dimension of strategic importance when fighting poverty was reducing inequalities among and within countries.
She confirmed her Government’s commitment with the poor in developing countries. The Guiding Plan of Spanish Cooperation (2005-2008) envisaged that at least 20 per cent of ODA would be targeted to basic social sectors. Along with that, a stronger commitment on behalf of the Organisation for Economic Cooperation and Development (OECD) countries was necessary. That commitment must be visualized in an international commercial policy that would be geared towards the needs of developing countries, with decisive measures for the problem of debt, as well as to ensure environmental sustainability.
LYUBOMIR DATZOV, Deputy Minister of Finance of Bulgaria, said efficient national development strategies largely depended on a complex combination of factors, which included country ownership of its future, full mobilization of domestic resources, and support from the international donor community. The European Union target of 0.7 per cent of gross domestic product (GDP) for ODA by 2015, which Bulgaria subscribed to, was ambitious, but achievable. In addition to increased ODA, new innovative sources of financing were being considered by the international community, such as the International Finance Facility. The expected benefits from such proposals should be carefully balanced against potential difficulties and obstacles in implementing them.
In Bulgaria, sound financial and macroeconomic policies had proven effective in achieving long-term financial stability, resulting in annual economic growth of 4 to 5 per cent over the past seven to eight years. The country had employed such policies in restructuring and reducing its external debt from more than 120 per cent to 38 per cent of GDP in the last two to three years. The Bulgarian experience had clearly shown the importance of transparent and effective governance, establishing the rule of law in both judicial and economic sectors, and combating corruption and organized crime at the national and regional levels.
MAURICIO GOMEZ LACAYO, Vice-Minister-Secretary of Economic Relations and Cooperation of Nicaragua, said that it was obvious that donors and recipients realized that cooperation must be effective and have an impact. The quality of development assistance was the key to the success of the various points in the Monterrey Consensus. There must be greater efficiency and effectiveness, and resources must have greater impact on countries’ socio-economic development. It was necessary to examine the conditions in receiving countries and the philosophy behind the cooperation provided by donor countries. Nicaragua and others had assumed leadership and established national development plans and created the tools to guarantee effectiveness and transparency. The same must be done in the international community. His country had participated actively in the follow-up to Monterrey and the high-level forums of Rome and Paris.
He said it was necessary to promote machinery for rapid action on development; to put forward national development plans; to create better balance between investments in social sectors; and to show that cooperation could function in the area of economic growth. What was also needed was to make a qualitative leap forward in development. On the issue of debt, he emphasized the need to work within the context of the Heavily Indebted Poor Countries (HIPC) Initiative. He congratulated the Group of Eight (G-8) for dealing with multilateral debt.
In a globalized world, he noted, it was important to make public investments in countries that were net receivers of external cooperation, and to ensure better quality of external resources. Free trade treaties had provided great opportunities that must be maximized. It was also necessary to increase competitiveness. In order to ensure good governance, it was important to strengthen capacities and to invest in national institutions. In addition, access to public services must be seen as an issue of human rights.
PEDRAG BOSKOVIC, Vice-Minister for Foreign Affairs of Serbia and Montenegro, said that developed countries should provide assistance mainly to those nations that had demonstrated resolve in implementing economic and political reform, opening up their economies and fighting corruption. His country supported recommendations to increase ODA from 0.44 per cent to 0.54 per cent of GDP by 2015, and to increase assistance to countries registering progress in achieving the Millennium Development Goals by 2005. Developed countries should also set deadlines for increasing ODA and achieving the target of 0.15 to 0.20 per cent of GDP for ODA to least developed countries.
Serbia and Montenegro had set up a working group to monitor achievement of the Millennium Goals in October 2004, he said. A group of national experts in health, education, social policy, environmental protection and global partnerships had prepared the Review of Implementation of the Millennium Development Goals in Serbia. The country based achievement of the Goals on integration into the European Union, harmonization of its laws with developed States, the reduction of poverty, the strengthening of democracy, and regional cooperation.
ANA HRASTOVIC, Assistant Minister for Finance of Croatia, noted that her country was very likely to achieve all of its specific Millennium Development Goals. The first lesson learned in achieving progress towards the Goals was a need for clear country ownership. Country ownership, enhanced by the mobilization of domestic resources and policy coherence among development partners, was of crucial importance. Croatia’s economic strategy was consistent with the policy programme supported by the International Monetary Fund (IMF)’s Standby Arrangement, and the overall macroeconomic policy would also be supported by a number of structural measures to be further enhanced by the World Bank. The main pillar of the programme was the fiscal adjustment needed to limit external vulnerability and the increase of Croatia’s external debt-to-GDP ratio. The programme also aimed to enhance transparency and financial management in the government and public sector. The best way to achieve the Millennium Development Goals was to integrate country-specific goals into domestic economic strategies and support them further with development partners’ programmes.
Another lesson learned was the need to coordinate policies internally, she said. In Croatia, the Ministry of Foreign Affairs and European Integration had been assigned the task of monitoring the Millennium Development Goal process and acting as main partner of the United Nations Development Programme (UNDP) in implementation. She supported improving the processes and capacities at the country level in order to strengthen the voice of developing countries, while not forgetting transitional economies. Further capacity-building in transitional countries was important for supporting their active engagement in the international development arena, and active participation as owners -- not only borrowers -- in Bretton Woods institutions.
GEORGE GYAN BAFFOUR, Deputy Minister of Finance and Economic Planning of Ghana, said the gulf between North and South had widened in the past two decades, despite a plethora of internationally agreed development goals. Such a state of affairs called not only for a radical change in the approach to development issues, but also for both developed and developing countries to translate those goals into realistic and workable actins. The new concept of development embodied in the Monterrey Consensus provided both a positive framework and the right impetus for developing countries to pursue the implementation of responsible socio-economic development agendas, and for developed countries to complement those efforts by supporting, both morally and financially, the poverty-reduction agendas of developing countries.
The Millennium Summit could not have come at a more appropriate time for Ghana, he said. The goals and targets both vindicated and validated the development initiatives it had been pursuing since the late 1980s. The Millennium Development Goals, together with the Monterrey Consensus recommendations, captured the very essence of the strategies contained in the Ghana Poverty Reduction Strategy. Regarding poverty reduction, Ghana had made good progress, reducing the number of people living below the poverty line from over 52 per cent in 1992 to 42 per cent in 1997, with a further reduction to 35 per cent in 2003. Gains in the area of health, however, were less encouraging. In the globalized world, developed countries’ support was a sine qua non for real progress. In pursuit of sustained economic growth and poverty reduction, Ghana’s Government emphasized democracy, good governance, the rule of law and respect for human rights as essentials for sustainable development. The free and fair elections of the past 12 years testified to the democratic path Ghana was charting.
RUBȎ RAMIREZ, Vice-Minister for Economic Affairs and Integration of Paraguay, said it had been recognized that developing countries had the primary responsibility for mobilizing their national resources to finance their development. In that regard, his country had instituted a programme to strengthen governance and fight corruption, among other things. However, development assistance was still needed on a timely manner, without conditionalities and on favourable terms. That way, it would be possible to strengthen internal efforts and bring out investments for development. At Monterrey, developing countries were convinced that the Consensus adopted was the right means to fight poverty and allow for countries to enjoy better living conditions. The results of that Conference were only the beginning of a long road that both developing and developed countries must travel together.
According to the Economic Commission for Latin America and the Caribbean (ECLAC), poverty in his region continued to be high, with 96 million living in conditions of extreme poverty. That showed that the gap between rich and poor countries continued to widen, with no solution in sight. The problem of poverty continued in many countries. National development must accompany international assistance. To develop small and vulnerable economies, such as the least developed countries and the small island developing States, the factors that would influence a change of course required actions of different kinds. There must be broad and unrestricted access to world markets for those countries.
The Monterrey Consensus, he continued, had stated that trade was the most important instrument to finance development. But the share of developing countries in the world trade system had been marginal. That situation was particularly dire in the case of landlocked developing countries. It was important to bear in mind the high costs those countries must shoulder in shipping products to principal markets.
ALOUNKEO KITTIKHOUN (Lao Peoples’ Democratic Republic), speaking on behalf of landlocked developing countries (LLDCs), said financing for development had remained indispensable in achieving sustained economic growth, especially for LLDCs. While mobilization of domestic resources had improved in many developing countries, LLDCs had lagged behind, mainly due to slow economic growth and declining levels of foreign direct investment (FDI). For LLDCs to overcome such restraints and move forward in pursuing developmental goals, the donor community should give them unconditional support. He appealed to the international community to increase ODA and facilitate greater flows of FDI to LLDCs, so that they could meet their developmental needs.
Landlocked developing countries had remained marginalized from the world trading system due to their high transport costs and lack of territorial access to the sea, remoteness from world markets, poor transport infrastructure and burdensome border crossings, he said. Current LLDC expenditure on transport and insurance as a share of total export earnings doubled that of developing countries overall, and tripled that of developed economies. Such high costs prevented LLDCs from reaping the benefits of international trade, and kept them out of the regional and global economic mainstream. Adding that his country hoped to see an open, equitable, rule-based and development-oriented multilateral trading system, he stressed the importance of concluding the Doha round by 2006, and called for current World Trade Organization (WTO) negotiations on market access for agricultural and non-agricultural good to focus on products of special interest to landlocked developing countries.
HERALDO MUЏZ (Chile) said that it was now necessary to strengthen multilateralism, and to move beyond analysis and evaluation. It was also necessary to move towards a more just world order. That was especially the case in Latin America, which had the greatest disparity in income distribution. It was necessary to make the aspiration for development something tangible. In that framework, Chile had participated in initiatives against hunger and poverty, particularly in an action against hunger and poverty initiative with Brazil and France. In doing so, it had, with those countries, prepared a menu of innovative mechanisms to promote complementary flows to development assistance. The Millennium Declaration had identified the goals to be achieved by 2015. The Monterrey Consensus and the Johannesburg Plan of Action had laid down the processes and identified responsibilities in that regard for consistent action at the national, regional and international levels.
He noted that the 0.7 per cent ODA target was not enough to carry out the tasks to achieve the goals set. He reaffirmed the need to promote positive interaction between the private sector and all social actors in the economic and social development of countries. In the multilateral framework, it was necessary to complete the Doha round of WTO negotiations, eliminate practices which distorted trade, generate fair competition and provide access to markets. No one should be excluded from the fruits of globalization.
ZHANG YISHAN (China) said the most urgent task in financing for development was to bridge the financial gap. Due to historical and current reasons, developing countries had not been able to get out of their financial difficulties. Coupled with shortages of domestic financial resources, international commitment to financial aid had never been fulfilled and the “development deficit” had remained unsolved for a long time. Many African and least developed countries were bogged down in “poverty traps”, lacking the essential resources for national infrastructure, social services and public management. In some countries, heavy debt payments had taken away their valuable resources, which would otherwise be spent on development. Such problems must be corrected.
He said the European Union had taken an important step towards formulating the timetable for realizing ODA targets, and it was to be hoped that other developed countries would also follow their steps to reach the targets at an early date. Second, debt cancellation and reduction should be extended and deepened and China welcomed the initiative by the G-8 finance ministers to forgive the debts of 18 heavily indebted poor countries. Third, China looked forward to the International Finance Facility, which would hopefully provide experiences for more extensive financing arrangements. Fourth, a monitoring mechanism should be established to intensify supervision of follow-up actions in financing for development, so as to ensure the timely delivery of high-quality ODA.
From the long-term point of view, the key to financing for development lay in enhancing the capacity of developing countries for self-financing and diversifying the means of financing, he said. That would be a long and arduous task and, to support them, the international community must help developing countries to strengthen their capacity- and institution-building. It was important to create a favourable external environment, and especially a fair and equitable international economic system. In terms of capacity-building, current international efforts to support developing countries were still rather generalized and some were even mixed with conditionality aimed at putting pressure on recipient countries, which was more harmful than helpful.
He said that in order to create an enabling external environment and solve the systemic problems of developing countries, the international community should understand fully the special difficulties they faced in the globalization process. They should be allowed to choose policies suited to their national conditions and given sufficient “policy space”, as high-handed actions would only aggravate their difficulties. Also, the international community should build a fair, non-discriminatory and rule-based multilateral trade system.
RONALDO MOTA SARDENBERG (Brazil) said that, at the national level, his country had combined sound macroeconomic policies with strong social programmes. It had put into practice fiscal discipline, warded off inflation and adopted measures to stimulate economic growth. As a result, its GDP had grown, its trade surplus had expanded and investments had increased at a fast pace. It had also put in place the so-called “Zero Hunger” programme, which had already benefited millions throughout the country.
Brazil, he said, had also endeavoured to put into practice Monterrey’s recognition of “the value of exploring innovative sources of finance”. With that purpose, it had, together with Chile and France, launched the action against hunger and poverty initiative. To follow up on that, a technical group on innovative financing mechanisms continued to elaborate proposals aimed at increasing the amount of resources available for development and ensuring better predictability of aid disbursements.
Regarding the international community’s appraisal of what had been done to meet the Monterrey commitments, he noted that, on the one hand, there had been promising announcements in the fields of foreign debt and ODA. On the other hand, some of the main guiding principles of the Consensus, unfortunately, had not been put into practice, such as the need for enhanced participation of developing countries in international forums. Nor had any breakthrough been reached in the area of trade. He hoped those and other issues would be taken up at the next WTO meeting in Hong Kong later this year.
ANDREY DENISOV (Russian Federation) said that debt relief was vital in mobilizing resources to attain developmental goals and solve social problems. This year, Russia intended to announce the cancellation of $2.2 billion in debt for the poorest African States within the framework of the HIPC Initiative. However, cancelling debt by itself, without effective financial and budgetary policy and structural reforms, stronger institutions, and an improved investment climate, would not achieve favourable results. Continuous increase in credit volume and constant cancellation of past debt gave the wrong signal to debtors.
Supporting in principle the use of innovative sources of financing, he stressed that such mechanisms as the proposed International Financial Mechanism or international taxation to extend global economic assistance should be strictly voluntary, and should be adopted only by countries that considered such mechanisms compatible with their national legislation and economic capabilities.
Adding that expansion of world trade would create additional opportunities for achieving the Millennium Goals, he called for a rapid completion of the WTO Doha Round of trade negotiations. The international community must ensure stable, predictable and non-discriminatory conditions for market access for all, including countries in transition that have not yet acceded to the WTO.
ASIM ARAR (Turkey), aligning himself with the statement made on behalf of the European Union, said poverty was still the main obstacle for an equitable international economic system, because it stemmed from unequal levels of production and an unbalanced income distribution among countries. The responsibility for developing countries was to create a comprehensive national development strategy focusing on poverty reduction. There was also a joint responsibility of both developed and developing countries to mobilize international resources for sustainable development. Developed countries should design a pro-development international finance system to ensure a global flow of FDI. To attract that investment, developing countries should implement the principles of good governance and the rule of law, as well as create a strong legal basis for market-friendly institutions. Unfortunately, neither side had yet completely fulfilled those conditions.
Developing countries should be provided with help to help themselves, he said. International partners should focus on capacity-building for national administrations and transferring know-how about development policies and best practices. Quick implementation of the commitments regarding the increase of ODA was also important. The negative impact of the indispensable aid, however, was an increase in the foreign debt. Heavily indebted countries deserved, therefore, special attention. International trade had a central role in promoting, encouraging and supporting development activities, and his country, therefore, supported an early conclusion of the WTO negotiations. It should, however, be kept in mind that, in the absence of global stability, no policy, good governance, rule of law and implementation of free market policies could deliver sustainable development.
HAMAD HAREB AL-HABSI (United Arab Emirates) stressed the importance of strengthening international political will to develop a clear and integrated strategy for financing development. International financial institutions and developed nations should commit 0.7 per cent of their GDP to ODA for developing countries, and 0.15 per cent to 0.20 to least developed countries, ensuring that such assistance was free of conditions. They should also establish an international multilateral trading system based on equality among countries, which would aim to open international markets for developing country products, attract foreign investment and capital, and promote modern technologies for peaceful purposes.
For their part, he continued, developing country governments should mobilize foreign investments to finance development programmes, as recommended by a series of conferences on South-South cooperation, the latest of which was held in Qatar. The Qatar conference urged nations to adopt national plans to reform financial and social institutions, and called for stronger regional cooperation, especially in exchanging expertise, developing financial and human resources, advancing the private sector, and promoting bilateral and regional agreements aimed at promoting investments in financial, industrial and technological fields.
IFTEKHAR AHMED CHOWDHURY (Bangladesh) said that, in the road towards development goals, each developing country must be in the driver’s seat. Development could only be achieved on the matrix of pluralism, democracy, good governance, rule of law and gender justice. To that end, his country had undertaken an array of reforms in both political and economic sectors, including deregulation and liberalization in every sector of the economy. In doing so, it had achieved considerable progress in those sectors.
He highlighted the plight of least developed countries, noting that 50 of them were seemingly caught in a trap of underdevelopment, poverty and structural weaknesses. They continued to be marginalized, facing a variety of barriers in their major markets. He urged the international community to provide immediate duty-free and quota-free market access for all exports of least developed countries. As reiterated in Monterrey and Brussels, 0.20 per cent of gross national product (GNP) should be directed towards least developed countries. Also, he noted that current debt relief efforts had been far from effective. The outstanding debt of all least developed countries must be written off immediately, as that would free up much-needed resources for investment in development. Whatever approach was chosen for fuller debt relief, it had to be additional to current assistance to least developed countries. Likewise, a significant portion of foreign direct investment should be directed to the least developed countries.
MOHAMED BENNOUNA (Morocco) stressed the need to reaffirm the North-South partnership represented by the Monterrey Consensus, and to take concrete decisions within its context. Adding that the international community must mobilize the necessary financing to give hope to so many people living in want and poverty, he supported the European Union timetable of contributing 0.7 per cent of GDP to ODA by 2015. Official development assistance must be combined with debt relief, however, and efforts made to accelerate implementation of the HIPC Initiative, as well as to attain substantial debt relief for all developing countries.
Turning to trade, he said only predictable access to global markets could provide new momentum to sustain economic growth and achieve the Millennium Goals. He appealed to developed countries to open up their markets and eliminate quotas on developing country products. Developing countries would also benefit from the proposed International Financial Facility or some form of international taxation, which could mobilize major resources for development. Regarding international governance, decision-making in international financial institutions must be reformed to allow countries of the South a stronger voice in matter of globalization.
CHOI YOUNG-JIN (Republic of Korea) said that if the Monterrey Consensus was to be fully implemented, further measures must be undertaken by both developing countries and the international community. Four areas that were crucial in that regard were cultivating domestic resources, providing sufficient and effective ODA, promoting trade and enhancing regional cooperation. To maximize domestic financial resources, every developing country must adopt a national development strategy that strengthened good governance while supporting private sector-led economic growth. Also crucial was sharing knowledge and lessons learned regarding the strengthening of good governance.
He agreed that ODA played a critical role in supplementing domestic resources. But just as important as increasing the quantity of aid was ensuring that it was used effectively. Further measures should be taken to improve coordination among donors, strengthen good governance and align the dispersal of aid with the priorities of recipient countries. As an emerging donor, his country had intensified its efforts to both increase its volume of ODA and to improve its policies and procedures on ODA implementation. It was developing medium- and long-term strategies to further increase and improve its ODA.
While ODA was an important source of financing for development, aid alone could not ensure sustainable development over the long term, he added. Trade played an important role in that regard, and he hoped the Doha development round could be soon successfully concluded.
FAYSSAL MEKDAD (Syria) said the outcome of the Monterrey Conference was a crucial element for implementing the Millennium Development Goals. Syria had transformed itself into a real workshop in various areas of development, in order to achieve the aspirations of its people. It was one of the first States to submit its report on achieving the Millennium Development Goals, despite the hardships it had faced. Syria’s development depended, to a large extent, on the mobilization of domestic resources. The country was increasing national investment, producing structural transformations, and had a market based on competition. It was also reforming education, promoting research and development, and stressed the role of civil society and women in development. A number of laws had been adopted to implement the main development projects of the country and to improve the investment climate.
He said that, despite the fact that the Monterrey Consensus had stressed trade as the driving force of development, some parties were hampering the use of international trade to finance development. He supported the appeal for the WTO to facilitate the accession of developing countries. He welcomed the European Union’s decision to achieve the 0.7 per cent ODA target, and encouraged other States to establish timetables to increase their volume of assistance. Given the urgency of development in Africa, Syria had made the continent a priority when it came to ODA. The debt of all least developed countries should be cancelled, and not tied to ODA. He also welcomed efforts to find innovative sources of financing for development, and called on all developed States to adopt measures in keeping with Brazil’s initiative. Development was a right for everyone, and should be the top priority at the September Summit.
CARMEN MAŔ GALLARDO HERNDEZ (El Salvador) stressed that developing countries must overcome obstacles to sustainable development by creating the appropriate conditions for international trade, promoting good governance, and empowering civil society as a whole. They could not accomplish such tasks alone, however, and must have technical cooperation and other assistance from developed countries and international financial organizations. Developed countries must abide by their commitments to provide investment and relieve unsustainable external debt.
In efforts to achieve the Millennium Goals, her Government was determined to create jobs through new enterprises, and had increased the general budget by 7 per cent to support local development. Such efforts, however, must be accompanied by an increase in international capital flows, as well as foreign direct investment for sustained economic development. In addition, the international community must develop predictable trade rules and seek to protect vulnerable economies, including medium-income economies, in its efforts to combat poverty.
MIHNEA IOAN MOTOC (Romania) said that, as an emerging donor, Romania would increase over the next few years the volume of development cooperation with developing countries and countries in transition. As an acceding country to the European Union, it would take on board new responsibilities in the field of development policy. It would also continue to extend technical assistance on a bilateral basis. He felt closer attention should be paid to the phenomenon of emerging donor countries. Among other things, their coming on board should normally multiply the chances for meeting the targets for development assistance. The new or emerging donors from his part of the world were keen on meeting the high ODA targets set out by the European Union.
For its part, he said Romania wished to be able to deliver on commitments and expectations. He was confident that joining the European Union -- the largest donor of development assistance, and the foremost contributor to multilateral trade assistance programmes in the world -- would prove an invaluable “learning-by-doing” experience. Increasing the effectiveness of development cooperation implied adequately responding to partners’ needs, simplifying operating procedures and enhancing coordination.
ROBLE OLHAYE (Djibouti) said that, according to the Secretary-General’s report, foreign direct investment remained geographically concentrated, with certain regions suffering steady declines and others showing signs of weakness in competing for newer and higher-quality investments. Africa, in particular, was likely to show a modest increase in foreign direct investment flows. But there, again, those investments remained largely concentrated subregionally and sectorally. The report further elaborated that most least developed countries had fallen further behind in real growth in GDP. Accordingly, sub-Saharan Africa, in particular, was off-track in meeting the Millennium Goals, and the number of people living in absolute poverty in Africa had grown by about 40 per cent in the last decade.
The Monterrey Consensus had identified trade as the single most important external source of development financing, he recalled. However, the participation of many developing countries in global trade remained marginal. Hence, a breakthrough in the Doha Round of negotiations in favour of developing countries was crucial. It was now widely accepted, he said, that many poor developing countries would miss out on achieving the Millennium Goals unless ODA was substantially augmented, both in quantity and quality. Achieving ODA goals would involve more developed countries meeting their commitments to reach the 0.7 per cent target. He also welcomed innovations such as the tax on airline tickets or foreign exchange purchases. It was imperative that the international community remain open to financing suggestions and proposals.
MUNIR AKRAM (Pakistan) stressed the need for sound economic policies and good governance for turning around even the worst performing economies. Development also required adequate financing, however, and would be difficult in countries with a net outflow of resources from developing to developed countries. Viewed in that context, current ODA targets, as well as proposed debt relief, seemed inadequate in achieving the Millennium and other agreed development goals. The September Summit should redefine “debt sustainability” as the level of debt consistent with achieving national development goals, and consider significant debt cancellation for all developing nations, including heavily indebted middle-income countries.
Emphasizing the need for foreign direct investment flows to a wider range of developing countries, he said they facilitated technology transfer, created jobs, boosted productivity, enhanced competitiveness, accelerated economic growth and eliminated poverty. Unfortunately, such flows were a small fraction of global investment flows, and were concentrated in only a few emerging markets. The September Summit should endorse national and international measures to generate domestic, as well as foreign direct investment in low-income countries. Those measures could include international and national investment guarantee schemes, tax and other incentives, and revised “risk rating” arrangements to help direct a greater flow of private investments to developing countries that could not attract such transfers through normal market mechanisms.
An open and equitable international trading system was also vital for sustainable growth and development, he said. The Summit should identify development objectives of the Doha Round, and act to bring immediate benefits for developing countries before it even concludes. Among other actions, the Summit should agree on an end date for eliminating agriculture export subsidies by developed countries; commit to the elimination of tariff peaks and tariff escalation against exports of developing countries; impose a moratorium on anti-dumping actions against low-income countries; and put an end to arbitrary and abusive use of sanitary, phytosanitary and other standards to restrain exports of low-income countries.
LOUIS MICHEL, European Commissioner for Development and Humanitarian Aid and Chair of the observer delegation of the European Community, said that the Monterrey Consensus, for the first time, instituted the global partnership for development, which was central for eradicating poverty. Progress had been made, but it was not enough. That was unacceptable, both humanly and politically. Given the persistence of poverty and globalization, radical change was necessary. The main responsibility was on developing countries themselves, which must put in place bold strategies to combat poverty and become owners of the development process. They could not do that without effective integrated governance.
The international community, he continued, could not dodge its responsibilities in that process. It must do more, do better and do it more quickly. The European Community was committed to that process, and had agreed to increase its budget. The European Union was already one of the primary donors and through its new decision would consolidate its leadership for development. It now had a new timetable and precise targets to attain the 0.7 per cent ODA target. He supported suggestions for innovative sources of financing, such as the initiative for a voluntary tax on airline tickets. He was also studying the possibility of using the anti-trust levies, as an additional contribution to the development budget.
He added that improving the quality and effectiveness of aid was another challenge, in addition to increasing the volume of aid. He stressed the need to stop having administrative demands which were often not connected with the facts on the ground. The Union had adopted a coherence policy for development, to ensure that internal policies adopted within the Union would not undermine the achievement of the Millennium Development Goals. Also, the Union had adopted proactive, pro-African policy, particularly for sub-Saharan Africa. The whole donor community must live up to its promises relating to development.
YERZHAN KH. KAZYKHANOV (Kazakhstan) said international development partners of developing and least developed countries should continue to provide required assistance in order to implement national poverty-reduction strategies. Immediate debt relief should be provided for highly indebted poor countries. His country attached great importance to innovative and unconventional sources of financing for development initiated by the United Nations and several MemberStates. Also, an open, rule-based and equitable multilateral trading system could play a significant role in stimulating economic growth. Close cooperation between the Organization and the Breton Woods institutions, and a more active role of the regional and subregional organizations would help to successfully achieve people-centred development.
He said Kazakhstan actively contributed to the implementation of the Millennium Development Goals. It had built a functioning market economy, and rapid economic growth had made it possible to substantially expand government expenditures in the social sector. He asked for clearer and more specific recommendations regarding assistance by development partners to landlocked developing States. Tapping the potential of such major international agreements as the 2003 Almaty Programme of Action and global partnerships to address the special needs of landlocked developing countries should be a priority. Regional cooperation, in particular South-South cooperation, and open borders, free of tariff and customs barriers, were key to making economies more competitive. His country had, therefore, focused on the establishment of a Union of Central Asian States, proposed by its President.
LAXANACHANTORN LAOHAPHAN (Thailand) said that international trade had remained the most powerful and sustainable source of financing for development. The WTO Doha Round of trade negotiations must be completed by 2006, paying special heed to enhanced market access for developing country products, as well as commodity prices.
Addressing FDI, she said Thailand not only received foreign investment from various international corporations, but was itself investing in neighbouring countries. Investment between developing countries had been increasing and was becoming an important source of additional financing for development.
Thailand was also working with both developed and developing partners to establish the Asian Bond Fund, which would not only be a vital resource facility in the Asian region, but would act as a safeguard against fluctuations in international financial markets. Official development assistance played an important role in financing development, but should supplement other sources such as domestic resources. She commended those nations who had fulfilled their ODA commitments, and urged those who had not to do so without delay.
SERGE CHAPPATTE (Switzerland) said it was crucial that developing countries -- which had primary responsibility for their own development -- formulate and implement efficient and effective poverty-reduction strategies, establish policy frameworks enabling sustainable development, and mobilize domestic resources. Industrialized countries were called on to increase and further improve the quality and effectiveness of their ODA, facilitate the transfer of resources and continue to open their markets to developing countries, especially the poorest.
Since Monterrey, Switzerland had been increasing its ODA continuously and was reaching what it considered to be a realistic objective, he said. Despite a comprehensive rebalancing exercise of the federal finances, ODA would be among the very few budget items growing over the next few years, namely, by 8 per cent over the period 2006 to 2008. Also, Switzerland would actively pursue its support in the different domains of the Monterrey Consensus, particularly regarding the enhancement of good governance and management capacities, and pay particular attention to partnerships with the private sector with a view to further increase the impact of the country’s ODA.
Concerning debt, he said that his country had actively contributed to concrete debt-alleviation measures through innovative bilateral debt cancellation programmes and through involvement in the HIPC Initiative. While he continued to have reservations regarding the possible introduction of global mechanisms and facilities for mobilizing new resources for development, he was willing to examine participation in more limited mechanisms on a voluntary basis, such as the recently proposed financing facility to support immunization.
BRUCE MONTADOR, Vice-President of the International Development Agency of Canada, said that this year promised to be a turning point in the fight against poverty. The global community had mobilized and momentum was building. At Monterrey, the international community established the basis of a partnership to help mobilize the resources necessary to achieve the Millennium Goals. Canada was committed to supporting the efforts of developing countries to establish strong foundations for their sustainable development. Clearly, that meant increasing its aid. Since Monterrey, Canada was on track to fulfil its promise and double its aid by 2010.
More importantly, he said, Canada wanted to make its aid better and more effective, and was aligning its efforts with the priorities of its development partners. However, aid was only a small part of the development puzzle. It worked best when it was part of a broader and more coherent set of policies. By establishing clearer links among its development, diplomatic, trade and security agendas, his Government would help to ensure that its actions in areas other than development cooperation took the interests and needs of developing countries into account.
Canada, he said, supported the negotiation of foreign investment protection agreements or bilateral investment treaties to better manage and mitigate investment risk. Also, it viewed the WTO as an important forum in the approach to help achieve the Millennium Goals. He noted that the recent G-8 decision to cancel 100 per cent of the debts of some countries was an excellent result for Africa. Canada was increasing its investments in Africa, where needs were clearly the greatest. It was doubling its 2003 level of aid to the continent by 2008.
TENS KAPOMA (Zambia) said that his country had successfully reached the HIPC conclusion point in April, resulting in the reduction of its debt stock of $7.1 billion in 2004 by $3.8 billion. Also, Zambia was one of the beneficiaries of the 100 per cent debt cancellation by the Bretton Woods institutions at the last meeting of the G-8. Consequently, the debt stock had reduced significantly to less than $2 billion, which would facilitate increased expenditure on development programmes. The Government had embarked on policies and strategies that would ensure debt sustainability, among which were prudent debt management and soliciting for more grants as opposed to loans.
In addition, Zambia was currently implementing the Harmonization in Practice Initiative and had signed a memorandum of understanding with 15 development partners, outlining partnership commitments on aid effectiveness based on ownership and mutual accountability, among others. He stressed that more needed to be done to reduce conditionalities and increase untied aid; eliminate the multiple assessment frameworks; change the mindset of development partners who were still clinging to their “darlings”; and strengthen the donor field offices based in developing countries with powers to manage and make decisions on aid delivery to avoid the “post office syndrome”.
MOURAD BENMEHIDI (Algeria) said the Monterrey Consensus still gave rise to much hope among developing countries. However, developing countries did not own their own development, as the Consensus had stipulated, and developed countries were far from honouring their ODA commitments. Developing countries, despite their lack of resources and capacity, had made commendable progress in reform and institution-building. Stressing that developed countries should live up to their commitments to increase ODA to 0.7 per cent of ODA by 2015, he commended those countries that had already done so. The international community must also promote FDI, which had remained at a ridiculously low level in several regions.
Continuing, he said innovative sources of financing could be extremely beneficial, but should not take place of traditional sources in combating poverty and hunger. Adding that debt was also a serious obstacle for developing countries, especially heavily indebted ones, he welcomed decision of G-8 to cancel external debt for heavily indebted poor countries.
TERUNEH ZENNA (Ethiopia) said the record in achieving the Millennium Goals indicated a big disparity between regions. The challenge of meeting the development goals in Africa remained one of the key reasons for enhanced international partnership. He shared the Secretary-General’s view that countries adopt and begin to implement, no later than 2006, a national development strategy bold enough to meet the Millennium Goals by 2015. Ethiopia had undertaken a series of economic policy reforms geared towards poverty eradication and sustainable development. According to the Millennium Development Goals needs assessment report, Ethiopia would need $5 billion in ODA per year, while the present level was only about $1 billion.
He noted that ODA would continue to play a crucial role in supplementing the resources of developing countries, particularly those in sub-Saharan Africa. In addition to the need to raise the level of ODA, he underlined three areas the Secretary-General’s report had mentioned. First, not only did ODA have to increase substantially, it was essential to direct at least half of ODA to sub-Saharan Africa. Second, the call to increase ODA must be qualified, so that it referred to real increases in financial resources to support the Millennium Development Goals channelled through the budgets of recipient countries. Third, the rise in ODA had to go hand in hand with improvements in aid quality and effectiveness.
FRANCIS BUTAGIRA (Uganda) noted that developing countries created the necessary environment to allow for the mobilization of domestic and international resources for development. Uganda had put in place the necessary macroeconomic policies through the poverty eradication action plan. To encourage competitiveness, the Government had focused on raising productivity by improving efficiency in macroeconomic management; providing public goods, infrastructure and information; and ensuring security, law and order. Investments in health, education, water and sanitation were also a priority that would lead to higher productivity.
Uganda welcomed the G-8 announcement of debt cancellation for highly indebted poor countries, which should be supported by sustained measures to ensure that those countries did not fall into unsustainable debt once again. Being a least developed country and a primary commodity dependent country, he said Uganda was interested in seeing implemented the provision in the Monterrey Consensus for targeted financial technical assistance and capacity-building programmes, as well as immediate duty-free and quota free access for all least developed country products into developed country markets.
Although they had pursued sound economic policies, countries like Uganda were faced with negative economic growth due to external factors, he said. It was time for action to address global systematic imbalances by enhancing coherence and consistence in the governance of international institutions dealing with trade, financing and monetary issues. The voice and participation of developing countries in systematic issues would make for a more realistic outcome.
IMERIA NUЅZ DE ODREM (Venezuela) said that the decade of the 1990s had created a framework focusing on development, with developing and developed countries moved towards consensus. In Monterrey, countries undertook shared responsibilities for ensuring development. In spite of the efforts made, the prognosis was that the world was moving towards regrettable failure in the fight against poverty. At that rate, the Millennium Goals would not be achieved by 2015. In the area of trade, Venezuela had emphasized the need for a public review of the impact on Member States of the Marrakech Agreement. Access by developing countries to major markets should not depend on conditionalities. The policies of macroeconomic reform and open trade had aggravated the disparities between developed and developing countries. That required implementing concrete policies to deal with debt and the problems of medium- and low-income countries. External debt continued to have a pernicious impact on the economies of developing countries.
In spite of all that, she said a response had only come from the World Bank and the IMF, which had only sought to guarantee the repayment of the debt of developing countries. It was necessary to approach debt in a way that ensured the sustainability of the societies affected. Venezuela supported the rights of developing counties to implement their development strategies, and rejected the imposition of conditionalities. The past six years had been plagued by difficulty in her country, but it had shown what could be done if resources were mobilized to finance development. There must be massive efforts by the people, who must take part in decision-making processes affecting the country. Statistics indicated that her country would attain many of the Millennium Goals by 2015.
ISIKIA RABICI SAVUA (Fiji) said that trade and economic growth was very important for Fiji. A fair, open and equitable trading system, supplemented with adequate aid, were powerful drivers of economic growth. While the recommendation to complete the Doha round of multilateral negotiations and the fulfilment of its development promise were lauded, Fiji’s concern continued to remain its outcome, which he hoped would be favourable to developing countries and small economies.
He called for enhanced market access for products, and strengthening the supply side capabilities and productive capacity in developing countries to strengthen export competitiveness and build capacity to overcome trade challenges arising from trade liberalization. The September Summit should also address trade distortion through subsidies, as commonly practiced in developed countries. In sum, developing countries needed financial support and “policy space” to lift their exports sector and “grass-roots economies” from the doldrums and enable them to be competitive.
He said that natural disasters experienced in small island developing States in the recent tsunami exposed their vulnerability and fragility. He asked for appropriate technical and financial assistance to ensure the effective and full implementation of the Mauritius Strategy. He also drew attention to the seeming lack of focus paid to developing countries in Asia and the Pacific that were in dire need of assistance.
DIRK JAN VAN DEN BERG (Netherlands) commended the European Union decision to raise ODA according to a specific timetable in coming years, but stressed that that was not enough. Other donor countries should also increase their ODA contributions to enhance the sustainability and predictability of development financing. Emphasizing that debt relief could also play a key role in liberating resources needed to achieve the Millennium Goals, he welcomed the decision by G-8 finance ministers to cancel the debt of highly indebted poor countries to the IMF, World Bank and the African Development Bank. He stressed, however, that debt relief should not reduce resources available to other developing countries, or jeopardize the long-term financial viability of international financial institutions.
Turning to microfinance, he said it had huge potential in reducing poverty and attaining the Millennium Goals. The World Bank’s publication “Doing Business” could devote a separate edition to financial sector development issues, including financial snapshots, as well as concrete recommendations and best practices. National microfinance platforms could support their governments in implementing those recommendations, and a high-level task force could advise and advocate for microfinance as a major contribution to poverty reduction.
JIHAD AL-WAZIR, Deputy Minister of Finance of the Palestinian Authority, said that Palestine was one of the main recipients of international aid and, with the help of the international community, had been undergoing significant reforms at all levels of society. In the last three years, it had taken key steps towards economic and political reforms, culminating in the democratic presidential and municipal elections. Also, a series of financial reforms had been enacted, which had proven the capacity of the Government to manage resources efficiently, and to formulate, implement and enforce sound policies and regulations in a transparent manner. Those reforms had been recognized by the World
