financing for development buildingonmonterrey development monterrey

I Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

tFinancing for DevelopmentBuildingonMonterrey

Published by the Financing for Development Coordinating Secretariat, Department of Economic and Social Affairs.

asdfUnited Nations New York.

Note:The United Nations does not take responsibilityfor any omissions or discrepancies that mayinadvertently appear in transcriptions of speeches where the text was not submitted bydelegations or in the interpretation of speecheswhere the corresponding translations were not provided by delegations to the Secretariat.

The United Nations is very grateful to the El Norte Newspaper, Monterrey, Mexico, for the use of their photographic archives in thispublication and in the accompanying CD-Rom.All photographs, except where otherwiseacknowledged, are courtesy Grupo Reforma,Mexico.

Financing for Development: Bui ld ing on Monterrey

II

Sales No. E.02.II.A.5ISBN No. 92-2-104515-0

United Nations Publication.Published by the Financing for Development Coordinating Secretariat,Department of Economic and Social Affairs,

United Nations, New York.

Printed by United Nations Reproduction Section, New York.

Copyright © United Nations, 2002.All rights reserved.Bu

ildin

g Mon

terr

eyon

Contents

Foreword by Secretary-General Kofi Annan .......................................... IIIPreface by Under-Secretary-General Nitin Desai ................................... V

Ch 1 Monterrey Consensus .............................................................................. 1Ch 2 Opening Summit Plenary Session ......................................................... 15

Speeches by the Host Country and Major Stakeholders Ch 3 Monterrey Summit ................................................................................... 31

Speeches by Heads of State and GovernmentCh 4 Monterrey Summit ................................................................................... 119

Speeches by other Heads of DelegationCh 5 Summaries of Round Table Discussions ............................................... 277Ch 6 Statements of the NGO Global Forum ................................................. 305Ch 7 Business Forum Communiqué ................................................................ 313Ch 8 Role of Regional Development Banks .................................................. 319Ch 9 Statements of the Parliamentarian Forum .......................................... 323Ch 10 Retreat for Heads of State and Government: .................................. 327

Briefing by President of Mexico

Annex: Summaries of Press Conferences .......................................................... 331

Enclosure: CD-Rom

• Monterrey Consensus• All Statements made in Plenary sessions at the International Conference

on Financing for Development, Monterrey, Mexico, 18-22 March, 2002 (including videos of summit speeches)

• Summaries of Round Table Discussions• Retreat for Heads of State and Government: Briefing by President of Mexico• Statements and Proposals of the Business Forum to the Plenary Sessions• Statements and Resolutions of the NGO Global Forum 14-16 March 2002• Statements of the Parliamentarian Forum• Press Conference Summaries and DPI Press Releases• Secretary-General’s Report to the Preparatory Committee with Technical Notes• Report of the High-level Panel on Financing for Development• Side Events• FfD Chronology• FfD in the News (Press clippings)• Monterrey Photo Gallery

III

Financing for Development Building on Monterrey

Secretary-General Kofi Annan attends the Summit of Heads

of State and Government during the International Conference

on Financing for Development at Monterrey, Mexico.

Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

t

V

ForewordThe International Conference on Financing for Development was a turningpoint in the quest for economic and social progress, which has been high on the agenda of the United Nations from its earliest days.

The consensus reached in Monterrey reflects a landmark global agreement between developed and developing countries, in which both recognize their responsibilities in key areas such as trade, aid, debt relief and institution-building. It produced a breakthrough on the question of official development assistance, with substantial new pledges, and a major change in attitude, which between them promise to begin to reverse the decade-longdecline. Monterrey also reiterated that poor and economically distressed people need not be objects of pity and charity; rather, they should be regardedas untapped reservoirs of initiative, and should be welcomed as partners in the development process.

Governments were far from the only participants at Monterrey. Civilsociety groups and private sector representatives were there in force, energiz-ing the process by offering ideas and forging partnerships for the future. The conference also saw unprecedented cooperation between the UnitedNations and the World Bank, the International Monetary Fund and the WorldTrade Organization, as part of efforts to promote greater coherence and consistency among the international monetary, trade and financial systems and institutions.

This publication offers a comprehensive view of the MonterreyConference, pulling together in one volume and CD-Rom all the relevantspeeches, proposals, reports, resolutions and other documentation, includingthe Monterrey Consensus itself. It is intended to serve as a resource for scholarsand policy-makers, and as a vehicle to carry the messages of Monterrey to a wider public. The challenge now, as ever, is implementation. I urge the international community to do its utmost to fulfil the commitments made atMonterrey, and to do all it can to help developing countries shake off the yokeof poverty. With political will, this goal can be reached within this generation.

Kofi A. AnnanSecretary-General

Under-Secretary-General Nitin Desai briefs the Press in Monterrey,

Mexico, during the International Conference on Financing for

Development.

Financing for Development Building on Monterrey

Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

t

PrefaceThe International Conference on Financing for Development (Monterrey,Mexico, 18-22 March 2002) signalled a turning point in the approach to devel-opment cooperation by the international community. It was the first UnitedNations-sponsored summit-level meeting to address key financial and relatedissues pertaining to global development. With more than 50 Heads of State andGovernment and over 200 ministers of foreign affairs, trade, development andfinance – the largest ever participation of finance officials at a United Nations-sponsored event – gathered in Monterrey, the Conference succeeded in placingfinancing for development firmly on the global agenda.

The success of Monterrey marked the culmination of over four yearsof patient consensus-building work during which the process travelled a delicatecourse through diverse interests and concerns. Yet, the antecedents toMonterrey go back for decades. The current phase came to life in the aftermathof the financial and economic crisis that hit South East Asia in 1997 and itsaccompanying contagion effect. The crisis brought in its wake severe social con-sequences and major reverses of the progress made by the affected countriesover many years. The uncertainties generated by the Asian crisis and the per-ceived inadequacies of the international response triggered calls for the redesignof the international financial architecture as well as a search for ideas in myriadfora. In the United Nations a political space opened up for more sympatheticconsideration not only of the macroeconomic dimensions of the crisis but espe-cially of what it meant for the promotion of long-term development and theeradication of poverty.

The opening of this political space was undoubtedly a key factor inthe eventual success of the financing for development process. Another was theunprecedented collaborative effort involving the United Nations, the WorldBank, IMF and WTO, along with other actors at the international and regionallevels that went into the preparatory phase and in the Conference itself.Especially noteworthy was the quality of engagement of civil society and thebusiness sector, who became active partners during the process.

The Monterrey Conference responded to an ambitious mandate.General Assembly resolution 54/196, which established the PreparatoryCommittee for the Conference, defined the broad contours of the process. Theresolution set out its main purpose as follows: To address national, internationaland systemic issues relative to financing for development in a holistic manner in

VII

the context of globalization and interdependence and to identify the means for ensuring the availability of sufficient financial resources to reach the goals set by major UN conferences and summits of the 1990s. The MillenniumDevelopment Goals, adopted by world leaders gathered in September 2000for the Millennium Summit, provided a powerful boost to the success of the Monterrey Conference, as well as a framework for a collaborative interna-tional response.

Responding to the multidimensional nature of the global developmentchallenge, the Preparatory Committee adopted a broad agenda covering sixmajor interrelated themes, each integral to financing for development. Thesewere the mobilization of domestic financial resources, international privateresources, trade, international financial cooperation (mainly OfficialDevelopment Assistance), external debt, and systemic issues with emphasis onenhancing the coherence and consistency of the international monetary, finan-cial and trading systems in support of development. The principle of a holisticand integrated approach to these various aspects has been a key distinguishingelement of the financing for development exercise.

The ‘Monterrey Consensus’ adopted by the Conference reflects boththe broad agenda and holistic approach that have characterized the process. Farfrom being an end point, the Consensus establishes a veritable platform onwhich to build a new global alliance for development, encompassing all relevantactors at the global, regional and national levels. This alliance is premised onfull ownership by developing countries of their development and a renewedcommitment on the part of the international community to support the effortsof developing countries.

The process also engendered immediate achievements, most notablyin regard to development assistance. The European Union and the UnitedStates made announcements of significant increases in their ODA portfolios.Also, concrete initiatives were proposed by business and civil society. What ismore, we have been witness to a fresh debate on aid and development issuesamong policymakers and in the press that places a new spotlight on the urgentneed for reinvigorated international cooperation to address the challenges ofinterdependence and globalization.


VIII

In adopting the Monterrey Consensus, world leaders recognized thatthe building of a global alliance for development required an unremitting effort.Hence, they committed themselves to staying engaged, to ensuring proper fol-low-up to the implementation of agreements and commitments made atMonterrey and to continuing to build bridges between development, finance,and trade organizations and initiatives. The challenge now is to translate thespirit of the Monterrey Consensus into a pragmatic and practical programme ofimplementation. To do this successfully, it will be important to draw on the posi-tive features and lessons learned from the process and to adapt them to theprocess ahead.

One such feature is the inclusive character of the process. The activeengagement of a broad range of stakeholders was a key factor. The collabora-tion among the major global institutions that influence the development dis-course and policies in developing countries needs to be sustained and strength-ened. This would entail pooling the resources of the United Nations, theBretton Woods institutions and WTO in novel ways to enhance coordination,coherence and effectiveness. This multi-stakeholder collaboration has to be fur-ther extended to engage the regional development banks, regional commis-sions, UNCTAD, UNDP and other organizations within and outside the UnitedNations system. It will also entail new forms of engagement of the business sec-tor and civil society in the construction of an expanded multilateral partnershipfor development. These actors shared the table with governments and interna-tional institutions and, needless to say, the UN’s relationship with them is vitalto the fulfillment of its purposes in development.

Every effort should also be made to consolidate the holistic approachto the interrelated aspects of development and foster a more effective andfocused deployment of the multilateral machinery in support of developmentalobjectives. While respecting the mandates and governance structures of differentinstitutions, such an approach should better harness their respective strengthsand competencies, at the same time providing opportunity for greater collabora-tion, coordination and coherence in the design and execution of policies.

The Monterrey process further underlined the necessity for strongerinter-ministerial collaboration on financing for development issues at the nation-al level, involving ministries of finance, trade, development/planning and for-eign affairs. In a number of instances, specific steps have already been taken tofoster such collaboration. In the context of sustainable development there isneed for closer collaboration not only within the macroeconomic domain, butalso drawing in the social and environmental aspects of the equation.

IX

Preface

Much remains to be done to harness the momentum of Monterreyto the achievement of the Millennium Development Goals and the promotionof a more inclusive and democratic global economic system, as called for inthe consensus document. Continued efforts will be required to translate thecommitments on capacity-building and to enhance the participation of devel-oping countries in decision-making on global economic issues. At the sametime, we need to keep in mind strategic linkages between Financing forDevelopment and other relevant processes, including the outcomes of theDoha Conference on Trade and the Johannesburg Summit on SustainableDevelopment, with a view to consolidating a comprehensive developmentagenda into the twenty-first century, supported by the means and instrumentsnecessary for its realization.

The commitment to stay engaged is critical. So, too, is the mobiliza-tion of public and political support to build on the achievements of Monterrey.The United Nations has a pivotal role to play, together with our partners, inensuring that real progress is made. It is our hope that the present publicationwill contribute to the efforts of the international community in this regard.

Nitin DesaiUnder-Secretary-Generalfor Economic and Social Affairs


X

Chapter 1Monterrey Consensus

ConsensusMonterreyMonterrey

MonterreyMonterreyMonterreyMonterreyMonterreyMonterreyMonterreyMonterreyMonterrey

The draft Monterrey Consensus is formally agreed at the

plenary session of the Preparatory Committee of the

International Conference on Financing for Development

in the General Assembly Hall of the United Nations on

15 February 2002, paving the way for its unanimous

adoption at the Monterrey Summit on 22 March 2002

Photo: Sanjay Acharya

Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

tFinancing for Development: Bui ld ing on Monterrey

I. Confronting the challenges of financing for development:A global response

1. We the heads of State and Government,gathered in Monterrey, Mexico, on 21 and 22 March2002, have resolved to address the challenges offinancing for development around the world, particu-larly in developing countries. Our goal is to eradicatepoverty, achieve sustained economic growth and pro-mote sustainable development as we advance to a fullyinclusive and equitable global economic system.

2. We note with concern current estimates ofdramatic shortfalls in resources required to achieve theinternationally agreed development goals, includingthose contained in the United Nations MillenniumDeclaration.1

3. Mobilizing and increasing the effective useof financial resources and achieving the national andinternational economic conditions needed to fulfilinternationally agreed development goals, includingthose contained in the Millennium Declaration, to elim-inate poverty, improve social conditions and raise liv-ing standards, and protect our environment, will beour first step to ensuring that the twenty-first centurybecomes the century of development for all.

4. Achieving the internationally agreed devel-opment goals, including those contained in theMillennium Declaration, demands a new partnershipbetween developed and developing countries. We com-mit ourselves to sound policies, good governance at alllevels and the rule of law. We also commit ourselves tomobilizing domestic resources, attracting internationalflows, promoting international trade as an engine fordevelopment, increasing international financial andtechnical cooperation for development, sustainabledebt financing and external debt relief, and enhancingthe coherence and consistency of the internationalmonetary, financial and trading systems.

1 Genera l Assembly resolut ion 55/2.

5. The terrorist attacks on 11 September2001 exacerbated the global economic slowdown, fur-ther reducing growth rates. It has now become all themore urgent to enhance collaboration among all stake-holders to promote sustained economic growth and toaddress the long-term challenges of financing fordevelopment. Our resolve to act together is strongerthan ever.

6. Each country has primary responsibility forits own economic and social development, and therole of national policies and development strategiescannot be overemphasized. At the same time, domes-tic economies are now interwoven with the global eco-nomic system and, inter alia, the effective use of tradeand investment opportunities can help countries tofight poverty. National development efforts need to besupported by an enabling international economic envi-ronment. We encourage and support developmentframeworks initiated at the regional level, such as theNew Partnership for Africa’s Development and similarefforts in other regions.

7. Globalization offers opportunities and chal-lenges. The developing countries and countries witheconomies in transition face special difficulties inresponding to those challenges and opportunities.Globalization should be fully inclusive and equitable,and there is a strong need for policies and measures atthe national and international levels, formulated andimplemented with the full and effective participation ofdeveloping countries and countries with economies intransition to help them respond effectively to thosechallenges and opportunities.

8. In the increasingly globalizing interdepend-ent world economy, a holistic approach to the inter-connected national, international and systemic chal-lenges of financing for development – sustainable,gender-sensitive, people-centred development – in allparts of the globe is essential. Such an approach mustopen up opportunities for all and help to ensure thatresources are created and used effectively and thatstrong, accountable institutions are established at alllevels. To that end, collective and coherent action isneeded in each interrelated area of our agenda, involv-ing all stakeholders in active partnership.

3

Monterrey ConsensusFinal outcome of the International Conference on Financing for DevelopmentAdopted by acclamation on 22 March 2002 at the Summit Plenary Session of the International Conference on Financing for Development

9. Recognizing that peace and developmentare mutually reinforcing, we are determined to pursueour shared vision for a better future, through our indi-vidual efforts combined with vigorous multilateralaction. Upholding the Charter of the United Nationsand building upon the values of the MillenniumDeclaration, we commit ourselves to promotingnational and global economic systems based on theprinciples of justice, equity, democracy, participation,transparency, accountability and inclusion.

II. Leading actions:Mobilizing domestic financial resources for development

10. In our common pursuit of growth, povertyeradication and sustainable development, a criticalchallenge is to ensure the necessary internal conditionsfor mobilizing domestic savings, both public and pri-vate, sustaining adequate levels of productive invest-ment and increasing human capacity. A crucial task isto enhance the efficacy, coherence and consistency ofmacroeconomic policies. An enabling domestic envi-ronment is vital for mobilizing domestic resources,increasing productivity, reducing capital flight, encour-aging the private sector, and attracting and makingeffective use of international investment and assis-tance. Efforts to create such an environment should besupported by the international community.

11. Good governance is essential for sustain-able development. Sound economic policies, soliddemocratic institutions responsive to the needs of thepeople and improved infrastructure are the basis forsustained economic growth, poverty eradication andemployment creation. Freedom, peace and security,domestic stability, respect for human rights, includingthe right to development, and the rule of law, genderequality, market-oriented policies, and an overall com-mitment to just and democratic societies are alsoessential and mutually reinforcing.

12. We will pursue appropriate policy and reg-ulatory frameworks at our respective national levelsand in a manner consistent with national laws toencourage public and private initiatives, including atthe local level, and foster a dynamic and well function-ing business sector, while improving income growthand distribution, raising productivity, empoweringwomen and protecting labour rights and the environ-ment. We recognize that the appropriate role of gov-ernment in market-oriented economies will vary fromcountry to country.

13. Fighting corruption at all levels is a priority.Corruption is a serious barrier to effective resourcemobilization and allocation, and diverts resources awayfrom activities that are vital for poverty eradication andeconomic and sustainable development.

14. We recognize the need to pursue soundmacroeconomic policies aimed at sustaining high ratesof economic growth, full employment, poverty eradi-cation, price stability and sustainable fiscal and exter-nal balances to ensure that the benefits of growthreach all people, especially the poor. Governmentsshould attach priority to avoiding inflationary distor-tions and abrupt economic fluctuations that negativelyaffect income distribution and resource allocation.Along with prudent fiscal and monetary policies, anappropriate exchange rate regime is required.

15. An effective, efficient, transparent andaccountable system for mobilizing public resources andmanaging their use by Governments is essential. Werecognize the need to secure fiscal sustainability, alongwith equitable and efficient tax systems and adminis-tration, as well as improvements in public spendingthat do not crowd out productive private investment.We also recognize the contribution that medium-termfiscal frameworks can make in that respect.

16. Investments in basic economic and socialinfrastructure, social services and social protection,including education, health, nutrition, shelter andsocial security programmes, which take special care ofchildren and older persons and are gender sensitiveand fully inclusive of the rural sector and all disadvan-taged communities, are vital for enabling people, espe-cially people living in poverty, to better adapt to andbenefit from changing economic conditions andopportunities. Active labour market policies, includingworker training, can help to increase employment andimprove working conditions. The coverage and scopeof social protection needs to be further strengthened.Economic crises also underscore the importance ofeffective social safety nets.

17. We recognize the need to strengthen anddevelop the domestic financial sector, by encouragingthe orderly development of capital markets throughsound banking systems and other institutional arrange-ments aimed at addressing development financingneeds, including the insurance sector and debt andequity markets, that encourage and channel savingsand foster productive investments. That requires asound system of financial intermediation, transparentregulatory frameworks and effective supervisory mech-anisms, supported by a solid central bank. Guaranteeschemes and business development services should bedeveloped for easing the access of small and medium-sized enterprises to local financing.


4

18. Microfinance and credit for micro, smalland medium-sized enterprises, including in rural areas,particularly for women, as well as national savingsschemes, are important for enhancing the social andeconomic impact of the financial sector. Developmentbanks, commercial and other financial institutions,whether independently or in cooperation, can beeffective instruments for facilitating access to finance,including equity financing, for such enterprises, as wellas an adequate supply of medium- and long-term cred-it. In addition, the promotion of private-sector finan-cial innovations and public-private partnerships canalso deepen domestic financial markets and furtherdevelop the domestic financial sector. The primeobjective of pension schemes is social protection, butwhen those schemes are funded they can also be asource of savings. Bearing in mind economic andsocial considerations, efforts should be made to incor-porate the informal sector into the formal economy,wherever feasible. It is also important to reduce thetransfer costs of migrant workers’ remittances and cre-ate opportunities for development-oriented invest-ments, including housing.

19. It is critical to reinforce national efforts incapacity-building in developing countries and countrieswith economies in transition in such areas as institu-tional infrastructure, human resource development,public finance, mortgage finance, financial regulationand supervision, basic education in particular, publicadministration, social and gender budget policies, earlywarning and crisis prevention, and debt management.In that regard, particular attention is required toaddress the special needs of Africa, the least devel-oped countries, small island developing States andlandlocked developing countries. We reaffirm our com-mitment to the Programme of Action for the LeastDeveloped Countries for the Decade 2001-2010,2

adopted by the Third United Nations Conference onthe Least Developed Countries, held in Brussels from14 to 20 May 2001, and the Global Programme ofAction for the Sustainable Development of SmallIsland Developing States.3 International support forthose efforts, including technical assistance andthrough United Nations operational activities for devel-opment, is indispensable. We encourage South-Southcooperation, including through triangular cooperation,to facilitate exchange of views on successful strategies,practices and experience and replication of projects.

2 A/CONF.191/11.

3 Report of the Global Conference on the Susta inableDevelopment of Smal l I s land Developing States ,Br idgetown, Barbados, 25 Apr i l -6 May 1994 (United Nat ionspubl icat ion, Sa les No. E .94. I .18 and corr igenda) , chap. 1 ,resolut ion 1, annex I I .

Mobilizing internationalresources for development: foreign direct investmentandother private flows

20. Private international capital flows, particu-larly foreign direct investment, along with internationalfinancial stability, are vital complements to nationaland international development efforts. Foreign directinvestment contributes toward financing sustained economic growth over the long term. It is especiallyimportant for its potential to transfer knowledge andtechnology, create jobs, boost overall productivity,enhance competitiveness and entrepreneurship, andultimately eradicate poverty through economic growthand development. A central challenge, therefore, is to create the necessary domestic and internationalconditions to facilitate direct investment flows, con-ducive to achieving national development priorities, to developing countries, particularly Africa, least devel-oped countries, small island developing States, andlandlocked developing countries, and also to countries with economies in transition.

21. To attract and enhance inflows of produc-tive capital, countries need to continue their efforts toachieve a transparent, stable and predictable invest-ment climate, with proper contract enforcement andrespect for property rights, embedded in sound macro-economic policies and institutions that allow business-es, both domestic and international, to operate effi-ciently and profitably and with maximum developmentimpact. Special efforts are required in such priorityareas as economic policy and regulatory frameworksfor promoting and protecting investments, includingthe areas of human resource development, avoidanceof double taxation, corporate governance, accountingstandards, and the promotion of a competitive envi-ronment. Other mechanisms, such as public/privatepartnerships and investment agreements, can beimportant. We emphasize the need for strengthened,adequately resourced technical assistance and produc-tive capacity-building programmes, as requested byrecipients.

22. To complement national efforts, there isthe need for the relevant international and regionalinstitutions as well as appropriate institutions in sourcecountries to increase their support for private foreigninvestment in infrastructure development and otherpriority areas, including projects to bridge the digitaldivide, in developing countries and countries witheconomies in transition. To this end, it is important toprovide export credits, co-financing, venture capitaland other lending instruments, risk guarantees, lever-

5

Chapter 1 Monterrey Consensus

aging aid resources, information on investment oppor-tunities, business development services, forums tofacilitate business contacts and cooperation betweenenterprises of developed and developing countries, aswell as funding for feasibility studies. Inter-enterprisepartnership is a powerful means for transfer and dis-semination of technology. In this regard, strengtheningof the multilateral and regional financial and develop-ment institutions is desirable. Additional source coun-try measures should also be devised to encourage andfacilitate investment flows to developing countries.

23. While Governments provide the frameworkfor their operation, businesses, for their part, areexpected to engage as reliable and consistent partnersin the development process. We urge businesses totake into account not only the economic and financialbut also the developmental, social, gender and envi-ronmental implications of their undertakings. In that spirit, we invite banks and other financial institu-tions, in developing countries as well as developedcountries, to foster innovative developmental financingapproaches. We welcome all efforts to encouragegood corporate citizenship and note the initiativeundertaken in the United Nations to promote globalpartnerships.

24. We will support new public/private sectorfinancing mechanisms, both debt and equity, for devel-oping countries and countries with economies in tran-sition, to benefit in particular small entrepreneurs andsmall and medium-size enterprises and infrastructure.Those public/private initiatives could include the devel-opment of consultation mechanisms between interna-tional and regional financial organizations and nationalGovernments with the private sector in both sourceand recipient countries as a means of creating busi-ness-enabling environments.

25. We underscore the need to sustain suffi-cient and stable private financial flows to developingcountries and countries with economies in transition. Itis important to promote measures in source and desti-nation countries to improve transparency and theinformation about financial flows. Measures that miti-gate the impact of excessive volatility of short-termcapital flows are important and must be considered.Given each country’s varying degree of nationalcapacity, managing national external debt profiles,paying careful attention to currency and liquidity risk,strengthening prudential regulations and supervision ofall financial institutions, including highly leveragedinstitutions, liberalizing capital flows in an orderly andwell sequenced process consistent with developmentobjectives, and implementation, on a progressive and

voluntary basis, of codes and standards agreed inter-nationally, are also important. We encourage public/private initiatives that enhance the ease of access,accuracy, timeliness and coverage of information on countries and financial markets, which strengthencapacities for risk assessment. Multilateral financialinstitutions could provide further assistance for all those purposes.

International trade as anengine for development

26. A universal, rule-based, open, non-discrimi-natory and equitable multilateral trading system, aswell as meaningful trade liberalization, can substantiallystimulate development worldwide, benefiting countriesat all stages of development. In that regard, we reaf-firm our commitment to trade liberalization and toensure that trade plays its full part in promoting eco-nomic growth, employment and development for all.We thus welcome the decisions of the World TradeOrganization to place the needs and interests of devel-oping countries at the heart of its work programme,and commit ourselves to their implementation.

27. To benefit fully from trade, which in manycases is the single most important external source of development financing, the establishment orenhancement of appropriate institutions and policiesin developing countries, as well as in countries witheconomies in transition, is needed. Meaningful trade liberalization is an important element in the sustainable development strategy of a country.Increased trade and foreign direct investment couldboost economic growth and could be a significantsource of employment.

28. We acknowledge the issues of particularconcern to developing countries and countries witheconomies in transition in international trade toenhance their capacity to finance their development,including trade barriers, trade-distorting subsidies andother trade-distorting measures, particularly in sectorsof special export interest to developing countries,including agriculture; the abuse of anti-dumping meas-ures; technical barriers and sanitary and phytosanitarymeasures; trade liberalization in labour intensive manu-factures; trade liberalization in agricultural products;trade in services; tariff peaks, high tariffs and tariffescalation, as well as non-tariff barriers; the movementof natural persons; the lack of recognition of intellectu-al property rights for the protection of traditional


6

knowledge and folklore; the transfer of knowledge andtechnology; the implementation and interpretation ofthe Agreement on Trade-Related Aspects ofIntellectual Property Rights4 in a manner supportive ofpublic health; and the need for special and differentialtreatment provisions for developing countries in tradeagreements to be made more precise, effective andoperational.

29. To ensure that world trade supports devel-opment to the benefit of all countries, we encouragethe members of the World Trade Organization toimplement the outcome of its Fourth MinisterialConference, held in Doha, Qatar from 9 to 14November 2001.

30. We also undertake to facilitate the acces-sion of all developing countries, particularly the leastdeveloped countries, as well as countries witheconomies in transition, that apply for membership ofthe World Trade Organization.

31. We will implement the commitments madein Doha to address the marginalization of the leastdeveloped countries in international trade as well asthe work programme adopted to examine issues relat-ed to the trade of small economies.

32. We also commit ourselves to enhancing therole of regional and subregional agreements and freetrade areas, consistent with the multilateral trading sys-tem, in the construction of a better world trading sys-tem. We urge international financial institutions,including the regional development banks, to continueto support projects that promote subregional andregional integration among developing countries andcountries with economies in transition.

33. We recognize the importance of enhancedand predictable access to all markets for the exports ofdeveloping countries, including small island developingStates, landlocked and transit developing countries andcountries in Africa, as well as countries witheconomies in transition.

34. We call on developed countries that havenot already done so to work towards the objective ofduty-free and quota-free access for all least developedcountries’ exports, as envisaged in the Programme ofAction for the Least Developed Countries adopted inBrussels. Consideration of proposals for developingcountries to contribute to improved market access forleast developed countries would also be helpful.

35. We further recognize the importance fordeveloping countries as well as countries witheconomies in transition of considering reducing tradebarriers among themselves.

4 The Resul ts of the Uruguay Round of Mult i latera l TradeNegot iat ions : The Legal Texts (Geneva, GATT Secretar iat ,1994) , annex 1C.

36. In cooperation with the interestedGovernments and their financial institutions and to fur-ther support national efforts to benefit from tradeopportunities and effectively integrate into the multilat-eral trading system, we invite multilateral and bilateralfinancial and development institutions to expand andcoordinate their efforts, with increased resources, forgradually removing supply-side constraints; improvetrade infrastructure; diversify export capacity and sup-port an increase in the technological content ofexports; strengthen institutional development andenhance overall productivity and competitiveness. Tothat end, we further invite bilateral donors and theinternational and regional financial institutions, togeth-er with the relevant United Nations agencies, fundsand programmes, to reinforce the support for trade-related training, capacity and institution building andtrade-supporting services. Special consideration shouldbe given to least developed countries, landlockeddeveloping countries, small island developing States,African development, transit developing countries andcountries with economies in transition, includingthrough the Integrated Framework for Trade-RelatedTechnical Assistance to Least Developed Countriesand its follow-up, the Joint Integrated TechnicalAssistance Programme, the World Trade OrganizationDoha Development Agenda Global Trust Fund, as wellas the activities of the International Trade Centre.

37. Multilateral assistance is also needed to mit-igate the consequences of depressed export revenuesof countries that still depend heavily on commodityexports. Thus, we recognize the recent review of theInternational Monetary Fund Compensatory FinancingFacility and will continue to assess its effectiveness. Itis also important to empower developing country com-modity producers to insure themselves against risk,including against natural disasters. We further invitebilateral donors and multilateral aid agencies tostrengthen their support to export diversification pro-grammes in those countries.

38. In support of the process launched inDoha, immediate attention should go to strengtheningand ensuring the meaningful and full participation ofdeveloping countries, especially the least developedcountries, in multilateral trade negotiations. In particu-lar, developing countries need assistance in order toparticipate effectively in the World Trade Organizationwork programme and negotiating process through theenhanced cooperation of all relevant stakeholders,including the United Nations Conference on Trade andDevelopment, the World Trade Organization and theWorld Bank. To those ends, we underscore the impor-tance of effective, secure and predictable financing oftrade-related technical assistance and capacity-building.

7


Increasing international financial and technical cooperation for development

39. Official development assistance (ODA)plays an essential role as a complement to othersources of financing for development, especially inthose countries with the least capacity to attract pri-vate direct investment. ODA can help a country toreach adequate levels of domestic resource mobiliza-tion over an appropriate time horizon, while humancapital, productive and export capacities areenhanced. ODA can be critical for improving the envi-ronment for private sector activity and can thus pavethe way for robust growth. ODA is also a crucialinstrument for supporting education, health, publicinfrastructure development, agriculture and rural devel-opment, and to enhance food security. For manycountries in Africa, least developed countries, smallisland developing States and landlocked developingcountries, ODA is still the largest source of externalfinancing and is critical to the achievement of thedevelopment goals and targets of the MillenniumDeclaration and other internationally agreed develop-ment targets.

40. Effective partnerships among donors andrecipients are based on the recognition of nationalleadership and ownership of development plans and,within that framework, sound policies and good gover-nance at all levels are necessary to ensure ODA effec-tiveness. A major priority is to build those develop-ment partnerships, particularly in support of the needi-est, and to maximize the poverty reduction impact ofODA. The goals, targets and commitments of theMillennium Declaration and other internationallyagreed development targets can help countries to setshort- and medium-term national priorities as the foun-dation for building partnerships for external support.In that context, we underline the importance of theUnited Nations funds, programmes and specializedagencies, and we will strongly support them.

41. We recognize that a substantial increase inODA and other resources will be required if develop-ing countries are to achieve the internationally agreeddevelopment goals and objectives, including those con-tained in the Millennium Declaration. To build supportfor ODA, we will cooperate to further improve policiesand development strategies, both nationally and inter-nationally, to enhance aid effectiveness.

42. In that context, we urge developed coun-tries that have not done so to make concrete effortstowards the target of 0.7 per cent of gross nationalproduct (GNP) as ODA to developing countries and0.15 to 0.20 per cent of GNP of developed countriesto least developed countries, as reconfirmed at theThird United Nations Conference on Least DevelopedCountries, and we encourage developing countries tobuild on progress achieved in ensuring that ODA isused effectively to help achieve development goals andtargets. We acknowledge the efforts of all donors,commend those donors whose ODA contributionsexceed, reach or are increasing towards the targets,and underline the importance of undertaking to exam-ine the means and time frames for achieving the tar-gets and goals.

43. Recipient and donor countries, as well asinternational institutions, should strive to make ODAmore effective. In particular, there is a need for themultilateral and bilateral financial and developmentinstitutions to intensify efforts to:

• Harmonize their operational procedures atthe highest standard so as to reduce transaction costsand make ODA disbursement and delivery more flexi-ble, taking into account national development needsand objectives under the ownership of the recipientcountry;

• Support and enhance recent efforts andinitiatives, such as untying aid, including the imple-mentation of the Organization for EconomicCooperation and Development/DevelopmentAssistance Committee recommendation on untying aidto the least developed countries, as agreed by theOrganization for Economic Cooperation andDevelopment in May 2001. Further efforts should bemade to address burdensome restrictions;

• Enhance the absorptive capacity and finan-cial management of the recipient countries to utilizeaid in order to promote the use of the most suitableaid delivery instruments that are responsive to theneeds of developing countries and to the need forresource predictability, including budget support mech-anisms, where appropriate, and in a fully consultativemanner;

• Use development frameworks that areowned and driven by developing countries and thatembody poverty reduction strategies, including povertyreduction strategy papers, as vehicles for aid delivery,upon request;

• Enhance recipient countries’ input into andownership of the design, including procurement, oftechnical assistance programmes; and increase theeffective use of local technical assistance resources;


8

• Promote the use of ODA to leverage addi-tional financing for development, such as foreigninvestment, trade and domestic resources;

• Strengthen triangular cooperation, includ-ing countries with economies in transition, and South-South cooperation, as delivery tools for assistance;

• Improve ODA targeting to the poor, coor-dination of aid and measurement of results.

We invite donors to take steps to apply theabove measures in support of all developing countries,including immediately in support of the comprehensivestrategy that is embodied in the New Partnership forAfrica’s Development and similar efforts in otherregions, as well as in support of least developed coun-tries, small island developing States and landlockeddeveloping countries. We acknowledge and appreciatethe discussions taking place in other forums on pro-posals to increase the concessionality of developmentfinancing, including greater use of grants.

44. We recognize the value of exploring inno-vative sources of finance provided that those sourcesdo not unduly burden developing countries. In thatregard, we agree to study, in the appropriate forums,the results of the analysis requested from theSecretary-General on possible innovative sources offinance, noting the proposal to use special drawingrights allocations for development purposes. We con-sider that any assessment of special drawing rightsallocations must respect the International MonetaryFund’s Articles of Agreement and the established rulesof procedure of the Fund, which requires taking intoaccount the global need for liquidity at the internation-al level.

45. Multilateral and regional developmentbanks continue to play a vital role in serving the devel-opment needs of developing countries and countrieswith economies in transition. They should contributeto providing an adequate supply of finance to coun-tries that are challenged by poverty, follow sound eco-nomic policies and may lack adequate access to capitalmarkets. They should also mitigate the impact ofexcessive volatility of financial markets. Strengthenedregional development banks and subregional financialinstitutions add flexible financial support to nationaland regional development efforts, enhancing owner-ship and overall efficiency. They also serve as a vitalsource of knowledge and expertise on economicgrowth and development for their developing membercountries.

46. We will ensure that the long-term resourcesat the disposal of the international financial system,including regional and subregional institutions andfunds, allow them to adequately support sustained eco-nomic and social development, technical assistance forcapacity-building, and social and environmental protec-tion schemes. We will also continue to enhance theiroverall lending effectiveness through increased countryownership, operations that raise productivity and yield measurable results in reducing poverty, and clos-er coordination with donors and the private sector.

External debt

47. Sustainable debt financing is an importantelement for mobilizing resources for public and privateinvestment. National comprehensive strategies tomonitor and manage external liabilities, embedded inthe domestic preconditions for debt sustainability,including sound macroeconomic policies and publicresource management, are a key element in reducingnational vulnerabilities. Debtors and creditors mustshare the responsibility for preventing and resolvingunsustainable debt situations. Technical assistance forexternal debt management and debt tracking can playan important role and should be strengthened.

48. External debt relief can play a key role inliberating resources that can then be directed towardsactivities consistent with attaining sustainable growthand development, and therefore, debt relief measuresshould, where appropriate, be pursued vigorously andexpeditiously, including within the Paris and LondonClubs and other relevant forums. Noting the impor-tance of re-establishing financial viability for thosedeveloping countries facing unsustainable debt bur-dens, we welcome initiatives that have been undertak-en to reduce outstanding indebtedness and invite fur-ther national and international measures in thatregard, including, as appropriate, debt cancellationand other arrangements.

49. The enhanced Heavily Indebted PoorCountries Initiative provides an opportunity tostrengthen the economic prospects and poverty reduc-tion efforts of its beneficiary countries. Speedy, effec-tive and full implementation of the enhanced Initiative,which should be fully financed through additionalresources, is critical. Heavily indebted poor countriesshould take the policy measures necessary to becomeeligible for the Initiative. Future reviews of debt sus-tainability should also bear in mind the impact of debtrelief on progress towards the achievement of the development goals contained in the Millennium

9


Declaration. We stress the importance of continuedflexibility with regard to the eligibility criteria.Continued efforts are needed to reduce the debt bur-den of heavily indebted poor countries to sustainablelevels. The computational procedures and assumptionsunderlying debt sustainability analysis need to be kept under review. Debt sustainability analysis at the completion point needs to take into account any worsening global growth prospects and decliningterms of trade. Debt relief arrangements should seekto avoid imposing any unfair burdens on other developing countries.

50. We stress the need for the InternationalMonetary Fund and the World Bank to consider anyfundamental changes in countries’ debt sustainabilitycaused by natural catastrophes, severe terms of trade shocks or conflict, when making policy recom-mendations, including for debt relief, as appropriate.

51. While recognizing that a flexible mix ofinstruments is needed to respond appropriately tocountries’ different economic circumstances andcapacities, we emphasize the importance of putting inplace a set of clear principles for the management and resolution of financial crises that provide for fairburden-sharing between public and private sectors andbetween debtors, creditors and investors. We encour-age donor countries to take steps to ensure thatresources provided for debt relief do not detract fromODA resources intended to be available for developingcountries. We also encourage exploring innovativemechanisms to comprehensively address debt prob-lems of developing countries, including middle-incomecountries and countries with economies in transition.

Addressing systemic issues:enhancing the coherence and consistency of the inter-national monetary, financial and trading systems in support of development

52. In order to complement national develop-ment efforts, we recognize the urgent need toenhance coherence, governance, and consistency ofthe international monetary, financial and trading sys-tems. To contribute to that end, we underline theimportance of continuing to improve global economicgovernance and to strengthen the United Nationsleadership role in promoting development. With thesame purpose, efforts should be strengthened at the

national level to enhance coordination among all rele-vant ministries and institutions. Similarly, we shouldencourage policy and programme coordination ofinternational institutions and coherence at the opera-tional and international levels to meet the MillenniumDeclaration development goals of sustained economicgrowth, poverty eradication and sustainable development.

53. Important international efforts are underway to reform the international financial architecture.Those efforts need to be sustained with greater trans-parency and the effective participation of developingcountries and countries with economies in transition.One major objective of the reform is to enhancefinancing for development and poverty eradication.We also underscore our commitment to sound domes-tic financial sectors, which make a vital contribution tonational development efforts, as an important compo-nent of an international financial architecture that issupportive of development.

54. Strong coordination of macroeconomicpolicies among the leading industrial countries is criti-cal to greater global stability and reduced exchangerate volatility, which are essential to economic growthas well as for enhanced and predictable financial flowsto developing countries and countries with economiesin transition.

55. The multilateral financial institutions, inparticular the International Monetary Fund, need tocontinue to give high priority to the identification andprevention of potential crises and to strengthening theunderpinnings of international financial stability. Inthat regard, we stress the need for the Fund to furtherstrengthen its surveillance activities of all economies,with particular attention to short-term capital flowsand their impact. We encourage the InternationalMonetary Fund to facilitate the timely detection ofexternal vulnerability through well designed surveil-lance and early warning systems and to coordinateclosely with relevant regional institutions or organiza-tions, including the regional commissions.

56. We stress the need for multilateral financialinstitutions, in providing policy advice and financialsupport, to work on the basis of sound, nationallyowned paths of reform that take into account theneeds of the poor and efforts to reduce poverty, andto pay due regard to the special needs and implement-ing capacities of developing countries and countrieswith economies in transition, aiming at economicgrowth and sustainable development. The adviceshould take into account social costs of adjustmentprogrammes, which should be designed to minimizenegative impact on the vulnerable segments of society.


10

57. It is essential to ensure the effective andequitable participation of developing countries in theformulation of financial standards and codes. It is alsoessential to ensure implementation, on a voluntary andprogressive basis, as a contribution to reducing vulner-ability to financial crisis and contagion.

58. Sovereign risk assessments made by theprivate sector should maximize the use of strict, objec-tive and transparent parameters, which can be facili-tated by high-quality data and analysis.

59. Noting the impact of financial crisis or riskof contagion in developing countries and countrieswith economies in transition, regardless of their size,we underline the need to ensure that the internationalfinancial institutions, including the InternationalMonetary Fund, have a suitable array of financial facili-ties and resources to respond in a timely and appro-priate way in accordance with their policies. TheInternational Monetary Fund has a range of instru-ments available and its current financial position isstrong. The contingent credit line is an important sig-nal of the strength of countries’ policies and a safe-guard against contagion in financial markets. The needfor special drawing rights allocations should be keptunder review. In that regard, we also underline theneed to enhance the stabilizing role of regional andsubregional reserve funds, swap arrangements andsimilar mechanisms that complement the efforts ofinternational financial institutions.

60. To promote fair burden-sharing and mini-mize moral hazard, we would welcome considerationby all relevant stakeholders of an international debtworkout mechanism, in the appropriate forums, thatwill engage debtors and creditors to come together torestructure unsustainable debts in a timely and efficientmanner. Adoption of such a mechanism should notpreclude emergency financing in times of crisis.

61. Good governance at all levels is also essen-tial for sustained economic growth, poverty eradicationand sustainable development worldwide. To betterreflect the growth of interdependence and enhancelegitimacy, economic governance needs to develop intwo areas: broadening the base for decision-making onissues of development concern and filling organization-al gaps. To complement and consolidate advances inthose two areas, we must strengthen the UnitedNations system and other multilateral institutions. Weencourage all international organizations to seek tocontinually improve their operations and interactions.

62. We stress the need to broaden andstrengthen the participation of developing countriesand countries with economies in transition in interna-tional economic decision-making and norm-setting. To those ends, we also welcome further actions tohelp developing countries and countries with eco-nomies in transition to build their capacity to partici-pate effectively in multilateral forums.

63. A first priority is to find pragmatic andinnovative ways to further enhance the effective partic-ipation of developing countries and countries witheconomies in transition in international dialogues anddecision-making processes. Within the mandates andmeans of the respective institutions and forums, weencourage the following actions:

• International Monetary Fund and WorldBank: to continue to enhance participation of alldeveloping countries and countries with economies intransition in their decision-making, and thereby tostrengthen the international dialogue and the work ofthose institutions as they address the developmentneeds and concerns of these countries;

• World Trade Organization: to ensure thatany consultation is representative of its full member-ship and that participation is based on clear, simpleand objective criteria;

• Bank for International Settlements, BaselCommittees and Financial Stability Forum: to continueenhancing their outreach and consultation efforts withdeveloping countries and countries with economies intransition at the regional level, and to review theirmembership, as appropriate, to allow for adequateparticipation;

• Ad hoc groupings that make policy recom-mendations with global implications: to continue toimprove their outreach to non-member countries, andto enhance collaboration with the multilateral institu-tions with clearly defined and broad-based intergovern-mental mandates.

64. To strengthen the effectiveness of the glob-al economic system’s support for development, weencourage the following actions:

• Improve the relationship between theUnited Nations and the World Trade Organization fordevelopment, and strengthen their capacity to providetechnical assistance to all countries in need of suchassistance;

• Support the International LabourOrganization and encourage its ongoing work on thesocial dimension of globalization;

11


• Strengthen the coordination of the UnitedNations system and all other multilateral financial,trade and development institutions to support econom-ic growth, poverty eradication and sustainable develop-ment worldwide;

• Mainstream the gender perspective intodevelopment policies at all levels and in all sectors;

• Strengthen international tax cooperation,through enhanced dialogue among national taxauthorities and greater coordination of the work of theconcerned multilateral bodies and relevant regionalorganizations, giving special attention to the needs ofdeveloping countries and countries with economies intransition;

• Promote the role of the regional commis-sions and the regional development banks in support-ing policy dialogue among countries at the regionallevel on macroeconomic, financial, trade and develop-ment issues.

65. We commit ourselves to negotiating andfinalizing as soon as possible a United Nations conven-tion against corruption in all its aspects, including thequestion of repatriation of funds illicitly acquired tocountries of origin, and also to promoting strongercooperation to eliminate money-laundering. Weencourage States that have not yet done so to consid-er signature and ratification of the United NationsConvention against Transnational Organized Crime. 5

66. We urge as a matter of priority all Statesthat have not yet done so to consider becoming par-ties to the International Convention for theSuppression of the Financing of Terrorism,6 and callfor increased cooperation with the same objective.

67. We attach priority to reinvigorating theUnited Nations system as fundamental to the promo-tion of international cooperation for development andto a global economic system that works for all. Wereaffirm our commitment to enabling the GeneralAssembly to play effectively its central role as the chiefdeliberative, policy-making and representative organ ofthe United Nations, and to further strengthening theEconomic and Social Council to enable it to fulfil therole ascribed to it in the Charter of the UnitedNations.

5 Genera l Assemby resolut ion 55/25.6 Genera l Assemby resolut ion 54/109, annex.

III. Staying engaged

68. To build a global alliance for developmentwill require an unremitting effort. We thus commit our-selves to keeping fully engaged, nationally, regionallyand internationally, to ensuring proper follow-up tothe implementation of agreements and commitmentsreached at the present Conference, and to continuingto build bridges between development, finance, andtrade organizations and initiatives, within the frame-work of the holistic agenda of the Conference.Greater cooperation among existing institutions isneeded, based on a clear understanding and respectfor their respective mandates and governance struc-tures.

69. Building on the successful experience ofthe Conference and the process leading up to it, weshall strengthen and make fuller use of the GeneralAssembly and the Economic and Social Council, aswell as the relevant intergovernmental/governing bod-ies of other institutional stakeholders, for the purposesof conference follow-up and coordination, by substan-tively connecting, in ascending series, the followingelements:

a. Interactions between representatives of the economic and Social Council and thedirectors of the executive boards of theWorld Bank and the International MonetaryFund can serve as preliminary exchangeson matters related to follow-up to theConference and preparations for the annu-al spring meeting between those institu-tions. Similar interactions can also be initi-ated with representatives of the appropri-ate intergovernmental body of the WorldTrade Organization;

b. We encourage the United Nations, theWorld Bank and the International MonetaryFund, with the World Trade Organization,to address issues of coherence, coordina-tion and cooperation, as a follow-up to theConference, at the spring meeting betweenthe Economic and Social Council and theBretton Woods institutions. The meetingshould include an intergovernmental seg-ment to address an agenda agreed to bythe participating organizations, as well as adialogue with civil society and the privatesector;


12

c. The current high-level dialogue on strengthening international cooperation fordevelopment through partnership, heldevery two years in the General Assembly,would consider the financing for develop-ment-related reports coming from the Economic and Social Council and other bodies, as well as other financing for devel-opment-related issues. It would be reconsti-tuted to enable it to become the intergov-ernmental focal point for the general fol-low-up to the Conference and related issues. The high-level dialogue would include a policy dialogue, with the partici-pation of the relevant stakeholders, on the implementation of the results of the Conference, including the theme of coher-ence and consistency of the international monetary, financial and trading systems in support of development;

d. Appropriate modalities to enable partici-pation in the reconstituted high-level dia-logue by all relevant stakeholders, as neces-sary, will be considered.

70. To support the above elements at thenational, regional and international levels, we resolve:

• To continue to improve our domestic poli-cy coherence through the continued engagement of our ministries of development, finance, trade and foreign affairs, as well as our central banks;

• To harness the active support of theregional commissions and the regional developmentbanks;

• To keep the financing for developmentprocess on the agenda of the intergovernmental bod-ies of all main stakeholders, including all UnitedNations funds, programmes and agencies, includingthe United Nations Conference on Trade andDevelopment.

71. We recognize the link between financing ofdevelopment and attaining internationally agreeddevelopment goals and objectives, including those con-tained in the Millennium Declaration, in measuringdevelopment progress and helping to guide develop-ment priorities. We welcome in that regard the inten-tion of the United Nations to prepare a report annual-ly. We encourage close cooperation between theUnited Nations, the World Bank, the InternationalMonetary Fund and the World Trade Organization inthe preparation of that report. We shall support theUnited Nations in the implementation of a globalinformation campaign on the internationally agreeddevelopment goals and objectives, including those con-tained in the Millennium Declaration. In that respect,we would like to encourage the active involvement ofall relevant stakeholders, including civil society organi-zations and the private sector.

72. To underpin those efforts, we request theSecretary-General of the United Nations to provide –with collaboration from the secretariats of the majorinstitutional stakeholders concerned, fully utilizing theUnited Nations System Chief Executives Board forCoordination mechanism – sustained follow-up withinthe United Nations system to the agreements andcommitments reached at the present Conference andto ensure effective secretariat support. That supportwill build on the innovative and participatory modali-ties and related coordination arrangements utilized inthe preparations of the Conference. The Secretary-General of the United Nations is further requested tosubmit an annual report on those follow-up efforts.

73. We call for a follow-up international confer-ence to review the implementation of the MonterreyConsensus. The modalities of that conference shall bedecided upon not later than 2005.

13


14 Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

tFinancing for Development: Bui ld ing on Monterrey

Addressing a unique press conference by the major stakeholders

in financing for development, Secretary-General Kofi Annan

is accompanied by World Bank President James Wolfensohn,

IMF Managing Director Horst Köhler, and

WTO Director-General Mike Moore

Chapter 2Opening Summit Plenary Session 21March2002

Speeches by the Host Country and Major Stakeholders

OpeningSummit

PlenarySession


16

Opening Statement by HostCountry: His Excellency Mr. Vicente Fox Quesada President of the United MexicanStates and President of theInternational Conference on Financing for Development*21 March 2002

Good morning. I declare open the summit segment ofthe United Nations International Conference onFinancing for Development and call to order the thirdplenary meeting of the Conference.

Welcome to Mexico. Welcome to a nationseeking to build a bridge between the problems of thepast and the opportunities of the future. Welcome to acountry that, from the standpoint of its new image ofitself, views the world with fresh eyes. Today is a veryspecial day that holds great significance for Mexicanmen and women. Today we are celebrating the birthof Benito Juarez, an admirable man who left an indeli-ble mark on our nation. It is appropriate to rememberhim here at this United Nations meeting because hisvision of respect for the rights of others is a vision ofpeace. That vision is also the basis of coexistenceamong our peoples.

Through our own experience, we havebecome familiar with the suffering and poverty thataccompany underdevelopment. However, we are alsofamiliar with the success and prosperity that can beachieved in a country determined to work and toadvance, if it has the necessary resources. Thus, wehave enthusiastically supported this meeting betweenthe developing world and developed countries. Fordecades the nations of the world have endeavoured toaddress the problems of development and povertythrough international cooperation. So far, however,the results achieved have been limited, belated and discouraging.

Mexico

President Vicente Fox of Mexico makes the opening statement

by the host country at the first Summit session of the International

Conference on Financing for Development at the Cintermex

complex in Monterrey.

SpeechesSpeeches

17

Host Country

A century in which security was identifiedwith the construction of walls and barriers has justended. Today it is our responsibility to pave the wayfor a century of bridges, not barriers; of encounters,not wars; of shared responsibilities and achievements,not isolated efforts.

Let us all welcome this historic opportunitywe have to construct these bridges. Let us buildtogether — developing and developed countries —bridges between economic growth and human devel-opment, between liberal trade and local developmentand between economic efficiency and citizen wellbeing. Let that spirit prevail at this meeting. Let thatbe the spirit of Monterrey.

This is the time for change, in order tobuild. This meeting marks the beginning of a new con-cept of development. Monterrey has become the trig-ger for a new movement to fight marginalization andunderdevelopment. Monterrey provides us, the devel-oping countries, the opportunity to commit ourselvesfreely through the implementation of responsible eco-nomic policies and the developed nations the opportu-nity to improve the lives of the most poor. In this newera of shared progress, we must all assume ourresponsibility. If the twenty-first century is to be theCentury of Development for All, we must be preparedto take bold action. This implies a challenge to ourearlier attitudes and a search for new ideas and action.Let that be the spirit of Monterrey.

This Conference is not an isolated event. Itis part of a world movement for development. TheMillennium Summit marked the beginning of this neweffort to eradicate marginalization. Impetus was pro-vided in Doha for more equitable participation bydeveloping countries in world trade. In a few months,the Johannesburg Summit will emphasize environmen-tal aspects for sustainable development. We must allcontribute to the new agenda for world developmentand participate in forging a future of peace, harmonyand universal development, to which we all aspire, ina new spirit — the spirit of Monterrey.

We can no longer afford well-being that islimited to a few nations or risk continuing in a worldmarked by exclusion and injustice. The struggle againstpoverty is a struggle for justice and peace in the world.Let us forge a new future for our nations. Let us adoptthe Monterrey Consensus. Moreover, let us give impe-tus to the future development of nations in a spirit ofresponsibility and solidarity. We now have this greatopportunity. Let us all have the integrity to use it. Letus not disappoint those who have placed their trustand hopes in this meeting.

We will all benefit from a more humane,more prosperous and more just community. Futuregenerations will recognize our value or will reproachus for our lack of vision. Let us be bold enough tomake this a century of bridges and encounters, not ofwalls and barriers. The time to decide is now, today,in Monterrey.

I now invite the Conference to begin con-sideration of sub-item 10(a), entitled “Generalexchange of views”. Under this item, we will hearstatements by the Secretary-General of the UnitedNations and the President of the General Assembly,and the executive heads of the World Bank, theInternational Monetary Fund and the World TradeOrganization. We will also hear statements by heads ofState or Government, as well as by heads of delega-tion. I now have the honour to invite His ExcellencyMr. Kofi Annan, Secretary-General of the UnitedNations, to address the Conference. I have the pleas-ure of giving him the floor

* The text of th is s tatement has been transcr ibed f romaudio recordings, as the or ig ina l was not submitted to theSecretar iat .

Chapter 2 Opening Summit Plenary Sess ion 21 March 2002


18

United Nations

Secretary-General Kofi Annan addresses the opening

plenary session of the Monterrey Summit, 21 March 2002.

Photo: Luis Galan/ Terra Networks.

Opening Statement byMr. Kofi AnnanSecretary-General of the United Nations21 March 2002

Aid Does Work

We are here to discuss the fate of people. Not peoplein abstract, but millions upon millions of individualmen and women and children — all of them eager toimprove their own lives by making their own choices;and all of them able to do so, if only they are given alittle chance. At present, they are denied that chance— by multiple hardships, each of which makes it hard-er to escape from the others: poverty, hunger, disease,oppression, conflict, pollution, depletion of naturalresources.

Development means enabling people toescape from that vicious cycle. And for development,you need resources: Human resources; naturalresources; and also, crucially, financial resources.That is why we are here — and it is good to see somany of you here, particularly those of you fromdeveloped countries. You have realized, as more andmore of your fellow citizens are realizing, that we livein one world, not two; that no one in this world canfeel comfortable, or safe, while so many are sufferingand deprived.

It is equally good to see so many leadershere from the developing world itself. They are nothere asking for handouts. They know that they them-selves have much to do to mobilize domestic resourcesin their own countries, as well as attract and benefitfrom international private capital. What they are ask-ing for is the chance to make their own voices heard,and ensure that their countries' interests are taken intoaccount, when the management of the global econo-my is being discussed. What they are also asking for isthe chance for their countries to trade their way out ofpoverty — which means that the markets of the devel-oped world must be fully and genuinely open to theirproducts, and the unfair subsidies to competing goods

Speeches

19


must be removed. The promise of Doha must be ful-filled. What many of them are asking for is relief froman unsustainable burden of debt. And many of themare saying that, in order to do without handouts, theircountries first need a helping hand up, in the form ofsignificant increase in official development aid.

Eighteen months ago, the political leadersof the entire world agreed, at the Millennium Summit,that we must use the first 15 years of this new centuryto begin a major onslaught on poverty, illiteracy and disease. And they gave us a clear measure of suc-cess or failure: the Millennium Development Goals.Achieving those goals by 2015 would not mean thebattle for development had been won. But if we fail to achieve them, we shall know we are losing. And all serious studies concur that we cannot achieve them without at least $50 billion a year additionally of official aid — roughly a doubling of the present levels — given in an efficient way, which, for instance,leaves recipient countries free to choose the suppliersand contractors that best meet their needs.

The clearest and most immediate test ofthe Monterrey spirit, which the President referred to,is whether the donor countries will provide that aid.The substantial amounts that have been made, and thesubstantial announcements that have been made in thelast few days, clearly reflect a new spirit and a revivalof commitment to aid. Some donors may still be scep-tical, because they are not convinced that “aid works”.To them, I say, “look at the record”. There is abun-dant evidence that aid does work. Aid brings spectacu-lar improvements in literacy, and spectacular declinesin infant mortality, when it is channelled to countrieswith enlightened leaders and efficient institutions.Indeed, enlightened leaders can use aid to build effi-cient institutions. Aid is vital, but it is not the wholestory. Development is a complex process, in whichmany different actors have to work together, and notagainst each other. To take just one example, it is nogood helping dairy farmers in a country if, at the sametime, you are exporting subsidized milk powder to it.

That is why it is encouraging to see financeministers and businessmen here, as well as develop-ment ministers. And that is why the process of prepar-ing this Conference — with the United Nations, theWorld Trade Organization, and the Bretton Woodsinstitutions working together as never before -- hasbeen so extraordinary. At last, we are all tackling theissues together, in a coherent fashion.

Mr. President, that is the true spirit ofMonterrey, which we must sustain in the months andyears ahead. The "Monterrey Consensus" is not aweak document, as some have claimed. It will be weakif we fail to implement it. But if we live up to thepromises it contains, and continue working on ittogether, it can mark a real turning point in the livesof poor people all over the world.

Let's make sure that it does!

StakeholdersMajor


20

General Assemblyof the UnitedNations

Dr. Han Seung-Soo, President of the General Assembly

of the United Nations, delivers his address at the opening

Summit session of the International Conference on

Financing for Development. Photo: Luis Galan/ Terra Networks

Opening Statement byHis Excellency Dr. Han Seung-Soo (Republic of Korea)President of the General Assemblyof the United Nations21 March 2002

I would like to express my profound grati-tude to the government and people of Mexico forhosting this meeting and especially for the warm hos-pitality extended to all of us. The contributions thatMexico, under the leadership of President Fox, is mak-ing to better global governance are a source of inspira-tion and encouragement for the entire internationalcommunity. I have no doubt that President Fox'sdynamic leadership and keen insight will do much tofacilitate a successful conclusion. I would also like topay tribute to Dr. Ernesto Zedillo for the most valuablecontributions he has made as the chairman of theHigh-Level Panel on Financing for Development.

Now, more than ever, the challenge ofdevelopment is the central task confronting human-kind. The rapid pace of globalization and the rise ofinformation technologies give an added urgency to thedevelopment agenda. Countries that fail to grasp these unprecedented opportunities in time risk fallingpermanently behind in the race for development.

In September 2000, the world leadersgathered in New York adopted the United NationsMillennium Declaration, which presents a clear visionfor the future and, on that basis, sets forth internation-al development targets to be achieved by 2015.

Eighteen months have passed since then,and progress toward achieving those targets has, wemust admit, been rather slow. Something must bedone to galvanize the global political will for an accel-erated drive to meet the Millennium Declaration tar-gets. This conference is our best hope to provide theneeded momentum.

In the wake of 11 September, we wereforcibly reminded that development, peace and securi-ty are inseparable. Underdevelopment and extremepoverty are the breeding ground of violence anddespair, thus undermining peace and security fordeveloped and developing countries alike. When theterrorists struck the United States last year, they alsodealt a heavy blow to the fragile economies of scoresof developing countries. We must find a way to breakthe vicious cycle of poverty, despair, and violence.And I am convinced that the UN MillenniumDeclaration points the way forward.

21

I need hardly emphasize that each countryshould take primary responsibility for its own econom-ic and social progress. In this regard, I also want tostress that no country can achieve sustainable develop-ment without meeting at least three preconditions.First, it must have access to financial resources,domestic or external, or most likely a combination ofthe two. Second, it needs the human capacity to effi-ciently absorb those resources and the wherewithal tobuild greater human capacity as more resources aregenerated. And third, it requires the "appropriate"intangible infrastructure such as markets to make pro-ductive use of the available resources.

The core elements of intangible infrastruc-ture include free enterprise, good governance, soundmacroeconomic policies, a strong anti-corruptionethic, and transparently applied rule of law. If theseare present in large measure, a healthy market econo-my will, I believe, almost inevitably develop as a result.The preconditions I have broadly described, whenmet, will not only promote efficient domestic resourceallocation, but also attract substantial inflows of exter-nal financial resources.

Often, developing countries lack an ade-quate level of domestic savings to finance rapid devel-opment. Also, during certain periods and in certaincircumstances, inflows of external private capital mayfall far short of what is needed. Under such conditions,Official Development Assistance (ODA) plays a crucialrole for promoting development. The importance ofdomestic savings, foreign borrowings, FDI, and ODAin financing development should not be understated.However, I believe that the most important potentialand very self-relying source of such financing for thedeveloping countries is export earnings.

In the post-World War II period, virtuallyevery country that has completed the transition fromunderdevelopment to development has relied primarilyon income from exports. This pattern of developmentcan be no less apparent at the start of the 21st centu-ry, the century of globalization.

But for such a strategy to succeed, thedeveloped countries must make their markets moreopen and accessible to the developing countries andmaintain the high levels of growth needed to absorbever rising imports. And so it is gratifying to note thatthe U.S. economy is now showing signs of recovery. I would strongly urge other developed countries to adopt the kind of growth-stimulating policies thatwould enable them to boost domestic consumerspending, thus benefiting both the local consumersand overseas exporters, many from developing coun-tries.

I am pleased to note that the MonterreyConsensus includes the recognition that the UnitedNations, particularly the General Assembly, togetherwith the Economic and Social Council, should play acentral role in enhancing coherence, governance, andconsistency of the international monetary, financial,and trading systems. Based on my own experience ofthe General Assembly, I firmly believe that the UnitedNations General Assembly and its High-level Dialogueconstitute the most appropriate forum for monitoringand facilitating implementation of this Conference'soutcome, given its universal membership of 189 statesand its character as the chief deliberative and policy-making organ in the United Nations system.

It is my profound hope and sincere expec-tation that through the Monterrey Consensus the glob-al community will be able to achieve the international-ly agreed upon goals and objectives, including thosecontained in the Millennium Declaration. Taken as awhole, these present to us a vision of mankind's futurethat should inspire our best efforts on behalf of the sixbillion human beings alive today as well as generationsyet unborn.

In his Nobel Lecture for 1990, the greatMexican writer Octavio Paz lamented as such: “Theadvanced democratic societies have reached an enviable level of prosperity; at the same time they areislands of abundance in the ocean of universal mis-ery.” I believe that the global community has both thepower and the will to cause that ocean to recede and,in time, to build up continents of prosperity whereonce there were only islands of abundance. Let uscommit ourselves heart and soul to this most ambitiousof all reclamation projects.


GeneralAssemblyof theUnited Nations

The World Bank

World Bank President James Wolfensohn addresses the

opening Summit session of the International Conference

on Financing for Development.


22

Opening Statement byMr. James D. Wolfensohn President of the World Bank 21 March 2002

Distinguished Excellencies, Delegates, Ladies andGentlemen: please allow me to thank both our host,President Vicente Fox of Mexico and Secretary-General Kofi Annan, for organizing this Conferenceon Financing for Development.

As most of you know, the World Bank hasbeen very closely involved in the FfD process. Webelieve this is a great opportunity to reinforce our col-lective commitment to expand the opportunities andresources necessary to halve world poverty by 2015and meet the other Millennium Development Goals.

It is apt that we meet here in Monterrey,Mexico. For Mexico today exemplifies much of whatcan be achieved from open markets, capacity building,the creation of an investment climate, good fiscal andmonetary policies, an attack on corruption, and acommitment to democracy. Mexicans should be proudof their progress. But Mexico also shows how resilientinequality and exclusion can be. Development is a longroad. We must not underestimate the challenge ahead.

This conference brings together Heads ofState and Government; foreign, finance, developmentand trade ministers; civil society, business leaders andinternational institutions for perhaps the first time inan international meeting. And for perhaps the firsttime in an international meeting there is greater con-sensus than ever before about what needs to be done.

We must not squander that opportunity.Nor must we forget why we are here. All people havea right to human dignity. That is why we are here.

All people have a right to control their ownlives. Yet, for billions, poverty snatches that rightaway. That is why we are here. People have a right toopportunity — in education, in trade, in building a bet-ter future for their children. That is why we are here.We must not fail them.

I have spoken before of an imaginary wallthat separates the rich world from the poor. For toolong belief in that wall, and in those separate and sep-arated worlds, has allowed us to view as normal aworld where less than 20% of the population — therich countries – dominates the world’s wealth andresources and takes 80% of its income.

23


There is no wall. There are not two worlds;there is only one. Here at Monterrey we must rid our-selves of that wall once and for all. Here at Monterreywe must recognize the link between progress in devel-opment and progress in peace. So that generations tocome will point to Monterrey and say “Something newbegan at Monterrey. A new global partnership wasborn at Monterrey.” And we will remember, and wewill tell our children — we were there and we did notfail. For the opportunity is ours to seize.

What is this new partnership? It is anunderstanding that leaders of the developing anddeveloped world are united by a global responsibilitybased on ethics, experience and self-interest. It is arecognition that opportunity and empowerment — notcharity – can benefit us all. It is an acknowledgementthat we will not create long-term peace and stabilityuntil we acknowledge that we are a common humanitywith a common destiny. Our futures are indivisible.And we have the makings of just such a new partner-ship before us.

A new generation of leaders is takingresponsibility in developing countries. Many of theseleaders are tackling corruption, putting in place goodgovernance, giving priority to investing in their peo-ple, and establishing an investment climate to attractprivate capital. They are doing it in the private sector,in civil society, in government and in communities.They are doing it not because they have been told to.But because they know it is right. We must supportmore and more countries to take this path.

And in rich countries growing numbers ofpeople are beginning to understand that poverty any-where is poverty everywhere; that imaginary walls willnot protect us. And their leaders are listening. I verymuch welcome – as should we all – the recent deci-sions by President Bush and the European Union toboost aid spending. There is no debate that our effortsneed to be focused and effective. On this we are allagreed. Too much money has been squandered in thepast by decisions borne of politics not development. Ilook forward to the forthcoming discussions onincreasing the effectiveness of the development com-munity as a whole.

Your Excellencies: We have come a longway in just a week. But we must not stop there.

This is not just about resources. It is aboutscaling up – moving from individual projects to pro-grammes, building on and then replicating, for exam-ple, microcredit for women or community drivendevelopment, where the poor are at the centre of thesolution not the end of a handout.

It is about recognizing that any effort tofight poverty must be comprehensive. We know thereis no simple formula that alone will defeat poverty; butwe know too that that there are conditions that fostersuccessful development: Education and health pro-grammes to build the human capacity of the country;good and clean government; an effective legal and jus-tice system; and a well-organized and supervised finan-cial system.

It is about recognizing that debt-reductionfor the most highly indebted poor countries is a crucialelement in putting countries back on their feet, andthat the funds freed up by debt relief can and must beused effectively for poverty programmes. And we mustpush ahead with this programme. We know that incountries with good governance and strong policiesaid can make an enormous difference. Yet we knowtoo that corruption, bad policies, and weak gover-nance will make financial aid ineffective – even coun-terproductive.

We must support nations to build capacityso that they can create an investment climate and in-vest in their people. So that they can create jobs, sothat they can increase productivity and boost invest-ment in health and education. This is not about richcountries telling developing countries what to do. Thisis about creating a chance for developing countries toput in place policies that will enable their economiesto grow. Policies that are home grown and homeowned. For the surest foundation for long-term changeis not development by fiat, but social consensus.

TheWorldBankStakeholders


24

But even if developing countries do all this,we estimate that it will take somewhere between $40-60 billion in additional resources a year to meet theMillennium Development Goals. We have made a fine start. But we must not stop here. Let us worktogether for results and build the pressure for addition-al funds as we succeed in using effectively the fundsnow promised.

Nor can we shrink from taking action ontrade. We must keep urging rich countries to teardown trade barriers that harm the world’s poorestworkers, depriving them of markets for their products.Yes there will be powerful lobbies ranged against anysuch action. But it is the task of leaders to remindelectorates that lowering of trade barriers will not costthe rich countries anything in the aggregate; they gainfrom freer trade in these areas, far in excess of anyshort-term costs of adjustment. There is little sacrificerequired, no excuse for failing to take action thatwould leave all countries better off.

Rich nations must also take action to cutagricultural subsidies – subsidies that rob poor coun-tries of markets for their products; subsidies that aresix times what the rich countries provide in foreign aidto the developing world. Trade and agriculture must bea crucial part of the new global deal.

Your Excellencies: In one week alone wehave seen new commitments on resources, we haveheard new words on interdependence. In recentmonths we have seen the launch of a promising newTrade Round. We have had a taste of what is possible.But we do not have much time. In 25 years 2 billionmore people will join our planet – the challenge willbe greater, the pressure on resources will be moreacute, the chances of success may be slimmer.

Let us not have come this far to stop now.Let us build on this momentum as we move forward toJohannesburg. Let us tell our children, “We seized themoment. We did not fail.”

InternationalMonetary Fund

IMF Managing Director Horst Köhler addresses the

opening Summit session of the International Conference

on Financing for Development.

IMF

25


Opening Statement byMr. Horst KöhlerManaging Director of the International Monetary Fund 21 March 2002

I would like to join in giving thanks to President Fox,for hosting this Conference on Financing forDevelopment. And I would also salute the leadershipof Kofi Annan, who has been a constant source ofwise advice and friendship.

Mr. President, ladies and gentlemen, thisconference should become a milestone in the fightagainst world poverty. I do think it is possible toachieve the Millennium Development Goals. The IMFis deeply committed to playing an active part in thiseffort. It is an honour to share my vision of the IMF’srole, and to seek your input and support.

I welcome the intensive and critical debateabout globalization. We need to work for a better glob-alization--one that provides opportunities for all, andone in which risks are contained. But let us not con-fuse ourselves--integration into the global economy isgood for growth, and growth is essential for fightingpoverty. The world needs more integration, not less.But it also needs stronger international cooperation, toguide and shape the process of globalization. We mustdo our utmost to ensure that people at the local levelunderstand this process, are engaged, and have themeans to take advantage of its opportunities. We needto build bridges through dialogue, cooperation, andinclusion, to create a sense of global ethics. And theinteractions between people and nations must respecthuman rights, while recognizing personal and socialresponsibility.

I am encouraged that there is an unprece-dented degree of agreement about what is required toovercome world poverty. The Monterrey Consensusdefines the right priorities. It makes clear that nothingwill work without good governance, respect for therule of law, and policies and institutions which unlockthe creative energies of the people and promoteinvestment-including foreign direct investment. It alsorecognizes that when poor countries are ready to liveup to these responsibilities, the international communi-ty should provide faster, stronger, and more compre-hensive support. I see four priorities for that support:

Trade is the most important avenue forself-help. It generates income and reduces aid depend-ency in poor countries, and creates a win-win situationfor all. We must work ambitiously to open marketsand phase out trade-distorting subsidies in the industri-al countries, and to reduce barriers to trade amongdeveloping countries. I share Mike Moore’s appealthat Doha should be the start of a true “DevelopmentRound.”

Second, the international communityshould stick to the target of 0.7 percent of GNP forofficial development assistance. And it should alsostick to the principle of channelling support throughbudget laws, because this is the most transparent,accountable, and concrete expression of solidarity.The commitment by the EU to raise ODA to an aver-age of 0.39 per cent of GNP by 2006, and the recentproposal by President Bush, are significant steps for-ward. I am confident that even stronger support willbe possible if the public understands aid even better asan investment in peace, stability, and shared prosperi-ty, and – equally important – if poor countries demon-strate that they are putting aid to good use.

Debt relief is another essential element in acomprehensive effort to fight poverty. The IMF andWorld Bank are working hard to make the enhancedHIPC Initiative a success. But in all our work on debtrelief, we should not forget that the ability to lend andborrow is an important element of financing for devel-opment, and trust that contracts will be honoured isessential for a modern economy and a stable interna-tional financial system. I would challenge civil societyorganizations, to devote as much energy and attentionto a worldwide campaign to increase aid and tradingopportunities for poor countries as they have to thesuccessful effort on debt relief.

Finally, we have to recognize that slowprogress in the reforms needed to fight poverty oftenreflects lack of institutional capacity, rather than lackof political will. Our response should be to pay evenmore attention to capacity building in our work withpoor countries. This is why the IMF recently openedregional technical assistance centres in the Pacific andthe Caribbean. And this is why I have proposed to setup regional centres in Africa in the Fund’s core areasof responsibility, as part of our support for the NewPartnership for Africa’s Development (NEPAD).


26

The IMF itself is in a process of reform,learning from experience and driven by our desire tomake globalization work for the benefit of all. We aremaking the IMF transparent, and advocating trans-parency for our member countries.

Knowing that financial crises can undoyears of economic and social progress, we are concen-trating more than ever on crisis prevention. We areactively promoting rules of the game for the globaleconomy, through our work on standards and codes.We are helping our members to strengthen theirdomestic financial sectors, and to combat money laun-dering and the financing of terrorism.

In our work on international capital mar-kets, we are looking equally at risks in emerging mar-kets, and risks coming from the advanced countries.We are trying to define more clearly the roles of theIMF and private creditors in financial crises. I believe itis essential to be able to resolve unsustainable debt sit-uations in a more orderly, faster, and less costly man-ner. I therefore welcome the ongoing debate on IMFManagement’s proposal for a sovereign debt restruc-turing mechanism.

We have become more focused on theIMF’s core responsibility for macroeconomic stability-not as an end in itself, but as a precondition for sus-tained growth, and because the poor suffer most fromhigh inflation, unsound public finance, and volatility.We are also taking steps to focus IMF conditionalityand make room for true national ownership of reformprogrammes. And we are working in close coopera-tion with other international institutions, especially theWorld Bank and the broader UN family.

We recently completed a thorough reviewof the Poverty Reduction Strategy Paper (PRSP)process, pioneered two years ago by the IMF andWorld Bank, and the IMF’s Poverty Reduction andGrowth Facility (PRGF). Our worldwide outreach,including the UN and civil society, has confirmed thatthe PRSP process is a promising approach for tacklingpoverty systematically. Why?

• First, because it is a country-led approach. • Second, because it is a comprehensive,

long-term approach, which integrates the economicand social perspectives.

• And third, because it aims at broad consul-tation and engagement with domestic stakeholders anddevelopment partners.

Our reviews showed that there is room forimprovement. We want to make sure that every PRSPand PRGF-supported programme is tailored to the cir-cumstances of individual countries. We will be workingfor an open dialogue with stakeholders about the con-tent of reforms and possible alternatives. We need topay more attention to the sources of sustainablegrowth, and to poverty and social impact analysis.And donors must better align their assistance withPRSP’s, simplify and harmonize their procedures, andwork for a more predictable aid flows.

It would be right to adopt the proposed‘Monterrey Consensus’ as an outcome of this confer-ence. Beyond Monterrey, we must transform this con-sensus into concrete action, with a sense of urgency.And we need to develop a comprehensive and trans-parent system to monitor progress toward theMillennium Development Goals. As part of thisprocess, we should identify more clearly the respectiveresponsibilities of poor countries and their develop-ment partners-donor countries, international institu-tions, the private sector, and civil society. On this basiswe can establish better accountability. I would have nohesitation in subjecting the IMF to the scrutiny of sucha monitoring system, provided that it did not producebureaucracy and would apply equally to all the partiesinvolved.

Mr. President, ladies and gentlemen, with aconcerted effort, I am optimistic that we can achievethe goals we have set. The global economy appears tobe in a process of recovery.

The United States has demonstrated lead-ership through timely policy action to minimize therisk of a more severe downturn. And I am confidentthat developing countries will benefit. The resilience ofthe global economy and financial system shows thatthe initiatives to strengthen the international financialarchitecture are beginning to pay off. The implemen-tation of the Monterrey Consensus should be a nextchapter in our efforts to create a better world.

StakeholdersMajor

World TradeOrganization

WTO Director-General Mike Moore addresses the

Press following the opening Summit session of the

International Conference on Financing for Development.

Opening Statement byMr. Mike Moore Director-General, WTO21 March 2002

A Grand Bargain: A New International deal

I come to you with a clear and simple message:Poverty in all its forms is the greatest single threat topeace, democracy, human rights and the environment.It is a time-bomb against the heart of liberty; but it canbe conquered and we have the tools in our hands todo so, if only we have the courage and focus to makeproper use of them.

One of these tools is trade liberalization. Itcan make a huge contribution to the generation ofresources for the financing of development. Studyafter study has shown the enormous impact of tradeliberalization. Let me cite but one example. Everyone,globalizer or opponent, NGO or multinational, left orright on the political spectrum, would agree thathealth and education are the fundamental bases of anydevelopment programme. Recent studies have estimat-ed that the cost of achieving the core MillenniumDevelopment Goal of universal primary educationcould be in the region of US $10 billion per year. Yetdeveloping countries would gain more than 15 timesthis amount annually from further trade liberalization,according to one study by the Tinbergen Institute.

Indeed, the staff of the IMF and WorldBank estimate that reaching all seven of theMillennium Development Goals would require an addi-tional US $54 billion annually – just one-third of theTinbergen estimate of developing country gains fromtrade liberalization. And the World Bank’s GlobalEconomic Prospects report estimates that abolishingall trade barriers could boost global income by $2.8trillion and lift 320 million people out of poverty by2015.

Of course, these are only estimates and wecan quibble about the figures. But the basic message isclear: if governments put their minds to it, the newtrade round launched at Doha can bring huge benefits.It is this immense magnitude of the benefits of tradeliberalization, which makes the work your govern-ments are doing in implementing the DohaDevelopment Agenda so potentially important as asource of finance for development.

27


WTO

Poor countries need to grow their way outof poverty and trade can serve as a key engine of thatgrowth. But currently products of developing countriesface many obstacles in entering the markets of richcountries. Rich countries need to do more to reducetrade-distorting subsidies and dismantle their existingbarriers on competitive exports from developing countries. So a basic priority of the international trade community must be – as the Doha DevelopmentAgenda recognized – the creation of conditions in which developing countries can maximize the gainsthey are able to reap from trade. This requires actionin four key areas:

• Agriculture: This is the backbone of almost alldeveloping economies. The poorest part of the popu-lation – living in the rural areas – depends for theirincomes on the development of a sustainable and pro-ductive agricultural sector. Nearly 50 developingeconomies depend on agriculture for over one-third oftheir export earnings. Nearly 40 of them depended onagriculture for over 50 percent of their export earn-ings in 1998-2000. Yet massive agricultural support inthe OECD countries undercuts the developing coun-tries and forces even the most efficient producers outof markets where they would otherwise be earning for-eign exchange. The number one element of a truedevelopment agenda will therefore be to reduce sub-stantially such support (and to eliminate the specificexport subsidies – but these are only a very small frac-tion of total agricultural support payments which reacha billion dollars a day). In addition, the average OECDbound tariff rate for agricultural products is four timesthat on industrial products. The return to developingcountries in this one area would be eight times all thedebt relief granted developing countries thus far.Complete liberalization in all sectors, agriculture, serv-ices and manufactures, would amount to about eighttimes ODA. Rapid action is also needed on this.

• Textiles and clothing: This is the greatest exportearner for many developing countries, and the negoti-ations must ensure that the sector is cleanly “integrat-ed” as planned for 1 Jan 2005. Given the back-load-ing of this agreement, with the bulk of changes sub-stantively improving export prospects of developingcountries being left until the final year, there is everyreason to be extremely vigilant.

• Tariff peaks: Study after study has shown how,despite low average non-agricultural tariffs, the prod-ucts in which developing countries are competitivenevertheless continue to attract relatively high tariffs(in both developed and developing countries); thesemust imperatively be beaten down in the negotiationsif trade is to provide the needed boost to resources fordevelopment.

• Tariff escalation: Even more insidious an issuethan tariff peaks is that of tariff escalation, which tiltsthe tables against the development of indigenous pro-cessing/transformation (and thus movement up thevalue-added chain). If developing countries are ever todiversify their economies away from the dependenceon a few primary products for most of their foreignexchange earnings, cutting them off from the mostdynamic part of world merchandise trade, such escala-tion must be rooted out.

How do we pay for our dreams and thevision of this conference? The restrictions I’ve outlinedare costly to the countries that maintain them. Forexample, protection costs the European Union, theUS and Japan, from between US $70 to US $110 bil-lion each annually. The net losses to the US associat-ed with its textile and clothing import restrictions aloneamount to over $10 billion annually.

This conference is about financing develop-ment in an era when private foreign direct investmentoutnumbers ODA four-fold, and is ten times the WorldBank’s development lending. Knowing that no countryhas too much invested, we should encourage an inter-national agreement on investment. It’s on the DohaDevelopment Agenda, but many countries don’t yetfeel they have the ability to cope with the complexitiesof such negotiations.

Other important development and goodgovernance issues such as transparency in governmentprocurement, competition policy and trade facilitation,need direction from the highest political levels. Tradefacilitation, according to APEC and UNCTAD studies,will generate huge returns. An Inter-AmericanDevelopment Bank study showed how in SouthAmerica a truck delivering product to markets acrosstwo borders took 200 hours, 100 hours of which werebound up in bureaucratic delays at the border.

The need for this public service infrastruc-ture improvement is desperately urgent to protect andpromote domestic property rights and justice systems.Domestic red-tape and bad governance is costly andcorrosive.


28

The poor’s assets need to be legitimized. InLatin America 80% of all real estate is held outside thelaw. The extra-legal sectors in developing countriesaccount for 50% - 70% of all working people. In thepoorest nation in Latin America, the assets of thepoor are more than 150 times greater than all foreigninvestment since their independence in 1804. In oneAfrican country, it took 77 bureaucratic procedures at31 public and private agencies to legally acquire land.

And if the US were to raise its ODA to theUN target of 0.7% it would take the richest countryon the planet 150 years to transfer to the world’spoor resources equal to those they already possess.

Unlocking and securing these investments,this talent and skill is the challenge. This is where wecan converge with the ambitions of NEPAD and otherbold initiatives.

Developing countries need not wait untilthe conclusion of the Doha Development Round.South/south trade in the 1990s grew further thanworld trade and now accounts for more than one thirdof developing country exports, or about $650 billion.The World Bank reports that 70% of the burden ondeveloping countries’ manufactured exports resultfrom trade barriers of other developing countries. Thequicker those walls come down, the quicker thereturns to developing countries.

So the way forward is clear: You,Excellencies, should resolve at this Conference toinstruct your trade ministers to ensure that their offi-cials cast aside the petty mercantilist methodology,which has pervaded trade negotiations for so manydecades, in favour of a grand bargain that would seethe barriers I mentioned above (and others which per-sist in areas I have not mentioned) dismantled. Thentrade can play its important role in generating financefor development – a role which, not incidentally,would also reduce significantly the burden on otherfacets of the finance for development equation.

I have good news to report from Geneva.Donor governments have kept their word, giving usincreased funding in our core budget for additionaltechnical assistance to ensure developing countries canparticipate fully in the new Round. On top of this, ourPledging Conference gave us CHF 30 million, doubleour target. We must redirect ODA and technical assis-tance to train negotiators, build efficient customsregimes and plug porous tax systems. We must give asmuch attention to building up the intellectual infra-structures of skilled public servants, as we did filling inpotholes, building roads and dams.

The UN agencies have been very support-ive of the WTO, and partnerships with sister organiza-tions have been formed, increasing institutional coher-ence and making better use of your resources. Theround is successfully under way and everything, fromnegotiating structure, time-tabling of meetings, to con-sensus on chairpeople for all committees, is on sched-ule. The Doha Development Round can be achievedand implemented on time. Conditionality wasimproved by developing countries at Doha, the condi-tion for success will be improving capacity to providefor good governance to enable them to participate,negotiate, conclude and implement our agenda. This is being done.

We must and we can succeed.

29


Financing for

Development

Stakeholders


30

Heads of State and Government attend the Summit plenary session

of the International Conference on Financing for Development at

Monterrey, Mexico, 21-22 March 2002

MonterreyBuilding ON

Chapter 3Monterrey Summit 21-22March2002

Speeches by Heads of State and Government

Speechesby Heads of

Stateand

Government

Algeria

President Abdelaziz Bouteflika of Algeria.

Statement byHis Excellency Mr. Abdelaziz BouteflikaPresident of the People’s Democratic Republic ofAlgeria*21 March 2002

I wish to thank the Mexican officials for their generoushospitality and for the excellent organization they haveprovided for our Conference. I wish to pay homage toMexico’s rich history and its commitment to peace andprosperity for all.

Financing for development today is a majorundertaking. It is an essential vector for spreadingprosperity and reducing poverty. The eminently politi-cal dimension of this endeavour is being ensured forthe first time at the highest global level through thisConference, and this augurs well for concerted andinnovative action. Our Conference is opportunely apart of the global process that we collectively outlinedat the Millennium Summit – namely, strengthening theinternational community and creating conditions forstability and predictability, which are necessary fordevelopment of a world that is more rational and equi-table – that is, a world to which all peoples aspire.


Assuredly, it offers us an opportunity todeepen the current dynamic in the wake of the agree-ments reached in Doha and to achieve objectives thatare more open, transparent and free of restrictivepractices that have impeded international trade. Ourwork should also mark an important stage in contribut-ing to the success of our next major meeting inJohannesburg. That meeting will be aimed at promot-ing sustainable development, which could satisfy theexpectations of present and future generations, and atpreserving the environmental systems of our planet.

We have taken practical measures to allevi-ate the problems arising in many spheres, given thesensitivity and the stakes that they hold out. Financialand monetary spheres are often marked by instability,and these are at the core of the problem. They cannotbe circumscribed to one country or region. The per-sistence of the debt burden, but also phenomena suchas massive speculative capital flows, money launderingfrom illicit activities or financing of terrorism, areincontrovertible symptoms of the poor functioning ofthe world’s monetary and financial system. Ad hocreplies and interim measures that can only addressimmediate crisis management aspects have all showntheir limitations, as can be seen from the succession ofcrises and their recurrence. This means that we mustaddress the global and interdependent nature of finan-cial, economic and monetary stakes. We must identifythe framework for national and international action, sothat the monetary and financial architecture can beimproved and made sustainable. This means actionthat can address all the factors that impede sustainabledevelopment and that can improve international eco-nomic relations. We must facilitate the necessary artic-ulation between financial and real economies.

It has been established that the “discon-nect” between these two spheres has, more thanonce, generated disorder, imbalance and crisis. Then,it becomes a question of promoting the mobilization offinancial resources for long-term development on acontinuous, foreseeable basis, strengthening national,regional and international financial institutions. And,lastly, it is a question of pragmatically preparing thetransition of a world economy based on over-indebted-ness and a world economy based on optimal exploita-tion of the vast increase of direct investment flows.These are the three directions where we must make aresolute and simultaneous commitment if we want toensure a solid basis for world economic development.

At the root of this undertaking is the defini-tion of policies and measures to be implemented atthe national, regional and global levels. At the nationallevel, the requirements of a sound macroeconomic


32

framework, the strengthening of institutional capacityand the reform of fiscal financial banking systems areparamount factors for policies that can generateinvestment and savings and stimulate Governmentinvestment. The State must ensure that it meets theimperatives of sustained growth by creating jobs andreducing poverty under general conditions of stability.

At the regional level, decisive efforts aimedat the convergence and harmonization of monetary,financial and fiscal policies, and strengthening cooper-ation instruments, are a must if we are to have anenabling environment that could promote financial andinvestment flows to ensure national development andsubregional and regional integration and globalization.

At the global level, it is a question of con-tinuing and intensifying the evolutionary process ofadapting existing institutions to the requirements stem-ming from globalization in the spheres of economy,finance and trade. In a world economy whose growthis now interconnected and based on general economicpolicies and sectoral policies, the requirement ofbroadening multilateral cooperation is inevitable.Hence, the crucial role that international institutionsmust play in promoting the objectives of sustained andbalanced growth. Such growth is possible providedthat constructive solutions are arrived at to addressmajor problems affecting the world economy as awhole. This in turn presupposes, first, more effectivecoordination with policies in order to ensure compati-bility and a greater symmetry in the process of adjust-ment, which should be more geared towards exploit-ing the potential productive capacity of developingcountries. This also requires a rationalization of supplyand management of international liquidity, with agreater participation by developing countries in theworld economy. This also means optimum use of for-eign direct investment and a significant increase ofofficial development assistance (ODA) and non-dis-criminatory, non-restrictive global and adequate treat-ment for the problem of indebtedness so as to doaway with the obstacles to prospective global develop-ment.

The present Summit on Financing forDevelopment is crucially important for Africa, becauseit is engaged in an enterprise of vast scope – namely,The New Partnership for Africa’s Development(NEPAD) initiative. However, despite their degree ofrelevance, African efforts can only produce the desiredresult if they benefit from a favourable world environ-ment and the consistent support of the internationalcommunity. In this connection, I am pleased to notethat the G-8 Genoa Summit has endeavoured, throughthe preparation of an Action Plan, to focus on the

process of recovery for the continent. Support hasbeen expressed for this African initiative, and thesecommitments encourage the continent to forge aheadwith its destiny, to occupy its proper place in theworld and to contribute in turn to the expansion of theworld economy and to universal progress.

The common objectives that have broughtus together here challenge our collective capacity topromote operational partnerships and to promoteaccelerated development that can benefit world peaceand prosperity. Our Conference should result in firmcommitments and lead to better organization andmanagement of international financial and monetarycooperation in order to unify the world economy. ThisConference reflects a clear awareness of the need tomake globalization an end that would serve the well-being of all, to begin a new era where developmentwould be at the centre of the enterprise of understand-ing, cooperation and solidarity among all peoples.

We committed ourselves to these objectivesat the Millennium Summit. Members of the interna-tional community must contribute fully to this bothsingly and collectively. We commend the decision ofPresident Bush to increase appreciably the level ofUnited States ODA. We would like to express the wishthat such a generous initiative will be followed by otherequally concrete actions that could become significantonly if they are collective. We also welcome the deci-sion of the European Union (EU), as announced byPresident Aznar of Spain, while we continue to hopethat, as soon as possible, the 0.7 per cent grossnational product (GNP) target, which was decidedupon three decades ago, will be reached. Of course,we have been sensitive to the commitment made byPrime Minister Jean Chrétien of Canada, but morespecifically, our gratitude goes to Norway, Denmark,Sweden, the Netherlands and Luxembourg, known asthe ‘One Per Cent Club’. Financing for developmentfor the benefit of future generations is part of the chal-lenge posed in today’s world if we are to get out ofthe problems we face and to ensure security.

Nine/Eleven left an indelible mark on ourhistory last year. This murderous paroxysm is yetanother blow to the destiny of humankind. The year2001 was a year of survival; it established a new inter-national order, with great emotional and symbolicvalue. The international community has experiencedcommunally the tragedy of 9/11, together with theUnited States, and we hope that this event will gener-ate a better future of more awareness for all. People’sattention should be focused on everything that must bedone in order to make the repetition of 9/11 objec-tively impossible, where no violence should erupt. We

33

Chapter 3 Monterrey Summit 21-22 March 2002

must break with our thought patterns of the past thathave too often led humanity down the wrong road.Together we must build political globalization so thatwe do not break down separately. Together we mustuse the multilateral framework to promote globaliza-tion so that new communications technologies make itpossible to be everywhere in the world at once. Wemust acknowledge the new horizons and the new chal-lenges that face humankind’s conscience.

Argentina

President Eduardo Duhalde of Argentina.

Statement byHis Excellency Dr. Eduardo DuhaldePresident of the Argentine Republic21 March 2002

Argentina, my country, is in crisis.

Argentina, my country, has decided to change. Andthis always means crisis. We are at the end of a cycle.But history shows us that the End is the foundation ofthe Beginning.

To change, to start again, we have decidedto put an end to the fiscal disorder which, combinedwith an unfortunate monetary and exchange system,has led us into the greatest recession in our historyand to replace it by an economic programme basedon the following macroeconomic foundations:

• A balanced public budget • One single currency, our own • A floating exchange rate • A progressive elimination of financing

and payment restrictions

Thus, we hope to build a competitive mar-ket economy, which allows us to get back onto thepath of growth and successful integration in the world.These are the pillars of our programme, which seek torecuperate the path we lost along the way, based onproduction, a culture of work and Social Justice.However, this change, this transformation we arestarting, thanks to the huge sacrifice of our people,also needs the understanding and cooperation of theinternational community.

I speak to you under theses circumstancesas I consider that this Consensus is the most seriousattempt, in a long time, to discuss issues related to thedevelopment process.

We all here agree that freedom, democra-cy, cooperation, market economy, and particularly anequitable distribution of wealth are the basis and, atthe same time, the instruments we must use to discussthe problems of development. The lack of a seriousapproach to these issues, may be the greatest globaldebt of the ’90s, has pushed us into the XXI centuryfull of asymmetries for the developing countries toobtain, under fair conditions, the necessary resourcesto ensure their economic growth and social peace.

The difficulties in market access, protec-tionist policies, corruption, terrorism, the lack of train-ing and the volatility of external capital flows, are fac-tors that prevent the world from enjoying the benefitspromised by globalization. Therefore, the gap betweenmany emerging economies and developed countrieshas not been reduced. On the contrary, it seems deep-er day by day. Otherwise this meeting would not havebeen held.

We are not asking for compassion but for anew global context. The President of the World bank,James D. Wolfensohn, had said that the world needs anew architecture for development. This will not bepossible if the rich economies do not reduce protec-


34

tionism in all its forms and eliminate its distortingeffects. A long time ago, an Argentine economist, Mr. Raul Prebisch, coined a phrase that belongs cer-tainly to the sense and spirit of this Conference:“Trade not Aid”.

I am not saying that aid is not importantfor development; it is always needed and, in somecases, and at some stages, it is crucial. We understandthat. But it is impossible to think that it is efficient in acontext of severe trade distortions, mainly in the agri-cultural sector.

Argentina expects then – as many coun-tries represented here expect as well – that the RoundNegotiations started in Doha may help to improve thesituation of emerging economies and facilitate theiraccess to markets with greater purchasing power. It isalso clear that changes are necessary in the way thatmultilateral credit agencies work, enabling them toadapt to the new reality.

That is why Argentina urges theInternational Monetary Fund, the World Bank, and theWorld Trade Organization to cooperate in the designof preventive and anticyclical policies to assist thosesectors which have been greatly damaged.Development and prosperity of nations can no longerbe an abstract theory nor an exercise of trial and errorsince the results reflected in figures and graphics donot show the faces of millions of children, women andmen. They are the ones that pay the cost, the highcost of being eliminated from the system.

In the daily fight between the powerful andthe destitute, the lack of participation does not meanneutrality. It means siding with the wealthy. The lastcall I am making today at this Conference is one forillusion, for the hope of reaching a better balancebetween the emerging nations and developed ones.

A map of the world, where utopia is not included,is not worth considering.

Armenia

Prime Minister Andranik Margaryan of Armenia. Photo courtesy

Permanent Mission of Armenia to the United Nations

Statement byHis Excellency Mr. Andranik MargaryanPrime Minister of the Republic of Armenia*22 March 2002

On behalf of the Government of the Republic ofArmenia, may I thank you for organizing this confer-ence and for the chance given us to set out our viewson crucial issues relating to financing for development.

Taking this opportunity, I would like toexpress our gratitude to the entire world communityand to representatives of international organizations,which in the last decade have helped Armenia inimplementing development programmes. We believethat without this help the progress that we have madetoday in the area of economic and human develop-ment would not have been possible. By the sametoken, the transition period has been aggravated bypoverty.

The Government of Armenia is committedto the principles enshrined in the MillenniumDeclaration, and therefore has become an initiator ofthe development and implementation of the relevant

* The text of th is s tatement has been transcr ibed f romaudio recordings as the or ig ina l was not submitted to theSecretar iat

35


national programmes. This year we plan to adopt aprogramme to combat poverty. For the implementa-tion of these prospective measures we will mobilize allpossible internal resources, both State and private.

In Armenia, we have begun reforms in thearea of civil service and improving the managementsystem. At this time, we are developing a strategy tocombat corruption. In order to resolve issues relatingto increasing tax revenues, we have developed reformprogrammes in the area of tax administration.

The Government is using its existingpotential to mobilize national resources and improvingconditions to develop the private sector. TheGovernment of Armenia attaches special importanceto stimulating direct foreign investment. We have cre-ated the necessary legal conditions, excluding discrimi-nation and guaranteeing the right of private ownershipfor foreign investors.

Armenia is in the last stage of acceding tothe World Trade Organization. With membership inthis organization, we shall have new opportunities todevelop foreign trade, which we believe is a consider-able source to develop our economic potential.

By the same token, we should bear in mindthat the economic and transport blockade on the partof certain countries against others is a serious hin-drance to the development of international trade. Wesupport the proposal to the effect that in countries intransition development programmes should insofar aspossible be implemented with resources allocated onpreferential terms. We support the partnership formof interrelations, which gives us the opportunity toorganize our programmes around internationally rec-ognized development purposes, in particular aroundthe realization of policies designed to implement thepurposes enshrined in the Millennium Declaration.

We believe that we have taken an impor-tant step in cooperating between the Governmentsand donors in the area of development programmes.We support the proposal for debate at this Conferenceto increase the power of developing countries andcountries in transition to work out development pro-grammes and assess their implementation and neededchanges.

At this stage, we attach priority to themovement from bilateral discussion on programmes tomultilateral debates – between Governments, civil soci-ety and the private sector, between Governments andinternational organizations, and between internationalorganizations and civil society. This will be a guaranteefor transparency in decision-making and implementingthese decisions. We also believe that among the goals

of our Conference is the expansion of regional coop-eration in the interest of development, which wouldfurther the peaceful settlement of conflicts in specificregions.

In conclusion, I would like to express mycertainty that the provisions of the MonterreyConsensus will become reality and will enable us toachieve the important goals we have set for ourselves.

Bahamas

Prime Minister Hubert Ingraham of the Bahamas.

Statement byHis Excellency Rt. Hon. Hubert A. Ingraham Prime Minister, Commonwealth of the Bahamas22 March 2002

I wish, firstly, to thank the Government and people ofMexico for the courtesies and warm welcome extend-ed to me and my delegation.

There is, surely, a global consensus thatrapid and sustainable economic growth is critical tothe elimination of social tensions, both within nationsand across national boundaries. Economic growthmust transcend demographic features and providehope and assurance to all that the future will be betterthan today: It must be sustainable and so must notdegrade the environment; and its benefits must beequitably distributed.


36

The linkage between strong and growingeconomies and enhanced social and economic welfareis clear. Vibrant growth increases employment, enablesthe development of inclusive social policies, raises liv-ing standards and promotes the economic and socialsecurity of a people. The failure to attain economicsecurity is evidenced by the tragic persistence of politi-cal refugees and of undocumented economic migrants,and underscores the urgency of our business here.

Three issues arise for the focus of our con-sideration. Firstly, how can the international communi-ty, acting in concert with the major multilateral agen-cies truly assist in accelerating the economic growth ofdeveloping nations? Secondly, how can developingnations provide a framework to achieve greatest bene-fit from this assistance and attract additional capital,both domestic and international, to sustain economicdevelopment? Thirdly, can international rules andstandards be developed so that they are not inherentlydiscriminatory against smaller developing countries?

To partially answer these questions, I willrelate the experience of The Bahamas – an experiencewhich is not atypical of other small island developingeconomies.

At the commencement of the last decade,the Bahamas was faced with falling investment levels –particularly in the tourism sector, the engine of theBahamian economy – and bedevilled by high and ris-ing unemployment levels and declining standards ofliving. We accepted that our capital infrastructure andpolicy framework needed renovation. Not without diffi-culty, and some anxiety, we reformed our policies,implemented appropriate strategies in a deliberate,coordinated and comprehensive manner and under-took major capital works.

The record shows that the economic poli-cies introduced, which encouraged foreign investmentand established strict and prudent fiscal management,provided a favourable climate for increased investmentinflows to the Bahamas. As a result, our tourism andfinancial services sectors strengthened; a nascent man-ufacturing sector awoke and extended its reach intothe local economy; and the industrial sector was rein-vigorated. The direct, highly favourable impact on thelives of Bahamians whose incomes and, hence, stan-dards of living improved significantly, was dramatic.

As our national economic indicators recov-ered and improved, we ensured that the benefits of astrong national economy accrued to the Bahamianpeople through improved public services, enhancededucation and training and health facilities, andthrough expanded opportunities for economic empow-erment.

The country’s enhanced economic andfinancial position was assisted by concessional financ-ing available through international financial institu-tions, and from grants and assistance from donoragencies of the developed world. The latter were forinvestment in social infrastructure projects and capitalexpenditure for reconstruction after the effects of natu-ral disasters, particularly hurricanes. I affirm, therefore,that developing countries can implement good gover-nance and sound macroeconomic management, andcould benefit from financial support with reasonableconditionalities from the international community. Istill consider, however, that economic growth is elusive– elusive because the developed world has the capacityand sometimes the inclination, to arbitrarily changethe rules of the game.

In recent times, the developed world unilat-erally changed the rules governing the delivery ofinternational financial services, and demanded stan-dards and established time-lines for compliance by off-shore financial jurisdictions – standards not met, orrequired of themselves. Then, beginning in the fourthquarter of 2001, a recession, already in progress,aggravated by acts of terrorism, adversely affectedtourism output resulting in unrecoverable loss of rev-enues to Government. Urgent requirements for recon-struction following a hurricane completed the scenario.

To this mix must be added the strain ofunplanned demands on social, educational, health andsecurity resources of countries, such as the Bahamas,created by the continued infiltration of undocumentedmigrants from neighbouring Small Island DevelopingStates (SIDS), many in transit to North America.

As countries like the Bahamas come toterms with the requirements of the new standards gov-erning the conduct of international financial servicesas required by the developed countries of the world;continue to pursue policies which keep their tourismeconomies competitive and, hence, viable for investorswho require reasonable returns for their investments;persist in modernizing, upgrading and maintaininginfrastructure; seek to encourage direct foreign invest-ment in non-traditional sectors of the economy; con-tinue to make the maximum possible investment ineducation, health and in communications; and seek toincorporate information technology into the fabric ofthe economy, we call on the developed world to helpin the creation of an enabling international environ-ment that will permit SIDS to achieve reasonabledevelopment.

37


We welcome the decisions of the UnitedStates and the European Union to increase their levelof official development assistance to developing coun-tries. We record our support for the MillenniumDevelopment Goals adopted at the MillenniumSummit in September 2000.

Mr. President, we know that the MonterreyConsensus is a product of compromise, and thereforecannot be expected to be a panacea for the complexdevelopment needs of the developing world. It is theBahamas’ hope, however, that the Consensus will be asymbol of our commitment to begin the essential dia-logue, and to take the vigorous and determined actionrequired to pursue and achieve a coherent, inclusivestrategy for promoting economic and social, progressfor all peoples.

Barbados

Prime Minister Owen Arthur of Barbados.

Statement byHis Excellency Rt. Hon. Owen Arthur, M.P. Prime Minister and Minister for Finance andEconomic Affairs, Barbados21 March 2002

I am delighted to be here today to offer a perspective,on behalf of the people of Barbados, on theDevelopment Initiatives embodied in the MonterreyConsensus.

It is our conviction that this conference, atthis moment in history, holds the potential to makethe decisive difference to the course of man’s develop-ment. In recent times, beginning with the Rio Summiton the Environment and Development, and continuingthrough the Global Conference on Small IslandDeveloping States at Bridgetown, the Cairo Summiton Population, the Copenhagen Summit for SocialDevelopment, the Beijing Summit on Women, theHabitat Conference, the Food Summit in Rome, theEarth Summit in New York and culminating in theMillennium Summit, the global Community has morethan shown itself capable of stating desirable andachievable goals, and an Agenda for InternationalDevelopment.

Indeed, the goal of rescuing more than abillion souls from abject poverty, and affording themthereafter the prospect and the reality of sustainablelivelihoods confers upon the agreed Agenda forInternational Development an urgency and a meaningwith which it would be impossible not to be identified.

However, in a world impatient forprogress, and endowed with the means to achieve thatprogress for all, the mere statement of lofty goals andobjectives can no longer suffice.

Financing is to development what a steadysupply of oxygen is to human life. As such, a processof development, that can have a real meaning in thelives of the poor, has remained unfulfilled by reason ofthe extraordinary inability of the international commu-nity to support the statement of objectives with themeans necessary for their accomplishment.

Incantations without follow through are justanother way of killing time. And so it has been in therealm of the global development agenda.

This conference, as conceived, to supportthe statement of a global development programmewith the mobilization of the resources necessary toensure its realization is therefore a historic necessity. Itcan, as never before, reconcile the ends and themeans of global development and give to mankind thefirst realistic chance to achieve humane and civilizeddevelopment.

In such a context, it would be impossible tofault the Monterrey Consensus for recognizing andprescribing that, as regards financing for development,there have to be more concerted efforts to make fairtrade become more of an engine for development; tovigorously resolve the debt problem of developingcountries, to boost aid and to make it more effective,and for more appropriate domestic policy responsesby all countries to the common challenge of sustainingequitable development.


38

It has however to be said that the precisereason why a conference such as this is necessary isbecause the international financial system, as presentlystructured, and the institutions for global economicgovernance predispose the global economy to recurring financial crises accompanied by persistentpoverty.

Many of the essential issues at the heart ofdevelopment financing have to do with the quality ofglobal economic and financial governance. For, therehas been the extension of the global reach of financialtransactions and markets without a correspondingempowerment of global institutions to make suchtransactions work for stable and equitable global devel-opment.

In a word, the challenges of civilized global-ization cannot be adequately handled by an interna-tional financial system designed for the world of 50years ago. And we will continue to flounder in meetingthe goals of global development, if the reform of thatsystem, as has been the case of late, is to reinforce itsinitial unrepresentative character without equipping itto prevent and resolve financial crises, provide ade-quate international liquidity, and mobilize financing ofa mix and on terms required for genuine global devel-opment. Radical institutional changes often appearimpossible, until after they happen, at which pointthey seem predestined. This Monterrey Conferencehas afforded the global community the opportunityakin to that of Bretton Woods to conceive a new inter-national financial system to serve for a generation.

It is Barbados’ view that the Consensus ofMonterrey has not gone far enough in conceiving anew system for financial governance to redress theimbalances of the old. As such proposals haveemerged that must not be allowed to go away – thecreation of a rules-based World Financial Authority tobetter supervise today’s more complex global financialand capital markets than the Bretton WoodsInstitutions can; an International Tax Organization tooversee global cooperation in cross border tax mat-ters; new ways of raising global revenue to financeglobal public goods and to eradicate poverty.

It is in the belief that the Consensus ofMonterrey reflects a work in progress, a beginningrather than an end, that the Government of Barbadosis greatly pleased to be associated with its purposes,and thanks the Government of Mexico for affording usthe opportunity, amidst such splendid hospitality, to bepart of this historic occasion.

Belgium

Prime Minister Guy Verhofstadt of Belgium.

Statement byHis Excellency Mr. Guy Verhofstadt Prime Minister of the Kingdom of Belgium*21 March 2002

I wish to express our full gratitude and admiration toyou, Mr. President, and through you to all the Mexicanpeople.

I must admit that the retreat that you haveplanned for the Heads of State or Government, to beheld tomorrow at lunchtime, has rekindled my hope. Isee a new, if not a final, opportunity to give the sub-ject that we are addressing today a more ambitiousdimension then.

Poverty in the world is indeed an existentialissue of current times. Poverty is the despair of hun-dreds of millions of people, who are alone, dispos-sessed, powerless and shadowed by the fate of unsustainable inequality. This injustice makes us recall the collective selfishness of the rich world, a worldwhose only response is all too often as ritualistic as itis cynical.

* The text of th is s tatement has been transcr ibed f romaudio recordings, as the or ig ina l was not submitted to the Secretar iat .

39


Of course, we must pay tribute to thediplomats who prepared the final text of thisConference. We all know that the task of these diplo-mats is thankless and difficult. Very often we ask themin our stead to find painless and placebo solutions tothe conflicting issues that divide us. However, in thiscase I can hardly accept that we, bearing the ultimatepolitical responsibility, should not negotiate the broad-est possible common denominator of a common posi-tion. The Monterrey Conference cannot lead to abanal declaration that would deprive this meeting of allsignificance, a meeting being held at the highest level.I thank the United Nations Secretary-General, Mr. KofiAnnan, for his renewed appeal for us to move awayfrom lingering reluctance.

We are not here to sidestep the subject.We are not here to speculate, each in our own corner,on the best way to escape what we owe mankind. Weare here because we want to be here. At theMillennium Summit we agreed on a concrete andviable goal and we also decided to reduce poverty inthe world by half. We know that this dream is accessi-ble if we truly want it.

This promise in and of itself should sweepaway our doubts, hesitation and reservations. Onceagain, I should like to appeal to you, Mr. President,with the full force of my deep conviction that we notleave this summit with an ambiguous commitment,because the only result would be sending the poorestsector of mankind into scepticism and despair. At thesame time, that will feed into the disillusioned con-tempt of all youth, who, in our countries, generouslybear the promise for a better world.

It has been agreed that none of the conclu-sions will be changed. However, the nature of what isprobably the most fundamental political issue of thecentury deserves a real debate, a real exchange ofviews and requires boldness and decisiveness.Naturally, we will hold other meetings elsewhere, for-tunately – in Rome in June and in Johannesburg inSeptember.

Please do not consider the vehemence ofmy statement as impertinence. Just see it as myresolve to lay here in Monterrey the groundwork fornew impetus that must be crystallized this year. In thefuture, we must truly shed the ritual, agreed texts andsweetened declarations that will no longer suffice inthe future.

The events of 11 September have foundeda legitimate and healthy coalition against terrorism.The free world cannot permit such a grave and bar-baric attack on our democratic and humanistic values.The front against this crime must remain welded, unal-terable. The coalition that has been built with ourAmerican partners must be flawless.

At the same time, we are not entitled tobelieve that eradicating this abject phenomenon will besufficient. Poverty, daily humiliating inequality and theabsence of the smallest glimmer of hope for hundredsof millions of people feed the fertile soil of this abomi-nation. When one no longer believes, anything will do.Fanaticism cannot become the new opium of the mar-ginalized. I am convinced that to respond to theworld’s inequality would be to truly respond to thispermanent danger that I have just mentioned.

That is why I wish to conclude my state-ment by addressing three specific tracks that we canimplement, if we so wish. They are, first, to set a pre-cise term to a promise so often renewed and to allo-cate 0.7 per cent of gross domestic product to devel-opment aid. My country has not always been in thebest place to give lessons in this regard. But it is thefourth consecutive year that we have substantiallyincreased our development aid budget with the certain-ty this year of reaching the declared percentage in2010. We must admit that the conclusion today onthe subject is disappointing. It risks being considered aconfession of failure foretold.

My second idea refers to another idea thatis often debated but has never really been settled. Thatis debt relief for the poorest countries. Steps havealready been taken. But we can, and must, workfaster. My country has designed a specific proposalentitled ‘Prospective Aid and Indebtedness Relief’,PAIR for short. What is this about? It is a matter ofsetting up a fund financed by the 23 richest countries.These each would allocate, over the next 15 years,0.1 per cent of their gross domestic product.


40

That mechanism would enable us to expe-ditiously reduce the debt of the 49 poorest countriesand to finance new human development programmes.In other words, 850 million inhabitants living in the23 richest countries would finally extend their hand tothe 850 million inhabitants of the 49 poorest coun-tries. I intend to make this proposal into a personalpriority. I will also submit it to the ministerial meetingof the Organization for Economic Cooperation andDevelopment, which I will have the honour of chairingin May in Paris. I wish to ask the Secretary-General toput this proposal before the United Nations.

Finally, my third consideration comes with-in the context of negotiations within the World TradeOrganization. We have heard Mr. Moore. These nego-tiations have just begun. I think, more than ever, wemust place emphasis on developing countries. Thismeans devoting ourselves to everything but arms andremoving export subsidies for products coming fromour countries.

The small local farmer has had a hard timebelieving that world trade is a source of freedom andsocial justice when we prevent him from placing hismilk, butter or cheese on markets, sometimes kilome-tres away from his village. He is then a powerless wit-ness to the fact that our export subsidies evict himfrom his own market. Thus we sap his faith in free-dom and leave democratic soil to illusion, which in thepast has been ineffective, when it has not sown hatredand violence.

The stakes of our meeting are here. Thestakes are indivisible freedom – the eternal seed of thegreatest civilizations; that freedom which is never con-tent and which lives in the hearts, the minds and thespirits of men; freedom that no planning, frontier, orobstacle has ever been able to kill and which, when itwakes up, moves individuals to scale summits andhumanity towards justice.

Bolivia

President Jorge Quiroga Ramírez of Bolivia.

Statement byHis Excellency Mr. Jorge Quiroga RamírezPresident of the Republic of Bolivia*21 March 2002

I would like to begin by expressing my thanks toPresident Fox and his country for the hospitalityextended to us. Today he is beginning to receive lead-ers from Latin America, and I congratulate him onthis.

The figures are evident. Thousands of mil-lions of our citizens have known nothing but poverty.The challenges of the Twenty-first Century are clear:Reduce poverty, drug trafficking and terrorism. Theseare three enemies of democracy, and they can be van-quished only by development, by freedom and instates where the rule of law and opportunity prevail.

We have come to Monterrey to face thesechallenges. But, leaving these statistics aside, let uslook at the problem through the eyes of the QuentaTarque family. This family lives in a Bolivian provincewhere they produce alpaca products. They have ten

* The text of th is s tatement has been transcr ibed f romaudio recordings as the or ig ina l was not submitted to theSecretar iat .

41


children who alternate between working in the fieldsand going to school. Two children have died. They, ofcourse, are part of the infant mortality rate. How canwe in Monterrey help this family? We can worktogether in three areas: financing for their develop-ment, access to markets for their products and inte-grating them into the digital world.

First, as far as financing is concerned, howmuch is needed? The answer is: As many concessionalresources as are sustainable under the budgetary situa-tions of the countries and the solvency of the lendingagencies. Also needed are subsidies based on the reali-ty of each country and – it is to be hoped – resourcesearmarked in order to make sure that the social realityof the recipients is considered and not the conven-ience of those giving the resources.

What is even more important: How shoulddevelopment be financed? Bolivia believes that itshould be done through the system that we are usingto develop our poverty eradication policy. This is aprocess that has involved thousands of men andwomen from all of the country’s municipalities. Itincludes thousands from the Catholic Church andmany different groups from Bolivian society. Theprocess has mobilized our social capital to define howto use half a billion dollars over a period of 15 years.This amount has come from the alleviation of externaldebt, known as the Heavily Indebted Poor Countries(HIPC) Debt Initiative.

The aforementioned process was based onthe following exchange. Bolivia is opening its doors tocivil society in order to define the way resources willbe used. It wants to earmark these resources in adecentralized fashion through the different provincesand municipalities. This will be done gradually so thatthe indigenous and rural populations will be able toreceive more funds, thus guaranteeing maximumtransparency through institutional reforms and mecha-nisms of social control.

On the other hand, the international com-munity is offering untied aid – resources that are nottied to the provision of services from the donor coun-try – and they assign this under a single coordinatedframework, avoiding the dispersion that very often hasdeleterious effects on the effectiveness of the aid. Overtime, this is sustainable, because it is supported byinternal participation, which is more sustainable thanany conditions coming from the outside. One canhave confidence in this situation, because it is result-oriented. The results are seen in terms of schools, ofhousing and of vaccination programmes.

Our country has exceeded the 18 goalsthat were set in the first HIPC plan four years ago. Inthe light of this experience, Bolivia fully supports theidea that cooperation should be based on tangibleresults in terms of improvement to the economy andpoverty reduction and should leave behind the systemof earmarking on the basis of political quotas, amongother things.

The key question is: Can the system that Ihave just described be used for more than $1.5 billioncoming from debt alleviation? Why could it not beused for future resources in the area of cooperation?Could these not include participation, progressivedecentralization, social control and institutional reformin countries such as my own? These areas could bereplaced with untied aid, which is coordinated andresult-oriented.

While on this topic, allow me to say some-thing about corruption. Corruption cuts down onresources needed to fight poverty. Poverty weakensand destroys states on a permanent basis. Theabsence of a state provides fertile ground for thegrowth of terrorism and drug trafficking. So the logicalconclusion to be gained from this is that we have tocombat corruption with the same force and in thesame resolute way that we face drug trafficking andterrorism. Only in this way will those who are corruptshare the fate of terrorists and drug traffickers. Forthis reason, in Bolivia, in areas that were open to cor-ruption, such as tax collection, customs, justice, road-building and the social sphere, a congressional vote ofalmost 90 per cent recently designated professionalpublic officials whose mandates go beyond that of thepresidential term.

As to the second point, access to markets,an educated and healthy citizen who has no access tomarkets and has no link with the productive area rep-resents a lost opportunity for Bolivia. We havereduced the deficit and inflation. We have knockeddown tariffs and have opened the country up to pri-vate investment. We are decentralizing public invest-ment and aiming it at social programmes. We arechanging the justice system, and we are reforminginstitutions.

But how do we feel about this? Well, some-thing is missing: Access to markets in the agriculturaland labour-intensive manufacturing sectors. I comefrom a country that was not prepared 15 years ago tocompete in the twenty-first century. We shaped up,and now we see in our frustration that, in the soccermatch of world trade, the rules are constantly chang-ing because they have to be accommodated to the


42

requirements of other teams in the game. Many of ourmanufacturing players are not allowed to use their feetto score goals; they can only use their heads to do thisthrough highly selective applied tariffs. Our agriculturalsoccer players are kept very far away because of mas-sive agricultural subsidies. Those who dare to scoregoals are expelled through anti-dumping. Other play-ers are bound at the ankles to phytosanitary and envi-ronmental controls. Finally, advisors and consultantsare sent to tell us that our soccer team lacks competi-tion.

Let us speak clearly here. We cannot con-tinue to manage agricultural sectors and labour-inten-sive manufacturing sectors; we cannot continue toopen some sectors and close others; it is time todecidedly foster free trade – free of the tariffs thatcause problems for the Quenta Tarque family and theiralpaca business, as I mentioned earlier – free of subsi-dies, which finance underdevelopment, and free ofpara-tariff controls. There is no financing for develop-ment if there is no opening of markets for develop-ment.

Lastly, a citizen with financing for develop-ment and access to markets has to have the third ele-ment available to him. This means the possibility ofbeing digitally-integrated. Whereas in the past, theeducation gap meant that there were thousands left inpoverty, tomorrow the digital divide will leave thou-sands of educated citizens in sort of a digital illiteracy.Whereas in the past poverty was the cause, and thedigital divide the effect; tomorrow the digital divide willbe the cause, and poverty the effect.

Turning to the subject of HIV/AIDS, inpast months it has been established that the right tolife is worth more than the right to a patent. We needto discuss the just balance between the right to accessto technology and the right to patents, in order thatmillions of citizens can have not only financing fordevelopment but also knowledge for development.

More than 50 years ago, my grandfatherwrote a book about the difficulties of a peasant family.He wound up with two individuals who were wonder-ing about the future of their children and who said, “Itis always a dark night for our children. When will thesun rise for them? When will the sunrise come?”

This is certainly the same question that theQuenta Tarque family and millions of others are askingtoday. The response is that a new day will come whenwe are able to expand our resources and change thesystem of financing for development, when we areable to knock down the barriers that condemn millionsof people to live on the side of this artificial wall of

underdevelopment that separates us, and when accessto a digital world will be as routine for rural communi-ties in Bolivia as they are for Bolivian students study-ing here at the Monterrey Technological Institute.

We hope that the changes deriving fromthis Summit will make it possible for the end of theTwenty-first Century to coincide with a new rising dayfor development. This is something that our peoplefervently need and hope for.

Botswana

President Festus Mogae of Botswana.

Statement byHis Excellency Mr. Festus Mogae President of the Republic of Botswana*21 March 2002

If I were to convey a single message to thisConference, it would be that whereas individual coun-tries bear the primary responsibility for their ownadvancement, development, nevertheless, is a globalchallenge requiring global solutions and the active par-ticipation and inclusion of all stakeholders. Indeed, themobilization of domestic and international resources,including foreign direct investment and other private


43


flows, policies conducive to equitable growth of inter-national trade, increased official development assis-tance, the resolution of external debt and conducive,coherent and consistent international monetary inter-agency systems, as well as the fight againstHIV/AIDS, are all pivotal to poverty eradicationacross the globe. This Conference, therefore, marksthe beginning of a common global approach to devel-opment financing.

Let me also emphasize that for developingcountries to overcome poverty, significant volumes ofofficial development assistance are required to spareeconomic and social progress in the short to mediumterm, while increased efficiency of aid should be amajor concern, it should, however, not be used to as apretext for not allocating additional resources of offi-cial development assistance. Official developmentresources can contribute to building the human andthe institutional capacities. Furthermore, the value ofuntying aid, harmonizing donor policies and proce-dures, as well as making it more responsive to devel-oping country needs, would be a great improvement.

Using aid as an instrument of promotingeconomic activity in donor countries themselves tendsto distort the development priorities of recipient coun-tries. Aid policies should also be flexible and forwardlooking and ensure equitable access by developingcountries at various stages of development. Penalizingcountries that have made some advances by not givingthem sufficient resources with which to overcomeremaining challenges is counterproductive.

That traditional official development assis-tance is necessary does not in any way detract fromthe major responsibility of developing countries fortheir own development in terms of optimizing domes-tic resource mobilization and ensuring good gover-nance, as well as appropriate social and economicpolicies that recognize the crucial roles of the privatesector, civil society and other stakeholders.

It is estimated that 20 per cent of theworld population enjoys 80 per cent of its wealth andthat over 1.2 billion people around the world live inabsolute poverty. This requires immediate redress anddevelopment strategies forecast on poverty eradica-tion. We in the developing world, especially in Africa,look to the Monterrey Consensus to give greater impe-tus to global, regional and national strategies andactions for resource mobilization, particularly resourcesfor investment in poverty reduction and improvementin health, education and physical infrastructure.

In particular, the poor economic and socialconditions in Africa should be a major concern of thisConference. There exist wide disparities in humandevelopment, as indicators between Africa and the restof the world amply illustrate. Even worse, these dispar-ities are widening, depriving a vast number of peoplethe basic necessities of life and human dignity.

The sluggish economic growth, imprudentsocial and economic policies and management, politi-cal instability and an unfavourable global economicenvironment continue to aggravate the prevalence andthe depth of poverty, disease, hunger, malnutrition,illiteracy, unemployment and inadequate shelter. Thisturn leads to the loss of hope and an insecure futurefor multitudes of people. All these factors pose thegreatest threat to world peace, stability and security.

We, therefore, implore the internationalcommunity to support the New Partnership forAfrica’s Development, NEPAD. NEPAD is anchoredon the fundamental principles of African ownership,leadership and accountability, as well as good gover-nance and the maintenance of peace and security.

NEPAD envisages a strong partnershipwith the international community that is built on mutu-al good will, respect and solidarity. The support ofdeveloped country partners in increased access to theirmarkets, as well as technological know-how, highervolumes of official development assistance and techni-cal assistance, in line with NEPAD’s established priori-ties, are imperative to the success of NEPAD. This isnecessary in order to, inter alia, bridge gaps in infra-structure, foster regional integration, combatHIV/AIDS, enhance the availability of information andcommunication technologies and ensure Africa’smeaningful integration into the global economy. ThePresidents of Nigeria, South Africa, Senegal andAlgeria are our spokespersons and emissaries to theG-8 and the Organization for Economic Cooperationand Development.

HIV/AIDS is a human tragedy and thecore development issue of our time. There can be nodevelopment in Africa without concerted efforts toensure adequate financial resources to combat thepandemic. HIV/AIDS is a major crisis requiring anemergency response from the international communi-ty. Unless additional official development assistanceand technical assistance or resources are allocated tofight this scourge, sustainable development will be seri-ously compromised.


44

Botswana is severely affected by theHIV/AIDS pandemic. The war against HIV/AIDS hasbeen waged with determination and resolve so that thesocial and economic progress that we have achievedthus far is not reversed.

While HIV/AIDS is a daunting challenge, itis not an insurmountable challenge. With the requisiteinternational support, political will and resources, wewill be positioned to turn the tide against the pandem-ic and realize our full development potential.

Botswana has long recognized that sustain-able development has to be a nationally owned andled process that requires sound democratic institutionsand prudent economic management. Adherence tothese principles, coupled with the exploitation of min-eral resources and donor support, has propelledBotswana from the category of the poorest countriesat independence in 1966 to the middle-income statusof today.

Botswana continues to take constructivesteps to solidify peace, democracy and good gover-nance, upon which our pursuit of development isgrounded. We are also committed to fostering partner-ships with the broad spectrum of stakeholders, includ-ing both foreign and domestic investors, in order toachieve prosperity for all, as enshrined in our nationalmission 2016. Continued donor support is still neces-sary in order to consolidate the progress achieved andto ensure sustainable development.

Now is the time for a new architecture fordevelopment cooperation. Firstly, the scope of devel-opment cooperation should be broadened to includenot only development assistance, but also trade, pri-vate sector development, private investment, access totechnology, as well as equitable and inclusive globalgovernance. Development assistance should also besynergistic with private sector development and con-tribute to national capacity-building, common interestand complimentary needs of the rich and poor coun-tries, as well as global goals forged through the UnitedNations, must provide for new partnerships and com-pacts.

It is unfortunate that at this confluence ofimmense needs and great opportunity in the world, wefind that official development assistance is declining.The official development assistance target of 0.7 percent of the gross domestic products of developedcountries should be met, or even surpassed, in theimmediate future, if the Millennium DevelopmentGoals are to be achieved. The present level of 0.24per cent is a serious underachievement that needs tobe corrected.

It is also critical that in the new develop-ment financing agenda, small- and middle-incomeeconomies, including small island economies, that con-tinue to demonstrate true commitment to global gover-nance, the rule of law and economic reform, but areunable to access private sources of capital due to lackof interest by investors or perceived lack of strategicvalue by the powerful, should be supported as theygrapple with uplifting the standard of living of theirpeople and emerging challenges of globalization.

Dialogue and positive engagement withstakeholders, especially those in the private sector whomake decisions that profoundly affect developmentaround the world, is a matter of great importance tous. My Government values interaction with the privatesector. We have in fact instituted consultative mecha-nisms to ensure continuous engagement with the pri-vate sector and civil society in an effort to enhancetheir contribution to national development.

It is clear that trade is the primary meansthrough which developing countries can be integratedinto the global economy. For trade to have an endur-ing impact, developed countries need to take concretesteps to address the concerns of developing countriesover the implementation of Uruguayan Round under-takings, particularly the Agreement on Textiles andClothing, the Agreement on Agriculture, the provi-sions concerning special and differential treatment andthe provisions of technical assistance. In this connec-tion, I wish to acknowledge, on behalf of sub-SaharanAfrica, the positive actions of the European Unionunder the Lome Conventions and the United Statesunder the African Growth and Opportunity Act(AGOA).

The World Trade Organization has to betransformed to incorporate the development dimen-sions of trade and to ensure coherence in global trade,financial and monetary development policies. We areencouraged by the dialogue and cooperation betweenthe United Nations, the World Bank, the InternationalMonetary Fund and other important stakeholders thathave characterized the financing for developmentprocess. This cooperation should be further consolidat-ed to ensure coherent and mutually reinforcing multi-lateral development policies. Similarly, developmentpolicy concerns that do not precisely fall within thepurview of existing international organizations shouldbe addressed as a vital step in bringing the ‘global gov-ernment deficit’.

45


The United Nations must also ensure thatthere is an adequate follow-up to resolutions of previ-ously held conferences. Concrete proposals such asthe feasibility of an international tax system, theInternational Development Association providing agreater proportion of mutual resources to the poorestcountries in the form of grants, rather than loans,should be analyzed objectively and firm proposals putforward without procrastination. The United Nationsmust promote global citizenry so that countries are notjust preoccupied with our parochial interests.

The world will be safer and more securewith shared values, broad-based development andwhen all its inhabitants can see the promise of a brightfuture, instead of perpetual despair. The UnitedNations strong advocacy for human-centred develop-ment should therefore be intensified. In this regard,my Government wishes to reiterate its unflinching sup-port for the United Nations system.

It is my ardent hope that this Conferencewill herald a paradigm shift in international develop-ment cooperation that is underpinned by strong politi-cal commitment by both developed and developingcountries and coordinated support for multilateraldevelopment institutions. However, this would beincomplete without the establishment of clear mecha-nisms to monitor the implementation of resolutions ofthis Conference and achievement of MillenniumDevelopment Goals to ensure the MonterreyConsensus leads to sustainable development financingand poverty reduction in the world and, more impor-tantly, that all stakeholders play their full part in theglobal partnership.

Canada

Prime Minister Jean Chrétien of Canada.

Statement byHis Excellency Mr. Jean Chrétien Prime Minister of Canada21 March 2002

On behalf of Canada I would like to voice strong sup-port for the Monterrey Consensus. A consensus that isunprecedented in scope and participation. That seeksto take an indispensable step forward together insecuring a fundamental common cause of the UnitedNations. As expressed in the Millennium Declaration.That of creating a true international partnership orcompact for development. Whose ultimate goal isnothing less than ensuring that the benefits of global-ization are truly global.

Canada is especially pleased that theConsensus acknowledges the complexity of the issueat hand. It resists the temptation to resort to attractivebut simplistic solutions.

The Consensus recognizes the importanceof development assistance. Something that Canadahas acknowledged with increases in recent years toour development assistance budget. But the Consensusalso recognizes the fact that development assistancewill never by itself create the sustained economicgrowth that is integral to achieving meaningful devel-opment and a better quality of life. That is why meet-ing the challenge of forging a real partnership isessential.


46

FfD

Leaders of developing nations need to fol-low policies that create a framework for sustainableeconomic growth and productive private sector invest-ment. Including a commitment to good governanceand the rule of law. Sound fiscal and monetary poli-cies. And improved transparency. The challenge forleaders of developed countries is to reward theseefforts with effective assistance. The MonterreyConsensus is a blue print for how we can work togeth-er to meet this sweeping challenge.

Beyond aid it recognizes that we must dealwith choking debt loads. This will continue to be aCanadian priority. It also recognizes that there will belittle prospect of investment and trade if developingnations are denied access to world markets. This is amessage I have heard loud and clear in my own recentdiscussions with African leaders. Particularly in respectof agriculture.

As the Chair of the G8, Canada has madebuilding a development partnership with Africa a pri-ority. With an approach that reflects and seeks toadvance the Monterrey Consensus. Our goal is toendorse a concrete Africa Action Plan. Based on theNew Partnership for Africa’s Development. ThisPartnership is an historic point of departure from thepast in that it is Africa-driven. It has been conceivedby progressive African leaders on their own initiative.Not at the behest of donor agencies. It is based on theprinciple that the key to progress in Africa lies firstand foremost with Africans.

It entails strong commitments by Africangovernments to good governance and sound policy.And seeks an international partnership in dealing withdebt and trade issues. As well as on untying aid andknowledge sharing. To implement the objectives of theG8 Action Plan we have set aside an additional $500million. Discussions with G8 leaders are going well.And I look forward to reporting our results.

Above all we must recognize that the globaldialogue on development must continue. A dialogue inwhich the Monterrey Consensus and the G8 AfricaAction Plan are not the end of the road. But, in manyways, just the beginning of our journey. Toward amore just, more prosperous, and more secure world.

Cape Verde

Prime Minister José Maria Pereira Neves of Cape Verde.


Statement byHis Excellency Dr. José Maria Pereira NevesPrime Minister of the Republic of Cape Verde21 March 2002

Let me start by thanking His Excellency Vicente Fox,President of the United States of Mexico andPresident of this Conference for the warm welcomeand hospitality extended to us since our arrival to thisbeautiful city of Monterrey. We also want to conveyour deepest appreciation for the efforts dedicated toensuring the success of this high-level event.

It is an act of justice to stress the impor-tance of the sustained leadership of Secretary GeneralKofi Annan all along the way that brought us toMonterrey, including his personal and direct contribu-tions to the Preparatory Commission during the mostchallenging moments of the process.

We rejoice with the open mind and whole-hearted dedication of all those who participated in thepreparatory process. We praise the mission that thePreparatory Commission accomplished, by graduallyand with pragmatism, realism and creativity bringingup the ‘Monterrey Consensus’ that we will be approv-ing during the course of this Conference.

47


One of the main objectives of The Charterof the United Nations is to promote internationalcooperation aiming at solving economic, social, cultur-al and humanitarian problems of its member States.This means that our organization must be in the cen-tre of the efforts to achieve the aims of development.

However, in spite of the fact that develop-ment has always been one of the main directions of itsactions, the assessment of the global results is not sat-isfactory, as the proposed aims could not be reached,owing to the scarcity of resources for ODA to develop-ing countries that have been made available, still farfrom the agreed target of 0.7% of GNP of the indus-trialized countries.

If it is true that during the ’90s the UnitedNations Conferences dedicated to global issues far-reaching decisions to promote cooperation for devel-opment based on mutually assumed engagements, it isalso evident that we are still very far from their imple-mentation, thus leading to the adoption of a set ofimportant commitments by the Heads of State andGovernment gathered at the Millennium Summit.

On the other hand, the great changes inthe international economic environment induced byglobalization created great expectations and newopportunities of economic growth for the developingcountries. But these countries need to provide them-selves with the proper means to benefit from thoseopportunities and be able to face the inherent risks.

It is in this context, that the least developedcountries, like Cape Verde, must create institutional,human and financial capacities and be able to mobilizethe necessary resources for their development, alongwith implementing healthy macroeconomic policies,ensuring good governance and enforcing respect forhuman rights.

Under these circumstances we stress that itis time for resolute action, without any ambiguities orevasions whatsoever towards the effective implementa-tion of the 2001-2010 LDC Plan of Action, adoptedin Brussels during the Third United NationsConference on LDCs, as well for the implementationthe Global Plan of Action for the SustainedDevelopment of the Small Island States.

The support of the international communi-ty, as we all know, constitutes a key element of thesaid process, namely through the United Nations sys-tem. Our Conference, although admittedly not apanacea for all the problems faced by the developingcountries, represents notwithstanding a firm step inthe good direction, since it allows us to assess thelarge spectrum of issues implied in the process offinancing for development and share responsibilities insearch of the best solutions and commitments.

In this sense it is pressing the need of newand additional financial resources to be allocated inorder to promote institutional capacity building of bothpublic and private sectors, as well as directing furtherdirect foreign investments to the poorest countries,promotion and support of growth and competitivenessprogrammes, as well as to promote trade as tools forfighting poverty, especially in the LDCs, Small IslandStates and landlocked countries.

Fighting poverty must be a priority!

During the recent Forum on theImplementation of the United Nations Convention toCombat Desertification held in Praia, Cape Verde,from 5th to 8th of this month, the obvious correlationbetween the struggle against poverty and the struggleagainst desertification was widely demonstrated. It isnot by chance that the desertification planetary distri-bution map almost coincides with the map of povertydistribution. Therefore, we launch an appeal to ourpartners to firmly support comprehensive strategiessuch as the one proposed by the ‘New EconomicPartnership for African Development’ (NEPAD), con-sidering their common objectives of poverty eradica-tion and promotion of sustained development.

Likewise, market access for goods fromdeveloping countries is vital if we take into considera-tion the primary role of international trade in generat-ing resources for finance for development. Specialattention should be given to the Least DevelopedCountries (LDCs) if we want them to achieve effectiveself-sustainable development. In effect, no one canignore the intrinsic relation that exists between trade,economic development and poverty alleviation, andbetween the above and the processes of desertificationand environmental degradation.

We are aware of the fact that the supportof developed countries is fundamental for the develop-ment of the small, poor, island and sahelian country asmy country, Cape Verde. We are also conscious thatthe rhythm and quality of its development dependsmainly on our capacity to take our destiny in ourhands. As Amilcar Cabral, the founder of the CapeVerdean nationality, said “As hot as the spring watermight be, it will not cook your rice”

Since independence, in 1975, Cape Verdehas reached increasing levels of political, economic,social and cultural development. In spite of those sig-nificant levels, we are still facing the fundamentalproblem of structural imbalances. Our developmentprocess has been characterized by ups and downs due


48

to economic vulnerability proper to small island devel-oping states lacking natural resources, having a weakproductive base and heavily dependent on externalfinancial flows. Cape Verdean women and men arethe main resources of our country, and we are com-mitted to improve their technical and professionalskills. But we must act, and act rapidly in order to gen-erate the sustainability of our development.

In order to ensure a good macroeconomicframework and to implement structural reforms need-ed to enlarge the productive basis for growth andcompetitiveness of the Cape Verdean economy, greatefforts must be made.

Institutional and Public Administrationreforms, development of human capital, the creationof a strong, productive and competitive business sectorthat can generate employment; infrastructure and theorganization of territory; active solidarity policies; com-bating poverty and strengthening social cohesion –these are the main axes of action of my government.We are getting very good results as we are determinedto achieve good governance indicators.

In that sense, the densification of civil soci-ety, the rule of law, transparency and ethics in all mat-ters related to the State, as well as sound macroeco-nomic policies are essential. However our efforts needto be properly matched by partnership of the interna-tional community. What raises our expectations andincreases our hope is that Monterrey will open theway to solve the problems that afflicts the internationalcommunity, with onerous reflexes in the poorest countries.

The participation of Cape Verde in theConference on Financing for Development is that of acountry that is open to the world, and that seeks tobuild a strong and dynamic productive system basedon the promotion of its human capital, its technologi-cal capacity, as well as its culture. A country that wish-es to consolidate a society of peace and social justice,democracy, openness and tolerance; a country with asustained human development, of solidarity, with abalanced regional development, aesthetical and envi-ronmental sense based on a developed ecologicalawareness.

I would like to finish by expressing thehope that the results of this Conference will lead to aneffective contribution towards a better, more secure,just and peaceful world in which we may be able toraise international cooperation to higher levels so thatwe may all benefit from the great successes ofmankind.

Chad

Prime Minister Nagoum Yamassoum of Chad

Statement byHis Excellency Mr. Nagoum YamassoumPrime Minister of the Republic of Chad*21 March 2002

First of all, I would like to ask all the participants atthis Forum to accept the regrets of the President ofChad, who was unable to be with us this afternoon. Iwould also like to associate my voice with those ofearlier eminent speakers in thanking the President andthe people of Mexico for their kindness in hosting thisvery important initiative.

I would like to underscore that, at thebeginning of this millennium, the world seems to bemore truly aware of the tragedies that millions ofhuman beings are experiencing from war, natural dis-aster, disease and, above all, the injustices that charac-terize international relations. The Millennium Summitof September 2000 held in New York and the presentConference devoted to financing for developmentattest to the international community’s move towardsgreater equity and greater humanity in today’s world.


49


Now it is more urgent than ever to tran-scend the phases of holding conferences and thinkingand get down to action. Indeed, for more than half acentury, thousands of experts, and hundreds of variousorganizations, have prepared tons of developmentschemes for the third world. They have designednumerous files and projects aimed at integrating theunderdeveloped countries and the world economy.Some were successful, but most fell short. The devel-oping countries were not able to begin their expectedeconomic recovery. On the contrary, most havebecome more and more bogged down in underdevel-opment.

This is particularly visible in the Africancontinent, where poverty, famine, disease and politicalinstability seem to persist, if not increase. Proof of thisfact is that, of the 49 countries of the planet consid-ered to be the least developed countries, 34 are inAfrica. For a decade, despite the weighty legacy of thepast and the burdens and constraints imposed by dic-tatorships, Africa decided to react by committing itselfto far-reaching political reforms. It wants to take itsdestiny into its own hands. Of course, the results havenot yet been achieved, but reverse motion is impossi-ble.

In a more formal commitment, Africanleaders adopted The New Partnership for Africa’sDevelopment (NEPAD). This programme, thought upby Africans for Africans, is proposing a new form ofpartnership with the rest of the world. For its part,Chad, a landlocked State in the heart of Africa, aState that has experienced turmoil and dictatorship for30 years and has been beset by all kinds of natural dis-asters such as drought and disease, is resolutely part ofNEPAD. For over a dozen years our Government hascommitted itself to shattering a vicious cycle ofinevitable ills overwhelming the country. It has har-nessed itself with determination and the assistance ofall political and social stakeholders to build a societybased on liberty and law.

Chad has succeeded, above all, in achiev-ing our nation’s dream of exploiting Doba oil. Thanksto the sacrifice and courage of a people hardened byyears of privation, Chad has tried to redress itselfpolitically and economically.

Here we would like to thank all of our bilat-eral and multilateral partners who have supported thegreater burden of this endeavour. In this respect, Iwould like to extend particular thanks to the Republicof China on Taiwan** for its important assistance incarrying out vital projects. The foundations have beenlaid in Chad; they cannot be destroyed. It is now aquestion of correcting the shortcomings so that thisopus can resist all unforeseen ills. The support of ourdevelopment partners is essential in order to correctimperfections and to gain optimal national capacity.

At this time, Chad would like to makesome proposals, inspired by NEPAD, that could fostersocio-economic and political development in our coun-try, and I hope that they will get the attention of par-ticipants here.

The world has changed incontrovertiblyunder the influence of technological advance and newtechnologies. It is inadmissible that the prosperitystemming from these changes should coexist withpoverty affecting over three-quarters of the planet’spopulation. Our vision of the world should alsochange. Unbridled profit-seeking should yield to shar-ing and to mutual beneficial partnerships. It is for thisreason that the Republic of Chad supports the propos-al to increase the share of grants over that of trade inofficial development assistance (ODA). We are particu-larly encouraged by the recent statements of theUnited States and the position taken by the EuropeanUnion on behalf of the financial institutions. Thesevery praiseworthy initiatives should contribute tofinancing priority sectors in countries such as Chad.African countries, for their part, want to integratethemselves into the world political and economicarena. The international community has a duty to helpthem. It is not only a duty; but it is also a necessity,because it is illusory to believe that the happiness andprosperity of some will always remain at the expenseof the larger number.

I should like to pay tribute to the UnitedNations Secretary-General for his initiative in conven-ing this Forum, to ensure that there will be greaterhumanism, equity and responsibility in internationalrelations.

** The statement has been reproduced as rece ived. Thedes ignat ions employed do not imply the express ion of anyopin ion whatsoever on the part of the Secretar iat of theUnited Nat ions concern ing the legal s tatus of any country,terr i tory or area, or of i ts author i t ies


50

Chile

President Ricardo Lagos of Chile.

Statement byHis Excellency Mr. Ricardo Lagos President of the Republic of Chile*22 March 2002

I wish to begin by congratulating the President ofMexico for having convened this Conference. TheMonterrey Conference in and of itself is a success,because it lays down a new scenario for addressing thedifficult task of setting up just and well-balanced struc-tures for financing the development of the poorestcountries in order to promote domestic reforms, whichare absolutely necessary to ensure financing, and tohave the best possible trade with the best possibleaccess. This forum is designed to flag problems. It is agood step forward towards finding solutions.

Since we have very little time I wish tofocus on four essential topics that seem to me essen-tial. The first is that the world has changed much overthe past 50 years. Accordingly, financial assistance aswe understood it fifty years ago is quite different fromwhat is necessary now. Of course, the 0.7 per cent ofgross national product to support development holds.


But let me flag four essential facts:

• First of all, this assistance will go to thepoorest countries and that is how it should continue tobe.

• Secondly, we should have a set of rules toensure access to that assistance in an equitable andtransparent way.

• Thirdly, it should not be tied to conditionsby donor countries, which is something we consider tobe fundamental. It is good that at this meeting wehave listened to the President speaking on behalf ofthe European Union to increase assistance until 2006in order to reach 0.39 per cent. That is an initial step.

• Another point relates to a larger number ofdeveloping countries that are seeking not only financ-ing, but also access to markets. A recent study hasshown us that if trade barriers were lifted, the develop-ing countries would be able to generate $130 billion inprofits, more than twice the $50 billion that had beenproposed for the Millennium Summit. This is the mag-nitude of the transfer that we are speaking of, and thisrelates to market access.

In Doha, there was great success and ingood time. But let me say that we have difficult tasksahead of us, first of all because one third of the anti-dumping measures that were adopted in 1995 and2001 were traced to three developed countries. Iknow that it is hard. But we have to work so that wecan address this thorny issue.

I think that it is also important to under-stand that one possible cause of increased volatility inthe price of exports over recent years, which areessential for our trade, are protectionist measurespracticed by developed countries, which make themarket only send surplus to the world markets. Theresult is a high degree of volatility in commodityprices. Trading only surplus, because of protectionistmeasures makes it very difficult for there to be properaccess to markets.

Another point is something that did notexist 50 years ago – access to private financing. Let usbe clear here. Private financing is just as important aspublic financing. The higher-level developing countriesand medium-income countries have access to privatefinance now, but capital flows to our countries arevery cyclical. Capital is injected when there is worldabundance and withdrawn when the world economyshrinks.

51


Let me be very sincere here. In a countrysuch as Chile access to international markets is essen-tial. We have private finance sources within the con-text of infrastructure. We are getting private financingwith regard to education, health and our prison sys-tem. But the private international resources are essen-tial. These are just as important as official develop-ment assistance.

What can we do to ensure that theseresources that are directed towards emerging marketsdo not perform in a cyclical fashion, as they have todate? Countries have successful economies. They getcapital. Precisely, for that reason, the country growseven more. But there are international difficulties thatarise, and the capital migrates. This is a core issue ifwe want to be able to have serious discussions onfinancing for development.

How can there be financing for develop-ment with regard to international capital flows, whichare essential for development, but must performsomewhat better than they have in the recent past?We know that we have heard about various initiativesfrom this rostrum, for example a tax that would makeit possible for the transfer of private capital to be of adifferent nature. This is a factor that we consider to beat the core of our discussion here. I would like to haveour future tasks include that topic.

Finally, I would like to flag two factors thatI deem to be essential. This concerns the SpecialDrawing Rights. Special Drawing Rights are a way tocreate money at the international level through theInternational Monetary Fund. Special Drawing Rightsgo hand-in-hand with the contributions that eachcountry makes to the Fund. I think that we should bemaking headway so that those special drawing rightsand those created resources that do not imply transferfrom one country to another could be devoted tofinancing the public good. How can we make intellec-tual property rights for the laboratories that are work-ing against AIDS and other diseases be reconciled withthe need to have access to generic material in our ownlaboratories. The Special Drawing Rights could pay forpatents so that certain countries would be able to dealwith such situations. We are looking at the entire setof public goods and patents that could be financed inthis way. I think that this also deserves future discus-sion.

My second and last point is that SpecialDrawing Rights will make it possible for us to find themachinery to deal with crises that we are accustomedto facing as they have occurred over recent years. Theworld has been very concerned about the situation inMexico in 1995, and I intend no disrespect when I say

this. It was worried about the situation in Russia in1998. In Brazil, it was 1999. In Turkey it was 2000.In Argentina, it was 2001. What does all of this tellus? It means that we have to find new ways andmeans that will make it possible for the financial sys-tem to able to take steps such as last-minute loanswith clear rules and specific modalities. We are not justwasting resources when the tasks are not properlyperformed. There has to be an institution that is wellprepared to deal with such crises. Otherwise, damagewill be done to that transfer of 0.7 per cent. Tariff bar-riers will arise, whether they be for environmental rea-sons or labour reasons. The flows will become restrict-ed. So financing for development itself will be adverse-ly affected when such crises arise. Such crises musttherefore be dealt with by appropriate institutions.

My last point relates to our own responsi-bilities within our own countries. Here, we are talkingabout financing development. We have come here tosay that we want more, so we can have more develop-ment. That is fine and it is high time, but the essentialelement to develop and progress depends upon whatwe do domestically. We cannot increase domestic sav-ings and have proper microeconomic policies and therule of law unless we sit down at home and addressthis question. So that we can speak out in internation-al forums, we have to be aware of the fact that insideour countries, at home, we are doing the best with themost. The problem is when we do our best and findthat the international community is not well prepared.

As we said yesterday, the Monterrey spiritis the launching of a course of action so that we cando what the United Nations did 50 years ago inBretton Woods. Discussion of the international finan-cial architecture and the rules of trade belong to eachand every Member of the United Nations, and we allmust deal with these questions collectively. That is themeaning of the spirit of Monterrey. Let me once againcongratulate Members for having convened thisConference.


52

Colombia

President Andres Pastrana of Colombia

Statement byHis Excellency Mr. Andrés Pastrana ArangoPresident of the Republic of Colombia*21 March 2002

As we speak of our common world, I wish to tell youabout a well-known statistical exercise circulated eachyear on the Internet. Perhaps many of you are alreadyfamiliar with it. The exercise gives us an idea abouthow our planet’s population would be composed if wewere able to reduce its inhabitants proportionally tomerely 100 persons. I think this exercise will give us a lot to think about over these first few days of theConference, and I would like to share it with you.

If there were only 100 people on planetEarth, 57 would be Asians, 21 would be Europeans,14 would be from the Inter-American continent and 8would come from Africa. Fifty-two would be women,and 48 would be men. Thirty would be white, and 70would be from other races. Thirty would be Christian,and 70 would profess other religions. Eighty would beheterosexual, and 11 would be homosexual. Six wouldpossess 49 per cent of the world’s wealth, and those


six would come from the United States. Eighteenwould dwell in inadequate housing. Seventy would notbe able to read. Fifty would be undernourished. Onewould be about to be born, and another would beabout to die. Only one would have a university-leveleducation, and only one would own a computer.

If we look at our world from this com-pressed perspective, the need to accept the fact thatone has to be tolerant to understand and educate peo-ple becomes very impressive. I myself have to say thatI own a computer; I know how to read and write; I ameducated; I am not undernourished; I have decenthousing; and I am alive. Why should I complain? We,who not only have education technology and a goodquality of life, who have had access to the highest aca-demic levels, and who have national and internationalresponsibilities – what have we done? What are wedoing now? And what can we do so that this world,this immense global village, becomes a more just,more equitable and more peaceful world? This is pre-cisely the objective of this Conference.

If the planet had only 100 individuals, howmany of them would be leaders or would have thepower to lead – for better or for worse – the destiny ofour group? Surely one – and only one. This is theworld in which we have to live, but it certainly is notthe world in which we wish to live. We have manytools right in our hands to enable us to bring the worldcloser to a horizon where social justice prevails.President John Fitzgerald Kennedy once said that noone can be truly rich if his or her neighbours are poor.We are talking about a thought process that I thinksums up very well the philosophy that brings thisforum to the immense majority of world nations –including the most developed countries, those withmedium-level income and the least developed – name-ly, the crucial topic of Financing for Development.

Human beings, without any distinctionwhatsoever, are a community – a community that nav-igates together on this globe we call the Earth. As acommunity we have to work so that the fate of ourneighbours or of those who live far away can be thesame as that of those in our own countries. You can-not pick a flower in China without, sooner or later,feeling its effects on the other side of the planet.

Colombia has proposed to the world a veryfundamental concept that can and should apply to alltopics and problems that interest humankind as awhole – that of shared responsibility. This principle,which my country has encouraged and promoted suc-cessfully on the subject of the global problem of drugs,applies as well to all of the challenges facing humani-ty. Because of their global character, these challengesrequire an integrated approach.

53


Shared responsibility is financing for devel-opment. Shared responsibility means arms control.Shared responsibility means a joint, unswerving strug-gle against terrorism. Shared responsibility is to sup-port equal access to new information technologies.Shared responsibility means the preservation of theenvironment, because it belongs to all of us, and,above all, to future generations.

How does one visualize this shared respon-sibility in the area of Financing for Development? Itcan be done through the implementation of the fol-lowing postulates:

• First of all, the creation of a favourableinternational environment for the competitive integra-tion of the economies of developing countries;

• Consolidation of associations that linkGovernments, non-governmental organizations, inter-national organizations and various sectors of civil soci-ety so that they can work to support development,considering both its international and domesticaspects;

• Strengthening of the role of the regionalfinancial organizations;

• Fulfilling the goals referring to officialdevelopment assistance;

• Promotion of foreign direct investment;promotion of free and equitable trade with developingcountries; and

• Redesigning the international financialarchitecture to make financing for development moreflexible and efficient and to prevent the effects of pos-sible national or international crises.

We simply do not have the time to refer toeach one of these points in the detail that theydeserve, but I think it is good to know that, in thegreat majority of them, we are achieving important,very significant agreements in the MonterreyConsensus, which we will be signing tomorrow as alegacy of responsibility towards our people and theirfuture.

What we can do, however, is to make afew relevant points on some of these topics. ForColombia, it is clear that international financing shouldnot be aimed solely at the introduction of economicreforms to foster growth; rather, it has to foster some-thing else – this component of human and social wellbeing, which we call development, and which tran-scends figures that describe macroeconomic results. Ofcourse, we share the approach according to which theprimary responsibility to development is up to each

and every country. But we know that in a globalizedworld marked by interdependence it is impossible tospeak of development if we do not have a favourableenvironment in areas such as financing, cooperation,investment and trade.

Allow me to use my country as an exam-ple. Colombia is a nation of more than 40 millioninhabitants. We are talented, hard-working peoplewho have yielded fantastic artistic, cultural and scientif-ic results for humanity. Our territory is rich in naturalresources, and its biodiversity is among the greatest inthe world. However, more than half of our populationlives in poverty, to a great extent because of two phe-nomena that have affected the country during the lastfew decades and that have further deepened traditionaldisparities in the economic and social area. I am talk-ing about the worldwide problem of illicit drugs and aninternal conflict generated by a few violent groupswith an anachronistic dialogue and no popular sup-port. Faced with this situation, what can we expectfrom the international community?

As I said earlier – financing, cooperation,investment and trade – all mesh with the principle ofshared responsibility. The global drug problem, whichis the main financing source for violence and terrorismin my country and in the world, will not be solved ifwe do not work together and pool our efforts to staveit off. We need cooperation for the eradication of drugcultivation and for interdiction in producer countries.We require control to avoid the diversion of chemicalprecursors by industrialized countries. We need pre-vention control in consumption all over the world, andwe need control in the responsible sale of arms andweapons, and we need the international community’strue commitment against money laundering, which isturning the drug business into one of the most fantasti-cally huge businesses in the world today, and certainlyone of the most damaging. To fight this scourge, wehave to have put into practice a principle of responsi-bility.

In other words, we need more than solidar-ity; we need responsibility to ensure that the contribu-tion of industrialized countries is 0.7 per cent of grossdomestic product (GDP) for official development assis-tance (ODA). Responsibility, so that the most devel-oped countries do not put commercial barriers in theway of the least developed, thus maintaining protec-tionism that limits the opportunities for progress of thevulnerable countries. Responsibility, so that foreigndirect investment means truly more jobs and moreincome for recipient countries. Responsibility, so thatfinancing is also achieved with social criteria, makingsure that development goes before profitability.


54

No one can be rich if his or her neighboursare poor. This is a veritable fact that we must not for-get, because it is self-fulfilling. Poverty is contagious.Our challenge today is to ensure that wealth and thewell-being that it can create will extend in the widestand most equitable way possible all over the world.

This Conference, and the Consensus thatwill emerge from it, constitute a fundamental steptowards this objective. We have to continue to work sothat hope will never again die, imprisoned by wordsand promises, and so that children who know nothingabout this Summit, but who suffer from poverty, willbe able to reap the positive effects of our discussions.

Costa Rica

President Miguel Echeverría of Costa Rica.

Statement byHis Excellency Mr. Miguel Ángel RodriguezEcheverríaPresident of the Republic of Costa Rica*21 March 2002

Proceeding from the commitment achieved at theMillennium Summit that this will be the century ofdevelopment of All and, trusting in our own promises


to reduce extreme poverty by half by 2015, we Headsof State and Government from all corners of the world have come to this Conference to take a decisive step in that direction in the search for solutions to national and international problems of Financing forDevelopment. The countries of the Rio Group recog-nize that in the task of raising the quality of life of our peoples and families nothing can take the place of responsible work done within each country.Strengthening democracy and the rule of law, fiscaland monetary discipline, rational use of naturalresources and investment in infrastructure and humancapital in a setting of freedom, healthy competition,responsibility and solidarity. This is the agenda thatmust be pursued by responsible Governments in theirfight against poverty and the vicious circle that engen-ders it.

Although that is the first and most impor-tant step, it is not, nor will it be, sufficient if it is notaccompanied by opportunities afforded by the openingup of markets and financial support for the creation ofcapacities of human development for our people. Weview with concern how export subsidies damage thecompetitiveness of developing countries, as we werereminded by Peru this morning, and increasinglyimpoverishes them by forcing them to compete withartificially low prices. We view with concern how tar-iffs subject to the exports of the poorest countries are,according to World Bank data, virtually twice thosewhich are applied on average to the rest of thenations of the world.

The countries of the Rio Group will redou-ble their efforts so that the final results of the DohaAgenda, with the launching of this large round of mul-tilateral trade negotiations, may recognize the interestof the developing countries, especially with regard toimportant areas of this agricultural trade and labour-intensive goods. So that our entry into the world econ-omy will be full-fledged and truly profitable for ourfamilies, we must ensure that capital flows freely andtransparently in search of the best opportunities forinvestment under optimal regulations and machineryfor crisis prevention in such a way as to give greatervigour to production, employment and the well-beingthat we are seeking.

However, the Latin American region hasbeen prepared in recent years, according to ECLAC,to face fluctuating external flows of financing and ithas faced unequal access to capital markets, foreigndirect investment and resources with which to preventsystemic crises. Insufficient levels of official develop-ment assistance have limited the development of proj-ects having a high social benefit in countries that face

55


pressing needs. Given this picture, reactivating officialdevelopment assistance has become vital. Successfulexperience has shown that when a company investssufficiently in a sustained and effective manner in uni-versal education, health, basic services and humanitari-an programmes, one can break the vicious circle ofpoverty, and the means can be generated to continueadvancing on one’s own footing.

We therefore look with gratitude and opti-mism upon the recent decisions of the EuropeanUnion and the United States. It is the task of all tounleash a virtuous circle in developing countries. Therich countries must provide at least the agreed level offinancial support, as well as opportunities for growththrough the opening of markets. The poor and devel-oping countries must continue doing things right inter-nally, with a sense of responsibility and making use offinancial assistance efficiently and equitably in areasthat generate capacities for human development andfamilies.

Forgiveness of external debt to highlyindebted poor countries would be another show ofinternational solidarity that would release resources fordevelopment. However, that initiative should beassumed primarily by the developed countries withoutaffecting small poor countries that are creditors of therecipient countries, because forgiveness of debt, whichfor a rich country can be easily absorbed, can domajor damage to a poor country like Costa Rica.

In the present situation, without our partici-pation in decisions, Costa Rica has been asked toaccept a loan agreement that would amount to $101per person, whereas England and the United Statesagreed to $5.30 and $7.70 per dollar respectively.That would be unacceptable and highly prejudicial.

This inequity in the international financialstructure is one that must be promptly corrected. Webelieve that a system of emergency loans entrusted tothe World Bank would resolve many of the liquiditydifficulties faced by small countries during periods ofinternational crisis. At the time of an international cri-sis, which they do not provoke, they then find thatthey neither have access to the personnel at financialinstitutions nor to the resources that have already beenused. We might also have a system of guarantees bythe World Bank and the regional development banksfor the issuance of bonds with adequate monetarypolicies in order to guarantee in those circumstancesbetter resources under better conditions. Through cre-ating a fund with small resources from theInternational Monetary Fund, central banks could haveimmediate access with which to face crises of confi-dence affecting their currencies.

When we speak of opportunities for sup-port, resources and the international financial struc-ture, we are speaking of necessary conditions, so thatbetween us all we can put an end to misery and over-come the crisis of hunger, lack of education and dis-ease that plague our countries. In this regard, our gen-eration, as Jeffrey Sachs, the well-known economist,has said, could liberate mankind from the shackles ofpoverty. The rich countries could ensure that thepoorest of the poor could escape poverty, only byproviding a very small fraction of their annual incomeor even their military expenditure to overcome the cri-sis of hunger, education and disease. That aid, com-bined with market-based economic growth, could putan end to extreme poverty.

Allow me to conclude with a very personalcomment. In a few days, the mandate with which Ihave been honoured by Costa Rican democracy willcome to an end. In my four years of Government Ihave been able to participate in the MillenniumSummit, in summits dealing with the opening of trade,poverty, growth and unemployment. Here inMonterrey, thanks to the warm welcome of ourMexican brothers, we are now endorsing a technicallycorrect policy declaration. But the Food andAgriculture Organization tells us that we are not mov-ing ahead quickly enough towards the goal establishedin 1996 to reduce the number of hungry families byhalf by 2015.

The Secretary-General tells us that withpresent levels of development aid and efforts by thedeveloping countries, we will not in 2015 reach thegoals of the Millennium Summit. Rich and poor coun-tries know well what we must do in order to attainhuman development. Moreover, since 11 Septemberwe are living in a world without walls. It is clear thatwe are all morally responsible for the well-being of alland that we must be concerned about the conditionsunder which all others live.

We face political problems in our democra-cies that sometimes are due to the wrong focus ofinformation given to our citizens and shortsightedinterests and dictatorships where power is corruptlyexercised. We must mobilize public opinion in everynation in favour of economic rationality, personalresponsibility and social solidarity, nationally and inter-nationally. Achieving that is the key to human devel-opment. Let us assume our commitments as politicalleaders. Let us commit our lives to making it politicallypossible to fulfil our moral obligation: change forhuman development. If this summit is a beginning inmaking those changes, we will have successfullylaunched the Monterrey Consensus and spirit referredto this morning by President Fox.


56

Croatia

President Stjepan Mesic of Croatia.

Statement byHis Excellency Mr. Stjepan Mesic President of the Republic of Croatia21 March 2002

This is not the first time that a meeting has convenedat such a high level in order to discuss development,or, to be specific, financing for development. Even onthe occasion of earlier meetings, including those atlower levels, we knew that this is one of the key issuesin the world in which we live. We also knew that itwas high time to pay it due attention. And if one cansay that we have started to consider the problem ofdevelopment and its financing at the eleventh hour, asthey usually say, then this meeting is being held –without any exaggeration – at the last possible oppor-tunity indeed.

Engineering and technology are developingat an undreamed-of rate. Falling behind is literallybecoming a matter of life and death. An achievement,which took a couple of decades as late as the first halfof the past century, is currently accomplished in a cou-ple of years. As a result, a ten-year lag today is equalto a lag of fifty or more years in the mid-twentiethcentury. In the process, the gap between the devel-oped on the one hand and the developing and under-

developed on the other hand is increasing at an everfaster rate, and its closing is proving to be increasinglymore difficult.

The division into those that have and willhave, and those that do not have and see no chanceof ever having, is becoming ever more pronouncedand dangerous. In the globalizing world, wealth isglobalized as well as poverty. We must put a stop tothat! We have to demonstrate political will, becausethis is basically the issue, so as to start overcoming thedivision into the developed and the underdeveloped,or, in other words, into the rich and the poor.

Do not get me wrong. In free-market andfree-competition conditions, it is obvious that all coun-tries cannot get the same share of the cake. But allcountries should get the chance to open up the cycleof their own development, stop the headlong fall intopoverty and economic dependence followed by politi-cal dependence, by using their own potentials, natural,material and human alike.

Underdeveloped countries simply cannotopen up this development cycle on their own. This isprecisely why we are discussing today the Financingfor Development. Of course, I am not saying that theproblem can be dealt with by some kind of economiccharity. I am not saying that the developed countriesought to provide some kind of charitable aid in orderto resolve the issue. It is true that one also ought toprovide, to discuss thoroughly debt write-offs to thepoorest countries, to consider non-repayable aid aswell – but that can only help to alleviate temporarilythe most pronounced consequences, not to removethe underlying causes. Therefore, the problem shouldbe dealt with at its roots and on a long-term basis.

Having said that, I have the following inmind: Any country in the world, particularly in today’sever more interconnected and interdependent world,has certain specific comparative advantages and, byrelying on them, conditions on which to base its owndevelopment. But, let me reiterate once again, thereare many countries that are so poor, that lag so muchin their development through no fault of their own,that they cannot achieve this goal on their own. Thisis where the developed countries ‘enter the game’.They simply must help, even – let us be quite frankabout it – in their own interest as well.

Therefore, the developed countries musthelp, not merely because it is simply inhuman to be apassive witness of conditions in which millions arestarving, and thousands and thousands dying ofhunger daily, conditions in which millions are con-demned, from the very moment of their birth, not tolife but merely to survival, with no educational possibil-

57


ities, no health care, lacking all those elements distin-guishing life in developed countries and taken forgranted.

The developed must also help because mis-ery, poverty and dependence create the environmentfostering terrorism, producing desperate individualswho are easily misled by the abuse of either religion orideology or a just struggle for the achievement of legit-imate national rights. After the eleventh of September2001, does anyone still need an explanation why it isimportant to eliminate the causes of global terrorismthat currently faces us?

I have said this many times so far, and Ishall reiterate it on this occasion: the use of force isnecessary and unavoidable in the direct war againstterrorists and those that abet them. But this war willyield only temporary and short-term success unless weengage in a long-term action focused on eliminatingthe environment from which global terrorism origi-nates.

Some may feel this is an additional dimen-sion of the problem we are discussing here, but that isactually not the case. Poverty, underdevelopment,hopelessness, subservience and dependence havealways provided fertile ground for the recruitment ofpeople ready to resort to extremely radical methods –and terrorism is certainly one of such methods – intrying to change the current state of affairs. We knewthat before, but perhaps we were not prepared toaccept it. Today, we both know and accept it becauseafter the eleventh of September nobody is entitled toclose his eyes to the fact that global terrorism is direct-ly connected with the growing gap between the devel-oped and the underdeveloped regardless of the masksused by those that inspire it.

Let me conclude: Globalization is aprocess, which cannot be stopped. But, if we fail todirect it properly, its negative implications will move tothe forefront. Therefore, we must endeavour toreplace the globalization of enrichment on the onehand and impoverishment on the other by the global-ization of development.

Let us make development a global process,and we shall truly lay the foundations for a betterworld! If we want to, we can do it. If we want ‘tomor-row’ to be better than ‘today’, we must do it!

Cuba

President Fidel Castro of Cuba

Statement byHis Excellency Dr. Fidel Castro RuzPresident of the Republic of Cuba21 March 2002

Excellencies, not everyone here will share mythoughts. Still, I will respectfully say what I think.

The existing world economic order consti-tutes a system of plundering and exploitation like noother in history. Thus, the peoples believe less andless in statements and promises.

The prestige of the international financialinstitutions rates less than zero. The world economy istoday a huge casino. Recent analyses indicate that forevery dollar that goes into trade, over one hundredend up in speculative operations completely discon-nected from the real economy.

As a result of this economic order, over 75per cent of the world population lives in underdevelop-ment, and extreme poverty has already reached 1.2billion people in the Third World. So, far from narrow-ing, the gap is widening.

The revenue of the richest nations that in1960 was 37 times larger than that of the poorest isnow 74 times larger. The situation has reached suchextremes that the assets of the three wealthiest per-sons in the world amount to the GDP of the 48 poor-est countries combined.


58

The number of people actually starving was826 million in the year 2001. There are at themoment 854 million illiterate adults while 325 millionchildren do not attend school. There are 2 billion peo-ple who have no access to low-cost medications and2.4 billion lack the basic sanitation conditions. No lessthan 11 million children under the age of 5 perishevery year from preventable causes while half a milliongo blind for lack of vitamin A.

The life span of the population in thedeveloped world is 30 years higher than that of peo-ple living in Sub-Saharan Africa. A true genocide!

The poor countries should not be blamedfor this tragedy. They neither conquered nor plun-dered entire continents for centuries; they did notestablish colonialism, or re-established slavery, and,modern imperialism is not of their making. Actually,they have been its victims. Therefore, the mainresponsibility for financing their development lies withthose states that, for obvious historical reasons, enjoytoday the benefits of those atrocities.

The rich world should condone their for-eign debt and grant them fresh soft credits to financetheir development. The traditional offers of assistance,always scant and often ridiculous, are either inade-quate or unfulfilled.

For a true and sustainable economic andsocial development to take place much more isrequired than is usually admitted. Measures as thosesuggested by the late James Tobin to curtail the irre-pressible flow of currency speculation – albeit it wasnot his idea to foster development – would perhaps bethe only ones capable of generating enough funds,which in the hands of the UN agencies and not ofawful institutions like the IMF, could supply directdevelopment assistance with a democratic participa-tion of all countries and without the need to sacrificethe independence and sovereignty of the peoples.

The Consensus draft, which the masters ofthe world are imposing on this conference, intendsthat we accept humiliating, conditioned and interferingalms.

Everything created since Bretton Woodsuntil today should be reconsidered. A farsighted visionwas then missing, thus, the privileges and interests ofthe most powerful prevailed. In the face of the deeppresent crisis, a still worse future is offered where theeconomic, social and ecologic tragedy of an increas-ingly ungovernable world would never be resolved andwhere the number of the poor and the starving wouldgrow higher, as if a large part of humanity weredoomed.

It is high time for statesmen and politiciansto calmly reflect on this. The belief that a social andeconomic order that has proven to be unsustainablecan be forcibly imposed is really senseless.

As I have said before, the ever moresophisticated weapons piling up in the arsenals of thewealthiest and the mightiest can kill the illiterate, theill, the poor and the hungry but they cannot kill igno-rance, illnesses, poverty or hunger.

It should definitely be said: “Farewell toarms.” Something must be done to save Humanity! A better world is possible!

Thank you!

Clarification Note byHis Excellency Dr. Fidel Castro RuzPresident of the Republic of Cuba

Mr. President, I would need twenty seconds for a pointof clarification.

Excellencies, I ask for your indulgencesince I will not be able to accompany you any longer.A special situation created by my participation in thisSummit obligates me to immediately return to mycountry.

The leader of the Cuban delegation willthen be comrade Ricardo Alarcon de Quesada,Speaker of the National Assembly of People’s Power,and a restless combatant in defense of the rights ofthe Third World peoples. I entrust him with the pre-rogatives corresponding to me as a Head of Stateattending this conference.

I hope he will not be prevented fromattending any official function that is his right to par-ticipate in as the Leader of the Cuban delegation andthe President of the Supreme body of power in theCuban state.

Thank you, again.

59


DominicanRepublic

President Hipólito Domínguez of the Dominican Republic.

Statement byHis Excellency Mr. Hipólito Mejía DomínguezPresident of the Dominican Republic*21 March 2002

I wish to express our thanks to the people andGovernment of Mexico, and to its president Mr.Vicente Fox for the very warm welcome extended tous and express our support in celebrating the birthdayof Benito Juarez.

We express our congratulations also to theSecretary-General of the United Nations for enablingthis event to take place despite enormous financialfailures which everyday circulate around the world forthe great majority of the developing countries. One ofthe most important sources of financing to improvethe quality of the life of the poor remains internationalcooperation and, most especially, bilateral and multi-lateral banking. In that regard, the importance given toeconomic growth by international organizations waswell founded.


Therefore, I would like to share some ideaswith you relating to my specialty as President of asmall agricultural farming country and agricultural pro-ducer and as a former Minister of agriculture and nowPresident of my Republic. I repeat then, I wish to reit-erate the importance of financing for agriculture andworld development as a strategic topic that needs tobe among the new priorities to be placed on the agen-das of the international organizations. We have had avery interesting experience in the first year of our gov-ernment. We have succeeded in increasing agriculturalproduction by 8.3%, translating into an increase in thegrowth of the national economy by 2.7%. Clearly, thisgives us an experience worth sharing with you. Inaddition, our experience has meant that the reformsof our rural people who have faced poverty, as well asa series of problems also familiar to all of you, cannotbe lopsided by international organizations as we lookat world development as a highly important factor.

Something that is highly important, anexplanation of the reasons why our people are leavingthe land, has been translated into dramatic reductionin world financing that we experienced in recentdecades – the decades of the 70’s and 80’s – of theWorld Bank and Inter-American Development Bank.They deducted approximately 22% of their portfolio ofthe Latin-American Caribbean loans and, in recentdecades, this has declined significantly to 6.6%, andthe present trend is for it to decline further.

This plummeting of agricultural financingclearly concurs with the statement made by the UNthrough the Food and Agricultural Organization (FAO)that combating the fight against poverty is not achiev-ing positive results in the population. The DominicanRepublic at this time, and I’m speaking as aspokesman here, is occupying the chairmanship of theACP countries at the Summit that receives technicaland financial assistance from the European Union.

The purpose of this conference provides anopportunity to express some ideas on behalf of theseventy-eight countries that constitute the ACP Group,which constitutes two-thirds of the members of theWorld Trade Organization and more than half of themembers of the United Nations. In this dialogue fordevelopment we cannot lose sight of the fact thatsevere financial restrictions and strong distortions inthe operation of markets constitute at times insur-mountable obstacles to reaching competitivenessamong our nations. Technical advancement and theconsequent improvement of productivity are essential


60

pillars in promoting the competitiveness of the ACPcountries. However, this process, like none other,requires support from the international financial sys-tem to renew and develop productive infrastructuremade up of systems of irrigation, technological innova-tion, new technologies, credit, road construction andcommercial infrastructure. International financingshould contribute to introducing to countries with agri-cultural potential, as is the case of my country and theACP countries, a new technology upon which compet-itiveness in the world today depends. The ACP coun-tries are open to listening to recommendations frommultilateral financing organizations in order to agreeon modernization programmes for agricultural struc-tures to make it more efficient and competitive.

We are seeing in the world today a new,intensive and knowledge-based form of agriculture.Agriculture adapts very well to the conditions of ourcountries, where population density is threatening todestroy natural resources and the environment. Newagricultural technologies cannot only help to enhancethe productivity of our economies, but also to makerational and efficient use of scarce resources.Greenhouse agriculture, genetic engineering and spe-cific forms of irrigation enables the small farmer withsome resources in varied environments by using highlyproductive methods to produce enough food for all.Advances in phytosanitary biological control systemsand integrated management of plagues in the develop-ment of biotechnology are permitting the productionof foods that are increasingly safe for human health.In the year 2015, 25 per cent of agriculturally-basedproducts of developed countries will be organicallygrown. They, undoubtedly, will be the countries thatare best equipped to so.

Development of forestry in its variousaspects – horticulture, dairy and meat production,organic farming, ecotourism, small rural business andcrafts are excellent opportunities – on which a betterfuture could be built for our ACP countries.

A transparent and just system of trade forthe ACP countries without excessive protectionismand practice by large developing countries is an impor-tant condition for our development. We can avoidglobalization becoming a phenomenon that deepenspoverty and the difficulties of our peoples only withjust agreements and the guarantee that the majority ofour nations’ populations will receive tangible benefitsfrom this opening up. Globalization should be a two-way street. It should send clear and transparent sig-nals. For the ACP countries the initiatives that seek to

alleviate the external debt and its conversion into pro-grammes of economic development and support mustbe highly beneficial in their impact in order to diminishpoverty.

I wish to reiterate what I have said in allinternational forums: It is urgent that we find solutionsnow for our neighbour and fraternal country of Haiti,which requires urgent assistance today.

El Salvador

President Francisco Pérez of El Salvador.

Statement byHis Excellency Mr. Francisco Guillermo Flores PérezPresident of the Republic of El Salvador*21 March 2002

Since it seems to me that making generalizations isone of the things that has made it so difficult for us tounderstand poverty, I would like to talk about the onlything about which I really know – my country’s ownexperience.

Crushed by 13 years of the worst conflictever experienced by El Salvador in its entire history,with our basic infrastructure destroyed, our exportsgreatly reduced, our people leaving in great numbersfor other places and most of our people living inuntenable poverty, under those circumstances, El


61


Salvador decided to survive and overcome. We built aninclusive political model so that we would have a func-tioning democracy. We decided to have an economicmodel of freedom, and, today, while we still facemajor challenges such as poverty and learn daily abouthow to improve our youthful democracy, we have nev-ertheless left despair and war behind. We look to thefuture with optimism.

Therefore, it seems to us that the first pre-requisite for emerging from underdevelopment andtackling poverty is for a country to shoulder its ownresponsibilities. We were the ones who made mistakesthat led to war and we are the ones who made thedecision to achieve peace.

Thus, we believe that there are two mythsthat prevent us from tackling poverty. The first is thatthose that have developed believe that they have themagic formula to help a poor country emerge frompoverty. The second myth is that poor countriesblame the developed countries for poverty; they makethem responsible for it. When our country believedthose two myths, we were closed in on ourselves andwere not able to resolve our problems alone. It wasonly once the Salvadoran people assumed full respon-sibility for the country and its future that it was able tobegin to emerge.

The second prerequisite for tackling pover-ty is a legitimate leadership that is truly committed, inorder for a community, region or country to be able tobegin to find solutions. That is true of all humanorganizations. It is particularly true of any nation.

Leaders respond to the spontaneousprocesses under way. They are aware of what is need-ed to find the right direction. They are able to identifythose individuals who are particularly able at that par-ticular time of history. That is why we need this frame-work of freedom. We do not just need freedom. Wehave to make sure that freedom continues so thatleaders can continue to shoulder their responsibilityand maintain the right direction.

A system of freedom is much more thansimply voting people into office. At the most brutaltime of our war, twenty years ago, a high governmentofficial at that time decided that his neighbour’s carshould be his. So he sent three armed men to take hisneighbour’s car. The lady neighbour was rather out-raged, but she knew that there was no institution inthe country where her influence to receive justice wasgreater than that of a high official. So she went to theoffice of the high official and said to him, “You stolemy car. I have called the press. They are right here

outside; so either give me the keys to my car or I willgo out and denounce you to the press.” The officialgave her the keys to the car. This is why I say that thesystem of freedom is much more than a simple votingsystem.

Freedom of expression is essential. Thecommunications media must be developed andstrengthened in order to make sure that a system offreedom can actually exist and function.

The third prerequisite is a combination ofsecurity, stability and relative social harmony, whichwe call peace. I believe that, if twenty years ago theworld had been able to distinguish between legitimatepolitical demands and terrorism, the conflict wouldhave been shorter. I also believe that if our judicial sys-tem had been working properly, we would not havehad war in El Salvador. We can have peace only underthe rule of law.

The fourth and final prerequisite of which Iwish to speak is opportunity for the poor. Poverty issynonymous with isolation. An isolated community is apoor community. A country that does not have anopportunity to enjoy the fruits of its efforts in theworld markets because of trade barriers or distortionscreated by subsidies is a country condemned to pover-ty. The only way to emerge from poverty is throughwork. Only when we are able to sell the fruits of ourlabour on an open market that is not suffering fromdistortions will we be able to break our isolation. Thatis why I believe that assuming our responsibilities, hav-ing legitimate leadership, living under the rule of lawand having access to open markets are the prerequi-sites for development.

In my country international developmenthas been essential to help the poorest people, reformour institutions and face serious crises such as theearthquakes last year. Certainly increasing the amountsavailable to the least developed countries would beextremely helpful. However, above and beyond theamount is the quality of financing. Only when donorsare respectful and knowledgeable and when recipientshave dignity, leadership and vision will we be able toretain the objectives of this Conference.


62

EuropeanCommunity

Mr. Romano Prodi, President of the European Commission.

Statement byHis Excellency Mr. Romano ProdiPresident of the European Commission22 March 2002

It is only just over six months since 11 September,when the whole world recoiled in horror at one of theworst attacks ever perpetrated against our civilization.We were quick to demonstrate our solidarity, our unityand our determination to fight terrorism. This fightmust continue. And we must show the same determi-nation today in tackling the other crucial issues whichaffect the future of the world.

We began these efforts in Doha lastNovember, with our decision to launch an ambitiousagenda for negotiations on opening up our marketsand agreeing collective rules on a large number ofissues related to trade and investment. We also decidedin Doha to admit China to the World TradeOrganization and to give the developing world agreater share in world economic decisions.

We will be meeting again soon for theWorld Food Summit and then later in the year inJohannesburg for the Summit on SustainableDevelopment.

These different conferences are obviouslyall linked. They all deal with different aspects of thesame problem: How to control global interdependencecollectively and to harness globalization; how to givehope to the world’s poor; and how to preserve theresources of our planet.

The public at home are sceptical aboutglobalization. They know that the free movement ofgoods, services, capital and people brings oureconomies the wealth without which it is impossible tosatisfy their legitimate aspirations. At the same timethey worry about ever-growing inequalities, the threatsto our environment, the instability of the financial mar-kets and the rise in organized crime. They look to usfor constructive responses. It is our duty not to disap-point them.

For Europe, the year 2002 began with thesuccessful introduction of our single currency, theeuro. It will end, I hope, with the conclusion of negoti-ations for the accession of ten new Member States.We are at one and the same time deepening theUnion and striving to reunify Europe on the basis ofhuman rights, democracy and the rule of law. We willbe extending our area of stability and prosperity toalmost 80 million more European citizens.

We bring to Monterrey a message of peace– the peace we have established on our continent andthe peace we are trying to promote around us, notablyin the Mediterranean region and Africa. We also bringa message of solidarity – the solidarity we have forgedbetween the countries of the European Union and thesolidarity we have extended to the rest of Europe andto all the developing countries that receive aid fromus.

Our markets are open, wide open, notleast to the developing countries, from which weimport goods worth more than €400 billion everyyear.

The EU recently took an unprecedentedstep through the initiative ‘Everything-but- Arms’,when we decided to open our markets, including ouragricultural markets, unilaterally and totally, to importsfrom the poorest countries.

And we have decided to pursue the liberal-ization of trade, including trade in sensitive sectors likeagriculture, as part of a balanced negotiation of theDoha agenda. We undertake to negotiate constructive-ly to ensure that the success of the Doha Round givesa lasting boost to the world economy, confirms ourcommitment to multilateralism and benefits the devel-oping world.

63


EU companies account for by far thelargest share of investment in developing countries:nearly 70% of the world total in 2000. But we arewilling, through multilateral and bilateral negotiation,to improve the conditions for accommodating andprotecting this investment, thereby increasing it stillfurther. We are also willing to provide assistance, aswe are doing in Eastern Europe, to promote the eco-nomic reforms and regional integration that will enableour partners to attract even more investment.

We are conscious of the absolute moralimperative of combating the extreme poverty sufferedby one fifth of humanity and we have fully endorsedthe historic development goals written into theMillennium Declaration.

We know that in order to attain theseobjectives it is necessary both to improve the effective-ness and to substantially increase the volume of officialdevelopment aid.

The European Union reaffirms its commit-ment to the target of 0.7% of GNP to be devoted todevelopment aid, a target that several Member Stateshave already attained and overtaken. For thisMonterrey Conference the EU Member States havecollectively set themselves the interim target of 0.39%by 2006. This is a formal commitment which willallow a substantial increase in the amounts allocated torelieving poverty. Aid from the EU and its MemberStates will increase by about €8 billion (approximatelyUS $7 billion) per year by 2006 from its current levelof €27 billion, more than 50% of the world’s ODA.Over the period 2003-2006, this progressive increasewill enable us to devote about €22 billion more to thefight against poverty.

We are giving priority to health and educa-tion in the allocation of our aid and are making a sub-stantial contribution to the Global Health Fund to fightAIDS and other contagious diseases.

Globalization requires cooperation, andsolid and respected institutions to organize the manyforms it takes. And in order to engage the true com-mitment and support of the world’s people such coop-eration needs to be based on shared principles andrules. At President Fox’s invitation we shall shortly belooking at the various aspects of the collective actionneeded if we are to achieve our goals, in other wordsif we are to harness globalization more constructively,and I hope that this Conference will send out the rightsignal expected by world opinion.

I do not want to finish without a wordabout Africa, Europe’s neighbour, that sometimes for-gotten and war-torn continent. I would like to under-line the importance of the message issued by a group

of brave and respected African leaders who launchedthe New Partnership for African Development. Theydeserve our unstinting support.

The events of recent months show that ourworld is at a crossroads. Two equally possible paths lieahead: the spread of poverty and marginalization, warand environmental degradation; or advancing togethertowards a period of progress, peace and prosperity.Our future is a matter of political will and choice.Europe is opting for openness and solidarity. And Iwould call on our partners to work with us in a globalpartnership for peace and sustainable development.

Finland

President Tarja Halonen of Finland.

Statement byHer Excellency Ms. Tarja HalonenPresident of the Republic of Finland21 March 2002

We agreed at the UN Millennium Summit that wewould do everything in our power to free humankind –men, women and children – of misery and extremepoverty. We decided that by 2015 we would halve theproportion of people who have to survive on less thana dollar a day. It is now time for us to start putting thisdecision into effect.


64

A lot of things – both good and bad – havehappened since the Millennium Summit. The terroristattacks that shocked all of us made the world commu-nity give more serious thought to the state of ourworld. The Millennium Declaration’s message aboutthe importance of international cooperation, andbuilding a shared world, is more topical than ever.

We share one world, and we all need eachother. Every country bears the primary responsibilityfor its own economic and social development.However, many countries need outside support to beable to develop, and they must also get that help.

Growth in global development aid is crucialin achieving the Millennium Development Goals.Finland is committed to the 0.7-per cent target and,as a first step, we shall increase our aid to 0.4 percent of GNP by 2007. We need imagination, fresh-mindedness and creativity to find new sources offinancing to supplement official development assis-tance. One possibility might be the idea of a global lot-tery which is now being examined in Finland.

Official development assistance cannot bethe only answer to the challenges of financing fordevelopment. More than four-fifths of the foreign capi-tal that developing countries receive is private. At themoment, only few countries, which are seen to be theeconomically most promising, benefit from these capi-tal flows. The task of development cooperation is tohelp especially the least-developed countries create thekinds of conditions that would make it possible forthem to attract investment and financing also from pri-vate sources.

The task of the World Trade Organizationis to liberalize trade, but also to provide a frameworkfor fair trade. The special needs of developing coun-tries, and especially of the least-developed ones, aretaken into account in many ways in the WTO Treaty.This is a good basis to continue developing a fair tradesystem.

The importance of providing developingcountries with technical assistance and of increasingcapacity in the sector of trade and investment wasemphasized in the Doha Declaration. Finland is furtherincreasing its support for technical assistance pro-grammes and urges the international community toquickly implement the measures agreed in the DohaDeclaration.

No aid will suffice unless the developingcountries are able to share in the benefits of globaliza-tion. Products and services originating in the develop-ing countries must have the opportunity to gain fairaccess to markets in the industrial countries. In accor-

dance with the European Union’s ‘Everything-but-Arms’ decision, products from the least-developedcountries enjoy tariff-free access to the EU market.Finland hopes that other countries will follow the EU’sexample.

A country’s most natural trade partner isoften right next door. At the same time, as trade is lib-eralized globally, trade between developing countriesshould also be opened.

Economic growth cannot alone eliminatepoverty. For that we also need democracy, a moreequitable distribution of income and to create socialsecurity systems.

A central means of defeating poverty iseducation. Especially investment in education for girlsand women promotes development and reducespoverty. Education helps people themselves toimprove the conditions of their own and living stan-dards of their communities.

Globalization has much potential for widen-ing opportunities, raising prosperity and promotingdevelopment. Globalization can be a resource, aninstrument for progress. Yet, alongside the increasedprosperity there are widening gaps. These gaps existboth between and within countries.

Better cooperation and interaction betweeninternational organizations, international financial insti-tutions, national actors and civil society is a prerequi-site for managing globalization. The UN system has acentral role in this work.

The International Labour Organization(ILO) has appointed a World Commission on theSocial Dimension of Globalization, which I have thehonour of co-chairing along with President BenjaminWilliam Mkapa of Tanzania. The goal of the WorldCommission is to make proposals as to how as manyindividuals, peoples and countries as possible will beenabled to share in the benefits of globalization andhow the number who suffer from its adverse effectscan be minimized. The World Commission will not beable to do its work alone.

I am counting on all of you to give yourhelp and support in this work.

65


France

President Jacques Chirac of France.

Statement byHis Excellency Mr. Jacques ChiracPresident of the French Republic22 March 2002

Only yesterday, the world order was frozen by theclash of blocs which posed a threat to peace and liber-ty. Now that this fault-line has been overcome, theworld can at last set about accomplishing its commondestiny.

Globalization has brought us a degree ofeconomic dynamism without parallel in history, freetrade with its immense promises, and swift advances inknowledge and technology.

And yet more than two billion people livein dire poverty. People are still dying of cholera, tuber-culosis and malaria, for want of treatment. HIV/Aidsis ravaging entire populations – a terrible humantragedy and an obstacle to development.

And yet the world is confronted with fanati-cal terrorism, the tentacular power of organized crimeand drug trafficking. It is not immune to financial tur-bulence. And nations, fearing their identity is about tobe steamrollered by rampant globalization, are some-times inclined to seek refuge in nostalgia for timespast.

The inexorable advance of economic glob-alization calls for the globalization of solidarity. What isat stake in Monterrey is not only the financing ofdevelopment. It is also about harnessing the world’snations in search of an answer to the gnawing ques-tion of our times: namely, how to end a situation thatis morally unacceptable politically dangerous, and eco-nomically absurd? How are we to put an end to a situ-ation in which the accumulation of wealth will not suf-fice to lift the very poor out of poverty?

I want to see a new wind blowing inMonterrey, a wind of generosity and hope. The con-ference document represents only a first step, in myview, a first realization of the scale of the problem. Weshould be more ambitious. Already Europe has decid-ed to step up its development aid effort, aiming forthe objective of 0.7%. President Bush has announcedAmerica’s plans to revitalize its aid. The developingcountries have committed themselves to promotingeconomic growth through good governance andgreater recourse to private initiative. A global partner-ship for development through solidarity is being estab-lished where everyone will be pulling their weight.Africa has shown the way with the adoption of theNew Partnership for Africa’s Development.

But we need to go further still.

To achieve the aims of the MillenniumSummit, the World Bank estimates it will be necessaryto double the amount currently spent on poverty eradi-cation. It puts those needs at $100 billion annually.That is undoubtedly a lot of money. But we need to place that in the context of the huge volume of international trade. It does not amount to very much when compared with the human, political and eco-nomic benefits our world would reap from eradicating poverty.

We must pursue every avenue in search ofthis objective. And those avenues exist, starting withan increase in official development aid. But that aloneis not enough. We need to build on that. Via an addi-tional allocation of special drawing rights. Via greatergenerosity in the application of debt cancellation deci-sions for the very poor countries and more ambitioustreatment for the severely indebted middle-incomecountries. And it is natural to consider drawing on thewealth created by globalization in order to financeefforts to humanize and control it. We therefore needto ponder more deeply the possibilities of internationaltaxation.


66

But the issues raised by this new partner-ship are broader still.

We want to bequeath a clean planet to ourchildren. Even now we are using up nature’s resourcesfaster than it can replenish them. It would be irrespon-sible not to put an end to this dangerous trend.Polluting emissions have triggered a process of climatewarming that threatens the conditions of life itself forourselves and for our children. The Kyoto Protocol isthe only credible means to reduce them, and I callupon all countries to ratify it. The approach it embod-ies prefigures the new sharing of resources andresponsibilities on which nations must now agree.

For we need to build on Monterrey througha partnership for sustainable development. The eco-logical revolution is comparable in scale to the industri-al revolution. That is the challenge we must worktogether to overcome in Johannesburg, by inventingnew modes of production and consumption. By creat-ing a World Environment Organization.

Six months ago New York was disfiguredby a hateful crime. America, with the support of theinternational community, struck back at the terroristswho threatened it. And the world came together in acoalition against terrorism, determined to act firmly,within the framework of the law.

What can be done against terrorism cansurely be done against poverty, in the name of a morehuman, manageable globalization. Let us form a coali-tion to build together a universal civilization wherethere is a place for everyone, where everyone isrespected, and where everyone has a chance.

France has never ceased to pursue thesame dream, which is to make a global reality of itsown ambitious motto: liberty, equality, fraternity.Inspired by that ideal and by the commitments of theMillennium Summit, France proposes that we worktogether over the coming decade to bring to fruitionfive projects. Five projects that testify to our resolve tomake globalization serve mankind:

• Allocating 0.7% of the wealth of the indus-trialized countries to development of the poor coun-tries,

• Agreement on new funding for their devel-opment,

• The creation of an Economic and SocialSecurity Council, within which all can work togetherfor the sustainable management of global publicgoods,

• Fulfillment of the Kyoto objectives and theestablishment of a World Environment Organization,

• The conclusion of a Convention on culturaldiversity, expressing our confidence in the capacity ofhumans to reconcile the unity of the world with itsdiversity.

We owe it to future generations.

Gabon

President El Hadj Omar Bongo of Gabon

Statement byHis Excellency El Hadj Omar BongoPresident of the Gabonese Republic*21 March 2002

For a number of years now, meetings on the subjectof development have been organized all over theworld. We would like to congratulate the UnitedNations Secretary-General, who has been behind thisinitiative. We are pleased to see the very significantparticipation of the international community at theseforums.

* The text of th is s tatement has been transcr ibed f romaudio recordings, as the or ig ina l was not submitted to theSecretar iat

67


These meetings have gradually engendereda tremendous amount of hope and have led Africancountries to implement political, economic, financialand social reforms. We were assured that thesereforms were absolute prerequisites; however, we haveto note today, upon taking stock, that in spite of thevery firm commitment of African countries towardsthese reforms, our meetings are nothing more thanmedia events, with hardly any light at the tunnel forour countries, and without any prospects for our pop-ulations. This is because our own commitment has notbeen matched by that of our partners with the neces-sary firm will and unswerving commitment to supportdevelopment and to combat poverty.

It is very difficult to imagine that Africa,home to 10 per cent of the planet’s population, isinvolved in only 2 per cent of the world’s trade. Whyis it that since the 1960s, the commitment of officialdevelopment assistance (ODA) at the level of 0.7 percent of gross national product (GNP) has not beenachieved?

Nevertheless, since we are meeting here todiscuss the specific problems of financing for develop-ment with a view to reducing poverty, and togetherbuilding a world based on justice and solidarity, let usface these real problems down. If one were to glanceat our planet, one would very quickly see how impossi-ble it is to build a democratic, fair, harmonious andpeaceful world where there is poverty. There will beno democracy, no sustainable development, no truepeace, unless there is an improvement in the humancondition and quality of life of the great number ofpeople of our world. If our target, therefore, is tohalve poverty between now and the year 2015, let usequip ourselves with the specific means and tools tobe able to reach this objective, and let us move fromwords to deeds.

As far as Gabon is concerned, we stick toour commitments. Democracy resides in Africa. Goodgovernance is being seen in Africa now. We pay ourdebts. Regional integration is becoming organized.Moreover, The New Partnership for Africa’sDevelopment (NEPAD) is such that we have to selectthe issues on which to focus at this time in order to

make sure that our actions are credible. These issues,as participants in this Forum know, are numerous. Tobe specific, we could retain the following: first of all,we have mobilization of ODA; then we have the debtburden; next we have combating HIV/AIDS andmalaria; and then access to markets. This cannot omitour very strong concerns relating to infrastructure, theproduction sectors and human resources.

Lastly, it is important to point out that wewill never reach the objectives we have set for our-selves without the true harmonization of our policies –and by policies, I mean economic, industrial, socialand cultural policies.

I would not wish to conclude without rais-ing ethical concepts – the concept of a country – amedium-income country. Today countries such asmine – Gabon – find themselves excluded from any ofthe advantages from which other developing countriesbenefit. Gabon is penalized, and this reduces its capac-ity for investment; it is an obstacle to the efforts thatwe are making to combat poverty.

But Gabon and Africa cannot disappear;nor can they stay on the sidelines of the changes inthe world for very long. It is up to each of us to ensurethat such things will not happen. I am convinced thatif the Monterrey Consensus, this mutual commitment,will be for everyone, then there will be great hope,and this will lead to a new era of cooperation for thepeoples of the world.


68

MonterreySummit

Guatemala

President Alfonso Cabrera of Guatemala.


Statement byHis Excellency Mr. Alfonso Portillo CabreraPresident of the Republic of Guatemala*22 March 2002

About 18 months ago, meeting in New York City, weadopted a set of objectives to reduce poverty, consoli-date democracy and defend the natural heritage ofhumanity. We also assumed commitments for theaccomplishment of those objectives within the frame-work of the Millennium Declaration. We went homewith renewed enthusiasm, buoyed as we were by theconviction that we would be able to build a betterworld.

The road travelled since then has been, tosay the least, a rough one. The abominable terroristacts perpetrated in the United States on 11September and their aftermath, the flare-up of theMiddle East conflict and the recession experienced bythe world economy are only some of the develop-ments that were unforeseeable at that time, and nodoubt amount to serious additional obstacles to theattainment of the goals we had set ourselves. Therecession struck us particularly harshly.


We nevertheless do not falter in our enthu-siasm or in our will to advance in the fulfillment of thecommitments we have undertaken. This gathering inMonterrey offers us a new opportunity to renew thosecommitments and give them concrete content.

I would like to comment briefly on threevistas that this opportunity opens:

• In the first place, the poverty afflicting halfof humanity is the great unfinished task of the twenti-eth century and accordingly the gravest challenge ofthe present century. Although it sounds like a cliché itis nevertheless true that poverty and social injustice arethe breeding grounds that facilitate fanaticism in all itsforms. This Conference provides us with the opportu-nity to place development in the centre of our interna-tional agenda, viewed on this occasion from the per-spective of financing. It permits us to discuss the needfor our domestic savings to finance productive invest-ment and for our exports combined with open mar-kets to become the springboard of our development.

We try to practice what we preach. As weexplained during our recent meeting of the consulta-tive group on Guatemala, we have made considerabledomestic effort to raise the tax ratio and assign thefunds thus mobilized towards development. We recent-ly reached an agreement with the InternationalMonetary Fund on a support programme, which wewill formalize in a few weeks. We have also adoptedlabour policy and intellectual property reforms toimprove this. We have not chosen the easy road. Wehave chosen the hard road. But it is the right one.

As previous speakers have indicated, wehave worked to ensure that these legal, political andeconomic reforms domestically will make it possiblefor the country to become a part of the internationalmarket, obtain credit and compete. We have adoptedmeasures in the field of intellectual property toimprove our participation in the global economy asanother way to have access to financing. We haveadopted a strategy to eradicate poverty, and we areresolute in making public and private operations moretransparent with the support of multilateral organiza-tions.

We trust that the development roundadopted in Doha will yield the results we all hope for.We also salute the possibility of initiating negotiationsbetween Central America and the United States toremove barriers to the trade of our respective goodsand services to move forward in Central Americanintegration.

69


• Secondly, this conference allows us toprogress towards an enhancement of the adequacy ofthe multilateral institutions that support internationalcooperation. We welcome the advances already madewithin the framework of the preparatory process formoving the United Nations closer to the BrettonWoods institutions as well as the regional financialorganizations.

We hail the presence here of non-govern-mental organizations, the entrepreneurial sector andcivil society in general. We also welcome the impres-sive capacity of the United Nations to attract high-levelattendance, as reflected by the presence here of somany Heads of State or Government. This coalition ofinterests is moving in the right direction in its effort torejuvenate the institutional framework that is at ourservice to promote development and cooperation. Itinvolves greater coordination and greater participation.

• In the third and last place, I would like torefer to some pending matters. Various colleagueshave already mentioned the frustrated expectations ofmany countries that were hoping for firmer commit-ments on the part of some donors in the field of offi-cial development assistance. However, we applaud therecent announcement of the United States and theEuropean Union, which at least tends to reverse thistrend. On the other hand, we are surprised at theabsence in the Monterrey Consensus of a more com-prehensive focus on how we are to finance global pub-lic goods as a complementary category to the needs ofcountries in connection with the promotion of theirdevelopment. In this regard, we would have welcomedpledges to create a fund for financing education and aredoubled effort to finance the eradication ofHIV/AIDS.

Notwithstanding all of the foregoing, weare satisfied. We see this gathering in Monterrey asthe beginning of a historic process. We have built plat-form agreements and understandings that suggest thatthis process will be a promising. I trust that all of uswill commit ourselves to this result.

Haiti

President Jean Bertrand Aristide of Haiti.

Statement byHis Excellency Mr. Jean Bertrand AristidePresident of the Republic of Haiti*22 March 2002

I have the honour of addressing participants on behalfof the people of Haiti, who will be celebrating twohundred years of independence in two years; two hun-dred years of independence that should symbolize ahistoric transition towards sustainable development.We are rich in human, cultural and historic values, butthe economic indicators place us among the 48 coun-tries whose combined gross national product is thesame as the assets of the three richest individuals inthe world; yes, that world where one-fifth of the peo-ple still live in extreme poverty. The foreign debt bur-den causes suffering for many. There are 800 millionhungry people; 850 million are illiterate; and their suf-fering is indeed ours because when one person suffers,everyone suffers.

Against that backdrop, the spirit ofMonterrey can inspire us because we are talking hereabout financing for sustainable development at thenational and worldwide levels. We find reflected herethe decisions we made more than 10 years ago:



70

Investment in human capital, respect for human rightsand fundamental freedoms, combating corruption,drug traffic and terrorism, making sensible use of pub-lic resources with ever greater transparency, participa-tion and justice. To achieve sustainable development,we are fully resolved to keep the door of dialogueopen always.

We have scheduled democratic elections forNovember 2002 or for the first half of 2003. This ispart of our policy of being open and committed topeace and social cohesion. We would thank the sevenSenators who have resigned and all the other Senatorsand representatives who have agreed to give up twoyears of their term. This is a patriotic gesture. We alsothank the Caribbean Community and those foreignfriends who, together with the Haitian people, havecalled for the lifting of economic sanctions againstHaiti.

The closer we come to ending crisis, themore we want to thank all those friends in the interna-tional community who are helping us emerge from cri-sis. Just yesterday, here, President Hipólito MejíaDomínguez recalled how important and valuable thissolidarity is. The harmonious relations between theDominican Republic and Haiti demonstrate our resolveto promote peace, democracy and sustainable devel-opment throughout the island.

So we commit ourselves to promoting themarket, preparing a framework favourable to partner-ship between the public and private sectors, invest-ment and economic and human growth, pending theemergence of an equitable economic system open toeveryone.

We are happy at this point to see in theshadow of Monterrey some rays of hope lighting ourpath to 2004. The Republic of Haiti will warmly wel-come all those who plan to visit us upon the bicenten-nial of our independence.

Honduras

President Ricardo Joest of Honduras.

Statement byHis Excellency Mr. Ricardo Maduro JoestPresident of the Republic of Honduras*21 March 2002

Honduras supports the objectives and the commit-ments by donors at this Conference. The trend andthe general direction are probably right. We hope toreach the goal of 0.7 per cent of the gross domesticproduct, as set forth in the Millennium Declaration.We also urge the donor countries to make additionalcommitments, as proposed by the United States withregard to World Bank operations for developing coun-tries to increase grants, rather than concessional oans. We recognize that success in reducing poverty is possible only if there is assistance to developmentand access to markets; if there is assistance linked toappropriate domestic policies in our countries.

I should like to speak first about thechanges needed to strengthen the confidence of ourpeoples in their leaders and institutions; in otherwords, in governance. In the past year in Honduras,all the political parties and society in general havereached agreements to establish a new Supreme Courtthat is independent of political and economic powers.


71


We are strengthening the State and itsfunctions. We want to have a Congress that is closerto the electorate and have depoliticized electoral com-missions. There will no longer be immunity for publicofficials. These are some of the reforms that we havemade.

Secondly, human development must be apriority. There must efficient, sustainable and fairdevelopment in providing education and health servic-es for our people. Our tax and fiscal system requiresvery careful management to ensure stability. However,we will keep funds for education, health and securityintact. Our people realize that sustainability depends inpart on significant and timely assistance from theinternational community, but it depends even more onfirm and resolute participation by our citizens, organi-zations and civil society.

We recognize the tragic breakdown insome key actions by our Government because of thepoliticization of our public authorities and institutions.We are facing that problem. We are proceeding withdepoliticization, efficiency and transparency in ourpublic bodies. The only sustainable solution is partici-pation by our citizens over the long term. We aredemonstrating our approach. Markets must be open.We have started by opening up our markets to ourneighbours in Central America. We are determined toresolve any differences we have on this.

We have met with the Presidents ofPanama and Belize five times in the last month and ahalf, with a view to seeking greater regional integra-tion, settling our differences and establishing a com-munity in Central America based on solidarity so thatwe can present ourselves as a solid block to addressthe challenges we all face. I would just like to thankour regional neighbours for their firm commitment toour shared regional dream. Political and civil society inHonduras are working together today in bringingabout change in our society. Honduras is now ready toplay its part as a partner with others in development –with our regional brothers and sisters and at the worldlevel – and we are all seeking to reduce povertyamong our people.

Jordan

His Majesty King Abdullah Bin Al Hussein of Jordan.

Statement byHis Majesty Abdullah Bin Al HusseinKing of the Hashemite Kingdom of Jordan21 March 2002

Your Excellency, Excellencies, Ladies and Gentlemen:It is a privilege to be with you today. Let me thankand congratulate our hosts, Mexico, and all those whohave worked so hard to bring this Conference to asuccess.

Our meeting is an important step in histo-ry’s march towards truly universal, truly humanizeddevelopment. We have set bold goals, eradicatingpoverty, promoting development, and sustaining eco-nomic growth. Our challenge is to meet these goals,and meet them soon. I believe we can succeed, if wegrasp today’s unique opportunities for change.

• First, is the unprecedented awareness ofour mutual reliance, as people, and as nations.Today’s global markets are driving home a powerfultruth. Over the long term, growth for any requiresgrowth for all. Failure of one country can send ripplesof crisis around the world.


72

To act together, to defend our weakest, toraise our poorest, is a moral obligation and, more, it isrecognition of our common, economic, and politicalfate. Truly, the 21st century is an era of shared inter-ests, and mutual benefits. Therein lie our opportunityand our strength. A global burst of communications,technical knowledge, mobility, and economicexchange, is making it possible to work together asnever before. We can, and must, organize for change,not only through country-to-country relationships, butalso through vigorous multilateral and regional organi-zations. Indeed, soon in Amman, we will be articulat-ing a common social, political and economic vision for114 Non-Aligned countries.

• A second opportunity for constructivechange is a new and global sense of urgency. For toolong, deep pools of poverty, and desperation, haveserved as breeding grounds for conflict and division.Too many people, especially youth are alienated fromall that makes our era so promising. They perceive anunbridgeable divide between Western haves and world-wide have-nots. In their despair, they are listening tothe voices of hatred and violence, instead of freedomand hope.

On September 11, a worldwide alliancewas finally roused. Its mission cannot simply, or evenprimarily, be military. Victory over terror will requireeconomic, diplomatic, and development efforts. Wemust move quickly to remedy unfairness and healdespair. One essential step is a comprehensive lastingsolution to the Arab-Israeli conflict. Now, more thanever, it is time to bring justice, peace and hope, to thepeople of Palestine and Israel. The parameters of thesolution are there, so let us act now.

• A third resource is a growing database ofeffective development strategies. We know that themarketplace is a powerful engine for growth.Countries that participate in global commerce areboosting per capita income and opening new horizonsfor development. We know that sound domestic poli-cies, good governance, and the rule of law, are key toeconomic growth. And we know, that internationalfinancial and technical cooperation is vital. Such coop-eration, public and private, serves as a catalyst tolaunch education, health, and economic initiatives, andput developing countries, on the path to sustainablegrowth.

Yet, in 2000, developing countries receivedjust 19 per cent of all foreign direct investmentinflows, down from 41 per cent in 1994. And in1999, total Development Assistance, represented amere 0.2 per cent of the GNP of the developed coun-tries, down from 0.33 per cent in 1990. In contrast,the Monterrey Consensus would reaffirm a target forincreased direct assistance of 0.7 per cent of the GNPof the developed world. Let us put that figure in per-spective. If you divide a year into days, 0.7 per centequals about two-and-a-half days’ production a year.Two-and-a-half days a year, to reach the billions ofpeople who need access to education, jobs, and hope.Two-and-a-half days a year, to support strong, produc-tive societies, free of crushing unsustainable debt, ableto move forward with democratic and economicreform. Two-and-a-half days a year, to build stabletrading and investment partners, partners who see thatglobalization can be inclusive and desirable.

We have the awareness. We have theurgency. We have the strategies. Now, we must lever-age development through the energy of our peoples,and through global cooperation. Leveraging our inter-dependence is the vision of this conference, a visionthat humanizes economic development through globalpartnership. It is a vision that will enable us to addressfundamental imbalances, and meet the hopes andexpectations of peoples around the globe.

Thousands of years ago, the ancient math-ematician Archimedes, had something to say aboutthe power of leveraging. “Show me where to stand,”said Archimedes, “And I can lift the world.” Today, weknow where we must stand. We must stand together.And we will lift the world.

73


Financing forDevelopmentBuildingonMonterrey

Marshall Islands

President Kessai Note of the Marshall Islands

Statement byHis Excellency Mr. Kessai H. Note President of the Republic of the Marshall Islands22 March 2002

I join my distinguished colleagues who spoke beforeme and thank the people and the Government ofMexico, the United Nations and the organizers of thismeeting for the warm welcome and the hospitalityaccorded my delegation. I would also like to offer mycommendation to you, Mr. President, for the impor-tant role you are playing in the efficient conduct ofthis important International Conference on Financingfor Development here in this magnificent city ofMonterrey.

Our global community is undergoing transi-tion and transformation. The twin process of ‘disinte-gration’ and ‘integration’ are accelerating daily. On theone hand, the dominant patterns of production andconsumption are causing environmental devastation,including global warming and sea-level rise, excessivepollution of the air, land and water, and the depletionof resources. This harm is done in the name of eco-

nomic growth, but while the growth greatly benefitssome, it is inequitable as well as unsustainable andcauses widespread poverty and misery to the vastmajority of people.

Over the past decade, the Leaders of theWorld have gathered more frequently than ever beforeunder the guidance of the United Nations, to debateissues so critical to the sustainable livelihoods of ourpeople.

Since the Rio Conference 10 years ago,we have found that while the global debate on devel-opment has increased in momentum, uncovering fun-damental mechanisms to bring the “good life” to themass population of our planet that lives in abjectpoverty, we have discovered that the greatest obstacleconfronting our exhaustive effort up to now, is lack ofadequate financial resources needed to achieve ourdevelopment goals. Today is a propitious opportunityto participate in this International Conference onFinancing for Development as it is indeed a result ofour willingness and desire to reaffirm our commitmentto fight poverty and to achieve the development goalsas agreed to under the Millennium Declaration.

The commitments to achieve the OfficialDevelopment Assistance levels of 0.7% of GrossNational Product from the developed countries stillremain unsatisfactory. I join my other distinguisheddelegates and encourage the developed countries thathave not reached their Official DevelopmentAssistance targets to make every effort to do so. Inthis regard, I acknowledge the US’ Compact for devel-opment initiative as well as efforts currently undertak-en by the European Union.

Agenda 21 adopted at Rio still remainslargely at the conceptualization stages for implementa-tion. So far, commitments arising out of the numerousworld conferences addressing the fate of the poor andthe “poorest of the poor” have been mainly rhetoric.

The Republic of the Marshall Islands is anation that has survived mainly on external fundingsources, for which we are thankful. However, I canassure the Conference that our need for ‘financing fornational development’ has increased considerably thanever before. This is undoubtedly the common dilemmafaced by the developing countries, and in particularthe Small Island Developing States such as theRepublic of the Marshall Islands. The substance of thisConference therefore, is to reaffirm our full and collec-tive commitment to eradicate poverty in half by theyear 2015.


74

The Rio Declaration is a pioneer inacknowledging the special needs of developing coun-tries and has reiterated that those should be given spe-cial priorities. The subsequent convention of the UNGeneral Conference on Small Island Developing Statesin Barbados in 1994 has been a catalyst in focusinginternational attention on our special needs. It is inthis context that Agenda 21 was translated into four-teen specific policies, each representing a priority arearelevant to addressing the unique challenges faced bythe Small Island Developing States. The ensuing poli-cies, captured in the Barbados Programme of Action,comprise actions to be implemented at both theregional as well as the international levels.

I join my colleagues from the Small IslandDeveloping States to reinforce our common positionmanifested in the Alliance of Small Island StatesSingapore Declaration and call on the internationalcommunity “to provide adequate financial resources,transfer of appropriate, environmentally sound tech-nologies and assistance for capacity-building for suchnational and regional implementation.”

My delegation fully subscribes to the visionespoused in the Monterrey Consensus where its sixkey areas have been identified as pivotal benchmarksfor the mobilization and deployment of financialresources for development. I strongly encourage theparties to the Monterrey Consensus to pay close atten-tion to the special needs of the Small IslandDeveloping States.

In closing, I call upon the developed coun-tries to provide greater levels of development financeto our developing countries. In this regard, I reaffirmmy commitment to pursue sound macroeconomic poli-cies, good governance, upholding of the rule of law,protection of human rights and other actions con-ducive to achieve sustainable development.

Micronesia(Federated States of)

President Leo Falcam of Micronesia. Photo: Luis Galan /Terra Networks.

Statement byHis Excellency Mr. Leo FalcamPresident of the Federated States of Micronesia21 March 2002

At the outset, I would like to express my appreciationto the host country for the excellent courtesies andarrangements extended to me and my delegation sinceour arrival in this beautiful city.

I am honoured to have the opportunity toappear before you today to address an issue of utmostimportance to my nation – financing for development.I commend the United Nations for arranging this his-toric conference, and thank you, Mr. President, foryour efforts to bring this about.

Mr. President, before I proceed, pleaseallow me to offer a bit of background on my nationfor those who may be unfamiliar. The FederatedStates of Micronesia (FSM) is a small island developingcountry comprised of over 600 islands in the westernpacific. Our borders span an area roughly as large asthe continental United States, yet our land mass is

75


comparable with that of the smallest U.S. state.Scattered throughout this vast expanse is our totalpopulation of about 107,000.

Our people have inhabited their islands forhundreds, perhaps thousands of years. We have tradi-tionally made our living from the land, and mostimportantly, the sea. However, in the past hundredyears, we have been thrust upon the world stage andhave undergone an often painful transition to a mod-ern economy. These growing pains continue today,and are even greater in the course of our quest tobecome more closely integrated with the global econo-my.

This transition has been difficult for many.We have been aided in our development by our uniqueties to our former United Nations trust administrator,the United States. This arrangement is the result ofthe Compact of Free Association, a landmark agree-ment adopted by our two nations in 1986. Throughthe Compact, the FSM has enjoyed a defense umbrel-la provided by the United States. The Compact alsohas provided a guaranteed funding stream to assistwith my country’s development.

U.S. assistance, through the Compact, hasallowed my nation to make great strides in its develop-ment efforts with a goal of enhancing the standard ofliving of our citizens and working toward economicself-reliance for the future.

Like many small island states, the FSM hasfew natural resources. Coupled with our small popula-tion base, distance from markets and other con-straints, this limits the range of economic options atour disposal. Development, if it is to succeed, musttherefore overcome seemingly insurmountable odds.

I would remind those present of the find-ings of the Global Conference on SustainableDevelopment of Small Islands Developing States, heldin Barbados in 1994, and reiterated in a SpecialSession of the General Assembly in 1999. TheBarbados Plan of Action, adopted by the first meeting,and reaffirmed by the second, highlights the specialcircumstances of small island developing states such asthe FSM, and the challenges that these states face inthe global economy. A narrow resource base, depend-ence on international trade and vulnerability to naturaland human-induced disasters, transportation and com-

munications challenges – I need not repeat them allhere, but suffice it to say that my country faces most,if not all, of the phenomena on that list.

These conditions also create many obsta-cles for us in the global economy. For example, weare handicapped as to lending, based on the assump-tion that our size and circumstances constrain ourabsorptive capacity. The FSM’s copra industry, histori-cally our only significant land-based source of exportincome, has nearly collapsed due to our inability tocompete effectively with larger producers.

With this background in mind, please allowme to offer my brief remarks on some of the key issueareas before us today:

The experience of the Federated States ofMicronesia has shown that unless there is political sta-bility, transparency and accountability, economicdevelopment initiatives are bound to fail. We areproud of our system, and can point to its role in facili-tating the significant progress made in developmentduring the last fifteen years.

Too often, I’m afraid, we focus on failuresand overlook the significant progress that can be madewhen the proper climate for development exists. Aswe all know, there is not a nation on earth that hasnot faced internal difficulties on the path toward sus-tainable development. Of course, every effort shouldbe made to eliminate these problems, but we must notlet their existence deter those from furthering progresswhere initiatives find fertile ground.

It is true that domestic sources of develop-ment financing are essential to further the goals of anation. However, in most developing countries,domestic sources alone are not adequate to carry thenation forward. This is particularly true of small islandswhere resource bases are small, and where elementssuch as public administration and infrastructure costsconsume a large portion of these meager domesticresources.

We are deeply committed to integration ofthe FSM in the global economy. However, we mustrecognize that such integration does run the risk ofcarrying with it unintended social impacts that are par-ticularly troubling for a traditionally isolated, uniqueculture such as that of Micronesia. Every day my gov-ernment seeks to walk this fine line between reapingthe benefits of integration with the global economywhile preserving our local culture and way of life.

As the Barbados Plan of Action stated,“Small island developing states are limited in size, havevulnerable economies and are dependent both uponnarrow resource bases and on international trade,without the means of influencing the terms of that


76

trade.” The next round must give due attention to thecomparative disadvantages we in small island develop-ing economies face in the global marketplace. Theresults of the Barbados Conference, and its follow-upwith the Special Session of the United Nation GeneralAssembly (UNGA), will be on the table for the firsttime for future rounds of trade negotiations, andshould be accorded the weight they deserve.

We hope that this conference will positivelyinfluence the next round of global trade negotiations.The world economy is fundamentally different todaythan it was when the Uruguay round commenced, andnew issues have risen to the fore. The work we dohere in Monterrey should be instrumental in shapingthe elements to be considered by this next round.

I lend my voice to that of the distinguishedChairman of the G-77 and China in the course of hisstatement earlier, and would concur with the wisewords of the Chairman of the Preparatory Committeewhen he stated, “We simply cannot allow the declineof official development assistance (ODA) to continue.”Indeed, this decline is one of the most alarming trendsin international relations in the post-cold war era. Itmust be stopped. At a time when many around theworld are enjoying unprecedented prosperity, forthose who are prospering the most to turn their atten-tion away from the world’s poorest nations and peo-ples, strikes me as shortsighted and dangerous. Thegap between the ‘haves’ and ‘have-nots,’ not just interms of financial resources, but also technical expert-ise, continues to grow at an alarming rate.

Years ago, our predecessors established themodest target of 0.7% of gross national product (GNP)for official development assistance (ODA). With a fewnotable and welcome exceptions, most developednations remain far short of this goal, and many areslipping even further away from it. We commend theEuropean Union for the constructive steps they aretaking to reach this goal and reiterate our appreciationto those nations which have already succeeded inmeeting this goal.

A similarly alarming trend is the view thatforeign direct investment can serve as a substitute forODA. My country’s experience shows the invalidity ofthis premise. In recent years, the Federated States ofMicronesia has been engaged in a process of imple-menting a sweeping economic reform programme,

developed with the assistance of multilateral lendinginstitutions and development agencies. Still, due to thefactors I have mentioned previously, we have not beensuccessful in attracting foreign direct investment. Inlight of this we will have to continue seeking ODA toaddress the unique circumstances faced by small islandeconomies.

Finally, it is important to recognize thatfunding provided for implementation of internationalenvironmental conventions should be considered sepa-rately from ODA. A central component of long-termassistance to developing countries must be relief fromthe pressing burden of debt many nations face. I’mpleased to say that, largely as a result of our uniquearrangement with the United States, the FederatedStates of Micronesia does not suffer from the cripplingdebt burden that many of our neighbors face. Still, thisdoes not lessen our sensitivity to the issue, and we willwork constructively here and in other forums to ensurea fair and equitable resolution of the developing coun-try debt problem.

Both donors and recipients must changetheir approach to development assistance loans.Developing countries must ensure that borrowing isdone in the context of a sustainable development plan,and donors should strive to ensure that developmentassistance does not lead to an untenable debt burden.In this regard, assistance should increasingly take theform of direct grants especially in the case of leastdeveloped countries (LDCs), small island developingstates, and other vulnerable economies.

We lend our voice to those calling for ameaningful reform of existing international financeand development institutions to ensure that recipientcountries have a greater stake in the development andimplementation of measures undertaken by these insti-tutions. This is very much a common sense issue. Atthe micro level, it is widely held that all stakeholdersmust have a voice.

Therefore, it is inconceivable how thiscould not be in terms of international policies. Comingfrom a small island developing state, too often we findthat we are not adequately represented in global eco-nomic discussions that will impact our daily lives, andthat we are often not considered for loans and projectsdue to our small economy. This clearly should notcontinue.

Speaking of reforming economic institu-tions, I would like to highlight four elements that areequally important which I believe should be used as a

77


basis to affect decisions and/or plans when it comesto implementation of this very important Monterreyconference:

• First, ensure macroeconomic stability.Financing for development should build the necessaryconditions in developing countries including smallisland economies to become less vulnerable to shocks.

• Second, improve economic growth.Financing for development should ensure economicgrowth reaches the poor so they become increasinglyproductive participants in society.

• Third, improve the efficiency of basic socialservices. Financing for development should ensure thatmobilized resources are sufficient and targeted toadvance education and health which play such a vitalrole in alleviating poverty and accelerating broad-basedgrowth.

• Finally, economic growth should be envi-ronmentally sustainable. As nations achieve highergrowth and greater reliance on their own resources,the fragile environment and invaluable biodiversity willsurely face greater threats. Thus, a sensible, gradualpath toward sustainable development will promote bet-ter planning, resource utilization, and environmentallysustainable growth patterns. Financing for develop-ment should integrate this important element as a nec-essary condition.

In our view, the most important task beforeus in this regard is to change the mindset of theseorganizations and agencies. Different circumstancesrequire different approaches, as we are all too wellaware in Micronesia Obviously, models originallydesigned for projects in the mountains of SouthAmerica or the deserts of Central Asia will not bemost effective when applied to the FSM. Still, we toooften see these approaches in the current internationaldevelopment climate. For programmes to be effective,they must be designed with input from the recipient,and institutionally these agencies must take a flexible,responsive approach rather than one that is simplybureaucratic.

It is notable that the year 2002 featurestwo high-level, high-profile summits on issues of devel-opment. We must ensure that the results of this con-ference are adequately incorporated in the preparationfor the World Summit on Sustainable Developmentand that the key themes we address here be furtherexamined and developed in Johannesburg.

Beyond that, we must ensure that a perma-nent mechanism exists for continued work on theissues before us here today. Clearly, the lofty wordsand noble ambitions we bring with us to Monterreyare not going to solve these problems overnight. Muchwork remains, and in that work we should be guidedby our findings here as well as those expressed in thehistoric ‘Millennium Declaration’ and other interna-tional initiatives.

For my country’s part, we will continue tostrengthen our domestic institutions and economicdevelopment processes. As I have stated many timesbefore, we face a looming threat from accelerated cli-mate change, which carries with it the threat of mas-sive changes in our nation’s productive capacity. In thecourse of our future planning, we will endeavour toconsider and plan for potential shocks due to our envi-ronmental and economic vulnerability. Guiding ourefforts will be the underlying goal of achieving a levelof sustainable economic growth and reducing poverty.

Let us work together for an effective solu-tion to the wide range of pressing issues before us,and strive to achieve our goal of making the twenty-first century the ‘century of development for all’, asexpressed by Secretary-General Annan. In so doing,let us not neglect the special circumstances of thesmallest and most vulnerable members of the worldeconomic family – entities such as the FederatedStates of Micronesia and other small island nations.


78

Moldova

Prime Minister Vasile Tarlev of Moldova. Photo:Luis Galan/Terra

Networks.

Statement byHis Excellency Mr. Vasile TarlevPrime Minister of the Republic of Moldova*21 March 2002

First of all, may I thank the leaders of this wonderfulcountry and President Fox for their hospitality andexcellent organization of this Conference. I would alsolike to take this opportunity to thank the Secretary-General for his special contribution to the preparationand successful holding of this Conference.

This forum is a unique opportunity for dis-cussing issues of sustainable development in the twen-ty-first century at the highest level. To this end, wehave a clear point of reference: The mission statementof the Millennium Summit. We all agreed that to solvethis task we need considerable financial resources.

On this basis, we would like to stress thatthe initiatives supported by the United States adminis-tration and the member States of the European Unionat the Barcelona meeting to increase the volume offinancial development assistance have had afavourable impact on debates at the Conference.

* The text of th is s tatement has been transcr ibed f romaudio recordings, as the or ig ina l was not submitted to the Secretar iat

The Republic of Moldova is endeavouringto overcome the inevitable difficulties of the transitionperiod. In 2001 for the first time after a prolongeddecline there was certain economic growth. At thistime, we are taking every measure necessary to furtherrecent positive progress on basic macroeconomic andsocial indicators. We are endeavouring to maintaingrowth through reliable policies that inspire trust onthe basis of market economy principles and supportfor private initiatives.

Despite these positive moves, however,problems such as accumulated debt are a basic hin-drance to implementing the programme of combatingpoverty and further social, economic and structuralreforms. May I cite just one example? At this time, theburden of national debt servicing amounts to morethan 150 per cent of the gross domestic product,whereas debt repayment this year makes up 75 percent of the overall budget income. You will agree thatunder the circumstances, it is very difficult to developan effective tax policy and mobilize domestic resourcesessential to cover social costs and meet the needs ofthe low-income population.

Thus, we believe it is especially important,after the adoption of the Monterrey Consensus, tostep up the process of alleviating the debt burden fordeveloping countries and countries in transition. Wefully support the draft Monterrey Consensus, as theissue of financing sustainable development is of criticalimportance for economic growth and the eliminationof abject poverty.

The draft final document properly pointsout that the basic responsibilities to create adequateconditions to receive and reasonably use financial aidis to be borne by national Governments. We wouldlike to express our hope in this connection thatdonors, in assessing the activity of national Govern-ments in this field, should have a deeper understand-ing of the specifics and many social problems that weencounter in our democratic, but as yet fragile State.

In certain cases, we should no longer tiefinancial aid decisions to the status of our current rela-tions with the Bretton Woods institutions. This is par-ticularly the case given that the latter are beingreviewed in light of earlier experience and the searchfor new methods for the purpose of more effectivecooperation with recipient countries.

79


We are also following with hope the debateon the increase in grant aid from credit lines under theauspices of the Bretton Woods institutions. Along withother delegations, we believe that grants should beaimed at the elimination of natural disasters, combat-ing terrorism and separatism and settling regional con-flicts. In addition, we believe that they should also bedesigned to improve the legislative basis for economicreforms and combating AIDS and other infectious dis-eases. We support the need for transparency andcomprehensive monitoring of the use of such funds.

For its part, the Republic of Moldova willcontinue rationally and effectively to use its ownresources and donor aid to stimulate the developmentof the private sector of the economy, implementreforms and improve the investment climate. Weexpress our readiness to integrate ourselves further inthe international community and comply with the mul-tilateral and bilateral obligations we have assumed.

Morocco

Prime Minister Abderrahman Youssoufi of Morocco.

Photo courtesy Permanent Mission of Morocco to the United Nations

Statement byHis Excellency Mr. Abderrahman YoussoufiPrime Minister of the Kingdom of Morocco*21 March 2002

I have the honour to read out a message from HisMajesty Mohammed VI, King of Morocco, to thisConference.

First of all, I would like to pay tribute toMexico, a country that is a friend of ours, for hostingthis important Conference to take up the major chal-lenges facing the developing countries. We are notmeeting here to consider the causes and manifesta-tions of underdevelopment from which many develop-ing countries suffer. We are not here to examine thehuge disparities and imbalances that have led to a situ-ation in which our world is made up of small islands ofwealth and prosperity and vast oceans of poverty, illit-eracy, devastating epidemics and shocking inadequa-cies in various areas of human development.

We are all familiar with this harsh reality. Ithas been described very well and often in the past. Wehave to seek ways and means of obtaining the



80 Dev

elop

men

tFi

nanc

ing

for

resources needed to achieve sustainable development.Here, I would highlight financing for development.Various international conferences have addressed theissue. Many international recommendations have beenmade. But the matter has not yet been satisfactorilydealt with.

The backdrop to this Conference is anunavoidable structural evolution towards completeglobalization that is sweeping through markets andtrade. It is also characterized by violent upheavals.Indeed, the tragedy of 11 September 2001 was oneof the worst demonstrations of that. This backdropgives the item on the agenda of this Conference par-ticular strategic significance. It means that we must allbe firmly resolved to ensure that we talk up the issueof financing for development as the most effective wayof combating exclusion, despair and extreme poverty,which are the greatest threat to security and peace inthe world.

Our late father, His Majesty Hassan II,spoke in 1994 at the General Agreement on Tariffsand Trade (GATT) conference in Marrakesh. Hestressed the need to have good governance of publicaffairs. He urged that we take a multilateral approach,strengthening the harmony between national policiesand economic, financial and trade matters, withgreater coordination of the activities of the BrettonWoods institutions and the World Trade Organization.

Today, I am very happy to see that hisappeal was heeded and that our Conference is bring-ing together various multilateral institutions to discussinternational economic relations. So we must seize thisopportunity to develop a clearly defined strategicvision, backed up by collective resolve, to create asolid plan of action for the developing world. We mustbe pragmatic and realistic in what we say and do. Butwe must also be ambitious and proactive.

It is our hope that this Conference will takehistoric decisions to bring developing countries moreand more into globalization processes and enablethem to participate fairly and responsibly in decision-making on matters of concern to the entire humanrace within the context of a new concept of interna-tional, financial and monetary operations.

Public support for development is of hugeimportance here. Morocco calls on the internationalcommunity to muster their efforts to increase theamount of official development assistance as quickly aspossible to reach the Goals set at the MillenniumSummit, and, more specifically, to reduce poverty byhalf by 2015.

We must seek lasting efficient solutions tothe external indebtedness of developing countries. Iwould also make the point that trade liberalization

must be done fairly and equitably so that developingcountries can benefit from this liberalization to themaximum. This will lead to major resources beingmade available to them for economic and social devel-opment.

The development agenda that emergedfrom the Doha conference brings hope to all develop-ing countries, for it augured the emergence of a newmultilateral order for world trade. All countries, what-ever their level of development, will certainly benefitfrom that. This prospect must now become a reality.Geographical and sectoral diversity and foreign directinvestment, with incentives at the national and interna-tional levels, is another goal that we must worktowards. We must work hard for this so that we canlessen the different development levels in the world.

Africa is facing major difficulties. Itdeserves priority attention. For 33 African countriesare among the least developed countries of the world.Africa is still suffering from several conflicts andheightened tensions, and our peoples are exposed tomany devastating calamities and terrible tragedies. Toface up to such disturbing situations, the countries ofAfrica, to varying degrees, have taken bold steps inorder to ensure good governance, build the rule of lawand further liberalize their economies.

Africa has adopted a coherent and effectiveplan of development within the context of the NewPartnership for Africa’s Development (NEPAD). Thisinitiative reflects our countries’ resolve to control ourown development at the national, regional and conti-nent-wide levels.

The Kingdom of Morocco is strengtheningits bilateral relations with its neighbours and workingceaselessly to achieve regional integration in Africa,particularly through the Union of the Arab Maghreband the free-trade agreement between Morocco andWest African Economic and Monetary Union.

I would like to take this opportunity topresent once again my country’s proposal for a high-level standing body responsible for implementing thedecisions taken by the international community to helpAfrica.

This Conference is an opportunity for all ofus to usher in a new era of multilateral diplomacy,which, as I have said, will bring universal citizenship.We trust that this will in fact happen as soon as possi-ble, and we hope that we will quickly have a follow-upconference to ensure that the efforts made at thenational and international levels lead to actual commit-ments that will be complied with so that the additionalsteps needed can be taken to combat all forms ofexclusion and marginalization.

81


Mozambique

Prime Minister Pascoal Mocumbi of Mozambique. Photo: UN/DPI

Statement byHis Excellency Dr. Pascoal Manuel Mocumbi Prime Minister of the Republic of Mozambique21 March 2002

I wish to join the preceding speakers in congratulatingYour Excellency, Mr. President Fox, the people ofMexico and of Monterrey city, in particular, for hostingthis important event.

On behalf of the President of the Republicof Mozambique, His Excellency Joaquim AlbertoChissano, I would like to express our sincere thanksfor the invitation extended to us to participate in thisconference. Allow me to seize this occasion to expressmy satisfaction for the selection of Mexico to host theWTO Ministerial Conference in 2003. We thereforewelcome the decision by WTO member states to dou-ble the target for a new global Trust Fund with a viewto boosting technical assistance and helping develop-ing countries to increase their participation in the mul-tilateral trading system in the light of the DohaDevelopment agenda.

This conference constitutes a new andunique opportunity to develop a new paradigm forinternational cooperation. A paradigm that allows ajust sharing of the benefits of globalization to all

nations and remove the poor nations from their pres-ent marginal role into active players in the process.For the first time, Heads of State and Government,the United Nations System, International financial andmonetary institutions, WTO, business sector and civilsociety jointly and with a common objective, approachsuch an important and crucial issue as Financing forDevelopment.

We came to Monterrey to reaffirm theneed for a comprehensive approach to the issue ofFinancing for Development, an approach which mustinclude a genuine partnership among all stakeholdersinvolved in the development process. A partnershipbased on solidarity and mutual trust among all parties.A partnership founded on reciprocal benefits.

We all have to contribute to make the rightto development a reality for all and set humanity freefrom the scourge of famine, diseases, and ultimatelypoverty. In this way we will be contributing to a lastinginternational peace, stability and security.

When we adopted by consensus theMillennium Declaration, we set specific developmenttargets namely to reduce by half the percentage ofpeople living under absolute poverty by the year2015; allow children – girls and boys – all over theworld to have equal access to education; to reducematernal mortality by three quarters and child mortali-ty, under the age of five, by two thirds; revert thepresent trend of HIV/AIDS, malaria and other endem-ic diseases; we have to admit that we need to act now.We need to take concrete action that translates ourpolitical commitments into deeds.

Over the past two decades or so the inter-national community launched a series of initiativesaimed at narrowing the gap between the rich and thepoor. Most of these commitments remained to beimplemented. In recent years we adopted the Plan ofAction for the LDCs, the Doha Development Agendaand the Cotonou Agreement, which are commendableendeavours that still need fine-tuning to make themwork for the poor.

Access to markets is one of those aspectsthat need to be fine-tuned. In a situation where devel-oped countries’ subsidies to agriculture amount to 350billion US dollars per year, how can LDCs’ agriculturalproducts compete in the international market?

The external debt crisis, particularly in theHighly Indebted Poor Countries has led us to the con-clusion that this issue requires additional efforts,including the speeding up of the implementationmechanisms. We welcome the efforts by developedcountries, in particular by the G8, to enhance theHIPC initiative; notwithstanding, we call for such ini-tiatives to be more extensive and comprehensive, with-out rigid and fatal conditions.


82

We also welcome initiatives to provideadditional support to countries exposed to natural dis-asters. In the case of Mozambique, the impact of natu-ral disasters has worsened the vulnerability of thecountry and negatively affected the results of the eco-nomic reforms undertaken by the government. Torevert to the negative and unsustainable situation inwhich the majority of the world population lives, par-ticularly in Africa, it is imperative to reform the inter-national economic environment and allow the inflowto developing countries of additional untied financialresources.

We reiterate our call on the developedcountries to honour their commitment to allocate0.7% of their GNP to ODA of which between 0.15-0.20% to the Least Developed Countries. We com-mend those countries that have achieved even exceed-ed these targets and urge those who have committedthemselves to achieve the objectives. Failing to achievethese targets will undoubtedly lead us to greatertragedies.

We believe that the responsibility for eco-nomic and social development lies primarily on eachcountry. The promotion of good governance, soundeconomic policies, the rule of law, the respect forhuman rights, transparency in the decision makingprocess and the priority assigned to combating povertyare fundamental principles for the success of anynational development plan or programme. However,good governance at the national, regional and interna-tional levels must be pursued in an equally reinforcingmanner so as to sustain dialogue, transparency, equali-ty and equity – essential factors for economic growth,poverty eradication and sustainable development.

It is our conviction that the effective inter-action of all sources of finance, namely the mobiliza-tion of domestic resources, ODA, international tradeflows for direct investment and debt relief are criticalelements for achieving coherence in financing fordevelopment.

Ownership of the economic and socialdevelopment process and mobilization of resources arecritical elements that need to be complemented bymore flexible mechanisms of channelling financialresources. Yet, as our experience has shown, one USDollar of unconditioned aid has more value than twoor more dollars of conditioned aid.

Mr. President, in Mozambique, 70% of thepopulation lives below the absolute poverty line.Therefore, the Government adopted a PovertyReduction Strategic Plan (PRSP) for the Period 2001-2005, aiming at reducing absolute poverty indicatorsby 10%. This Plan is founded on the basic principle ofensuring peace, stability and development. It definesactions in the following priority areas:

• Education and health, • Basic infrastructure, • Agriculture and rural development, • The reform, of the legal and judicial

systems, and • The need to keep macroeconomic stability.

HIV/AIDS is a major challenge for eco-nomic and social development of Mozambique.Cognizant of this fact, the Government adopted aNational Strategic Plan directed to prevention andreduction of HIV/AIDS negative impact in the society.This Plan places the human being at the centre ofaction, in particular the most vulnerable groups of thesociety, including women, orphan children, youths,and girls.

At the continental level, the NewPartnership for African Development (NEPAD) createsan adequate framework to lead the continent out ofthe poverty cycle, laying the foundations for a truesustainable development. Based on national andregional priorities, as well as in the making of develop-ment plans through a participatory process NEPADintends to establish a renewed agenda for the develop-ment of the African continent.

At the subregional level, Mozambique ispart of the Indicative Strategic Plan for RegionalDevelopment designed by the Southern AfricaDevelopment Community (SADC) aiming at enhanc-ing Southern Africa’s development in the next decade.

Allow me to conclude by indicating that itis incumbent upon all of us to recognize the undeni-able fact that the peoples around the world, in particu-lar in the developing countries, look forward withgreat expectations to the deliberations of this confer-ence. The Monterrey Consensus before us providesand excellent framework for launching concertedefforts in the field of financing for development. Thekey to success in this endeavour is the adoption ofeffective implementation and follow-up measures with-in the appropriate mechanisms. This requires a strongand determined political will.

We must not let this consensus becomeanother dead letter. We must live up to commitmentswe are talking today in order to meet our peoples’hopes and aspirations.

83


Nicaragua

President Enrique Bolaños Geyer of Nicaragua.

Statement byHis Excellency Mr. Enrique Bolaños GeyerPresident of the Republic of Nicaragua*21 March 2002

We have come here to make history and we are doingso under difficult circumstances. As a country thatreceives cooperation, I have come here in hope, and Iwant to try to make the developed countries aware ofthe hopes aroused by this Conference on Financingfor Development.

Poor countries need cooperation, as do thedeveloped countries. They also need to increase theirnational security. A horrible, despicable act was com-mitted on 11 September, and I pay tribute to thememory of the victims.

When we leave this Conference, we will allbe winners or losers. Nicaragua has been a model ofinternational solidarity, but that has not been enough.After 10 years of structural adjustment in my country,the results are barely visible. Our people simply cannotstand the pressure any longer. We urge greater coop-eration and greater increases in available funding onthe basis of the Monterrey Consensus.


It is essential that Nicaragua finally reachthe point where the Heavily Indebted Poor CountriesInitiative is implemented. Our resources must be sup-plemented in order for us to meet adjustment policies.Then there is the debt problem. What we are gettingis too little too late. In addition to cooperation, weneed opportunities. We need the chance to sell whatwe produce on international markets. We have to beable to attract investment. We need a reduction in sub-sidies, which distort trade.

Democracy is not just the right to vote. Italso means giving dignity to those who need it themost. Our people cannot live eating democracy.

In Nicaragua we are working for moralrenewal. We have undertaken a campaign to combatpublic and private corruption. To that end, I havecalled on civil society vis-à-vis a pluralist national coun-cil on social, political and economic issues. A few min-utes ago I was told that a Nicaraguan judge had justhanded down sentences against three former officialsof the previous Government and against three otherpersons on acts that impoverish our people. The judgehas left the case against former President Aleman andeight more officials of the former Government pend-ing. In order to continue with my ‘zero tolerance’ poli-cy towards corruption, I must return as soon as possi-ble to my country to contribute to justice and trans-parency in this historical milestone that courageousdecision represents.

Public opinion polls have shown the needfor greater institutionalization of our electoral system.Our tax system also requires further improvement. Iwant to suggest that a new agreement be undertakento establish the rule of law, transparency, combat cor-ruption, terrorism, drug trafficking and money launder-ing. I expect to have solidarity and resources from par-ticipants so that together we can defeat poverty andcreate a world in which we can all live in dignity.

Nicaragua also urges the inclusion of thecountries such as Republic of China on Taiwan** thatwant to be recognized by international organizationsand the United Nations system. We welcome the factthat Switzerland has joined the United Nations.

This statement is my modest contributionto this great Conference that seeks to eradicate pover-ty from the world.

**The statement has been reproduced as rece ived. The des-ignat ions employed do not imply the express ion of anyopin ion whatsoever on the part of the Secretar iat of theUnited Nat ions concern ing the legal s tatus of any country,terr i tory or area, or of i ts author i t ies


84

Nigeria

President Olusegun Obasanjo of Nigeria.

Statement byHis Excellency Mr. Olusegun ObasanjoPresident of the Federal Republic of Nigeria21 March 2002

On behalf of the Nigerian delegation, let me expressappreciation to President Vicente Fox and the peopleof Mexico for their very warm reception and generoushospitality extended to us since our arrival.

After decades of debate, the UN Secretary-General has every reason to be pleased and proudthat, at last, the Conference on Financing forDevelopment is not only taking place, but also beingheld during his tenure. I commend the UN Secretary-General and the Coordinating Secretariat for theirefforts in the preparatory process. Also, I note withappreciation the participation of the Bretton Woodsinstitutions, the World Trade Organization, the civilsociety organizations and the private business sector,among the multi-stakeholders who have been part ofthe process leading to this landmark gathering.

At the United Nations Millennium Summitin September 2000, the leaders of all member coun-tries of the United Nations, including myself, agreedon a set of ambitious international development tar-gets, which were designed to help create a better

world and to halve the scourge of poverty by the year2015. Attaining these targets of 2000 requires anenormous amount of resources, both by governmentsin developing countries and by the international donorcommunity. Almost two years after the MillenniumDevelopment Goals were adopted, we detect noprogress and must express our profound concern atrecent studies by the World Bank which suggest thatAfrica in particular is unlikely to come even close torealizing those goals if present trends continue.

For almost 35 years the international com-munity had agreed to the principle that industrializedcountries should devote 0.7 per cent of their GNP forofficial development assistance (ODA). While we com-mend the very few countries that reached this target,the record for the majority shows decline. Today weregister a deplorable 0.25 per cent of GNP from theindustrialized world earmarked for development pur-poses, with a rather inequitable distribution amongcountries and regions. This shockingly low perform-ance makes the realization of the Millennium Goalsimpossible. At the same time we are again witnessinga significant diversion of funds from development pur-poses, especially for Africa, to the financing of pro-grammes in other parts of the world in a similar pat-tern as at the beginning of the 1990’s following thefall of the Berlin Wall.

The dismal failure of ODA is compoundedby the recent sharp drop in foreign direct investment(FDI), which for some years in the 1990s was adducedas the new mechanism to bring resources and pros-perity to the developing world.

What then can we do? Where do we gofrom here? Is there hope for an improvement of thisunacceptable situation? To answer these questions, wemust begin by committing ourselves to an honest reckoning.

In a globalized world the fate of the majori-ty of humankind cannot be isolated or ignored.Ultimately, the survival and security of nations will bedetermined through action or inaction, effectiveness orineffectiveness, enlightened self-interest or cold-heart-ed pursuit of short-term, narrow interests. Let us makeno mistake: if the lessons of the past six months, sinceSeptember 11, are to be heeded, it is that security isindivisible. Lack of security anywhere translates direct-ly into lack of security everywhere! Conversely, securi-ty for one enhances security for all our countries andcharting a way out of conflict, poverty, poor gover-nance and marginalization.

85


NEPAD is an African-bred and African-inspired exercise, which could benefit from a variety ofpartnerships with actors from the North. Yet, we mustguard that NEPAD is not being turned against us as atool for new conditionality. If partners want to comeon board they are welcome now, as before, but contri-bution must not only be limited to words and goodadvice. If we cannot find sufficient partnerships andnew resources to bolster and assist NEPAD, permit meto wonder why we gather for meetings such as these?On the other hand, NEPAD is being drawn up in sucha way that, with or without adequate contributionsfrom our development partners, it can be implementedto a significant extent, based on our own visions andour own programmes.

Let us set aside the crafted language of theMonterrey Document and state in clear and simpleterms what the developing world expects from thisgathering. Among others, we expect:

• One, re-dedication to the MillenniumDeclaration and joint pursuit of the MillenniumDevelopment Goals.

• Two, debt relief at a substantial level for alldeveloping countries, not only limited to the HIPCprocess.

• Three, significantly improved market accessand removal of distortions, especially in agriculture,through WTO negotiations, which should not be vitiat-ed by unilateral legislation.

• Four, reversal of the present decreasingtrend in ODA flows – and, in particular, a significantincrease in ODA for Africa and the least developedcountries.

• Five, effectiveness in the allocation of aidby the donors and the utilization by the recipients.

I believe we can achieve more than thescope of the draft Monterrey Consensus. We are capa-ble, and we must express and codify our collectivedetermination and readiness to provide a critical massof development assistance. If we must acknowledge –as we do – that the long-standing international targetof 0. 7% of GNP for ODA is unattainable at the pres-ent time, let us then agree here on a realistic target forthe next few years, which corresponds with our collec-tive sense of urgency, responsibility and atonement forpast failures. The Monterrey Compact could thus havethree pillars:

• On the part of the developing countries:There would be an undertaking to promote good gov-ernance and accountability – which in any case is inour own best interest – in order to ensure an enablingenvironment for economic and social developmentthat would reduce poverty and stimulate investment;

• On the part of industrialized countries:There should be commitment, individually and collec-tively, to a gradual increase of 0.5% of GNP for ODA.This would mean a doubling of current, woefully inad-equate, levels within five years. Alternatively, thoseindustrialized countries who do not want to be boundby such a quantitative target, may wish to committhemselves to funding, in full or partially, the activitiesrequired to attain the Millennium Development Goals;

• A joint commitment: To negotiate by theend of 2003, a further substantial reduction in tariffsand quotas for goods and services from the developingcountries – which would be the most immediate andeffective mechanism to improve incomes.

Such a compact would instil true anddynamic meaning to our efforts here in Monterrey. Itwould create the conditions for and the means to worktowards a better world with less poverty, more securityfor humankind, and more global justice and equity.Without such a compact, I, for my part, believe thatthe Consensus Document will have no practical conse-quences beyond a repetition and reaffirmation of gen-erally accepted principles, concepts and statements.

Mr. Chairman, this Conference must setthe tone for our mutual engagement in the future. Ifwe succeed to engage each other on a more concretelevel than general exhortations, we will have made sig-nificant progress and may have turned the tide in amore encouraging direction. If we only talk at eachother, without concrete commitments and results, wewill have signalled our recognition that the MillenniumDevelopment Goals will remain a dead letter. In addi-tion, we also may have to re-examine the utility andwisdom of calling such mega-Conferences, if they con-sistently fail to deliver a minimum of real advance incritical areas.


86

Norway

Prime Minister Kjell-Magne Bondevik of Norway. Photo courtesy

Permanent Mission of Norway to the United Nations.

Statement byHis Excellency Mr. Kjell-Magne BondevikPrime Minister of the Kingdom of Norway21 March 2002

At the Millennium Summit, leaders across the worlddeclared they would spare no effort to free our fellowmen, women and children from extreme poverty.One and a half year later we meet again. The peoplesof the world are looking to us in anticipation. Theyexpect real steps towards realizing the goals in theMillennium Declaration. Poverty is the biggest chal-lenge of our time.

Six months ago, the terrible events ofSeptember 11 shocked the world. The terrorist attackswere an assault on everyone who values life and liber-ty. We stand united in the war on terrorism.

Today, the call is to fight poverty. No coun-try can remain neutral in the battle against poverty,just like no country can stay apart from the fightagainst international terrorism.

Five European Prime Ministers stated in anarticle in the International Herald Tribune today: Weformed a strong coalition against terrorism. We needan equally strong coalition against poverty.

September 11 also tore down the invisiblewall that divides poor and rich. Terror is not the voiceof the poor. But these events brought home to us all arecognition that we have to address poverty, lack ofdevelopment and social injustice in a serious manner ifwe are to win the long-term battle against internation-al terrorism.

Reducing poverty by half by 2015 is thecentrepiece of the Millennium Development Goals.Therefore, we must take action to:

• Prevent hunger and want. • Secure the dignity of the poorest and most

vulnerable. • Create access to basic health services and

education to all, in particular for the many girls andwomen who lack this.

• Ensure the freedom for all citizens toengage in open, public debate, and to participate andinfluence decisions without fear of retribution.

• And grant all people the right and opportu-nity to engage in economic activity of their own freewill, within the rule of law.

The elimination of poverty is about ensur-ing the human dignity and fundamental human rightsof every person. In order to succeed, we all have tofocus on our own deliverables. My Government hasjust launched its own Action Plan for CombatingPoverty. In that plan we pledge to:

• Increase ODA from 0.92 this year to 1 percent of GDP by 2005;

• Advance policy coherence in all relevantgovernment policies;

• Continue the transition from project toprogramme and budget support in our ODA;

• Forgive all debt to countries that get HIPCtreatment, and work hard to improve internationaldebt service arrangements;

• Stimulate investment, and private sectorgrowth;

• Implement zero tariff market access to allproducts but arms from the least developed countries,and to seek to increase market access for agriculturalexports from developing countries;

• Increase our efforts in areas such as peacebuilding and reconciliation, improving governance andthe protection of human rights.

87


The Monterrey Consensus is based onmutual responsibility. None of the MillenniumDevelopment Goals can be reached without majorefforts both in the North and the South. It rightly rec-ognizes good governance, the rule of law, transparen-cy and accountability as prerequisites for development.Here, the developing countries will have to do better.It also focuses on nationally-owned poverty-reductionstrategies and the imperative need for improveddonor-coordination. Here, the developed countrieshave to deliver. We also have to provide better marketaccess for developing countries and contribute furtherto ease their debt burden and fully finance the HIPCdebt initiative.

In addition, development assistance is cru-cial. For poverty to go down, aid must go up. TheZedillo Panel, the World Bank, the IMF and theCommission on Macroeconomics and Health have allconcluded that there is a need to at least double thepresent level of ODA. But the donor countries collec-tively provide only a third of the aid they have com-mitted themselves to, or only 0.22 per cent of theiraggregate GDP. Only five countries have reached thetarget of providing 0.7 per cent of our GDP as ODA.We have every reason to concentrate on the volumeof ODA.

The Monterrey Consensus demonstratesthat we, the international community, are in basicagreement on the means to eliminate poverty. Weknow what works, and what does not. We know whatis needed to get where we want. That is in itself amajor achievement. What we lack is sufficient politicalwill to mobilize the resources necessary to make a realdifference in people’s lives.

It has been said that the MonterreyConsensus is a good menu, and I agree. But, a menuhas never fed a hungry man or a hungry woman.

We must use Monterrey to mobilize theresources that mean real improvements for people.That is why I welcome recent announcements by theEU-countries and the US to increase developmentassistance. That is good. However, I strongly urge alldonor countries to set specific deadlines and indicatetime frames for increase in their ODA towards 0.7.Because we still have very far to go! Status quo willnot do!

We can and must win this fight againstpoverty. Let us agree that it is our joint responsibilityto provide to all people their birth right as humanbeings: Life, Liberty and Opportunity. There cannotbe a cause more noble. There cannot be a task moresublime. Now is the time to act.

Palau

President Tommy Remengesau of Palau. Photo: Luis Galan/ Terra

Networks.

Statement byHis Excellency Mr. Tommy E. Remengesau, Jr.President of the Republic of Palau21 March 2002

It is truly an honour to stand here today, before agroup of such distinguished world leaders, and toaddress you on the issue of financing development inthis new millennium.

For those of you who are not familiar withPalau, and I am sure there are many of you, Palau is asmall island nation, located in the North Pacific. In1994, Palau received its political independence, andsince then has been working very diligently to establisha real and effective framework for the achievement ofsustainable development. The ultimate goal of thisframework is to provide for economic self-sufficiency.

While Palau would certainly prefer toaccomplish its development goals without dependingon outside assistance, we realize that certain aspectsof such development are beyond our current knowl-edge and available resources.

Palau has a saying, “You can give a man afish today, and he will need another fish from youtomorrow; or you can teach a man to fish today andhe will provide for his own fish tomorrow.” In this


88

context, there must be a special recognition and sup-port for those developing countries making genuineefforts to help themselves.

The Republic of Palau seeks only the nec-essary training, tools and initial funding to establish itsown self-sufficiency. Within this context, we are verywilling to accept direct responsibility for our future suc-cesses or failures. We are consequently supportive ofthe notion that donor nations should expect eachdeveloping nation to establish a strong policy frame-work as a prerequisite to the receipt of financial assis-tance. This will help ensure that technical assistanceand direct funding contributions are not wastedthrough non-performance by the recipient nation.

We would therefore support recent sugges-tions put forth by President Bush of the United States,that an international financing programme be estab-lished that creates real incentives for nations that seekfunding from donor nations and that sets plannedstrategies and well defined criteria to qualify for suchincentives. By incentives I refer to the implementationof measures such as:

• Performance budgeting; • Requirements for balanced budgets; • Strict audit requirements; • Transparent banking laws that protect

domestic depositors and restrict unlawful international transactions; and

• Strong support for private sector development

Countries that put in place such policies ofgood governance, and thereby meet the establishedcriteria for incentive treatment, should then be giveneasier access to and a larger share of the developmentpie made available under this programme. Theyshould also have access to an expedited process ofreview and distribution. In addition, priority should alsobe given to nations that have established positive trackrecords in their use of financing assistance. Past fail-ures to use developmental funding for intended pur-poses and parallel failures to implement funded pro-grammes should not be rewarded. It certainly shouldnot result in equal development funding status to thosecountries that have made good faith efforts to achievethe stated goals of the development projects.Developing nations that have taken the initiative toreform their basic economic and political institutionsand that have strong and positive records should beplaced on a fast track programme to receive assistancethat leads to real self-sufficiency.

The difficult aspect of this ‘Incentive’approach to development efforts is that we mustsimultaneously respect the rights of all nations todefine their own development plans and patterns.Clearly, development has been shown to succeed onlywhen the ownership of such development sits firmly inthe lap of the developing country. In addition, ‘sustain-ability’ should be a key element in any discussion onthe financing of development. We strongly believe thatany international effort to finance development shouldplace clear and cohesive environmental standards ontypes of projects funded. If the developing world seeksto achieve the historical model of industrialized devel-opment at any cost, I can assure you, the quality oflife for the people will not rise. Rather, we will growand grow and grow only to realize that our lives havefar less value than the lives of our mothers and ourfathers. I am sure this is not reflective of their hopesfor their children nor is it our hope for our children.This is especially true for the Pacific Island Nationswhere sustainable development is really the only keyto success.

Ultimately, we must resolve this issuethrough continued global strategies that successfullyand consensually deal with sustainability issues. Globalwarming is a reality. Biodiversity is under attack. Ourvery way of life is changing before our eyes and wemust not sit back and helplessly watch the degradationof our future.

My fellow delegates to this very importantConference: there are so many difficult issues to facein establishing a realistic and effective developmentfinancing process. We believe that it is important torecognize that the past is not necessarily an appropri-ate model for the future. Rather than continue torepeat our mistakes, we must seek new models andprogrammes that result in real outcomes.

All people clearly have an inalienable rightto climb out of poverty, poverty that breeds terrorismand radicalism and that limits the opportunities andaspirations of all the peoples of the world. For thegood of the world community, we must establish aprocess for transferring development capacities andcapabilities that work. To this, I say the business of‘playing defense’ and reacting always to world povertyand rising tensions is too costly and never adequate.Let’s ‘play offense’ and be pro-active for a change andattack the problems with meaningful and lasting solu-tions beginning with this conference.

89


Panama

President Mireya Elisa Moscoso Rodríguez of Panama.


Statement byHer Excellency Ms. Mireya Elisa Moscoso RodríguezPresident of the Republic of Panama*21 March 2002

At the end of the twentieth century, we witnessednumerous considerations about the reality in which wehuman beings live in all corners of the planet. Thisreflection made it possible for us to evaluate our devel-opment, the realities of our institutions and the needsand requirements of our citizens. That point in timealso gave us the opportunity to analyze our behaviour,to look at the errors made and to define the objectivesthat we need to put in place in order to achieve devel-opment.

We have lived, and we have sufferedthrough all possible models – totalitarianism, socialism,capitalism – in all of their varieties and modalities, andwe have finally accepted an economic model thatapparently contains elements for a better flow ofresources, upgraded consumption, production and alevel of greater dignity for our people.


Making progress does not mean that weare no longer in the Third World, in developing coun-tries, or in countries with emerging economies. Thesesemantic considerations have never deemed to do any-thing more than to encourage us to continue our fightagainst poverty. Our nations have taken on andaccepted with ever greater interest that for many ofthe industrialized countries there is a new economicmodel. We have reduced tariffs, we have broken downprotectionist barriers, and we are opening up oureconomies to free competition with countries thathave technology, knowledge and resources that areoutside of our reach.

However, even with this approach, we arebeing asked to make more sacrifices. While the indus-trialized economies are using up most of their naturalresources, the developing countries are being prevent-ed from using their own. We are being required togive a greater fiscal contribution; at the same time,there are conditions on investments. In addition, thereare standards of efficiency and transparency that arebeing imposed on us; yet, they are not practicingthese standards, and they have never actually dis-cussed it with us.

After 11 September 2001, democracy andprogress are no longer political and economic con-cepts. We are not talking about global security issues.Apparently, the rich countries and the organizationsdealing with financing and cooperation have under-stood the Quebec Declaration, which says that democ-racy is not limited to the exercise of suffering everyfew months. Democracy requires knowing what thenecessities and the needs of the people are, especiallythose of the private sector, and to make sure thatthere is participation in order to offer more employ-ment opportunities for the people who need them. Itrequires the assurance of more solidarity and moreequity on the part of the industrialized economies.

In this context, I would like to reiterate thatwe have to speak very clearly and openly. We cannotwaste our time in Forums such as this one, with decla-rations that hold no real meaning, although we areaware that over the course of these two days there willbe many contributions and they will be very valuable.Panama feels the need to focus this statement on aspecific topic that affects us. One of the discussions inthe preparatory meetings, in fact, was about whether


90

poor countries with a per capita income of $3,000 orabove should have non-reimbursable loans or soft loanconditions. This is a problem of an approach thatdoes not understand the realities of a nation, which,precisely because of these structures, has become aproduct of practices over decades and all sorts ofexperiments, both economic and financial. Most ofthese practices have failed and now show one of theworst indices of distribution of wealth in the world.

Without a doubt, international cooperationis a very fundamental aspect of any model that wouldencourage development. But to submit this tool toconsiderations that do not express the real situation ofour nations and the efforts to consolidate democracyin a State where the rule of law prevails is an injusticeand, at the same time, is an element that has verydeleterious effects for our own possibilities. If we aretalking about being more efficient in our use of finan-cial resources for development, this Forum must pro-mote the creation of an international parameter thatcan be used to approve cooperation projects that willconsider the inequalities in income and the concentra-tion of wealth. This can then be used to attend to thestructural causes underpinning poverty, and it can beused to achieve better social and economic justice.

Other topics of similar importance to thatof cooperation are the external debt, free trade basedon equity and solidarity, the vast spending on armsand the role of minorities. These issues have extreme-ly clear and important definitions here in Monterrey.The Republic of Panama applauds this Summit,because it allows us to describe certain conceptsfrankly, openly and freely that do not have the oppor-tunity of being expressed in certain ministerial or typi-cal meetings. I reiterate our appeal to those who havethe power to decide to use it in support of true worldpeace.

Peru

President Alejandro Toledo of Peru.

Statement byHis Excellency Mr. Alejandro Toledo ManriquePresident of the Republic of Peru*21 March 2002

Poverty prevents the true exercise of free governmentand conspires against democracy and the sustainedgrowth of our peoples. Poverty conspires againstdemocracy. In recent months, we have discussed therelationship between national responsibility and multi-lateral responsibility in the search for a financial andtrade system that is better structured, which should bethe basis for the sustainable development of the poorcountries in the world.

From the standpoint of the Peruvian expe-rience, I can tell participants now that we can assumeour internal responsibility to financially re-engineerstructures that will enable us to reallocate resources tosocial investment. In specific terms, this year Peru hasjust reallocated a decrease of 20 per cent of defencecosts, redirecting them towards investment in healthand education. We are working with our neighbours,


91


our brother and sister countries, to reduce progressive-ly military costs and to make space to redirect publicinvestment towards social investment. We are design-ing new financial mechanisms to benefit small andmedium-size enterprises, which are the ones that aregenerating productive work and offer new opportuni-ties to the poor.

However, this is not enough. Nationalresponsibility requires a multilateral space that shouldbe of use to us all. Hence, we firmly back the proposalfor a new global alliance that will enable us to giveimpetus to financing for development and combatingpoverty in the most effective manner possible. Thisalliance must affirm a more equitable trade structurethat is open to goods from developing countries, build-ing on the Doha Ministerial Declaration. It mustensure that international capital flows do not destabi-lize small countries. It must also establish an interna-tional mechanism of payment maintenance for coun-tries with liquidity problems and with due safeguardsfor creditors and debtors alike.

The aim is that globalization and competi-tion have a human face; that globalization be an inte-grating, rather than an excluding, reality; that it signifi-cantly narrow the economic gaps between our coun-tries; and that it make nations sustainably governable.Hence, my country welcomes our goal of signing aDeclaration at this meeting, which means a new stepin that global alliance. Let us sign that alliance withconviction and let us move as soon as possible to theimplementation stage.

Participants are aware that global securityis inextricably linked with the health of the world econ-omy. Insecurity and the sinister role played therein byterrorism must be confronted. Terrorism sows violenceand intolerance. It prefers death to life. It generatesdistrust and uncertainty. Speaking of development isalso speaking of a firm struggle against terrorism inwhich the world has to be increasingly united.

Just a few hours ago, my country wasstruck by a new cowardly terrorist attack. Eight humanlives have been sacrificed and 30 men and women arestruggling between life and death right now. That isthe result of an attack of obscure origin that seeks tostrike the effort of a people that wants to reconstructits democracy and walk unambiguously towards devel-opment.

Peru is familiar with the bloody conse-quences of terrorism. It has paid for it with 25,000lives and many millions of dollars. It was that experi-ence that led us to adopt a firm stand of immediaterejection of the attacks of 11 September in the UnitedStates. That conviction has led us to submit a draft tothe Inter-American Convention against Terrorism,which is being discussed in the Organization ofAmerican States.

We are making a firm contribution to thefight against that global threat, but I should say herethat Peru, my Government and the courageousPeruvian people would not allow terrorism to bereborn in Peru. We shall be very firm with our punish-ment and with the law. We will fully apply the law.Peru has been and is a peaceful country and it willcontinue to be so. I will not rest in this endeavour, andI know that I can count on the support and coopera-tion of participants.

I apologize for interrupting my participa-tion at this important world Conference because myresponsibility compels me to be with my people inthese difficult times.


92 Build

ing

on

Fina

ncin

g fo

r

Romania

President Ion Iliescu of Romania.

Statement byHis Excellency Mr. Ion IliescuPresident of Romania21 March 2002

Allow me first of all to address my thanks to you, Mr.President, and through you, to the local authorities inMonterrey, to the friendly Mexican people for hostingthis important conference and for the warm hospitalityextended to us.

Economic and social development issuesconcern humanity as a whole. Globalization is thephenomenon nowadays that, on the one hand, speedsup the economic processes offering opportunities foreconomic and social development of all countries but,on the other hand, it highlights ever stronger thedivide between the rich and the poor countries. Thisdivide, if ignored or treated with indifference, maybecome an obstacle as well as a threat for the world’speace and stability, for all the actors of the globaliza-tion process.

Romania considers that the involvement ofthe United Nations in formulating adequate answers tothe economic and social problems faced by the devel-oping countries is both necessary and natural. In thisway, the Organization fulfils its mission – that of rep-resenting and harmonizing the interests of all its mem-bers.

Despite the efforts made by the UNMember States, by international financial organizationsand by many private companies that have understoodthe stakes of the development process at the globallevel, the widening of social gaps has become theupsetting reality of today’s world. While 20% of theinhabitants of our planet consume 80% of itsresources and possess as much of its wealth, 1% ofthe wealthiest people in the world have revenues high-er than 57% of the poor. Almost a billion people haveno access to water sources, 2.4 billions have no accessto basic medical care, 854 millions are illiterate, and1.2 billion people live on less than US $1 per day –according to data supplied by UNDP.

Therefore, the increase of the social andeconomic polarization has become, through its directand indirect effects, the main source of instabilitythroughout the world. And it happens at a time whenthe global economy has reached unprecedentedgrowth rates. Over the past fifty years, the global pro-duction of goods and services has risen more thanseven times. Moreover, the gap between the rich andpoor countries has widened dramatically. The disparityof revenues between the rich and the poor has alsoincreased in the richest countries, thus threateningtheir social stability. And, without social stability, devel-opment and economic growth can hardly be imagined.

These gaps, relating to the revenues of citi-zens and the wealth or poverty of nations, are comple-mented by another one, equally bad for most of theinhabitants of our planet: the one separating thosewho know, who have access to knowledge and infor-mation, from those who see themselves deprived ofthis opportunity – in a world in which well-being isever more fundamentally linked to knowledge, innova-tion, and the new information and communicationtechnologies. Education and quality of professionaltraining have become decisive for economic develop-ment and gaps reduction.

The eradication of poverty throughout theworld and the reduction of economic and social gapsremain major goals for all countries, including the richones. To keep under control, through military means,the present sources of instability and armed conflicts ismore costly than the aid offered to the poor countriesby the developed ones. As a matter of fact, the aver-age development assistance offered by the OECDmember countries has constantly declined in the lastfew years, standing for only 0.22% of the GDP of therespective countries. We find ourselves ever fartherfrom the objective set as early as 1969 by the UnitedNations, that the ODA should reach 0.7% of the GDPof the developed countries. Unfortunately, many of

93


these public funds for development have been ear-marked for military programmes, thus making this aideven less efficient.

Throughout its existence, the UnitedNations has pursued multiple actions in favour of asustainable and equitable economic development.They have been more or less successful, depending ona series of political, ideological, and even financial fac-tors. It has not been easy to ensure a constant inflowof financial resources for development projects incountries confronted with domestic instability, fragilityof institutions, corruption and bureaucracy, or involvedin conflicts with their neighbours.

If, until now, national governments andfinancial institutions such as the IMF and the WorldBank, have been regarded as the main actors forfinancing development, the International Conferenceon Financing for Development has a goal to integratethe other important actors, particularly from the pri-vate sector. Beside them, it is also noteworthy the rep-resentatives of civil society, because we must notignore the social and ecological dimensions of devel-opment.

We also appreciate the inclusion of theWorld Trade Organization in this process. The open-ing of markets and the liberalization of trade representa development opportunity, but also a challenge to theweaker economies. The free unregulated market hasalways caused social polarization. That is why there isa need for national social policies in favour of disad-vantaged people and for reducing the gaps. The inter-national organizations have to design policies andmeasures at the global level in order to bridge over thehuge gaps between the rich and the poor countries.

The World Trade Organization must setclear regulations for the efficient functioning of mar-kets and supervise their implementation, thus prevent-ing, at the same time, any abuses of the dominantforces on the global market. In the process of openingthe markets, we have to take into account the need toprotect and encourage the national production in theunderprivileged countries. Let us neither ignore norminimize the risks of opening the markets or considerthe liberalization of trade as a panacea for the prob-lems of development. There is enough evidence of thenegative effects of liberalization not supplemented bycompensation measures and global regulating mecha-nisms, which have worsened the imbalances in theunderdeveloped countries, have exacerbated povertyand social polarization.

Romania is glad to find out that a consen-sus is emerging with respect to the topics on the agen-da of this Conference. We will firmly support all theactions aimed at improving coordination and enhanc-ing coherence of the process of financing for a sus-tainable and equitable development.

The world economy, affected by the conse-quences of the 11th September 2001 terrorist attackson the US, is showing some signs of improvement.Yet, we have to promote the measures for supportinga sustainable economic growth throughout the world,and the efficient use of financial resources earmarkedfor development.

We fully support the conclusions of theWorld Bank and of the Zedillo Report, according towhich it is necessary to double the world inflow ofODA. The eradication of poverty, of famine and socialdiseases, the lessening of development gaps mustbecome the top priority of the international communi-ty. We need new mechanisms at the global level whichallow us to fulfil these ambitious goals, particularlybecause the world economy has the necessaryresources to sustain them.

We live in an evermore interconnected andcomplex world, in which one cannot imagine individ-ual answers to global issues, and in which protection-ism or isolationism do not produce the results expect-ed by those enticed to appeal to them. Neither is thefree game of the market a rational way for develop-ment. They have always favoured those who havepowerful market positions, and have disadvantagedthe poor actors. The high-level participation in thisConference of a significant number of UN memberstates represents an important political signal given tothe international community. It testifies to the commit-ment of these states to mobilize the necessary financialresources for sustainable development, as well as forcreating the domestic and international conditions nec-essary to fulfil these development objectives. There isimperative need for a more active involvement of thedisadvantaged countries and the countries in transition,which are beneficiary of international assistance, in theprocess of decision-making of the international eco-nomic organizations and fora and a more accuratereflection of these countries’ opinions and interests.

Likewise, it is not by chance that the inter-national economic fora are increasingly emphasizingthe need to enhance the social responsibility of theeconomic actors, particularly of the multinational com-panies. The latest must also get involved in changingthe motivation of the economic actors. Not only prof-it, for the sake of profit. The economy has to serve all


94

people, not only a favoured minority. This has to bethe motto of all actors – national and international –who have an impact and decide on the path of theeconomy at the beginning of this new century, inorder to combine economic efficiency with socialeffects.

We have to think together of the ways todiminish the costs of financing development, includingthrough the restructuring and better management ofthe debt of the poorest countries. At the same time,we have the obligation to harmonize the requirementsof development with those of preventing economicand financial crises. Life has shown that any crisis con-sumes resources, induces political, economic andsocial instability, inefficiency, and leads to the missingof opportunities for development.

Romania has experienced, during thereform and transition process from the state-com-manded economy to the market economy, a numberof serious difficulties related to financing for develop-ment. The scarcity of domestic and external resourcesis characteristic for the transition period in Romania.The difficulties are due to the inertia of the systemmanifested, on the one hand, in the promotion of thereform processes and, on the other hand, in the cre-ation of the new market economy institutions.Besides, we have not yet managed to find the mostappropriate ways to attract foreign investments.

In its economic policy, Romania sets outfrom the necessity to promote the public-private part-nership and to combine economic efficiency withsocial justice and reduction of inequalities between themembers of the society, according to the requests of anew sustainable human development. In this way onlycan the necessary economic reform be understood andsupported by all the members of the society. Withoutthe active support of civil society, no reform can suc-ceed.

Although well known for its social model,which has been beneficial to its sustainable economicdevelopment, Europe is also confronted with majordevelopment gaps, particularly between the EU mem-ber countries and the countries seeking accession.

In our vision, the Monterrey Conferenceshould seek to make up an international alliance,aimed at allocating, in an equitable way, the resourcesfor financing sustainable development and strengthen-ing multilateral cooperation aimed at solving the eco-nomic, financial, commercial and social problems.Without such a fair allocation of funds for develop-ment, the national efforts to mobilize the domesticresources remain without the expected results.

We are aware that a factor likely to ensurea constant and significant inflow of financial resourcesis represented by the promotion of a good nationalgovernance, through the building up of democracy,the respect of human rights, the achievement of a tol-erance climate regarding the relationships between themajority population and minorities, as well as the con-sensual approach to controversial issues.

Romania has taken firm steps for ensuringand maintaining macroeconomic balances, for therational and efficient use of public money on projectsof a general interest, particularly in infrastructure, aswell as for combating corruption and bureaucracy,including through the correct management of theassistance for development. We are paying particularattention to improving the management of economicagents, fighting inflation, maintaining the stability ofthe national currency, and to the reasonable structur-ing and management of the foreign debt.

For Romania, ensuring a complementaritybetween domestic and external resources of financingfor sustainable development is a central goal of its eco-nomic and social policies. In this context, we also pur-sue the economic and institutional criteria forRomania’s accession to the European Union. Theregional and subregional cooperation and integrationrepresent factors of economic progress and instru-ments of sustainable development.

The Monterrey Conference, through themajor importance and significance of its agenda, aswell as through its final outcome, is the economicevent of the year 2002. The Monterrey Consensuswill give a new shape and a new dimension to theinternational cooperation meant to ensure the financ-ing for sustainable and equitable development. It willcomplement the efforts that made it possible to launchin Doha the new round of multilateral trade negotia-tions set under the sign of the balanced developmentof all nations. Besides, the states of the world give astrong signal in favour of a multilateral approach todevelopment, which is not solely related to the liberal-ization of the international trade.

Romania hopes that the success of thisConference will enable the achievement of the devel-opment-related objectives set out in the MillenniumDeclaration and will contribute to the good prepara-tion of the forthcoming World Summit for SustainableDevelopment to be held in Johannesburg.

95


and illiteracy by the year 2015. Sadly, the heretoforefinancing, policy and institutional emphases, if allowedto persist, will ensure that these goals will be missedby a very wide mark.

So, here we are again gathered, this timein the magnificent land of Mexico, not to rehash thework of the Millennium Summit but to advance itsunderlying purposes in a remarkable new period, post-September 11th, hopefully with bold new ideas revolv-ing around the theme ‘Financing for Development’.

So in Monterrey it is not ‘déja vu’. It can-not be a celebration of cynicism nor a dragon’s danceupon a decorous platform of the finest diplomatic lan-guage which few are determined to embrace foraction. Rather, Monterrey ought to be seen as thatoccasion when human civilization commenced itsrenewed quest to save humanity, to turn the setbacksof the past (including the last eighteen months) intoadvances, to ensure that extant weaknesses metamor-phose into strengths, and limitations into possibilities.

In this historic venture to preserve andadvance human civilization and to arrest a descent intoan immediate and lurking barbarism of poverty, terror-ism and underdevelopment, we need all hands ondeck. Obligations accordingly reside in nations, in theinternational community, in corporate entities, in thearray of non-governmental organizations and, yes, inindividuals across this increasingly shrinking planetearth. Therefore we must all leave here with arenewed commitment to work together in human soli-darity to accomplish the solemn and uplifting declara-tions in the draft Monterrey Consensus which we arehere gathered to adopt and proclaim as our own.

This draft Monterrey Consensus does notin every material particular satisfy the country which Ihave the honour to represent, Saint Vincent and theGrenadines. But I shall not make perfection theenemy of the good. And so my county embraces ‘thenew global deal’ on the table which was eloquentlysummarized by the distinguished Secretary-General ofthe United Nations, His Excellency Mr. Kofi Annan, inan article in the New York Times of March 19th2002, in the following terms: “When developing coun-tries fight corruption, strengthen their institutions,adopt market-oriented policies, respect human rightsand the rule of law, and spend more on the needs ofthe poor, rich countries can support them with trade,aid, investment and debt relief.”


96

We salute and support the coordinatingrole of the United Nations in promoting the globalstrategies of development. The time has come to seri-ously think of setting up an Economic and SocialSecurity Council of the United Nations, allowing a bet-ter coordination and increased efficiency of all thesecomplex projects.

In conclusion, Mr. President, I would like toexpress my hope that our endeavours will be under-stood and supported by all those who are interested increating a worldwide stable economic and social cli-mate, in reducing the development gaps, for a moreequitable and peaceful world.

SaintVincent andthe Grenadines

Prime Minister Ralph Gonsalves of Saint Vincent and the Grenadines.

Photo courtesy Permanent Mission to the United Nations

Statement byHis Excellency Dr. Ralph E. GonsalvesPrime Minister of Saint Vincent and the Grenadines21 March 2002

Eighteen months or so ago, political leaders the worldover agreed upon a bundle of clearly defined targets,aptly-named ‘Millennium Development Goals’, whichfocused on a substantial reduction of poverty, disease

Of course, each of the elements in this newglobal deal is enveloped in controversy. As always thedevil is in the details. It is precisely for this reason thatsensible, rational, ongoing, structured conversationsamong all the relevant stakeholders are necessary anddesirable to hammer out acceptable conclusions on thedevilish details which are well known to all assembledhere.

We in Saint Vincent and the Grenadinesare deeply grateful for the bilateral assistance whichwe have been receiving from countries in NorthAmerica, Europe, Latin America, the Caribbean andAsia. It is to be regretted that one of our country’sprincipal donors from Asia, the Republic of China**,has been excluded from a place at the table of thecommunity of nations.

Still, it is true to say that the level of assis-tance delivered to poor countries by rich ones is whol-ly inadequate for genuine development. I do not how-ever traduce them for failing to meet even their owntargets. Rather, I urge them to accept that their ownself-interest dictates a greater and more appropriatelytargeted generosity. Surely, the call by the UnitedNations and the World Bank for rich countries to dou-ble their current levels of assistance is not unreason-able. Moreover, such aid ought not to be merely dis-cretionary; it ought, in this new globalized world to bea juridically grounded international obligation, moni-tored by an appropriate authority. At the same timetoo, the international financial structures fashioned atBretton Woods nearly sixty years ago ought to bereformed to meet the circumstances of this new,changed and challenging age.

Saint Vincent and the Grenadines is asmall, poor country set adrift between the CaribbeanSea and the Atlantic Ocean. Admittedly, we are notamong the poorest countries of the world but we areamong the world’s most vulnerable. Our very specialcircumstances cannot even be accommodated by theuseful, though shopworn, ideas under the rubric‘Special and Differential Treatment’. Much, muchmore is required from the international community ifsmall Caribbean countries like Saint Vincent and theGrenadines are to grapple satisfactorily with the falloutfrom globalization and the trade liberalization. Ouragenda in this regard is fair, reasonable and practical.


The overall cause of financing developmentupon which we are here embarked is a great one. Andgreat causes are not won by doubtful men andwomen. Great causes, too, admit not of time wasting.An urgency is upon us.

Now, more than ever, each of us is hisbrother’s keeper, Nations ought to reflect the magna-nimity which resides in the human spirit and not allowancient wrongs to rankle needlessly. Poor nations arenot worthless entities to be politically shunted aside.Rich nations ought not to permit their successes toengender a sense of rampaging triumphalism. Historyis not yet at an end. Here, let us all be thoughtful andcaring of, and for, the human condition, and bereminded, too, that of all time only the future is oursto desecrate. This conference is about the avoidanceof the desecration of the future.

Let me conclude by thanking the MexicanGovernment and people for hosting this wonderfulevent, I am honoured to have been part of it.

97


Spee

ches

by

Hea

dsof

Stat

ean

dG

over

nmen

t

Senegal

President Abdoulaye Wade of Senegal.

Statement byHis Excellency Mr. Abdoulaye WadePresident of the Republic of Senegal*21 March 2002

I would like on my own behalf and on behalf of thedelegation accompanying me to thank first of all theSecretary-General and also the President of the UnitedMexican States, its Government and the Mexican peo-ple for their hospitality. I would also like to express mygratitude and recall that millions and millions of peoplefrom all continents have their eyes turned to thisConference.

To go to the heart of the subject, I wouldrecall that since the admission of the underdevelopedcountries to the functioning of the international devel-opment finance system, financial institutions,European development funds and others, internationaldevelopment has been predicated on credit and assis-tance.

Official development assistance has onlyreached half the goal that was set in the 1970s – oftransferring 0.7 per cent of the gross national productof developed countries to the developing countries. Ido not want to go into the details of the contributions


of various developed countries, but I would raise thefollowing question. If, even today, here and now, therate of 0.7 per cent were reached, what would havebeen resolved concerning development problems? Nomodel of analysis has endeavoured to answer thisquestion. Moreover, at the pace at which official assis-tance is evolving since 1970, to attain but half of ourgoal, it would have only reached this goal in another30 years, without our yet knowing very well the prob-lems that it would have resolved.

I would not want, for my part, for us toleave here with the sole result of announcing tri-umphantly that official development assistance hasbeen raised to x per cent, because we would be dan-gerously raising hopes, while knowing full well that weare a long way short of the target.

Nevertheless, we must sincerely thank thedeveloped countries, whatever their contributions toofficial development assistance, because assistance isalways a sacrifice on the part of the populations thatgive it. We must recognize that assistance alone willnot resolve Africa’s problems. Assistance can onlycomplement, in my view, a system that is alreadyfunctioning and not be the essential element thatmakes the system run.

On the other hand, debt has reached insol-uble proportions. We must acknowledge that despitethe good will of all in the face of the problems ofAfrica, the credit and assistance system that was con-ceived to finance international development has failed.What is paradoxical is to correlate the needs of Africawith the generosity of the developed countries. Africa,paradoxically, wanted to develop in a way that hasnever been proven, because nowhere in the world dowe know of a country that has been able to developthrough assistance and debt.

This means that we must seek other solu-tions. We have to be imaginative. That is preciselywhat Africa has tried to do in the New Partnership forDevelopment in Africa (NEPAD), which focuses on thedevelopment of a partnership with the private sectorand public sector. In April, my country will be hostinga summit of African Heads of State in Dakar devotedto partnership with the private sector to financeNEPAD. Companies, businessmen and the private sec-tor of all countries are cordially invited – the UnitedStates and Canada, the countries of Europe and Asia,Arab countries and of course the African private sector.

I think that it is the private sector thatdeveloped Europe, the United States, Japan and cer-tain Asian countries, which do not have naturalresources, but have leaned on education and training.Africa should channel itself in that direction. In myview, most internal resources and official assistance


98

should go towards education and training by creatingthousands of schools of general education and voca-tional training in all villages and by making unem-ployed professionals into teachers and training person-nel. We should even recruit training personnel fromabroad.

With respect to debt, I need not expand onthis, because I have focussed on this issue elsewhere. Iwould simply say that I support the idea put forwardby President Bush to allocate 50 per cent of develop-ment resources as loans and 50 per cent as grants,because it serves no purpose to make loans, knowingthat the creditors will not be paid.

The second phase of NEPAD will be inJune, when we will meet with the Group of 8 inCanada.

I would simply like to add Special DrawingRights to the various sources of financing I havealready mentioned. I would refer you once again tothe proposal I made in 1972 in ‘African Reform ofthe International Monetary System,’ which I took upagain in 1989 at the Organization of African Unityconference in Abidjan and which was reflected in mywork ‘A destiny for Africa’ and in the Omega plan in2000.

The second point I wish to make is that aConference such as this can be a success only if itgoes beyond general principles and into detail,because Africa is not in the same situation as SouthAmerica or Asia, which are relatively more developed.To wish to deal with all developing countries with thesame concepts and strategies would be like a doctorwho wants to heal all the patients in his clinic with thesame medicine.

The present Conference should refer to thecontinental conferences such as the one NEPADorganized in Dakar in April on the theme, as I havesaid, partnership with the private sector for financingfor development. We intend to receive members of theprivate sector here to continue and follow up onMonterrey. We will be speaking in concrete terms.

The flows of private capital will be chan-nelled to Africa if we create genuine democracies,establish transparent regimes, assure security and cre-ate conditions for profitability, with the free repatria-tion of capital and long-term conditions of stability.The problem facing Africa is not actually developmentresources, because they exist, but rather the conditionsfor receiving capital flows. It is our political systems –or certain political systems – that have a negativeeffect on the flow of international capital, which isthus channelled elsewhere, such as towards Asia.

In conclusion, while we again express ourgratitude to the countries of the North and their peo-ples for the sacrifices that they make for the peoplesof the South through official development assistance,we would say that African development would never-theless take place through the private sector and noother means. Assistance of all kinds and financingfrom international institutions can only be a back-upfor a machine that works on its own and supplementwhat it lacks. A contrary vision would be a serious mis-take and can only lead to deep disappointment.

South Africa

President Thabo Mbeki of South Africa.

Statement byHis Excellency Mr. Thabo MbekiPresident of the Republic of South Africa21 March 2002

This historic meeting in Monterrey is a declara-tion of hope to the peoples of the world that the lead-ership of countries of the world is committed to “erad-icate poverty, achieve sustained economic growth andpromote sustainable development as we advance to afully inclusive and equitable global economic system”.

Our presence here signals unequivocallythat we will act together as a potent force for globalchange. We are here to break new ground and toextend the frontiers of what is possible to attain bal-

99


anced global development. The mission which broughtus here started, in earnest, at the Millennium Summiteighteen months ago where we stated that “We arecommitted to making the right to development a reali-ty for everyone and to freeing the entire human racefrom want.”

We have since been through the meetingof the World Trade Organization in Doha, which com-mitted to a development trade round. In Monterrey wemust reach explicit commitments on the financing ofdevelopment. We must then proceed with evengreater clarity of purpose to Johannesburg inSeptember this year to map out the detail for sustain-able development.

This gathering has been favoured with aconsensus document. This consensus must be accept-ed as a foundation on which we must build now.

We welcome the announcements made byboth the European Union and the United States ofAmerica in the past few days to substantially increasethe ODA commitments. We are greatly encouraged bythe discussions here in Monterrey between representa-tives of governments and the private sector on thesteps towards increased investment flows. We acceptthe proposals developed in round tables here toimprove on the coherence within countries andbetween the multilateral organizations. But, we musturge that more be done, soon.

If the world continues on the current trajec-tory, the combined threats of underdevelopment,poverty, environmental degradation, ill health and dis-ease, and conflicts over natural resources will under-mine the prospects for political stability and prosperityacross the globe. It is this which creates the urgencyfor an agreement on sustainable development.

But, to deliver on this agenda, we mustreturn to the mandate of this Summit, of mobilizingsufficient resources for sustainable development.

On international trade, we must urge thatthe post-Doha negotiations be treated with urgency.This must include the provision of increased marketaccess for products from developing countries. Wemust call on the OECD countries to act on the morethan $360 billion of agricultural subsidies, which lockout imports from developing countries.

On Official Development Assistance, weappeal for a greater focus on the objective of defeat-ing poverty and underdevelopment, simplification ofprocedures and greater transparency in the awardingof grants.

Perhaps it is appropriate to recall that thegreatest tragedy of ODA is that it peaked at 0.35% ofGNP in 1990 and has been in decline ever since. At alevel of 0.23% of GNP currently, it is a far cry fromthe committed 0.7%.

On External Indebtedness, we appeal for adrastic revision of the terms and conditionalities appli-cable to the HIPC initiative. Unless we can staunchthe outflow of scarce capital from the poorest coun-tries, we will never enable the governments in poorcountries to marshal the resources to improve on thequality of public services or to address the infrastruc-ture deficits.

Of great importance, we must, all of us,commit to a partnership of mutual accountabilitybetween North and South to effect the necessarychanges, as represented, for instance, by the NewPartnership for Africa’s Development, NEPAD. Thepremise of this partnership must be an unambiguouscommitment to solving problems together, in a spiritof joint responsibility among governments and withthe private sector and other organs of civil society. Atthe same time, we must commit to improving thecoherence between the multilateral institutions, toencourage the leadership of these institutions toundergo programmes of organizational transforma-tion, and to assure them of our unstinting support.

The world we live in has the capital, tech-nology and the human skills to end poverty and under-development. The world’s poor need this expressionof hope, hope that we will take the correct decisionsto end their misery.

We must, here in Monterrey, agree to findthe resources to end the misery and degradation. Atthe Johannesburg World Summit for SustainableDevelopment, we must then fill in the detail, and doso in confidence, knowing that the plans will be fullyfinanced in the future. Our responsibility as leaderstogether is to confirm that the trust of our peoples iswell-founded. We cannot afford to fail.


100

Spain

President José María Aznar of Spain

Statement byHis Excellency Mr. José María Aznar LópezPresident of the Government of Spain(on behalf of the European Union)21 March 2002

One of our shared concerns brings us together todayat this, the Monterrey Conference: the unbearable sit-uation of a large part of Humanity. It is not just amoral concern based on ethics. It is also the convic-tion that it is necessary to extend to everyone, that is,to every human being who inhabits the earth, theopportunities enjoyed by the citizens of developedcountries.

We have come, then, not only to reflect,but also to act, to make the world we live in a morejust, more prosperous and better place, with our sightsset not on abstract considerations, but on concretehuman beings.

In this sense, I sincerely believe that theMonterrey Conference is an important step in aprocess which the International Community as awhole decided to support at the Millennium Summit.Monterrey, along with Doha and Johannesburg, is andwill be a name associated with the effort to concerted-ly confront the varied aspects of development.Because global challenges require global responses.

This is the great potential of the well-named Monterrey Consensus. We are without a doubtfacing the important renewal of a universal pact toeradicate poverty. This pact is based on the firmengagement of some, and on a conviction: No one iscondemned to poverty or underdevelopment. Everycountry has a potential for creativity and growth whichmust be freed.

This is about an accord to seek andachieve commitment to the most relevant aspectsinfluencing development and the elimination of pover-ty. Liberty, democracy, good governance and trans-parency with respect to Fundamental Rights, econom-ic liberalization, increased and better aid, more dia-logue and participation, preferential attention to edu-cation – a basic element in sustainable development –are, among others, some of the issues comprising themultifaceted complex an adequate policy for theencouragement of development must be.

The European Union is the world’s biggestdonor of development aid, and would like to reiterateat this Conference its adherence to the principles andactions embodied in the Monterrey Consensus. Ournew international reality implies challenges whichdemand new, imaginative formulas. We are sensitiveto these concerns and thus, at this Conference I wouldlike to present the following initiatives the EuropeanUnion adopted by consensus.

In accordance with our repeated commit-ment to achieve the goal of channelling 0.7% of ourGross National Product to Official DevelopmentAssistance, the Member States of the EU have decidedto do what they must to collectively reach an averageof 0.39% in the European Union by 2006. In order todo this, those European Union Members with contri-butions equal to or greater than 0.7% will continuetheir efforts to maintain or exceed this amount. Thosecontributing less than this amount will make everyeffort to at least reach the level of 0.33% of theirGNP for Official Development Assistance in 2006.

In addition, the European Union demon-strates its determination to make DevelopmentAssistance more efficient. It must reach the beneficiar-ies with greater ease, greater speed and less cost. Inorder for this to happen, the Member States of the

101


European Union will implement concrete measures tocoordinate policies and procedures for harmonizationbefore 2004, in accordance with internationallyagreed criteria, including the application of the recom-mendations by the OCDE Special Unit, DevelopmentAssistance Committee, on donor actions.

In accordance with this same philosophy,we will implement the recommendations of theDevelopment Assistance Committee to eliminate con-ditions for assistance for least developed countries. Wewill also continue debates for a greater untying of bilat-eral aid. The European Union will also study measuresfor a greater untying of community aid, while main-taining the current systems of pricing preferenceswithin the framework of accords between the Unionand the ACP Group.

Based on the conviction that internationaltrade is an authentic engine for development, theEuropean Union is firmly committed to leading thedevelopment agenda agreed in Doha, with specialemphasis on the liberalization of markets. TheEuropean Union is in fact the main export market fordeveloping countries and offers generous trade prefer-ences. Furthermore, the EU has marked the appropri-ate path with the ‘Everything-but-Weapons’ initiative,which concedes access with no tariffs or contingenciesfor exports of Least Developed Countries.

The European Union will increase assis-tance to strengthen long-term trade capacity, produc-tive capacity and the measures to exceed supply limitsin developing countries. The EU will immediately facili-tate technical assistance to improve the negotiatingcapacity of developing countries with respect to trade,including its commitments assumed at the WTOPledging Conference in Geneva on March 11, 2002,which have reached 60% of the total amount commit-ted in 2002.

We will continue to work on the process ofan international definition of the most important glob-al public goods, including the proposal for the estab-lishment of a special unit to that effect. Sufficientfinancial resources must be dedicated to Global PublicGoods. This is consistent with the OfficialDevelopment Assistance convention. Specific funds,such as the recent Global Health Fund, may be validinstruments for channelling private, bilateral and multi-lateral resources.

The Union will make every effort to influ-ence the reform of the international financial systemby fighting against abuses of financial globalization,strengthening the voice of the developing countries inmaking economic decisions internationally and, whilerespecting their respective functions, enhancingcoherency between the UN, international financialinstitutions and the WTO.

Finally, the Union will continue its effortsto guarantee debt sustainability in the context of therenewed HIPC initiative, so developing countries, par-ticularly the poorest, can continue to grow and devel-op without the limitations of unsustainable debt. Weunderstand, however, that it is necessary to streamlineprocedures and to shorten terms, given the difficult sit-uations of the eligible countries.

These commitments express the will toinvolvement that the European Union has and willhave, for improving the living standards of broad sec-tors of the planet.

I would not like to end this speech withoutthanking the Government and people of Mexico fortheir ever-warm hospitality. In the same way, I wouldlike to thank President Vicente Fox for his offer ofMexico as host of this Conference. We find ourselvesin a country which is particularly conducive to under-standing the challenges, difficulties, opportunities andhopes of the struggle to obtain full development.

I also thank the United Nations and itsSecretary-General for having convoked thisConference, which is not an ending but rather a start-ing point. Many difficult efforts remain to be achieved,but we have received a mandate which we must fulfiland it is our own future that is at stake.


102

Thailand

Prime Minister Thaksin Shinawatra of Thailand.

Statement byHis Excellency Mr. Thaksin ShinawatraPrime Minister of the Kingdom of Thailand21 March 2002

Permit me to highlight a few priority concerns andshare some of Thailand’s own experiences in our col-lective efforts to reform and strengthen the global eco-nomic system to enable the achievement of truly viableand sustainable development growth in the new mil-lennium.

The draft of the Monterrey Consensusalready encompasses the broad strategies and outlinesthe requirements to eradicate poverty, promotingsound economic growth and sustainable economicdevelopment in a holistic and comprehensive manner.The Monterrey Consensus enshrines all the basictenets necessary for economic and social develop-ment, namely domestic mobilization of resources orself reliance and a conducive external economic envi-ronment through free and fair trade, improved invest-ment and capital flows, and better standards of con-duct and government transparency.

The Consensus highlights the need for anincrease in the level of official development assistance(ODA) that truly addresses the social, human andfinancial needs of the poor and individual national

requirements as well as the thorny issues of highindebtedness and improved external debt manage-ment, debt relief and debt forgiveness, where appro-priate. However, not enough priority is given to themonitoring and management of rapid, destabilizingoutflows of private capital from developing economies,which were the primary cause of past financial crises.The failure of the international financial system to pre-vent and respond to such crises should remain a highpriority concern.

The identification of basic and continuingsystemic development issues, in particular the need forgreater coordination and surveillance of all key playersto maintain global economic and financial stability, andreduced exchange rate volatility among the developedeconomies, as well as improved mechanisms to pre-vent future potential financial crises, remain key priori-ty issues. The role of international financial institutionsand new regional arrangements to provide timely andadequate support in times of financial crisis, andadjustments to ensure effective rescues, remain para-mount. At the same time, we must also ensure thatthe needs and requirements of the poor are not undulycompromised, particularly in the transition and crisisreform phase.

To avoid future crises, there is a need toproperly sequence and formulate fair, effective andrealistic codes of financial standards, transparency andgovernance codes appropriate to the level of econom-ic and financial maturities of individual economies.Such measures would reduce the vulnerability to finan-cial crisis and mitigate the social costs of requiredstructural adjustment programmes.

Towards this end, Thailand fully supportsand strongly urges that the highest priority be given tocreate a new forum to study, examine and proposenew and innovative ways for developing countries andtransition economies to engage equitably and properlywith the international financial community in a newglobalized context. Globalization and liberalization intrade, development and investment are issues thatrequire a reassessment of standards and safeguards toensure that all can participate meaningfully and fairlyat appropriate levels. One standard, while desirable,may not be suitable for all at the same time. A handi-capping system is a possible alternative that meritsserious consideration.

From Thailand’s experience, one of the les-sons of the 1997 Financial Crisis is that liberalizationof any sector must be well sequenced, appropriatelytimed, and accompanied by appropriate rules, regula-tions, and supervisory frameworks. As a consequence

103


of the Crisis and contagion, the developing economiesin Asia have undertaken a number of measures toreform and adjust their financial systems to the newdemands of globalization. These efforts are, however,inadequate without the cooperation and strong finan-cial support of the international community and inter-national organizations concerned.

The continuing worries of volatility of inter-national capital flows, more equitable burden-sharingbetween debtors and creditors, as well as flexibility ofpolicy options for economies experiencing financialdifficulties, need to be seriously considered. One solu-tion cannot solve every crisis. A more flexible crisismanagement paradigm is a must.

The issue of moral hazards has yet to befully addressed since one of the primary concerns wasthe IMF requirement for crisis economies to maintainliberal capital transfers. This, in effect, was a bailout ofprivate creditors and investors under the guise of gov-ernment and international guarantees of free andunrestricted financial transfers. The need to have animmediate time-out or short circuit, such as the meas-ures in the NYSE, would be a viable solution in futurecrises.

Greater dialogue between developed anddeveloping countries is clearly needed on these keyissues, based on mutual interests and shared responsi-bilities. The issue of immediate corrective actions, suchas restrictions on capital outflows and limitedexchange controls for an initial adjustment period,needs to be seriously re-examined and allowed intimes of severe financial duress.

International trade remains another majorsource of financing for development. Thailand believesthat all countries must strengthen their cooperation toensure that the new round of Multilateral TradeNegotiations (MTN) seriously addresses the needs andconcerns of developing countries in the negotiationand implementation of the WTO Agreement.

The primary and major concerns are con-tinued unrestricted market access for goods and servic-es, reduction of tariff and non-tariff barriers for agricul-tural goods and textiles, and liberalization of importantservice sectors. We are also concerned about how theTRIPS agreement should be implemented in a waythat will ensure the rights of less developed countriesto technology transfer, affordable medicine, and equi-table sharing of benefits from the utilization of naturalresources and indigenous knowledge. The fight toeradicate diseases, and ensure appropriate health andsanitation for the population especially the poor,

requires a new rethink, not merely based on financialbut also human dimensions. No one should have theright to suffer because they cannot afford the latestand most effective cure.

Thailand believes that the special and dif-ferential treatment and technical cooperation provi-sions of the WTO Agreement need to be strengthenedand effectively implemented. Meanwhile, the moredeveloped partners as well as related intergovernmen-tal organizations such as the WTO, UNCTAD andITC, could help provide technical assistance to devel-oping countries in building up their capacity in theareas of trade negotiation and promotion, trade andinvestment policy, and legislative adjustment for liber-alization of trade in goods and services.

Foreign direct investment is and remainsone of the most important sources of financing fordevelopment. The current declining trend of foreigndirect investment to the developing countries thereforeneeds urgent consideration. As in international trade,the imbalances and uneven distribution of foreigninvestment are caused by the weak economic andtechnological infrastructure and supply side capacitylimitation of developing countries. To help address thisshortcoming, the more developed partners and relatedintergovernmental organizations such as UNCTADshould help provide technical assistance in investmentpolicy formulation to attract foreign investment and toenable developing countries to reap benefits from FDIthrough the transfer of technology, management skillsand contribution to the economic and social develop-ment of such countries. Increased emphasis on capaci-ty building based on indigenous and traditional skills,as well as innovative interaction with the new knowl-edge society of information technology, is a newavenue to promote local and new sources of invest-ment.

On the question of declining ODA for tech-nical assistance to developing and least developedcountries, this must be addressed by closer consulta-tion among the parties concerned. In this regard, Ihave the pleasure to inform the Conference that, from1st May of this year, the International Institute forTrade and Development in Bangkok, jointly estab-lished by the Royal Thai Government and UNCTAD,will start its technical cooperation programme to buildup capacity for the developing and least developedcountries in Asia in addressing the risks and challengesof globalization and promoting trade and investment inthe region. I therefore wish to invite interested mem-


104

bers to participate in the Institute’s work programmesand call on our development partners and relatedintergovernmental organizations to support the opera-tion of the Institute.

The Thai Government is of the view that inaddition to traditional models of socio-economic devel-opment, new alternative models must also be exam-ined. We agree with the Consensus that the benefits offinancing for development must target those who aremost in need, namely the people at the grassrootslevel. We must eradicate poverty, directly and innova-tively. Rather than using development funds merely tocreate basic infrastructure as in the past, Thailand isconvinced that creating greater opportunities for thepeople to seek gainful employment, by expandingtheir access to capital, technology and new markets tobetter their lives, will be the new key to sustainableand sound growth.

Towards this end, my Administration hasemphasized an ‘outside-in’ approach to tackling thenation’s problems. Rather than presuming to knowwhat is best for the people, we have sought their inputregarding the main problems they would like theGovernment to solve and have incorporated this intothe Government’s policies. Having secured this valu-able information, we then did our utmost to encouragepublic participation at every level in order to ensurethat the people were also an integral part of the solu-tion.

The promotion of microfinance or micro-credits are among the highlights of our policy strategy,with small and medium-sized enterprises serving asone of the new supports of our economic system.Equal emphasis has been placed on the revival of theagricultural sector, productivity improvements, andtransformation to new market requirements as thebackbone of our population. A debt relief workoutprogramme has been implemented to give small-scalefarmers a breathing space to restructure their produc-tive capacity, thereby enabling them to become finan-cially viable in the medium term.

The introduction of village revolving fundsthroughout the country provides a source of financingfor rural employment and business community proj-ects. The administration of the funds is carried out bya committee composed of the local villagers them-selves. This peer group has a free hand in approvingand setting the terms of the loans without any interfer-ence from the Government.

Meanwhile, the promotion of a championproduct, or the so-called ‘One Village, One Product’initiative, helps foster creativity and competition toimprove productivity for the domestic and global mar-ket place wherever possible.

Finally, the establishment of a People’sBank for small-scale borrowers has served to providefinancing for development at the smallest unit of pro-duction. At the outset, many critics had forecast thatthe borrowers would most likely default on their loans.After 8 months in operation, however, we found thatthe NPL rate for People’s Bank loans amounted toonly 0.3 per cent of total loans. This is a true testa-ment to the pride that the people have in keepingtheir word and paying off their loans, if given theopportunity.

Development, of course, is also condi-tioned by the external environment, namely, globaldemand conditions, the stability of the financial andexchange rate system, and adequacy of externalfinancing. To ensure that domestic initiatives remainsustainable, Thailand believes that a supportive inter-national enabling environment is needed, particularlyopen market access for developing countries’ exports,sound and coherent policies at the international levelto ensure global financial stability and reducedexchange volatility, as well as a level playing field withproper safeguards.

We are all deeply concerned about theproblem of uneven development, which has led to awidening gap between developed and developingcountries. In these turbulent times, it is hoped that theindustrialized nations would offer some kind of sup-port, or ‘hand-holding’ to assist those who are less for-tunate. Such support would help bring the less devel-oped countries along and enable them to become bet-ter partners of the developed world in the future.

Thailand is mindful of the fact that mutualassistance and cooperation provide the best avenuefor greater prosperity. Therefore, we have tried toreach out to our neighboring countries through variouseconomic cooperation frameworks, such as theGreater Mekong Subregion. Our investment today intransportation networks, human resources, and sci-ence and technology will increase trade and employ-ment, while building greater capacity for many genera-tions to come.

Thailand is also ready to share with ourdevelopment partners our experiences in areas ofexpertise, such as our war on drugs. This has beenaccomplished partly by promoting crop substitutionprogrammes, both in our own country and our neigh-bours, thus creating an alternative source of incomefor the local people while helping to eradicate opiumproduction.

105


At UNCTAD-X in Bangkok two years ago,we exchanged views on the causes and cures of finan-cial crises, the imbalances of the international tradingsystem, and other questions on financing for develop-ment. We also adopted the Bangkok Plan of Action,which laid down strategies to make economic global-ization an engine for economic growth and develop-ment for all countries. Next month, Thailand will hostthe UNCTAD Midterm Review in Bangkok, with aMinisterial Round Table Discussion to assess globaleconomic developments since UNCTAD-X. This inter-national meeting, which will take place after threeother important international conferences on develop-ment, namely, the Brussels LDC-III, the Doha WTOMinisterial Conference and this FfD Conference, willprovide another important occasion for all of us tomake an assessment of the progress of the implemen-tation of the Bangkok Plan of Action and jointly for-mulate the development strategies and action plan forthe next two years until UNCTAD-XI. Therefore, Iwish to take this opportunity to invite you all to partic-ipate in this forthcoming meeting in Bangkok during29 April to 3 May 2002.

In closing, my delegation wishes to expressour sincere appreciation to the Government of Mexicofor hosting this very important Conference, which hasprovided us all with the opportunity to discuss andjointly formulate strategies and action plans for financ-ing for development.

The formerYugoslav Republicof Macedonia

President Boris Trajkovski of the former Yugoslav Republic of

Macedonia.

Statement byHis Excellency Mr. Boris TrajkovskiPresident of the former Yugoslav Republic ofMacedonia21 March 2002

It is a pleasure to be with you today, sharing the plat-form with such a group of distinguished individuals aswe work toward developing a new dimension in devel-opment and as we pave the path toward the creationof conditions for sustainable development of the globaleconomy, with a special emphasis on least developedand developing countries.

I want to begin my brief remarks byreminding all of us gathered here that the wealth andassets we have, collectively as countries and as individ-uals, are given to us to manage as responsible stew-ards, for our time on this earth. Whether we comefrom rich countries or poor countries, we mustremember that our goals should be creating conditionsthat allow for individuals – our citizens – to reach andachieve their God-given potential. This is one reasonwhy I am pleased that the goals we are working


106

FfD

toward achieving these few days are so clearly defined.The ‘Monterrey Consensus’ which will be the final out-put of this conference reflects the needed activities forthe appropriate implementation of the new develop-ment agenda and provides for a way for stable financ-ing of the same. In this regard, I congratulate all ofthose who have worked so hard on this document thatis the result of long negotiations and preparationprocess.

Recently a representative from an interna-tional NGO working in Macedonia told me that one ofthe beneficiaries they work with stated, “...we arethankful for the blankets, stoves, windows and doors,but what we really need is jobs.” This sums up ourwork here this week – how do we create jobs for indi-viduals in countries such as Macedonia given the newdevelopment agenda of the world.

In order to finance development, we needglobal action first on a local level, then on a nationallevel, then on a regional level and then on a globallevel in order to improve living standards for all. Aglobal increase in the world economy will eventuallyprovide for a decrease in poverty, a closing of the gapbetween rich and poor and implementation of theconcept of sustainable development in every dimen-sion. The success of the WTO Ministerial Conferencein Doha and the successful outcome of the MonterreyConference are a good basis for the success of theWorld Summit for Sustainable Development that willbe the culmination of a cycle in determining a newagenda. This new agenda will make the benefits ofglobalization equally accessible to all states and peopleof the world.

As you all know, last year my country wasa target of brutal attacks from extremist armed groupswhose purpose was to destabilize Macedonia, to dis-rupt inter-ethnic cohabitation and the development ofdemocratic processes. Thanks to responsible politi-cians, we have managed to find a political solution tothe crisis. However, full stabilization of the country,requires economic recovery. In that respect, the inter-national community last week at the Donors’Conference pledged €307 million, which was addi-tional sign of support and recognition to the peaceoriented policy of Macedonia.

However, allow me to send you the samemessage that the British Prime Minister, Mr. Blair, sentat the Summit of the 50th Anniversary of theMultilateral Trading System, to the world leaders afterthe signing of the Good Friday Agreement. I hope thatyou will all encourage your companies to look at thenew opportunities for trade and investment that theOhrid Agreement is bringing in Macedonia. That you

will help us bring economic prosperity needed tounderpin peace. These investments and trade will beinvestment in peace and stability and will help us bringeconomic prosperity and strengthen democraticprocesses and the civil character of my country.

Entirely aware of the importance of inter-national support, long term prosperity requires mobi-lization of domestic financial resources as an importantengine of economic development. Unfortunately, neg-ative experiences from the past, including the non-liq-uidity of banks, had a negative effect on level of thedomestic savings which in turn had a negative effect inthe lack of domestic capital and addiction to foreigncredits and grants. However, despite numerous chal-lenges such as an unstable region and the security cri-sis in my country, we have been able to succeed inincreasing the personal national savings rate. Our ulti-mate goal continues to be an increase in domesticinvestments in the economy, especially in small andmedium sized enterprises, which are the biggestengine of any economy.

While increasing domestic accumulation isa prime goal of ours, the attracting of foreign directinvestments is also a priority. To achieve this,Macedonia is creating a legal framework that is guar-anteeing the security of foreign direct investments. Inaddition, I would like to emphasize the need for amore active role of the international community. TheRepublic of Macedonia is an example of a country thathas all the right conditions for attracting foreign directinvestment but which has seen potential investors turnaway due to the various conflicts in the region and the country. The international community shouldapply a so-called preventive economy – orienting andguaranteeing potential investors in countries that have come out from a conflict and which need sustain-able stability.

The strengthening of international trade isalso an important factor in the financing of develop-ment. The creation of a liberal multilateral trade sys-tem will considerably stimulate development and willproduce certain benefits that are available to all coun-tries. As a small country Macedonia can achievegrowth only by creating an open market economy. Inthis context, my country has signed numerous freetrade agreements and intends to reach such arrange-ments with all other countries from the region.Macedonia will fully support the new round of tradenegotiations launched at the WTO MinisterialConference in Doha and does identify herself with theneed of all countries to take measures to strengthentheir international trade. The international communityshould support the process of quick accession to theWTO of all interested countries.

107


Foreign debt is also an important elementthat has influence to the development capabilities ofthe countries. The rising debt crisis in the world hashad an extremely bad influence on global economicdevelopment. That is why there is a need for actionon the part of the international community to alleviatethe negative affects of the debt crisis. We support theHIPC initiative and are pleased with the increase inthe number of states that are a part of it. It is veryimportant for us, as we stated in the preparatoryprocess, for a mechanism that would provide for thepartial pardoning of the debts of medium-developed,medium-indebted, and countries in transition.

In this regard, I would like to express mysatisfaction with Article 50 of the MonterreyConsensus that deals with this issue. This article willhelp in searching for proper solutions in negotiationswith the clubs of creditors and the Breton-Woods insti-tutions. The Republic of Macedonia is a perfect exam-ple of a medium-indebted country that, before ourrecent conflict, had a rising economy.

In order to provide for further implementa-tion of the long-term commitments of this conference,there is a need for improvement in the cooperationbetween Governments, international organizationsand, the NGO sector within the framework of theagenda agreed on the conference. The UN system,and especially ECOSOC has a very important role toplay, not least in the monitoring and coordination ofthe implementation process. Only with an active atti-tude and complete implementation of the obligationsagreed on at this conference by all sides involved, canwe create conditions for sustainable and long-termfinancing of development to the benefit of all of us.

In conclusion, I would like to reiterate thatwe must do a better job of reaching out to those whofear global economic development. There are manywho are afraid of this trend and believe that those whohave the resources do not want to share with those donot.

The people of Macedonia, and of theBalkans, are resourceful, creative, hardworking andenergetic. We just need that hand up to help usachieve it. And that is why I am excited about our newagenda focusing on sustainable economic develop-ment. The responsibility of wealthier nations towardthe rest of the world is to be responsible stewards ofthat wealth. The best way to accomplish that steward-ship is through the promotion of sustainable economicdevelopment throughout the world and by helping lessfortunate countries – but those that are willing toshoulder their share of the burden – to become moreprosperous.

Togo

Prime Minister Agbéyomé Messan Kodjo of Togo. Photo: Luis Galan/

Terra Networks.

Statement byHis Excellency Mr. Agbéyomé Messan KodjoPrime Minister of the Togolese Republic*21 March 2002

It is a great honour for me to address this assembly onbehalf of the President of the Togolese Republic, HisExcellency Mr. Eyadema, who would have liked tohave attended but was prevented from doing so at thelast minute by his responsibilities of State. Accordingly,he sent me to Monterrey to express his solidarity andhis overview of the problem, which will be at the fore-front of our discussions during our stay in this beautifulpart of the world. That is to say poverty, the develop-ment of which seems to challenge Man’s intelligenceand is a serious matter of concern to all.



108

After the Millennium Declaration inSeptember 2000 and the Third United NationsConference on the Least Developed Countries in May2001, which enshrined the determination of the inter-national community to eradicate poverty, thisInternational Conference on Financing forDevelopment attests to the fact that indifference andselfishness cannot prevail in this world that is markedby deeply rooted inequality. That is why it is a particu-lar pleasure for me to pay tribute to the action of theUnited Nations and its Secretary-General, Mr. KofiAnnan, and congratulate them on their fight to pro-mote peace and reduce poverty throughout the world.

On behalf of the Togolese delegation, Ishould like to tell you, Mr. President, and other mem-bers of the Bureau how very pleased we are to noteyour brilliant election. We are convinced that with thehelp of your experience, the Conference will achievepromising results that will bring sunshine and hope tomillions of people who are watching Monterrey today.

Our epoch seems to disdain thesemoments of rapture that humanity has witnessed inthe Copernican revolution, which was one of thegreatest expressions. But progress today heralds atime of uncertainty because change occurs so fast andis stamped by growing poverty throughout the world.That is why eradicating poverty cannot conceal theresponsibilities of the international community nor theshared efforts that must be made in this connection.Since the ’50s, the planet’s wealth has increased six-fold, whereas most of the world’s average income hasdecreased, as has life expectancy. The three richestpeople in the world have a fortune that is greater thatthe gross domestic product of 48 of the poorest coun-tries. The fortune of the 15 wealthiest individualsexceeds the gross domestic product of sub-SaharanAfrica as a whole. Finally, the assets of the 84 richestpeople exceed the gross domestic produce of China,which has 1.2 billion inhabitants.

That cannot be tolerated. The Third Worldcountries stagnate because of the weight of their exter-nal debt. The interest payment has grown by 95 percent. It now exceeds $176 billion and has reached$343 billion. Such difficulties lead us away from thetheory of optimal resource allocation, which is so dearto the protagonists of liberalism.

In recent years the economic balance sheetin Africa has shown some weak growth, which hasbeen mostly eliminated by demographic pressure. Ifthe real growth of gross domestic product is approxi-mately 3.4 per cent during the period 1995 to 2001,

the per capita ratio has declined to 1 per cent. Thatobservation obviously fluctuates according to the geo-graphical areas and even more according to the coun-try level.

At the dawn of the twenty-first centuryalmost half the population of the African continentlives below the poverty threshold on less than $1 perday. Similarly, life expectancy and literacy rates are 52years and 44 per cent respectively per individual.Those are the lowest rates in the world. The spread ofHIV/AIDS and the persistence of malaria may elimi-nate any economic or social progress made in recentyears. That should make it possible for Africa to rein-force its partnership with bilateral and multilateralfinancial institutions with civil societies and non-gov-ernmental organizations.

At this point in my statement, let me recalla few principles and methods that should underpinfinancing for development. They are intangible anduniversally-accepted principles that have been recog-nized by the international community as being thebible of universal morality, which should govern rela-tions among nations.

The first principle is the settlement of dis-putes through negotiation, which will contribute tothere being lasting peace, without which developmentis not possible. We must prevent conflicts by takingaction to address the causes of instability in the world,mitigate internal tension through accelerated develop-ment and ensure respect for human rights.

The second principle is the application ofthe dual standard of morality in international relationsthat gives pride of place to diversity in economic,social and cultural situations throughout the world andrejection of a single mindset.

In this connection, we must go beyond theWashington consensus, which frequently weakensinternational economic decision-making centres insome countries, reduces the effectiveness of projectsand programmes and implicitly promotes the waste ofresources. We must ensure that there is a real dialoguebetween development policies in order to ensure thatthe interests of all dovetail. In other words, we mustseek justice and equity in partnership – justice for themost fragile countries, and equity and just compensa-tion for those who are doing without their savings inorder to contribute to creating wealth elsewhere.

In other words, greater solidarity mustbring together foreign investors and recipient countrieswith a long-term vision for development in order toprovide us with the opportunity to modernize sectorsthat require great investment and to delay amortizationof debt. We are thinking here of communication andeconomic infrastructures.

109


To close this chapter on principles, I wishto indicate that it is necessary for there to be fairnessin international trade because a large number of thedeveloping countries are engaged in unfair competi-tion with developed countries by using non-tariff barri-ers, which have been promoted as being the hiddenface of customs disarmament. Fairness towards all,solidarity with the weakest, dialogue, justice and equi-ty, promoting peace, rejection of single mindsets andconfining ethnocentrism must be the principles onwhich we must base the Monterrey Consensus, whoseDeclaration is designed to ensure the effectiveness ofall investment and to promote sustainable develop-ment in developing countries.

Aside from these principles, mobilizing theinternational community for financing for developmentmust be the subject of innovative methods, or at leastimproved methods, if we wish to move forward, awaythe mistakes of the past, and abide by the spirit of theMillennium Declaration, which calls for more solidarityand effectiveness. From this standpoint, we must givepride of place to the measures of partnership, themeasure of effectiveness and consolidation of change.At this crossroads of giving and receiving, we mustensure that efforts will be made in order to help every-one.

The expanse of the need of the continentrequires that we streamline the clusters that we haveset up over the past four decades. A new partnershipmust prevail over this in order to ensure that develop-ment will be given some revitalization. At a time whenwe are trying to make regionalization more profitable,Africa needs to optimize its efforts to make industrialinvestments profitable and to set up infrastructuresthat will make it possible for there to be economies ofscale and make our economic areas more homoge-nous.

The Togolese Government appeals to theinternational community and the wealthy countries toincrease their direct investments, portfolio investmentsand official development assistance for Africa. Thatassistance has declined over the past decade. It hasfallen below the 0.7 gross domestic product target thatwas established by the United Nations. But that targetmust be achieved by the year 2015. This partnershipmust work together.

We know that part of the difficulties havebeen caused by an appreciation of the dollar and thedevaluation of some currencies. Although authoritativevoices in developed countries have been comforting usin our belief – and we wish to thank them very muchfor speaking out – it is time for the financial communi-ty to consider formulating an international tax at $75billion. That would be one-third of the debt of develop-ing countries. Mitigating the debt that our countriesare awaiting within the context of the Heavily IndebtedPoor Countries initiative remains complex. The resultsare mitigated.

I would be remiss if I did not say a fewwords about Togo’s efforts to eradicate poverty. Thesocio-political crisis of the ’90s and the suspension offinancial cooperation with our country have con-tributed to increasing poverty and reducing the State’scapability to intervene in order to deal with the phe-nomenon of growing pauperization of our population.Togo, with the support of its development partners,has been preparing a document on a strategy for erad-icating poverty. Participants will agree with us that fol-lowing that strategy cannot take place in a climate ofsuspension of economic relations. I want Togo toreceive greater support in its efforts to eradicatepoverty.

This is the vision of Financing forDevelopment that should be given pride of place if wewish to accelerate the development of the weakestcountries in accordance with the MillenniumDeclaration. This is a collective ambition and an act ofsolidarity that will make it possible for us to be suc-cessful as long as we cast aside selfishness. Thesetimes of uncertainty, fraught with speedy technologicalprogress, is something we must overcome, and wemust achieve a unified vision of the world free ofwaste, frustration, poverty, exclusion and misery topromote the reign of increased solidarity and lastingpeace among men and nations throughout the world.


110

Tunisia

Prime Minister Mohamed Ghannouchi of Tunisia. Photo: Luis Galan/

Terra Networks

Statement byHis Excellency Mr. Zine El Abidine Ben AliPresident of the Republic of Tunisia

Delivered on his behalf byHis Excellency Mr. Mohamed GhannouchiPrime Minister of the Republic of Tunisia21 March 2002

We are pleased, at the outset, to extend our deepestthanks and great consideration to His Excellency,President Vicente Fox Quesada, as well as to thefriendly people of Mexico; and to commend the excel-lent manner in which they have organized the pro-ceedings of this summit. We should also like to recog-nize the steps taken by UN member states in prepar-ing the conference document. We also extend to Mr.Kofi Annan, Secretary-General of the United Nations,our thanks for the laudable efforts he is exerting at thehead of our prestigious organization.

Our hope is for the proceedings of thisConference to be crowned by practical decisions con-tributing to the entrenchment of progress and well-being for mankind, within a climate of coexistence,cooperation, and solidarity.

Tunisia is aware of the need to mobilizenational resources and reinforce foreign investment todevelop the economy and achieve prosperity, as wellas the ensuing requirement: to carry out a fundamen-tal and comprehensive reform at the national level andto initiate a true partnership at the regional as well asthe international level.

Our country has embarked upon economicliberalization, convinced as it is that liberalization is anessential factor in successful development, taking intoconsideration notably social balances and the protec-tion of vulnerable social categories against the hazardsof marginalization and exclusion. Thus, we haveencouraged free enterprise in all production sectorsand issued a number of legal instruments covering thevarious structures of the economy, including thereform of taxation, the reinforcement of the monetaryand financial system, and the upgrading of publicenterprises operating within the competitive sector.We have also striven to encourage investment by set-ting up numerous facilities and incentives, within theframework of a unified investment code. Furthermore,we have developed a legislative framework for freetrade zones and consolidated partnership with allcountries.

The importance we attach to the establish-ment of balanced partnership relations, at the interna-tional level, stems from our resolve to meet therequirements of cooperation with regional groupingswhich are now a characteristic feature of our contem-porary world; and to reinforce the attributes of a digni-fied life, for all nations and all peoples, within a com-prehensive approach founded on a close interdepend-ence between the requirements of security, peace, anddevelopment.

The debate that was started on this topic,during the latest session of the Davos World EconomicForum in New York, has confirmed the awareness ofall parties, including the business sector, of the impor-tance of cooperation for development. Indeed, peaceand security could not prevail worldwide, unless allforms of poverty, marginalization, and exclusion areeliminated.

Based on the success of our experience inbringing down the poverty rate to the lowest level,through interventions by the National solidarity Fund,we have called for the setting up of a World solidarityFund to help eradicate poverty and impel social devel-opment in least favoured countries. While noting withsatisfaction the adoption of this initiative by the UN

111


General Assembly, we hope that appropriate mecha-nisms will be developed to establish this Fund as soonas possible, in line with the Millennium SummitDeclaration on the eradication of poverty worldwide.

Based on the widening digital gap betweenindustrialized countries and developing nations, we areconvinced of the need to take the necessary practicalmeasures to enable all states to keep abreast of tech-nological progress and to take advantage of the broadperspectives provided by the information revolutionand quickening economic changes. It is within thiscontext that we situate Tunisia’s initiative, submittedduring the meeting of the InternationalTelecommunications Union in Minneapolis, to host aninternational summit on the ‘Knowledge Society’. Inthis regard, we should like to express our deep consid-eration to all those who have contributed with us forholding this summit in Tunis, in 2005.

We avail ourselves of this opportunity toinvite the industrialized nations to further promotecooperation with developing countries in the areas oftrade and finance and in sectors related to the environ-ment; and to put into practice agreements reached inthis area during the World Trade Organization (WTO)Conference in Doha.

The decision by donor countries toincrease to 0.7% of GNP the size of public assistanceto development is still difficult to achieve. Hence theneed for common action to attain our goals, facilitateconditions for granting assistance, entrench interna-tional solidarity, and initiate a true partnershipbetween donor countries and beneficiary countries.The experience of the past few years has shown theefficiency of complementarity between public assis-tance to development and the promotion of construc-tive trade relations, in accordance with the principlesof the WTO, including the principles of preferentialtreatment for developing countries.

Tunisia had also warned against the graverepercussions of the continued and increasing debtburden on the economy of developing nations. Thiswas done through the call to the G8, during itsToronto summit in 1989. Tunisia has continued itsefforts in the same vein, during later meetings, the lat-est being the Havana South Summit; it has alsoaddressed a message to this effect to the Okinawa

Summit. We take this opportunity to express our con-sideration to those states which have written off, total-ly or in part, the debt owed by least advanced coun-tries and exhort the other industrialized nations to fol-low their example. Furthermore, we call for the specif-ic characteristics of debtor nations to be taken intoconsideration in dealing with the debt issue. Indeed,there is no justification for excluding medium-incomecountries from appropriate facilities, following the con-siderable efforts they have made to introduce structuraladjustments within their economies and meet theircommitments, while relying essentially on their owncapabilities.

While underscoring the need to reinforcethe harmonization of trade, financial, and monetarypolicies worldwide and to intensify cooperationbetween the various specialized international institu-tions and organizations, we advocate that the UnitedNations Organization remain the appropriate frame-work for the attainment of such objectives. To do so,the UN should promote its action in the economicfield and rationalize coordination with specialized UNand other international organizations, to ensure anenhanced interdependence of issues related to securi-ty, peace, and development. This is, in fact, theapproach advocated by Tunisia when it assumed thepresidency of the UN Security Council in February2001.

The current economic situation worldwidedictates that all states reinforce their relations of coop-eration and solidarity so as to establish a just and bal-anced economic order fostering a true partnershipbetween developing countries and advanced nationsand, hence, consolidating security and stability world-wide.

We hope that this international Conferencewill serve as an effective starting point in buildinginternational relations entrenching such objectives andorientations and paving the way for a better future forall mankind.


112

United States of America

President George W. Bush of the United States of America.

Statement byHis Excellency Mr. George W. BushPresident of the United States of America22 March 2002

Good morning. We meet at a moment of new hopeand age-old struggle, the battle against world poverty.I’m honoured to be with so many distinguished leaderswho are committed to this cause. I’m here today toreaffirm the commitment of the United States to bringhope and opportunity to the world’s poorest people,and to call for a new compact for developmentdefined by greater accountability for rich and poornations, alike.

I want to thank Vicente Fox, el Presidentede Mexico, and the people of Monterrey for suchgrand hospitality. I want to thank Kofi Annan for hissteadfast leadership. And I want to thank the distin-guished leaders who are here for your hospitality, aswell.

Many here today have devoted their livesto the fight against global poverty, and you know thestakes. We fight against poverty because hope is ananswer to terror. We fight against poverty because

opportunity is a fundamental right to human dignity.We fight against poverty because faith requires it andconscience demands it. And we fight against povertywith a growing conviction that major progress is with-in our reach.

Yet, this progress will require change. Fordecades, the success of development aid was meas-ured only in the resources spent, not the resultsachieved. Yet, pouring money into a failed status quodoes little to help the poor, and can actually delay theprogress of reform. We must accept a higher, moredifficult, more promising call. Developed nations havea duty not only to share our wealth, but also toencourage sources that produce wealth: economicfreedom, political liberty, the rule of law and humanrights.

The lesson of our time is clear: Whennations close their markets and opportunity is hordedby a privileged few, no amount – no amount – ofdevelopment aid is ever enough. When nations respecttheir people, open markets, invest in better health andeducation, every dollar of aid, every dollar of trade rev-enue and domestic capital is used more effectively.

We must tie greater aid to political andlegal and economic reforms. And by insisting onreform, we do the work of compassion. The UnitedStates will lead by example. I have proposed a 50 percent increase in our core development assistance overthe next three budget years. Eventually, this will meana $5 billion annual increase over current levels.

These new funds will go into a newMillennium Challenge Account, devoted to projects innations that govern justly, invest in their people andencourage economic freedom. We will promote devel-opment from the bottom up, helping citizens find thetools and training and technologies to seize the oppor-tunities of the global economy.

I’ve asked Secretary of State Powell,Secretary of Treasury O’Neill to reach out to the worldcommunity to develop clear and concrete objective cri-terion for the Millennium Challenge Account. We’llapply these criterion fairly and rigorously.

And to jump-start this initiative, I’ll workwith the United States Congress to make resourcesavailable over the 12 months for qualifying countries.Many developing nations are already working hard onthe road – and they’re on the road of reform andbringing benefits to their people. The new Compactfor Development will reward these nations and encour-age others to follow their example.

113


The goal of our development aid will be fornations to grow and prosper beyond the need for anyaid. When nations adopt reforms, each dollar of aidattracts two dollars of private investments. When aid islinked to good policy, four times as many people arelifted out of poverty compared to old aid practices.

All of us here must focus on real benefitsto the poor, instead of debating arbitrary levels ofinputs from the rich. We should invest in better healthand build on our efforts to fight AIDS, which threatensto undermine whole societies. We should give more ofour aid in the form of grants, rather than loans thatcan never be repaid.

The work of development is much broaderthan development aid. The vast majority of financingfor development comes not from aid, but from tradeand domestic capital and foreign investment.Developing countries receive approximately $50 bil-lion every year in aid. That is compared to foreigninvestment of almost $200 billion in annual earningsfrom exports of $2.4 trillion. So, to be serious aboutfighting poverty, we must be serious about expandingtrade.

Trade helped nations as diverse as SouthKorea and Chile and China to replace despair withopportunity for millions of their citizens. Trade bringsnew technology, new ideas and new habits, and tradebrings expectations of freedom. And greater access tothe markets of wealthy countries has a direct andimmediate impact on the economies of developingnations.

As one example, in a single year, theAfrican Growth and Opportunity Act has increasedAfrican exports to the United States by more than1,000 per cent, generated nearly $1 billion in invest-ment, and created thousands of jobs.

Yet we have much more to do. Developingnations need greater access to markets of wealthynations. And we must bring down the high trade barri-ers between developing nations, themselves. The glob-al trade negotiations launched in Doha confront thesechallenges.

The success of these negotiations will bringgreater prosperity to rich and middle-income and poornations alike. By one estimate, a new global trade pactcould lift 300 million lives out of poverty. When tradeadvances, there’s no question but the fact that povertyretreats.

The task of development is urgent and dif-ficult, yet the way is clear. As we plan and act, wemust remember the true source of economic progressis the creativity of human beings. Nations’ most vitalnatural resources are found in the minds and skills andenterprise of their citizens. The greatness of a societyis achieved by unleashing the greatness of its people.The poor of the world need resources to meet theirneeds, and like all people, they deserve institutionsthat encourage their dreams.

All people deserve governments institutedby their own consent; legal systems that spread oppor-tunity, instead of protecting the narrow interests of afew; and the economic systems that respect theirambition and reward efforts of the people. Liberty andlaw and opportunity are the conditions for develop-ment, and they are the common hopes of mankind.

The spirit of enterprise is not limited bygeography or religion or history. Men and womenwere made for freedom, and prosperity comes as free-dom triumphs. And that is why the United States ofAmerica is leading the fight for freedom from terror.

We thank our friends and neighboursthroughout the world for helping in this great cause.History has called us to a titanic struggle, whose stakescould not be higher because we’re fighting for free-dom itself. We’re pursuing great and worthy goals tomake the world safer, and as we do, to make it better.We will challenge the poverty and hopelessness andlack of education and failed governments that toooften allow conditions that terrorists can seize and tryto turn to their advantage.

Our new approach for development placesresponsibility on developing nations and on all nations.We must build the institutions of freedom, not subsi-dize the failures of the past. We must do more thanjust feel good about what we are doing, we must dogood. By taking the side of liberty and good govern-ment, we will liberate millions from poverty’s prison.We’ll help defeat despair and resentment. We’ll drawwhole nations into an expanding circle of opportunityand enterprise. We’ll gain true partners in develop-ment and add a hopeful new chapter to the history ofour times.

May God bless you all.


114

Uruguay

President Jorge Battle Ibáñez of Uruguay.

Statement byHis Excellency Mr. Jorge Battle IbáñezPresident of the Eastern Republic of Uruguay*21 March 2002

I promise that I shall be very brief.

I am the President of Uruguay, as was stated by ourfriend Paco Flores. Uruguay is the smallest country inSouth America. We have 3.4 million inhabitants and187,000 square kilometres. Fortunately, we have noilliteracy. We have overcome that. Our education isfree. I personally went to public school, public highschool and the university of the Republic, as have allother Uruguayans. Of the population, sixty-five percent own their own homes. There are 500,000 com-puters in my country. Our telephone system is 100per cent digital and covers the entire national territory.

In addition to this, we have free elections.There is freedom of the press. There are no prisonersof conscience. Our President is elected and changesevery five years through a free, secret and universalvoting system, and there is no re-election. We do notstay in power for 40 or 45 years.

* The text of th is s tatement has been transcr ibed f romaudio recordings, as the or ig ina l was not submitted to the

Secretar iat

The reality of 50 years ago, which gaverise to the world’s course in terms of the various glob-al institutions and organizations, has not yet beenadapted to the changes that have since occurred. Weare still in the times of Malthus and Hobbes. Therehas been a huge increase in the population, of whichthe weakest are the fastest growing in terms of thefamily unit, if it still exists. There is an enormous con-centration of population in urban areas – LatinAmerica being one example. They are populationswho cannot maintain themselves on economies basedon family agriculture and who move to the cities.Indeed, this situation even affects rural populations ofcountries with strong subsidies.

This situation, combined with a definitedichotomy in the treatment of trade structures andcustoms barriers that are high for agriculture, whichare essentially managed by the developed countriesand, at the same time, from GATT to now, hasinduced us to show the benefits and efficiency of lowcustom barriers for industrial products and services.Uruguay agrees with that second point of view. Theweakest countries, instead of being able to improvetheir situation, have seen it worsen. This has alsomeant that these three elements combined havebecome an explosive mix in the world today that notonly prevents the improvement of the weakest, butworse still, causes regression, because only the nega-tive factors increase. That this weakens governmentsshould also be considered. It weakens their capacity toexercise their functions and confuses the populationabout the appropriate solutions for their problems.

Uruguay is happy to participate responsi-bly, as it always has, in forums such as this one. Weare grateful to Mexico, its people and President Foxfor the fine job they have done in organizing thisimportant meeting. We welcome the effort beingmade by the international credit institutions of whichwe are members and with whom we have alwaysworked successfully and shall continue to do so; withthe International Monetary Fund, whose statementmade by Dr. Köhler here we applaud and agree with,the World Bank, the Inter-American DevelopmentBank and the strong participation of the World TradeOrganization, whose statement Uruguay endorses.

We welcome the actions of developedcountries, particularly the Government of the UnitedStates, whose President, Mr. Bush, has sent clear sig-nals of increased aid to the poorest countries.However, we stress that a true opening of marketsremains the best way to fight poverty.

Finally, Uruguay wishes to reiterate thatdiseases are cured by attending to their causes, not byreducing their symptoms.

115


Venezuela

President Hugo Chávez of Venezuela.

Statement byHis Excellency Mr. Hugo Chávez FríasPresident of the Republic of Venezuela*(on behalf of the Group of 77 and China)21 March 2002

One of the most distinguished people of Monterreyand one of the greatest humanists of America wasundoubtedly the poet Alfonso Reyes, who wrote hisromance of Monterrey in 1911 in the midst of the tur-bulent Mexican Revolution and almost at the sametime that Francisco Madero and Pancho Villa wentthrough Monterrey with their troops and dreams. Inthe distinguished romance of Monterrey the poetwrote a verse that I want to cite here today, perhapshaving been motivated by our friend and brother,President Fox, when he referred to the spirit ofMonterrey almost a century later.

“Monterrey of the mountains, You who are level with the river, I do not know why you do not raise a cry to God to correct the situation and strengthen sense, and tell nature to straighten what is twisted.”


That is what the poet said. From this ros-trum, having the privilege and the honour of address-ing all the peoples of the world, I ask all leaders andrepresentatives present to raise a cry to God so that,as Alfonso Reyes said, we will strengthen sense andstraighten what is twisted.

That is the first idea that I want to expresshere in my capacity as Chairman of the Group of 77and China and particularly on behalf of the poor ofthe planet – not just on behalf of the 1.5 billionabsolute poor of the Third and Fourth Worlds, but alsoof the over 200 million who live in the First andSecond Worlds. Many of them are aware of this sum-mit meeting, although I am sure that the majority donot even know we are here. But their fates and livesdepend to a large extent on what we have begun todebate here today.

The first idea has to do with the need forus all to acknowledge, not only on paper or throughthe written or spoken word, but in the deepest part ofour consciences, that the world is not only twisted; Iwould say, along with Eduardo Galeano, that theworld is upside down. In addition to the cry of Godand the cry to God, the leaders of the world meetinghere can and must do a great deal to straighten it out.

The second idea has to do with preciselythat. We must do, not just say what we are going todo. What better scenario is there than this, with thepresence of leaders and Heads of State orGovernment of the world, to make real decisions totransform the world, to save the world, because theworld as it is, in my judgement, is not viable in thelong term. We are destroying the world.

We have many poor examples of what wehave said and have written and of what we have notdone. There was the Earth Summit in Rio de Janeiroten years ago, in 1992. An evaluation made in recentyears shows that from that Summit to date we havecontinued to destroy tropical forests and the once-fer-tile soil which is now desert. Over 250,000 plant andanimal species have become extinct. They were extin-guished. The environment continues to be polluted.The climate is experiencing the most atrociouschanges that have occurred in the past 10,000 years,as has been acknowledged by scientists. TheMillennium Summit was a year and a half ago. Wemade a Declaration. We should wonder a year and ahalf later what have we done to begin to fulfil thosenoble challenges that we set ourselves to achieve by2015, to reduce poverty by one-half and to see to itthat all boys and girls receive free education and theright to life and health. Have we taken any crucial


116

decisions over the last year and a half? We have notseen them anywhere. Real decisions that change theworld have not yet been made.

Regarding the third idea on Financing forDevelopment, what type of development are we talk-ing about? We must define that. The JohannesburgSummit to be held in a few months’ time will be time-ly, because the development model of the North veryoften has been the cause of the underdevelopment ofthe South. It has been shown in some cases that if theentire world acquired the standard of living of the mostdeveloped countries of the world, 10 planets similar tothe Earth would be necessary to sustain life on theplanet. So we should define well where we are going,what kind of development we are talking about andwhat we are going to finance and develop.

Of course, the United Nations has beenguiding development. The United NationsDevelopment Programme is a wonderful instrument.We recommend that Heads of State or Governmentfollow it carefully. Certainly that is the developmentthat we must finance with urgency. We must addresshuman development with urgency. As we all know,the United Nations Development Agency has estab-lished three basic variables for human development:first, life expectancy and health; second, education,school enrolment and quality of education; and third,the level of real family income. These are three vari-ables on which we have to work very hard today, nottomorrow. They continue to deteriorate.

The fourth idea I want to place on therecord is a question. What are we going to do? Thereare some very positive ideas in the MonterreyConsensus, but I think that we have to give them timeand space. We have to begin with the highest priori-ties, the most pressing items. At the MillenniumSummit and the Americas Summit, Venezuela made aproposal to declare a social emergency. We referredto America, but I think it applies to the world. Wemust recognize that the world is experiencing a veryserious social emergency, we must declare that and wemust act accordingly. I would like to propose thatwhile the International Monetary Fund exists, it is notthe tool necessary for the struggle of the lives of bil-lions of people. No, it was not created for that.

I propose that we discuss with urgency thecreation of new tools. Why not consider an interna-tional humanitarian fund? We would only change afew words – Monetary to Humanitarian. How wouldwe nourish that international humanitarian fund rightnow? A percentage of foreign debt? We are not talk-ing about debt relief. That is like treating a mortal ill-

ness with paper towels for the peoples of the planet.Of the foreign debt of the developing world, of theworld of the poor, 10 per cent could be targeted rightnow at saving billions of lives; 10 per cent of theworld’s military expenditure would save billions of peo-ple. If tanks, smart bombs and aeroplanes were nolonger built, I think that we would save many livesimmediately. A percentage of drug traffic confiscation,international corruption and, something very impor-tant that has been debated but has never been decid-ed, a world tax on speculative transactions and taxhavens could also be used. But it is time to make deci-sions, not just talk. We must act. We have an emer-gency in the world.

I will not speak at great length. I will justrecognize the effort of the Group of 77 and Chinaafter lengthy deliberations to reach a consensus, whichwe have brought here. But behind that consensus,there are truths. Consensus cannot be absolute.Absolute consensus does not exist. It is impossible.There are a few important ideas. Every country isasked to take the national initiative of mobilizingresources for development; that is true, relativelyspeaking. There is a set of countries in the worldwhere 500 million people live that do not have theability to mobilize a cent for development. That is true.

However, the mobilization of internationalresources has been requested – that is the second itemof this Conference and Consensus. We must changehow we mobilize international resources. We have tochange the terms of conditions. For example, thePresident of the International Monetary Fund says thatit is reviewing its structures. We welcome that. Thestructural packages of the International Monetary Fundhave often been mortal poison for our peoples. Theso-called structural adjustments have caused rebellions,coups d’etat, wars, uncertainty and death for the peo-ples of the third and fourth worlds. We must reviewthat urgently. We must treat countries in accordancewith their degree of development or underdevelop-ment.

President Fox says that my time is up. I willend in a minute, but the Presidents of the internationalfinancial institutions also ran over their time, did theynot? They talked a lot. I think we heads of State havemuch to say here. I am sorry to answer you, Mr.President, in that way, but I have come to talk onbehalf of the Group of 77 and China. We have muchto say, but I will finish in a minute. I promise. I ask fora cry to God.

117


On international trade, how long will thefirst world continue to subsidize its agriculture? Theagricultural subsidy in the first world is billions of dol-lars a day, and it demands that we subsidize ourselves.That is not just unfair; it is immoral. We also need anew ethical architecture in the world. How can what isnot done be demanded and what is not done beclaimed? The world of the South demands that thesubsidies for production in the First World end.

Finally, we will comply with the 0.7 percent target of the gross domestic product agreed tomore than 30 years ago, which would give us approxi-mately $200 billion; enough resources for humandevelopment. The same applies to foreign debt. Truly,many peoples of the world cannot pay their foreigndebt. In three years Venezuela has paid $13 billion,despite our poverty and our disaster. We are payingthe debt, and we are responsible for it, but the same isnot true for many other peoples of the world. In thepast few years, the South has paid $800 billion ininterest to the North and has paid another $800 bil-lion in capital. The debt continues to be the same. Itdoes not decrease. If anything, it increases. Debt is astrange monster. We continue paying. It does notdecrease; it continues to grow.

I bring all these ideas on behalf of the peo-ples of the South, which has been my privilege tovoice. I give voice to criticism to find consensus on dif-ferences and to move on with the spirit of Monterrey,the spirit of Mexico, the spirit of justice and the spiritof Simon Bolivar. Let justice triumph, and freedom will triumph.


118 Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

t

Heads of State and Government and other Heads of Delegation meet

at the Monterrey Summit, 21-22 March 2002.

119


120

Heads of delegation meeting in the Summit plenary session

at the International Conference on Financing for Development

in Monterrey, Mexico.

Chapter 4Monterrey Summit 21-22March2002

Speeches by Other Heads of Delegation

Speechesby Other

Heads of

Delegation

AndorraStatement byMr. Jaume GaytánDirector of Multilateral Affairs and Development CooperationThe Principality of Andorra

It gives me great pleasure to be here today and to beable to share with you our ideas and concerns onfinancing for development. The Minister for ForeignAffairs, H.E. Mr. Juli Minoves, has asked me to conveyto you Andorra’s commitment to the fight againstpoverty and the solidarity of my country with thedeveloping world.

We are pleased to note that it is one of therare occasions where we achieve consensus on thetext before the Conference itself! This not only showsthe support of the international community for theprocess of financing for development but also bearswitness to the tireless efforts of the co-chairs of thePreparatory Committee. Reaching a consensus beforethe Conference has also enabled us to concentrate onthe core of the matter during these days and made iteasier to exchange opinions and stand points.

The Principality of Andorra considers that,as it is stated in the Monterrey Consensus, our goal is“to eradicate poverty, achieve sustained economicgrowth and promote sustainable development as weadvance to a fully inclusive and equitable global eco-nomic system (...)”. From our point of view, theachievement of this goal requires a new partnershipbetween the developed and the developing countries.

This partnership requires the internationalcommunity to accord the greatest respect to the under-takings made in the Millennium Declaration, theProgramme of Action for the Least DevelopedCountries and the Fourth Ministerial Conference of theWorld Trade Organization in Doha.

In the first place, Financing forDevelopment implies a sustainable mobilization ofresources at both national and international levels. As Ihave already said, the partnership is a double one. Onthe one hand it seems to us basic that there should begood governance at the national level. This will facili-tate investment in basic social and economic services.We believe that a sustainable investment in humancapital is the condition sine qua non for eliminatingpoverty. But a solid basis is only the beginning of anyconstruction. This is why, on the other hand, every

national effort should be complemented by a sustain-able harmonized management of the internationalflows of private capital and international financial stability.

In the second place, and more concretely,we believe that the level of external debt may compro-mise the level of the mobilization of national resourcesand of international resources at the long run.Certainly, a sustainable financing of external debt is agood tool to mobilize resources allocated for publicand private investment in order to eliminate povertyand obtain a sustainable development. In the case ofheavily indebted poor countries we are pleased to seethat there is the strengthened HIPC Initiative to reducetheir debt. This initiative needs the firm support of theinternational community if the countries in questionare to have the chance of improving and strengthen-ing their policies for development.

We note that there are important interna-tional efforts to reform the international financialarchitecture. But this work must be intensified.Particularly, we believe that multilateral financial insti-tutions such as the International Monetary Fund mustdirect their efforts to defining and preventing possiblecrises. In the case of a crisis, we believe that its man-agement should include and respect national goals fordevelopment and particularly policies for the eradica-tion of poverty.

To conclude, Mr. President, we wish to reit-erate the firm commitment of the Principality ofAndorra to the process of Financing for Development.In Andorra this commitment is a double one: On theone hand there is government participation in specificfunds and programmes such as the United NationsDevelopment Programme, the World FoodProgramme and the United Nations Fund forPopulation, and on the other hand there is the coop-eration through agencies or the governments of thecountries concerned. These participations have notceased to grow since Andorra joined the UnitedNations. But I should also stress the role of Andorrancivil society, which has always shown its solidaritythrough the various Non-Governmental Organizationsin a decided and constant fashion.

To finish, I wish to stress that in order toconsolidate this process the Government of Andorrahas set up the Department of Multilateral Affairs andDevelopment Cooperation, which I have the honourto lead. This step forward affirms our commitment notonly to the process of development but also to itsfinancing.


122

Antigua and BarbudaStatement byHis Excellency Hon. Gaston BrowneMinister of Planning, Antigua and Barbuda

This Conference on Financing for Development pro-vides a welcome opportunity for the InternationalCommunity to affirm the critical importance it attach-es to global development. It should also serve to con-firm the obligations and responsibilities of developedand developing countries in achieving the objectives ofthe Millennium Summit. I wish to remind the interna-tional community of the words of my Prime Minister,the Honourable Lester Byrant Bird who, in his addressto the Millennium Summit, called on the internationalcommunity “to surprise all the millions of people wholive in abject poverty”. Now is the time for us to showthe world that we are serious about addressing thetwin issues of poverty and development, by puttingour words into action.

I wish to endorse the statements made byHis Excellency President Hugo Chávez and the otherdeveloping countries that have already spoken. Thereare, however, some specific concerns that I would liketo highlight from the perspective of a small islanddeveloping state. The Monterey Consensus fails toacknowledge the heterogeneous nature of developingcountries. It also overlooks the fact that there is a sub-set of developing countries, namely small island devel-oping states (SIDS), with peculiar vulnerabilities andcharacteristics because of their size, i.e. small domesticmarkets, limited resources, excessive dependence oninternational trade and overall fragile physical environ-ment.

As a small island developing state, we areaware of our obligations and have over the years uti-lized our limited domestic resources, official develop-ment assistance (ODA) and Foreign Direct Investments(FDI) optimally to develop our health care, educationalsystem, utilities, telecommunications, air and seaports. This resulted in unprecedented rates of growthduring the eighties and early nineties. However, today,in the absence of ODA and declining FDI we haveexperienced a substantial reduction in the rate ofgrowth to a low of 1.5% for 2001.

It is obvious that despite our commitmentand creative efforts to manage and develop oureconomies there are certain exogenous factors mitigat-ing against development in small states such asAntigua & Barbuda. We have played by the rules ofglobalization, while the developed countries haveexempted themselves – particularly in the areas ofagricultural and textile production which are still subsi-dized and protected. We have opened up oureconomies to the goods of developed countries butinstead of benefiting from increased trading opportuni-ties and investments we have experienced a reductionin the export of goods and services and a redirectionof investment flows to developing countries with largerpopulations, greater economies of scale and henceprofit potential.

We have sought to diversify our economyinto offshore financial services to reduce our vulnera-bility and to provide jobs for our people. But again,rather than reaping the benefits of economic develop-ment, we were subjected to the aggression of theOECD. Mr. President, we are fully supportive ofefforts toward creating a sound international financialservices architecture. However, these efforts must bemade equitably, in the spirit of true partnership.

Antigua & Barbuda, like other small islandstates, is faced with a number of developmental chal-lenges including an unsustainable debt burden as aconsequence of:

• An extremely small tax base, • The lack of natural resources • Lack of access to ODA, • Substantially reduced foreign direct

investment flows and • Lack of access to capital markets

We have had to borrow at commercialrates of interest to finance our development. In addi-tion we have had to bear the consequences ofincreased exposure to global environmental risk and asa result have been struck by five hurricanes during thepast seven years. This has resulted in repeated bor-rowings at commercial rates of interest to reconstructour damaged socio-economic infrastructure.

123


We hereby call upon the international com-munity to expand the Highly Indebted Poor Country(HIPC) initiative to include debt relief for vulnerablesmall island states. It is my fear that in focusing exclu-sively on HIPC, the international community may failto support the efforts of the vulnerable middle. Whatgood would the Monterrey Consensus serve if it allowsthese vulnerable middle-income countries to degener-ate into poverty?

Whereas we welcome the increasedpledges by the European Union and the United States,it is regrettable that developed countries as a whole,despite their virtual monopolization of global resourcesand unprecedented prosperity, have, after threedecades, failed to meet their commitment of ODA of amere 0.7% of GNP. If the past is any guide to thefuture, it would suggest to me that Monterrey wouldbe yet another talk shop. But I am hopeful thatMonterrey may be that point of departure for a newworld order in which developed and developing countries will work in partnership to rid the world ofpoverty.

AustraliaStatement byThe Honourable Ms. Christine Gallus, M.P.Parliamentary Secretary for Foreign Affairs, Australia

The central message of the Monterrey Consensus isthat development is a complex challenge. Eradicatingpoverty and delivering prosperity to all our peoplerequire sustained and coherent effort – across all areasof public policy, and from all players at the domesticand international levels.

I have been struck this week by a welcomeconvergence of views between developed and develop-ing countries, and between government, business andcivil society. There is a consensus that developmentfinancing can no longer be seen in terms of traditionaldevelopment assistance alone. The continuing impor-tance of ODA is undeniable. But it is only one of anumber of interrelated responses that, together, con-tribute to development.

Sound domestic economic policy settingsand strong domestic institutions are crucial to attract-ing investment and sustaining growth. So is soundgovernance, both public and corporate. And interna-

tional economic and financial frameworks have toallow developing countries to compete for investmentand gain access to markets.

It seems to me that if there is one themethat has emerged in Monterrey this week it is thatthere has to be greater coherence and consistency inour approach. My government agrees absolutely. Iwant to give two practical examples to illustrate thepoint.

Much of the benefit of ODA is underminedby distortions in the international trading system.Agriculture accounts, on average, for seventy per centof employment and thirty per cent of production indeveloping countries. Yet developing countries areoften excluded from export markets by tariffs, quotasand subsidized exports from high-income countries.

According to the World Bank, high-incomecountries spend US $350 billion a year – nearly $1billion each day – on agricultural protection and sup-port. This is seven times greater than the amountthese countries provide in ODA, and twice the valueof agricultural exports from all developing countries.

Clearly, if we are serious about financingdevelopment, we must tackle these distortions andensure that trade can play its critical role as an engineof growth for developing countries.

My second example draws on Australia’sown efforts to promote coherent approaches to devel-opment in the Asia-Pacific region – a part of the worldwhich is home to two-thirds of the world’s poor andstill faces enormous development challenges.

Our approach aims to assist developingcountries meet their own development goals throughagreed development frameworks, strengthened institu-tions and improved policy settings. We work closelywith national governments, other donors and theinternational financial institutions to maximize theimpact of our development assistance and ensure thatdonor support is integrated within the recipient coun-try’s own development agenda.

The Monterrey Consensus points the wayahead. The challenge of financing development is onewe must tackle together – with creativity, cooperation,coherence of effort and, above all, with an unwaveringcommitment to assisting those in need.

I thank you, Mr. President, and the govern-ments of Mexico and Nuevo Léon, for your outstand-ing hospitality and for the contribution this conferencehas made to this important cause.


124

AustriaStatement byMr. Franz MorakState Secretary of the Austrian Federal Chancellery

Austria takes particular pleasure in the fact that thishistoric conference takes place in Monterrey inMexico.

We recall that it was under the co-chair-manship of Mexico and Austria that the first North-South conference was prepared and took place inCancun in 1981. It is interesting to note that many ofthe Mexican protagonists of Cancun are still around,and we might also point out that Mexico has a particu-lar position and talent to play the role of bridgebetween the North and the South.

Austria welcomes the EU Commitment toreach an average of 0.39 per cent of Official develop-ment Aid (ODA) of Gross National Income (GNI) by2006 as a concrete step forward to achieving theinternationally recognized goal of 0.7 per cent. Austriais committed to that goal.

However, the improvement of the econom-ic and social situation in developing countries does notsolely depend on the amount of external financialinflows. In pursuance of true ownership, the develop-ing countries must be enabled to create and extendtheir basic political, economic and social structures.This is a precondition to target development assis-tance effectively and more efficiently. Therefore theAustrian Development Cooperation puts high priorityon capacity-building, including democracy-building, theimprovement of public administration, and pro-grammes for conflict prevention, education and basichealth.

Good governance, the rule of law, respectfor human rights, development, peace and democracydo not exist in isolation; they are also indispensablerequirements for economic and social development.Governments have to create the conditions for eco-nomic growth through investment for social justice andfor offering the entire population education, healthand other social services.

Good governance is led by the State, buttranscends it by collaborating with the private sectorand civil society. All three domains are critical for sus-taining human development. The state is to create aconducive political, economic and legal environment

while the private sector is to generate jobs andincome. The civil society facilitates political and socialinteraction and mobilizes groups to participate in eco-nomic, social and political activities. All this would notbe sufficient without economic growth, without theprivate sector. Much has been said after Doha aboutthe role of trade and the necessity for better marketaccess.

But even before trade, goods have to beproduced and it is in this area where we believe thatparticular efforts are required. All this needs to bedone. We are aware money is not everything.However, it is equally true that we cannot succeedwithout money.

In Cancun, only 22 countries were present.Today, in Monterrey, over 160 countries, countlessNGOs, private sector representatives and the wholeUN and World Bank system are taking part. This is atruly global conference and therefore it points the wayforward.

Let us therefore combine our strengths,cooperate in our efforts and commit ourselves to thepursuit of the Millennium Goals. This will be the chal-lenge of Johannesburg and the road leading there.The International Conference for Financing forDevelopment in Monterrey has put us on the righttrack. Now let us get going and put words into actionsand ideas into reality.

AzerbaijanStatement byMr. Altai EfendievChairman of the Delegation, Republic of Azerbaijan

It is a great honour, privilege and responsibility to rep-resent my country at this high Forum. Let me startwith emphasizing the importance and significance ofthe spirit and objectives of the Monterrey for the coun-tries like Azerbaijan. As a young state in transition andland-locked country, Azerbaijan falls into the group ofthe most vulnerable countries in the ever-globalizingeconomy and among those who are in most need ofinternational assistance. A conducive external environ-ment is critical for the sustainable development ofthese countries. Therefore, banging the needs of coun-tries like Azerbaijan into the focus of the MonterreyConsensus as well as commitments for developmentaid made by the donor community conveys encourag-ing messages as well as raises our hopes and expecta-tions for a better future.

125


However, we clearly understand that inmobilizing resources for development major emphasisshould be put on the national level. Sound market-ori-ented reforms, democratization of all spheres of sociallife, and integration into the world economy revealenormous potential both inside the country as well asattract so much needed external resources for develop-ment.

Coherent and consistent policies of com-prehensive reforms for the last 7 years in close coop-eration with all major international institutions suc-ceeded in achieving impressive results in macroeco-nomic stability, structural changes, attracting FDI, aswell as ensuring overall growth. Just a few figures toillustrate: Average inflation rates remained at a level ofaround 2-3% while exchange rates against major cur-rencies have been stable even during the recent finan-cial crisis.

The share of the private sector in the econ-omy exceeded 70% thus transforming private initiativeand entrepreneurship into a driving force of develop-ing and shaping the new economy. Level of privateinvestments approaching US $10 billion mark ofwhich about US $7 billion are FDIs. FDI measured percapita is one of the highest indicators among countriesof Eastern Europe. As a result, Azerbaijan experiencedone of the highest average growth rates at the level of8-10%.

However, prospects for growth are evenhigher in the coming years as the country enters intothe full-phased development of its natural resources,implementation of regional infrastructure projects, andprogressing with large-scale privatization.

Handling and managing the expected mas-sive inflows of resources in a most efficient way, trans-forming potentially high growth into sustainable devel-opment is one of the major challenges facing thecountry. To this end, building up adequate institutionalinfrastructure, enhancing institutional capacities, intro-ducing good-governance practices, pursuing radicalstructural and administrative reforms, implementingpoverty reduction strategy, SME and non-oil sectordevelopment are at the core of economic policy andare the areas where international assistance andexpertise are most needed.

We recognize that regional cooperationand trade are powerful instruments in efficient utiliza-tion and allocation of resources from the point ofeconomy-of-scale consideration. Utilizing its naturaland geographical comparative advantages and sharingtheir benefits, Azerbaijan is contributing to the devel-opment of regional cooperation through participation

in a number of regional economic organizations.Azerbaijan is also actively involved in the implementa-tion of large regional infrastructure projects such asthe development of multiple pipeline routes for exportof Caspian oil and gas to international markets as wellas a transport corridor – Europe-Caucasus-Asia, link-ing two major global economic power centres –Europe and Asia. We are signatory to a number offree-trade agreements, and accession to the WTO andintegration into the multilateral trade system is on topof the economic agenda.

Notwithstanding the optimistic prospectsfor development drawn above, resources needed totackle the pressing needs of the country and those fordevelopment now are much higher. And here I oughtto draw the attention of the high audience to anothermost serious and acute problem the country has beenconfronting for over a decade. As many of you mightknow Azerbaijan is affected by one of the most pro-tracted conflicts unprecedented in its scale and themagnitude of consequences and implications. As aresult of the aggression, a fifth of the territory is underoccupation and over a million refugees and displacedpersons (every 7th person) are scattered across thecountry, living in temporary camps in misery andpoverty. Needless to say, this imposes an enormousburden on the economy and society, and it has mostserious implications on the mobilization and distribu-tion of resources for development.

More aid is badly needed to tackle theproblems of refugees and displaced people and to pre-vent further degradation and human tragedy, to helpthem to remain as productive part of society and getinvolved in social and economic activities.

Conflict and its consequences are also seri-ously impeding cooperation and development on theregional level by distorting economic rationale and effi-cient allocation of resources, badly affecting the attrac-tiveness of the region and discouraging FDIs.Occupied territories are used for drug trafficking andsmuggling of arms and human beings. This is whyconflicts and conflict-affected areas should be the focusof the international community as well as adequatelyreflected in the Monterrey Consensus. In that respect Iwould like to share with you some considerations withregard to coherence and consistency in providinginternational aid to conflict-affected areas.

To our belief, aid should be viewed as apowerful tool to promote and endorse the basic valuesand spirit of the UN Charter and MillenniumDeclaration, as well as the norms and principles ofinternational law. Aid is a channel for communicating


126

a message and the message should be clear, unbiasedand unequivocal, eliminating the risks of indirectfinancing of the conflicts. Therefore, compliance ofthe recipient countries with the abovementionednorms and principles should be a stringent criteria forproviding development aid. We all should be morecoherent and consistent in pursuing policies along theagreed rules if we sincerely want to build a better com-mon home.

For the time being, Mr. President, whilewhole-heartedly supporting and endorsing theMonterrey Consensus, I would like to make my coun-try’s reservation with regard to the provision concern-ing subregional cooperation. Obviously and under-standably we cannot commit ourselves to all-inclusivecooperation within the South Caucasus until a just and lasting settlement of the conflict.

In conclusion, let me voice once again oursupport for the Monterrey Consensus and state thatAzerbaijan stands ready to cooperate with the interna-tional community to contribute to the implementationof its noble objectives emanating from the spirit of the Millennium Declaration.

Finally, may I express gratitude to the gov-ernment of Mexico and the beautiful city of Monterreyfor hosting this event and extending genuine hospitali-ty. May I also express sincere appreciation to the UNSecretariat and all involved in organization of the conference whose invaluable contribution ensured thesuccess of the UN Conference on Financing forDevelopment.

BahrainStatement byShaikh Ebrahim Bin Khalifa Al-KhalifaUnder-Secretary in the Ministry of Finance andNational Economy, State of Bahrain*

It gives me great pleasure to participate in this veryimportant Conference as the representative of theKingdom of Bahrain.

One of the most important results of globalizationis that the process of economic development has lostits full local characteristics and has become global.This makes it incumbent on all actors involved in the


development of the global economy – developed coun-tries and international organizations – to cooperate inmaking the process of sustainable development fordeveloping countries successful and preventing failures in one country from having an impact onanother.

This will not be achieved unless every Stateimplements cohesive and diverse policies and meas-ures, including in particular adopting appropriatemacroeconomic policies, assuring good governance onthe microeconomic and macroeconomic levels, work-ing for political stability and social peace, spreading asocial safety net, which would protect vulnerable sec-tors of society, protecting society from upheavals andremoving all restrictions on business, particularly onthe private sector. This would encourage investment,particularly foreign direct investment, and help developthe banking and financial sectors and humanresources.

The Kingdom of Bahrain is considered oneof the more open societies in the area of liberalizingeconomic policies. Bahrain always occupies the firstposition in the area of developing resources accordingto United Nations reports. Moreover, the Kingdom ofBahrain was one of the first countries to enact laws tocombat money laundering. There is a law being issuedat this moment to combat terrorism and cut off itsfunding.

What is required from developing countriesin the area of economic development is a prerequisiteto combating poverty and bringing about sustainabledevelopment. But this is not enough in light of therecent developments and in the absence of adequatesupport from the international community, as experi-ence has shown. I mean by the international commu-nity, in particular the group of developed countriesand international organizations. We call on the devel-oped countries to play a very important and large rolein the development of developing countries. Thisrequires increasing the technical and financial supportthat they give to developing countries to the agreed-upon level of 0.7 per cent of Gross National Product.Given that this rate is not enough to confront theincreasing burdens of financing development in devel-oping countries, a reasonable level of foreign directinvestment should be directed to developing countries.The most important contribution that developed coun-tries could provide to financing development in devel-oping countries is to open their markets to their prod-ucts, particularly manufactured products. Developedcountries should make greater efforts to help develop-ing countries and forgive the debts of the least devel-oped highly indebted poor countries.

127


The role that we expect the developedcountries to play in the financing of development in developing countries would be more effective and beneficial if coordination occurs between the developed countries and international organizations.Coordination of efforts of different parties is needed tofurther economic development, alleviate poverty andspur growth. The International Monetary Fund in par-ticular has a very important role to play in bringingabout international financial stability, improving globaleconomic governance, bolstering global crisis manage-ment through an early-warning system, refining performance criteria and coordinating the efforts ofvarious oversight bodies on economic activities. TheInternational Monetary Fund should also secure theflow of short-term capital needed to finance develop-ment in developing countries.

As for the World Bank, it should increaseits volume of development and financial assistance todeveloping countries and alleviate the terms of bor-rowing as much as possible. It should also cancel debtwhen possible.

As for the World Trade Organization, wesupport the idea that it should devote time for collec-tive global negotiations on the problems of develop-ment and financing for development in particular.Focusing on the problem of pricing the primary com-modities and raw materials and opening the marketsof developed countries to the products of developingcountries and dealing with protectionism as well as giv-ing concessionary financing to developing countries.

These three organizations should imple-ment a variety of solutions to the problems of foreigndebt burden and external trade and the problems con-cerning regulating control, including transparency anddeveloping financing control, within the competenceof each organization to establish new mechanisms tofollow up the implementation of conference decisionsand recommendations in the area of financing devel-opment, each in its competence.

Finally, there is the importance of partner-ships between developed countries and developingcountries in structural readjustment and maintainingthe directives to international organizations so thatdeveloped countries do not monopolize this. Thedeveloping countries should positively participate inthis process so that the new directions of internationalorganizations are more effective and would givegreater momentum and real support to the process ofdevelopment. This requires from the governments ofthe developing countries to be up to undertaking theirresponsibility of fulfilling their duty in this area.

BangladeshStatement byHis Excellency Mr. M. Saifur RahmanMinister of Finance and Planning, the People’sRepublic of Bangladesh

It is a delight to be in this historic city on this historicoccasion. I bring to all of you, here at Monterrey, thewarmest greetings of our Prime Minister, BegumKhalida Zia. We thank to the Government and Peopleof Mexico for the Conference arrangements, and forthe warmth of your hospitality and the hospitality ofthe people of Monterrey. We are confident that yourleadership will guide our work to successful fruition.

We meet against the matrix of a rapidlychanging world. Wealth and resources are everexpanding. So, sadly, is the widening gap between therich and the poor. Mr. President, Should this gap per-sist? No. This must be closed by improving the lot ofthe poor. Financing for development must involve afirm global commitment to achieve that goal.

While the international community mustprovide the appropriate environment, developmentmust remain a core national responsibility. Theprocess must be domestically engineered owned anddriven. In this respect we in Bangladesh have a goodstory to tell. It would be my privilege to share ourexperience with you.

We believe that development is only possi-ble against the backdrop of democracy, respect forhuman rights and the rule of law. Good governance,fiscal responsibility and social accountability are thekey elements. Growth must be pro-poor, pro-women,and environmentally sustainable. All key stakeholdersmust participate in the effort. The market must befree, though the government must discharge its elec-toral mandate to protect the poor and vulnerable fromthe disorderly free market situation. Corruption mustbe eliminated from the society at all levels, and thismust be done in coordination with development part-ners. We believe in private sector-led growth. OurPrime Minister is intent on taking government out ofbusiness, and leaving business to the private sector. Atall times, we believe the point of reference must bethe individual human being and not soulless economicdata and dry statistics.


128

Operating within those philosophicalparameters, Bangladesh has made great strides.Within our region we take a modicum of pride in ourimpressive social indicators. We have tapped our cul-tural heritage and intellectual capacities to produceconcepts such as microcredit and used them effectivelyas instruments of social change. We have emphasizededucation, particularly education for woman and chil-dren and integrated health and family planning pro-gramme. Through an appropriate macroeconomicpolicy-mix we have addressed with success the prob-lem of poverty alleviation. We have empoweredwomen by expanding their access to credit andemployment. From a food deficit country not so longago, we have achieved miracles in agriculture, andnow produce enough to feed our 130 million people.We have just concluded the Bangladesh DevelopmentForum meeting with the Bretton Woods Institutionsand other donors in Paris in which they commendedthe increase in school enrolment, reduction in fertilityand mortality rates, improvement in disaster-manage-ment, and the emergence of an impressive NGO sys-tem.

Despite our best efforts, we acknowledgethat weaknesses persist. We intend to address themhead-on by deepening our reform agenda and intensi-fying trade tariff and institutional reform. An effectivecombination of our home grown initiatives, and out-side help, have rendered us what we are today, avibrant, liberal, and progressive polity, which is alsoone of the largest democracies in the world.

A US Government document entitled‘Successful Development: models for the 21stCentury’ says, and I quote: “The lesson in Bangladeshis that ODA – when applied in conjunction with acountry’s serious efforts to resolve its own develop-ment challenges – can yield dramatic results”.

Mr. President, I am not, like Oliver Twist,asking for more. What I am asking for is trade andmarket access for our exports that keep our women,farmers and workers employed and empowered. WhatI am asking for is an international support structurethat rewards performance and genuine reforms. WhatI am asking for is coherence among internationalagencies for better coordination, but they should notuse this as an opportunity to jointly impose mutuallyreinforcing stiffer conditionalities. I am asking forinvestments that entail genuine transfer of knowledgeand resources, and are not predatory. I am asking allthis not just for my country but for all others in com-parable circumstances.

It is our hope that the message fromMonterrey would galvanize humankind to a high levelof cooperation. It is on its anvil that we can forge amore stable, better and more secure world, a worldfree from poverty in all its dimensions. Such a globalalliance for development will create an enriched andsustainable civilization. This pledge at Monterrey canbe our gift to the world beyond.

BelarusStatement byHis Excellency Mr. Sergei S. LingAmbassador and Permanent Representative to theUnited Nations of the Republic of Belarus

The delegation of the Republic of Belarus would liketo most sincerely associate itself with the expressionsof appreciation addressed to the Government ofMexico as the host country of the InternationalConference on Financing for Development for the cre-ation of conditions for our successful work.

The Republic of Belarus shares the basicprovisions of the Conference final document – theMonterrey Consensus – which we see as comprehen-sive, balanced, and conscious of the needs of countriesat different stages of social and economic develop-ment.

We proceed from the understanding thatinternational commitments of states as to financing fordevelopment should be commensurate with their eco-nomic capacity. Quite a number of commitmentsagreed upon in the outcome of the Conference arealready a reality of the current social and economicpolicy pursued by the Government of the Republic ofBelarus.

In terms of Financing for Development weattach a critical role to the mobilization of domesticresources, trade and investment.

The prospective directions of social andeconomic development of our country envisage furtherstrengthening of the domestic finances and bankingsector, measures for gradual liberalization of financialand commercial markets, establishment of favourableinvestment climate, implementation of comprehensiveprogrammes for the targeted support of the poorest,incentives for the private sector and intensifying thefight against corruption.

129


Our delegation shares the point made earli-er by the delegations of China and Panama that everycountry must be given an opportunity to pursue itsown path of reforms that takes into account local con-ditions and specificities, since the international com-munity has already been a witness to quite a numberof examples in its most recent history when the appli-cation of ‘one-size fits all’ recommendations wouldresult in grave shocks and instability for the wholeregions. We are fully aware that in the today’s worldthe establishment of a sound and enduring economicsystem in any country is impossible in isolation frominternational experience and conditions.

The Republic of Belarus is an open econo-my and open society. We are building a human-cen-tred, democratic state governed by the rule of law andrealization of the strategy of sustainable development.The upward dynamics of the human developmentindex in Belarus indicate that we are on the right way.

We are generally supportive of the ideaspresented earlier by the leaders of the InternationalMonetary Fund (IMF) and the World Bank. Yet, wewould like to specifically point out to the factor oftimeliness in terms of rendering support to developingcountries and countries with economies in transition.Such support is urgently needed for the accelerationof reforms, monetary stability, realization of criticalprojects in the social sphere, development of civil soci-ety. However, what we are recommended is the attain-ment of these goals with our own scarce domesticresources and then we could probably count on someexternal support.

We agree that both donor and recipientcountries must responsibly cover their own part of theway to the common goal of sustainable development.Belarus has been following this way despite the hard-ships of overcoming the consequences of the accidentat the Chernobyl nuclear power plant. We fulfilled allour obligations in the area of disarmament, thoughthat was very painful for our economy; recuperatedthe industrial output; maintained the upward dynamicsof GDP growth over the past six consecutive years;avoided accumulating unsustainable foreign debt;achieved the level of exports to account for as muchas 50% of our GDP; developed human resources. Inother words, we have met all the key criteria for coop-eration that have been voiced by many at thisConference. And yet, we have not so far receivedaccess to the international financial and trade markets.

Belarus has achieved a certain progress incooperation with international and European financialinstitutions, including a step-by-step transition to thefull-fledged programmes of bilateral financial coopera-tion with the IMF, intensification of monetary andinvestment cooperation with the European Bank forReconstruction and Development (EBRD), as well aswith the institutions of the World Bank Group. Wehave advanced to a qualitatively new stage of ouractivities within the framework of the UN EconomicCommission for Europe (UN ECE). Belarus is deter-mined to become a member of the World TradeOrganization (WTO) and we are synchronizing ournegotiations for accession to this organization with thepace of domestic economic reforms.

We count on the Monterrey Conference asan additional impetus to provide for enhanced andpredictable access to international markets of exportsfrom developing countries and countries witheconomies in transition.

With regard to the issues of trade andinvestment we would also like to particularly empha-size the importance of ensuring predictable financialresources for programmes of technical assistance pro-vided by appropriate UN funds and programmes,including, inter alia, UN Conference on Trade anddevelopment (UNCTAD) and UN DevelopmentProgramme (UNDP).

Belarus is entirely supportive of the deci-sions by the Monterrey Conference as to the increas-ing consistency and coherence of functioning of theinternational monetary, financial and trade systems,especially those related to the enhancement of partici-pation of developing countries and countries witheconomies in transition in the international economicdecision-making and norms-setting.

In conclusion, we would like to underscorethat the Republic of Belarus is conscious of its beingan integral part of the international economic systemand we are ready to work with our partners to ensureits stability, endurance and security in accordance withthe decisions of the Monterrey Conference.


130

BelizeStatement byHis Excellency Mr. John BriceñoDeputy Prime Minister and Minister of NaturalResources, Environment and Industry, Belize

For some time now we have engaged in discussionsand negotiations leading to this conference and to theadoption of the Monterrey Consensus. For some, theprocess has been arduous and in certain instancesfrustrating. Still, we persisted, for our pain pales incomparison to the struggles of our people who toildaily to provide the basic necessities for themselvesand their families.

Today, rising from the shadows of theSierra Madre Mountains in the warmth and hospitalityof the good people of Monterrey, I question whetherthe Monterrey Consensus, which we came to adopt,brings us any closer to accomplishing the developmentgoals set out in the Millennium Declaration, to elimi-nate poverty, improve social conditions, raise livingstandards, and protect our environment. Yes, we haveput forth a document that clearly outlines our con-cerns as well as our hopes for possible solutions toovercoming poverty and achieve meaningful sustain-able development. In addition, we have identifiedthose factors that inhibit developing countries like myown from fully participating in the global economyand we outlined the need for new development financ-ing strategies and fair trade practices. But this is notenough.

The ability of developing countries to buildthe capacity for growth with the mechanisms in placeto benefit from globalization and ensuring that ourpeople fully participate in the global economy is cru-cial. Our efforts to create fair trade conditions or togenerate more investment are unsustainable if theyignore the human factor. Investment in trade liberaliza-tion and global participation must be guided by ourcommitment to improve the lives of our people whilereducing overburdening debt which were created in aneffort to meet the inevitable demands of thisinequitable global process.


For us in Belize, the way forward includesfair trade, debt reduction and increased investmentwith external financing by all relevant stakeholders.Like other economies in transition, we firmly believethat trade is the engine that will generate the much-needed financial resources crucial for our develop-ment. International trade, especially in those areaswhere we have a comparative advantage, cannot beignored in any process that seeks to address meaning-ful development. We believe in the promises of devel-opment through free trade, but we also recognize thatfree trade is only possible when there is fair trade. Wetherefore continue to call on our developed partnerswho consistently urge us to liberalize our economies,to work with us to make trade more just and equitableby removing the trade barriers placed on our agricul-tural commodities and by eliminating the subsidies totheir agricultural and industrial sectors that restrict ourability to compete within the world market. In thiscontext we support the sentiments of UNDPAdministrator Mark Malloch Brown when he remindsus that included in the Millennium Declaration arecommitments to “construct a more inclusive globaliza-tion that provides developing countries with the sup-port they need to compete on a levelled playing field.”

Another vital component of our develop-ment is external financing, whether in the form of aidor through foreign investment. While we recognizethat the responsibility for development lies within thescope of national governments, we are also realistic.We cannot develop with increasing GDP alone; in factone is often contingent upon the other. If we will suc-ceed in reducing poverty- and develop our economiesthere must be significant increases in ODA. UNCTADSecretary-General Mr. Rubens Ricupero expressed itwell when he stated before this conference:“Developing countries must turn to external financingto secure the means for increasing their internationalcompetitiveness.” It is important to stress that otherforms of assistance not be made in place of theagreed Official Development Assistance, ODA flowsmust continue as was agreed by our developed part-ners and its requirements less prohibitive by nationalpolicies alone. In this context, we continue to supportthe efforts of the government and people of theRepublic of China and Taiwan** for their ongoingtechnical missions to Belize and other CentralAmerican countries. We recognize their contributionto development and welcome their increase in ODAfrom eleven percent to 17 per cent of GNP.

131


We need to he reminded that continuedglobal economic growth is contingent upon our abilityto maintain global stability and that global stability canonly be maintained when all the people of the worldbelieve that they have a stake in the much exaltedglobalized economy. All must believe that their effortsto participate in the benefits of our globalized econo-my are not in vain. Our people have kept the faith;they have continued to be hopeful despite the gloomystatistics that clearly indicate that over the last decadesthe poor have been further marginalized.

At the dawn of the new millennium, ourpeople gave us a second chance. They preferred tosee this time as an opportunity for renewed hope. Atthe Millennium Summit we promised them that wewould work harder to alleviate their struggle. We tooktheir challenge and offered them a new hope.

The marginalized of the world have beenpatient and faithful, they have been kind to us, andhave listened to us argue and talk for the past tenyears. I believe we have come to that moment whenthey have heard enough. Let us go from Monterreyand immediately effect change. We need not holdanother conference, pass another resolution or speakanother word. What we need now is action, lest wefind ourselves in 2015 lamenting the fact that onceagain we have failed the future.

BeninStatement byHis Excellency Mr. Bruno Amoussou(on behalf of the Least Developed Countries)Senior Minister in charge of the Coordination ofGovernment Action, Planning and Development,and Personal Representative of the Head of State ofthe Republic of Benin*

It is a great pleasure and an honour for me to speakon behalf of the Least Developed Countries in this dis-tinguished forum of the International Conference onFinancing for Development.


I wish to associate myself with the congrat-ulations and appreciation conveyed to you, Mr.President. The international community has expressedits confidence in you through its recognition of yourability. That recognition is also a tribute to your coun-try. I also wish to thank the Mexican Government forits hospitality and the facilities they have offered usand for the successful organization of this Conference.The Benin delegation, through my voice, ensures itscooperation for and support to you during these pro-ceedings.

I wish to express my great satisfaction andgratitude, on behalf of the Republic of Benin and theLeast Developed Countries, to the Secretary-Generalof the United Nations, Mr. Kofi Annan, for all hisefforts and the critical momentum he has given to ourOrganization, so that the issue of financing for devel-opment would be the focal point of the internationalcommunity at this time.

I wish to recall that due to the need for anew partnership, the international community commit-ted itself at the Millennium Summit to supporting theThird United Nations Conference on Least DevelopedCountries and has asked development partners to actto provide debt relief, or even debt cancellation, toincrease official development assistance, and to openmarkets to Least Developed Countries.

The Millennium Summit also adopted therelevant recommendation to grant additional resourcesto least developed countries to help them break out ofpoverty and marginalization. In this regard, the ThirdUnited Nations Conference on Least DevelopedCountries, held in May 2001 in Brussels, laid thefoundation for a world partnership that would bestrengthened and would create the conditions for sus-tained economic growth and sustainable developmentin these countries to put an end to their marginaliza-tion, eradicate poverty and enable them to becomeintegrated and to benefit from the global economy.

To do this, this Conference developed anAction Plan for the Least Developed Countries for thedecade 2001 to 2010, which calls for a partnershipbased on a covenant of commitments. We, the LeastDeveloped Countries, have applied measures and spe-cific policies in order to offer better opportunities forour people, particularly the poorest, to eliminate thestructural deficits of our economies by implementingresults-oriented macroeconomic and social policies.

We are fully committed to implementingthe national measures and policies agreed in Brussels.In so doing, we are creating better conditions not onlyfor our people, but also for people everywhere. Infact, reducing or even eliminating poverty in the Least


132

Developed Countries is increasing the purchasingpower of millions of human beings, giving new oppor-tunities for international trade and improving the stan-dard of living of people everywhere.

Preventing and resolving conflicts, whichare often only the manifestation of discontent withlack of resources and the undeveloped capacity of theLeast Developed Countries, is strengthening securityat a worldwide level. Preventing the spread of sexuallytransmitted diseases such as HIV/AIDS and tuberculo-sis or eliminating malaria in least developed countriesis improving the state of health of the entire world anddeveloping better means of communication, just aspromoting greater human rights for our people andgood governance, is eliminating the sources of frustra-tion and strengthening world peace.

Therefore, it is in this spirit that in Brusselswe and our partners in development reached a con-sensus on an Action Plan that contains a mutual com-mitment in seven areas, including the need to mobilizefinancial resources for development. We consider thisInternational Conference on Financing forDevelopment the logical and complementary follow-upto the Third United Nations Conference on LeastDeveloped Countries in the sense that it calls for thereal involvement of all international institutions thatfinance development in educating, mobilizing andtransferring adequate financial resources for the imple-mentation of commitments made at the BrusselsConference.

Official development assistance remains anecessary source of financing in order to realize thegoals and objectives of the Action Plan for the LeastDeveloped Countries. Therefore, it is necessary tocarefully consider its quantitative and qualitativeaspects and the means to effectively coordinate them.Among the conditions to achieve these objectives isthe serious need for significant and real enhancementof the volume of public resources, namely officialdevelopment assistance.

We would like to remind you of the seriousneed for significant and real enhancement of the vol-ume of public resources, namely official developmentassistance. I do not need to emphasize the benefitsthat would accrue to all stakeholders measured interms of economic and social results, not only in termsof debt repayment. That is how we will break the cycleof debt accumulation and will avoid having future gen-erations pay for it. It is the time to remind participantsthat we have the common will for fuller involvement ofthe least developed countries in decision-making thathas to do with their development, be it through coor-dination or debt-relief measures.

Debt repayment is a heavy burden on ourfragile economies. It prevents economic growth anddevelopment. It is one of the major causes for the fail-ure of previous programmes of cooperation estab-lished to support the development policies that are rel-evant for our countries. We appreciate, of course, thescope of debt-relief measures adopted in variousmechanisms. These measures, although significant,are still insufficient. In fact, our countries need a newinjection. In that regard, our conviction is that theprompt and complete cancellation of all bilateral publicdebts and all multilateral debts for all of the least devel-oped countries would contribute to the eradication ofpoverty.

In addition to that, actions to finance devel-opment must be intensified and include more grantsthan loans. Therefore, we are launching an appeal tothe international community and in particular to themost developed countries, particularly the G-8 coun-tries, to make a significant increase in their contribu-tions to multilateral financial institutions, particularly tothe Agency for International Development, the WorldBank Group, the African Development Fund and allregional and subregional banks that finance develop-ment. I must also point out the critical need to financeprogrammes in sectors such as health, education,nutrition or other sectors related to human resourcedevelopment, even though these programmes are notdirectly generating revenue and therefore do not makea short-term contribution to debt repayment.

While we recognize that our countries arebasically dependent on official development assistance,we will continue to work to attract other foreignresource flows stemming from foreign direct invest-ment or revenues from our exports to markets wehope will be fairer. Foreign direct investment in ourcountries is weak. Measures to attract them are impor-tant elements of our national developmental strategies,which at the same time must be supported by financ-ing the basic infrastructure needed to reduce the costsof these investments.

Therefore, our exports should enable us toobtain substantial resources; more than those stem-ming from official development assistance and privatecapital flows. That is why we are launching an appealto the international community; so that the Brusselsmeasures will be implemented without delay; forexample, measures to improve preferential access ofthe least developed countries, duty-free and quota-free,to the markets of developed countries; to implementfully and urgently measures to grant a special and dis-tinct status for the least developed countries and to

133


fast-track membership through the World TradeOrganization for the least developed countries that arenot yet members. We support the Doha MinisterialDeclaration and the appeal made to developmentalpartners for them to increase their contribution signifi-cantly to the integrated technical framework for tradein order to carry out capacity-building.

The Monterrey Conference should not beconsidered an isolated conference that is disconnectedfrom past or future conferences, such as the one to beheld in Johannesburg. These conclusions should con-tribute to the effective implementation of the commit-ments made at the Millennium Summit and thosementioned in the Brussels Action Plan for the leastdeveloped countries. It is therefore essential that thefollow-up to the Brussels Conference and theMonterrey Conference be well coordinated and thatthe development of all of the least developed coun-tries, as well as relevant resourcing issues, be consid-ered a result.

I have just spoken as a spokesperson forthe Least Developed Countries throughout the world.The duration of my mandate is five years. I am askingparticipants to act in such a way as reduce the numberof our members by the end of my term, at theBrussels Conference, at the Millennium Summit andthe Monterrey Conference. We have made relevantstatements. We now need to act. I believe that wehave the means to do so. If we steel ourselves with thefirm will to act in solidarity, we will witness the long-sought new and genuine partnership.

BhutanStatement byHis Excellency Lyonpo Yeshey ZimbaMinister of Finance, Kingdom of Bhutan*

May I first of all thank the Government and the peo-ple of Mexico for the excellent arrangements made forwork and the warm hospitality extended to us.

The new millennium was ushered in withrenewed hope and aspirations for all the people of theworld, particularly the poor and disadvantaged. TheMillennium Summit saw the largest gathering ever oftop world leaders and the adoption of the very nobleand timely Millennium Declaration. All leaders from


the rich as well as the developing countries took stockof the state of the world in terms of peace and devel-opment and acknowledged the need to increaseresources for improving the plight of the poor.

The plight of the world’s poor is perhapsthe most widely discussed subject in nearly all majorinternational meetings such as those of theInternational Monetary Fund, World Bank and WorldTrade Organization. The subject is discussed at mostmeetings of the United Nations, regional developmentbanks and other agencies. We have heard so manytimes about the concerns expressed over the fate ofthe 1.2 billion people living on less than $1 a day andthe urgent need to transfer resources from the rich tothe poor and needy.

While much has been said and discussed,sadly, very little has actually been done. The problemof poverty and underdevelopment continues unabated.The long-awaited increase in resource transfer has nothappened. On the contrary official development assis-tance is actually falling, hitting hardest the weakest andmost vulnerable.

I fully agree that the onus of developmentcannot be placed on the donor partners and that we,the recipient countries, must assume full responsibilityfor the destiny of our countries and peoples.Unfortunately, given our level of poverty, most devel-oping countries, especially the least developed ones,are not able to mobilize adequate domestic resourcesto meet even urgent and important needs, particularlyin the social sector.

In this age of globalization, many look toforeign direct investment and trade as an alternativesource of financing for development. While much hasbeen achieved in many countries, the benefits of for-eign direct investment and trade accrue mainly to larg-er, more developed countries where there are greaterprospects for profit. Smaller, less-developed countries,particularly landlocked countries with limited resourcesand rugged terrain do not hold much scope for foreigndirect investment. Hence, there is no alternative toofficial direct assistance, at least in the near future, formany countries, including my own.

After having heard of the EuropeanUnion’s commitment to enhance its level of officialdirect assistance and the announcement of PresidentBush to increase the United States official direct assis-tance level over the next three years, I can indeed saythat the Monterrey conference was a worthwhileattempt to reverse the otherwise sad trend of decliningofficial direct assistance.


134

While the commitment falls far short of theneeds, it has nonetheless rekindled the hope and beliefin international good will and cooperation. TheMonterrey Consensus should certainly make all of ushappier, but it should not make us complacent. It isnow imperative that donor nations actually disbursewhat they commit to. We may otherwise see a repeti-tion of the past, where money available in principle isnot spent while the poor and needy continue to suffer.

In order to avoid such a situation, donornations must be more flexible and understanding whenit comes to conditions and selectivity. The vicious cycleof poverty, conditions and inadequate aid must nolonger be perpetuated.

I would also like to take this opportunity tocommend the northern European countries, particular-ly Denmark, Norway, the Netherlands and Sweden,for taking the lead role in enhancing official develop-ment assistance to more than the 0.7 per cent ofgross national product prescribed and, more impor-tantly, for adopting liberal and flexible aid modalities.

If there is to be peace and harmony, thedivide between the rich and the poor must be reduced.Peace cannot be assured when one fifth of the world’spopulation lives in abject poverty, suffering the painsand indignities of deprivation. The people of our plan-et, the rich and the poor, have a common destiny aswe share the same world. In the long run, we all sinkor float together. There is no other way.

So let us resolve to work together as afamily towards the common good of all humanity. Letthe rich help the poor. Let the poor put their ownhouse in order. Let us make the first century of thenew millennium the century of hope, peace and devel-opment.

Bosnia andHerzegovinaStatement byHis Excellency Dr. Jadranko PrlicVice-Minister for Foreign Trade and EconomicAffairs, Bosnia and Herzegovina

It is a privilege to be here with all of you today, Heads of State and Government, the United Nations,International financial institutions, WTO, business sector and civil society, joined for the first time with a

common objective – Financing for Development. Letme thank and congratulate our hosts, Mexico, and allthose who have worked to bring this Conference totake place.

This conference constitutes a new andunique opportunity to develop a new paradigm forinternational cooperation. The ‘Monterrey Consensus’will allow a just sharing of the benefits of globalizationto all nations and remove the poor nations from theirpresent marginal role into active players in theprocess.

Building peace and fostering developmentin Bosnia and Herzegovina was a first example of ajoint venture of the international community anddomestic forces. The thesis that the building of a newstate was a joint project made itself feel morally just onthe example of economy. So only a week after thesigning of the Peace Agreement, the First DonorConference was organized aimed at providing the ini-tial funds for reconstruction. The organization of thesubsequent (four) great donor conferences was entrust-ed to the European Commission and the World Bankon behalf of the international community.

Something unprecedented in human histo-ry happened: Almost 60 countries and about 30 inter-national organizations took part in the relief projectfor the country. The reconstruction activities, to alarge extent financed by the international community,led to the re-starting of a part of our industrial produc-tion, trade and services as well as greatly improvedinfrastructure, particularly the telecommunication andenergy sectors, and to some extent in the water sup-ply, healthcare and education sectors.

Since the war, a combination of donor-funded reconstruction and sound macroeconomic per-formance have helped the recovery of BiH leading toaverage growth rates of 30% annually and an averageinflation of 4%. Despite these achievements, BiH findsitself at a critical turning point, as the underlying foun-dations for developing a sustainable economy remainweak.

Economic growth since the war has prima-rily been driven by donor-funded reconstruction and,in the last two years, GDP growth rates have beenfalling to one digit number. In terms of funding to fuelinvestment and economic growth, sources are begin-ning to dry up. The large amount of donor fundingsince the war, estimated at $5 billion, is beginning todecline as donor fatigue sets in and attention is divert-ed to other regions. The situation is compounded bynegative trade balance, as imports continue to outstripexports and the low level of Foreign DirectInvestment.

135


As for the currently existing productioncapacities and those to be launched, results are belowour expectations, causing a great unemployment rate(approximately 40%) and below an acceptable GDPlevel that has currently reached but half of the pre-warGDP in Bosnia and Herzegovina.

It had been expected that the level of theGDP in Bosnia and Herzegovina, partly due also tothe influx of such a large aid package, would reach itspre-war level at the turn of the millennium. This failedto come true. The global strategy of economic devel-opment of BiH, adopted for the first time last year,forecasts that the 1990 level of GDP would bereached only at the end of this decade.

The expected results in the economy ofBosnia and Herzegovina stayed away for three kindsof insufficiency: lack of political will, lack of knowl-edge, and non-existence of efficient or any institutions.The lack of political will was compensated by the func-tion of international entities, especially by the activityof the High Representative. The local institutions start-ed to be built impermissibly late. The transfer of alleconomic ideas was done from outside, throughnumerous international agencies, which, however, donot have a sufficient knowledge of the domestic cir-cumstances nor of the domestic mentalities, and espe-cially unknown to them are the local possibilities.

Since May 1998, Bosnia and Herzegovinaembarked on an ambitious Programme of EconomicReforms, supported by the World Bank economicadjustment loan and the IMF stand-by arrangement.This Programme has the objective to create a singleeconomic space of Bosnia and Herzegovina with afree trade and investment flows between its Entities,the harmonization of legislation, as well as the harmo-nization of taxation systems and institution building; tocreate a functional banking system; the privatizationand restructuring of enterprises; the restructuring ofpension and health schemes; the implementation of asimplified customs system and the liberalization oftrade regime. The backbone of all these policies is theprogramme of macroeconomic stabilization based onthe existence of Currency Board.

After having received international techni-cal and financial assistance in the last few years,Bosnia and Herzegovina must now assume greaterresponsibility for its economic and social development.Aimed at providing support for the programme ofreforms, the following activities are already under way:

• Decrease of wage taxes aimed at stimulat-ing employment and reduction of grey labour. Otheraims include further and gradual reduction of otherbusiness taxes, focusing on eventual fiscal and socialconsequences;

• Privatization programme to ensure funda-mental transformation of the country’s economy,which in itself should lead to a higher productivity andemployment;

• Package of labour laws completely in har-mony with the International Labour Organization (ILO)recommendations and very close to the similar nation-al laws of the European countries.

• Reform of the Country’s payment system isimplemented;

• Transparency and efficiency of public rev-enues has improved;

• The Ministry of Treasury on the State levelis established;

• State Border Service has been established; • Some results have been also achieved in

the creation of appropriate regulatory institutionalarrangements, necessary for providing efficient servic-es provided by public companies in the transport,telecommunications and power supply sectors.

This year, we are accelerating the processof transition to the market economy, implying primari-ly elimination of excessively regulatory and administra-tive control. Likewise, we shall continue to makeefforts in order to improve the quality of administrativemanagement, to eliminate corruption and fraud, andto improve transparency in all aspects of transactionsin commercial and public sector.

Under these circumstances, it becomesparamount to tackle critical structural reforms, whichcan break the vicious cycle of declining growth and ris-ing unemployment and create the basis for sustainabledevelopment. These reforms include:

• Developing a Single Economic Space inwhich laws, taxes and institutions are harmonized andthere is free movement of goods, capital, labour andservices between entities.

• Privatization and creation of favourableenvironment for foreign investment that would, conse-quently, bring about development of private sector, tocompensate for the decreasing inflow of internationalfinancial aid;

• Improvement of public finances and effi-ciency of public institutions by:


136

— Improving the quality of public administration at all BiH levels;

— Strengthening of the State institutions that should take over the responsibility for economic and political management;

— Tax reform throughout BiH; — Improvement of tax collection; — Cost-effective public expenditures;

• Development of private sector (in thismoment participate in the economy of B&H with35%) and improvement of the regulatory environment;

• Creation of a modern banking system withspecial emphasis on regaining the confidence in sav-ings and its mobilization for investment in production(domestic saving in the year 2000 was 1.6% of GDPthat is considerably below the level which is necessaryfor self-sustainable economy);

• Development of the sustainable social pro-tection: To achieve this goal, a fundamental restructur-ing of social policy is necessary, social statistics. In thiscontext, it is necessary to mention that we have initiat-ed and undertaken the preparatory activities to draftthe Strategy for Reduction of Poverty, with the WorldBank support, engaging broad ranges of domesticgovernmental and non-governmental organizations.

I want to stress the importance of regionalcooperation. The regional infrastructural projects(energy, transport, telecommunication, etc.) wouldprovide for the basis to link the neighbouring coun-tries, and consequently enhance their economic coop-eration.

Great emphasis is put on theMemorandum of Understanding for the Creation ofthe Regional Free Trade Zones. The participatingcountries signed this Memorandum, and zones shouldbe established by the end of this year. Creation of thecustoms free market of South-East Europe, the regionwith the population of approximately 60 million,opens enormous opportunities for the development ofeconomy of the countries of this region. This wouldparticularly open the avenue for foreign investmentinto the existing and newly launched industrial produc-tion capacities in Bosnia and Herzegovina, and thisfully corresponds with the Strategy of EconomicDevelopment of Bosnia and Herzegovina. Bosnia andHerzegovina, as part of Europe, is strategically inter-ested in integration into the European Union, as themost successful organization in the era of globaliza-tion.

There are a number of milestones for BiHto achieve before reaching this goal. Firstly, BiH needsto meet the targets set out in the ‘Road Map toEurope’ which involves starting the process of creatinga single market based on a national regulatory frame-work and institutions that are harmonized with thebody of EU laws and regulations. Secondly, BiH needsto make a successful transition to a market economyin order to create the basis for sustainable develop-ment. BiH enterprises need to be restructured andrevived in a way that raises their ability to enter theglobal economy and withstand competitive pressuresas well as to meet EU standards, for instance, relatedto the environment.

It is important to emphasize that Bosniaand Herzegovina already enjoys trade privileges withthe European Union, to be extended in the future,parallel to the trend towards regional trade liberaliza-tion. This development would provide great opportuni-ty for foreign investment in Bosnia and Herzegovina,both from the East or the West, with future positiveeffects on the new business activities, with the aim toensure ‘catching up’ effect for Bosnia andHerzegovina as soon as possible.

The responsibility for economic and socialdevelopment lies primarily on each country. But suchownership is able to provide results only by usingeffective interaction of all sources of finance, namelythe mobilization of domestic resources, ODA, interna-tional trade flows for direct investment and debt relief.This is the reason to support proposed outcome,which is going to get added value in approachingSummit about sustainable development inJohannesburg this autumn.

Let’s make this year a turning point in thefight against poverty.

137


BrazilStatement byHis Excellency Mr. Celso LaferMinister for External Relations of the FederativeRepublic of Brazil

To finance is to give credit. But not simply in the nar-row sense of those who provide loans. The word‘credit’ is derived from the Latin ‘credere’, whichmeans ‘to trust’. In any financing relationship, thebridge that links the present to the future is trust. Herein Monterrey we seek to lay out the foundation forstrengthening the bonds of trust that will allow us todeal with the future in a constructive manner.

This conference has the fundamental goalof conveying to our societies the unequivocal commit-ment to provide a new impetus to development. Wemust recognize that the most dramatic challenge weface today is poverty. Poverty can no longer be seenas occurring only within well-defined geographic orpolitical boundaries. It is everywhere. We see hopeless-ness and despair that arise out of absolute poverty.Poverty has become a political problem on a world-wide scale and a catalyst for international insecurity.

It is self-deluding to believe that the invisi-ble hand of the market will solve this problem. Thesocio-economic system in our countries must be inclu-sive and respond to the cries and urgent needs of theless fortunate. The Declaration that we will sign consti-tutes an important step towards reaching a balancebetween macroeconomic goals and social ends andestablishing the foundations for a real and new‘growth pact’, in which financing for development is acrucial element. Each government must accept itsresponsibilities. Adequate national policies are part ofthe answer, but they alone are not enough. Theremust also be good governance at the internationallevel.

During the 1990s, the inflow of capital todeveloping countries more than doubled. The propor-tion of total private capital inflows received by devel-oping countries rose from 11.8%, in 1991, to 14.4%,in 1997. Since then, however, this figure has droppedprecipitously, down to 7.6% in 2000. The seriousnessof this situation, which stems from a mistaken percep-tion of risks, should not be underestimated. The globaleconomy’s ability to grow and recover depends largelyon restoring the vitality and predictability of financialflows.

A consistent growth of the so-called‘emerging markets’ would have significant effectsworldwide because they have the largest potential forgrowth of consumption anywhere in the global economy. For the countries that are not completelyintegrated in the international market, the ‘growthpact’ should be based on solidarity and support fromthe more developed world.

The decision of the United States and theEuropean Union to increase resources for develop-ment assistance is a positive step. Nevertheless, onlyvery few countries have met the target of allocating0.7% of their GDP to ODA. To restore confidence, itis also essential that the international communityattain a sense of ‘ownership’ for the plan that we areannouncing here today. In order to achieve that, weneed to democratize the international decision-makingprocess, particularly on issues concerning the interna-tional financial system. The allocation of resources ininternational organizations no longer corresponds tothe realities of today’s world. It is hence necessary toimprove the role of developing countries as membersof international financial institutions like the IMF inorder to correct this imbalance. Monterrey shouldstrengthen the multilateral governance arrangements,which are the only ones that are truly capable of deal-ing with the uncertainties and instabilities that threatenour collective ability to fight poverty.

We should also strengthen our mechanismsto prevent and manage crisis situations. All countriesshould be able to rely on predictable and supportiveadvice from international financial institutions andshould not be left on their own when crisis occur.Delaying response to crisis situations raises unneces-sarily the risks at stake and renders solutions more dif-ficult. Argentina is doing the utmost under extremelydifficult social and economic conditions to stabilize hereconomy. Important measures have been put in place.There is no justification to delay any longer that sup-port. The sooner it comes the better will theArgentine government be in a position to pursue thepath of stabilization it has already been following.

Finally, I wish to mention trade. The devel-opment of our societies depends, in part, on establish-ing a stable environment for trade, based on moreequitable rules, resisting protectionist practices andstrengthening multilateral rules and regional integra-tion schemes. The Doha Round presents an extraordi-nary opportunity to eliminate unacceptable distortionsthat still persist in global trade. The world cannot con-tinue to watch passively as the agricultural sectors ofthe developed countries are given vast subsidies


138

amounting to over $1 billion per day displacing a sig-nificant amount of agricultural export products fromcountries that need funds to finance their develop-ment, and distorting international trade in a mannerthat is deeply unfair, with sometimes dramatic socialconsequences.

Here in Monterrey, the United Nations hasrecovered the ground towards building a broaderengagement to mobilize funds for development.Absolute poverty and the international insecurity thatarises out of it have added urgency to a permanenttask. Our response must involve a wide range ofmechanisms in order to restore a network of confi-dence, with the engagement of governments, busi-nesses, and other economic actors that have the abilityto generate the substantial funds needed to financedevelopment.

I would like to finish quoting a famousMexican poet, Alfonso de Reyes who, by the way, wasalso a diplomat and lived for a few years in my coun-try, in Rio de Janeiro. In Sol de Monterrey (Sun ofMonterrey), Alfonso de Reyes made a beautiful andpoetic description of the sun we can all today enjoy inthis beautiful city: “(...) despeinado y dulce, claro yamarillo: ese sol con sueño que sigue a los niños”.Just as the sun of Monterrey is a sun of dreams, but asun that nevertheless follows children in their way toadulthood, influencing the course of their lives, I amconfident that this conference will change in a definitemanner the way our countries engage in the searchfor development, leading developed and developingcountries towards a more human and more responsi-ble future.

BruneiDarussalamStatement byHis Excellency Mr. Pehin Dato Ahmad Wally SkinnerDeputy Minister of Finance of Brunei Darussalam

Mr. President, Excellencies, Ladies and Gentlemen, mydelegation and I sincerely congratulate Your Excellencyand the Government of Mexico for hosting this impor-tant Conference. The gathering we are attendingtoday has a political significance. This is a historicoccasion for the world community to pledge coopera-tion, and to chart a clear path towards realizing thedevelopment goals including those set in theMillennium Declaration.

The developing countries have been wait-ing for this to happen since a decade ago. This is thebeginning of a long process that would eventuallyenable the developing countries to move away fromunderdevelopment and poverty, and to re-build theirconfidence to face the challenges of the new econo-my. However, the path leading to this Conference hasnot been easy. The road ahead of us is equally chal-lenging as well. For there is greater political, economicand social diversity and complexity among us, and the priorities and levels of development are wide anddeep.

We feel that we, the global community,must work together to translate the MonterreyConsensus into action plans. The United Nations,despite having a central role to play, cannot do italone. It requires active involvement of other key inter-national and regional organizations and institutions inthe process.

We welcome the outcomes of the DohaWTO Ministerial Meeting, in particular the decision totake on board the interest of the developing countries.Globalization should serve as an effective avenue forimproving the livelihood of people in both developedand developing countries.

We also welcome progress in the work toreform the international financial architecture, thoughwe feel that many issues yet remain to be addressed.We join many speakers before us in calling for in-creased participation of the developing countries inkey international fora, especially in setting up policiesand standards that reflect the interest of both devel-oped and developing countries.

When all is said and done, what thisConference is all about is the call for more effectiveand cohesive partnerships at all levels. The role of theUnited Nations is indispensable. So, too, are otherinstitutional stakeholders, particularly the IMF, theWorld Bank and the WTO. The smaller buildingblocks, the regional and subregional cooperation aswell as individual economies are the ones that aregoing to make the difference.

My delegation is confident that theMonterrey Conference will be able to generate a levelof momentum and a degree of partnership that arenecessary to realize our international developmentgoals, particularly those pledged at the MillenniumSummit.

139


BulgariaStatement byMr. Stefan SotirovDirector, Ministry of Finance, Republic of Bulgaria

At the outset, let me express my appreciation for theopportunity to participate in this conference.

As an economy in transition, Bulgariaattaches key importance to the preservation of themacroeconomic stability and the creation of growth-friendly environment, trade liberalization and high lev-els of foreign direct investment being the instrumentsfor ensuring economic growth. The Bulgarian econo-my is strongly dependent on foreign trade, whichaccounts for a high relative share of our GDP. Likemost small countries with open economies Bulgaria isinterested in further liberalization of the world tradebecause the reduction and/or elimination of the barri-ers to trade would increase the possibilities for export.At the same time, an increasing competitive pressureon the Bulgarian production would push it to seekgreater efficiency and development, taking intoaccount the competitive advantages of the country.

Together with the EU member countries,the CEFTA member countries and other developednations, Bulgaria maintains the position that a newcomprehensive round of multilateral trade negotiationsshould be launched within the WTO. The chances totake into consideration the interests of each partici-pant in the negotiations, even of the smallest coun-tries, as well as to negotiate further trade concessions,are greater if many and various issues are tackled in anew round of negotiations.

The globalization process calls for theWTO to develop the focus of its work. Therefore, themultilateral trade system should demonstrate particularresponsiveness to the needs and problems of the lessadvantaged members by revising the dispositions onspecial and differentiated treatment within the WTOagreements so as to improve on their precision, oper-ation and efficiency. Bulgaria shows understanding forthe difficulties of the developing and the least devel-oped countries. Similarly to them, Bulgaria is not ableto take full advantage of the instruments provided inthe WTO agreements. We are unable to help ourindustry due to financial constraints. At the same time,our industry experiences difficulties resulting fromimports of subsidized products from more developed

countries, or is unable to sell its products due to effec-tive antidumping or sanitary and phytosanitary meas-ures imposed by other countries. A number of agree-ments provide an option for special, relieved treatmentof the countries in transition. In practice, however,these dispositions are difficult to use in support of eco-nomic growth.

Within the WTO a number of countries userights and privileges as ‘developing countries’,although they often have much better economic indi-cators than Bulgaria. There is no officially adopteddefinition of ‘a developing country’ in the WTO andsome member countries are of the opinion thatbelonging to that category is a matter of self-defining.Any further division of the WTO members intounclearly or subjectively defined categories wouldundermine the nature of the WTO as a rule-basedorganization. For this reason Bulgaria has beendefending the position, which was reiterated manytimes within the WTO, namely that specific norms forseparate categories of countries should be establishedand new special rights and privileges should be provid-ed on the basis of objective criteria and economic indi-cators. Such an indicator is the GDP per capita, forexample, and the categorization of the World Bankcould be applied (whereby the countries are classifiedas ‘low-’, ‘lower middle-’, ‘upper middle-’ and ‘high-income’ countries). Bulgaria’s view is that all WTOmembers fulfilling the objective criteria of categoriza-tion should be able to apply the existing rights andprivileges granted to the separate categories of coun-tries.

In our opinion a universal, open, non-dis-criminatory and just multilateral trade system based onrules is capable of giving a significant impetus to theprocess of development throughout the world, bring-ing benefits to all countries irrespective of their level ofdevelopment.

Likewise, Bulgaria considers regional inte-gration as a major tool in improving the system ofinternational trade. Being convinced that regional inte-gration brings about higher degree of liberalization ofinternational trade, Bulgaria has concluded 9 freetrade agreements with 31 countries. These are theAssociation Agreement with the EU (15 membercountries), the agreements with the CEFTA countries(6 countries), with the EFTA countries (4 countries),and with Israel, Turkey, Croatia, Macedonia, Lithuaniaand Estonia. Free Trade Agreements are to be con-cluded with Latvia, Morocco and the Federal Republicof Serbia and Montenegro. Thus Bulgaria has ensuredpreferential access for the products of those countriesto its markets, and for its products to the markets ofits traditional trading partners.


140

Recognizing the fact that internationaltrade liberalization enhances the possibilities forincrease of exports, Bulgaria upholds the idea that fur-ther substantial trade liberalization is an important ele-ment of the strategy for sustainable development ofeach country.

Burkina FasoStatement byHer Excellency Ms. Anne KonateVice-Minister in charge of Economic Development,Burkina Faso*

The delegation of Burkina Faso joins with all thosewho have spoken from the outset of this Conferenceto thank the Mexican authorities and in particularthose of this beautiful city of Monterrey for theextremely warm welcome that has been extended tous.

This international meeting on Financing forDevelopment at the beginning of the third millenniumis a powerful sign of the transformations underway inour world. These transformations, namely all mannerof threats from all sources are of great concern to usand command our attention with every passing day.

I would like to extend our congratulationsto the United Nations system and the Secretary-General for the extremely important role played inpromoting peace and development in an increasinglyinterdependent but difficult world given the manyupheavals that we experience every day.

The current level of poverty, which affectsmost of the people on this planet, is a serious andunacceptable infringement on the dignity of humanityand a threat to international peace and security. In thisregard, solidarity between states, nations and peoplesshould be seen demonstrated at all levels and entailsrights and duties. As a result, we must all take part indecision-making and the implementation of these decisions.


The involvement of other players, such as civil society and the private sector in the quest for solutions to the problems of financing for develop-ment, requires from all the willingness and determina-tion to make this century one of prosperity for human-ity. Therefore, we must develop and strengthen ‘gov-ernment, private and civil society’ tripartism at thenational level.

The different themes encompassed byfinancing for development are extremely relevant. OurConference must promptly take operational measuresand firm commitments on all of these questions if wetruly want to have a positive influence on the courseof history and reduce the level of poverty. To do this,official develop assistance must be increased, becomemore and have fewer conditions.

With respect to the matter of mobilizationof national resources, my Government has been work-ing since 1991, with the support of the internationalcommunity, on setting up a set of reform measures ofan institutional, economic, financial and politicalnature. Mindful of the fact that domestic savings mustbe the main source of public investment, we haveundertaken a vast programme of macroeconomic andstructural reforms. This has made it possible toimprove public finance. We have also made a specialeffort to increase the level of mobilization of domesticresources through improved tax collection and in ourcombat against fraud.

We have done so bearing in mind the fluc-tuation of official development assistance, whichmeans that the financing of growth and the develop-ment process must depend increasingly on domesticsavings. There are other measures such as the devel-opment of private initiative and the strengthening ofthe banking sector.

With respect to the mobilization of interna-tional resources for financing for development throughdirect foreign investment and other private capitalflows, the Government has made considerable effortsin order to create positive conditions to stabilize themacroeconomic environment for political, economicand legal reforms in order to create an ideal environ-ment for private investment. The private sector is con-sidered the engine of development. However, theseefforts have not been rewarded, because direct foreigninvestment in our country is fairly low despite theimprovement in strengthening of our institutional andlegal environment.

141


Market access develops international trade and helps reduce poverty. Trade is the mostimportant mechanism to mobilize internal and externalresources. However, foreign trade in Burkina Fasoremains insignificant given the fact that the economyis not very competitive and the many obstacles that we face in developing trade.

Burkina Faso is structurally dependent onforeign resources to finance its economy. Officialdevelopment assistance is for my country the mainsource of financing, given that, as I said earlier, we donot really benefit from foreign direct investment,despite all the measures and concessions that we havemade. Perhaps, if donor countries had respected theircommitment, which has been recalled on many occa-sions, to devote 0.7 per cent of the their gross nation-al product to official development assistance, we wouldnot be here today to talk about eradicating poverty.We hope that the untying of aid will make officialdevelop assistance more effective.

Indebtedness has become a true develop-ment problem for Burkina Faso, and its consequencesare dramatic. As a result, since September 1999 mycountry has adopted a national debt strategy in orderto slow down the debt increase. We welcome theHeavily Indebted Poor Country (HIPC) Initiative, andask that its implementation be accelerated andstrengthened and that the Initiative be expanded.Cancellation of the debt of my country along with anincrease in assistance would make it possible to makemore progress in reducing poverty.

The way debt is dealt with in the HIPCInitiative is commendable, but it remains inadequate inscope and implementation. Indeed, despite the factthat it is an original measure, the HIPC Initiative ismarginal and limited given the current financial needswhen it comes to combating poverty. It would bedesirable that we make it more efficient by extendingit to all lending authorities and obtaining from all com-parable terms.

With respect to systemic issues, we mustadopt principles of governance that are adopted andopen, placing the globalization of the economy at theservice of development in the context of growinginterdependence.

Over time, we have established a consen-sus around points that were formerly controversial. Iam speaking about the role of the private sector inmobilizing resources for development purposes; theundeniable importance of official development assis-tance in financing for development; making povertyreduction a primary objective of financing for develop-ment and finally improving cooperation within theUnited Nations system.

Therefore, this is a timely opportunity torespond to the different concerns that I mentionedearlier, which involve all countries. The turn of eventshas made it possible to look at a wide range of ques-tions at the heart of the debate on Financing forDevelopment. Financing of Global Public Goodsshould make it possible to progress in reducing pover-ty and safeguarding international peace and security.This is why my country supports the idea of financingfor collective goods on a global scale.

I would not end my statement without rais-ing the question of the follow-up on the conclusions ofour Conference. My country expressed the wish thatan effective follow-up mechanism be set up to make itpossible to truly make progress in the war againstpoverty and for development so that Monterrey willnot simply be just another conference. Millions of peo-ple living under the absolute poverty threshold arenow looking to Monterrey. Together, we must assumebefore history our collective and individual responsibili-ty to eradicate poverty on our planet. We have under-taken the commitment. We have the means to do so.

CambodiaStatement byHis Excellency Mr. Cham PrasidhMinister of Commerce, Kingdom of Cambodia

On behalf of the Royal Government of Cambodia, Iwould like to join Cambodia’s voice to the other LDCsin welcoming the outcome of this InternationalConference on Financing for Development. We camewith a lot of expectations. We came to hear what therich countries would do to assist poorer countries toget out of poverty. The Monterrey Consensus reflectswhat is really going on in the world: We are still wit-nessing pledges, even more pledges for ODA, eventhough not up to the desirable level. We are also hear-ing pledges for better and enhanced market access forLDCs’ products.

The world’s current economic situationdoes not allow us to get more than what has beenachieved in Monterrey. We have to be practical; wecannot ask the rich countries to do more than whatthey can afford at this moment. We shall wait for bet-ter days. We do hope those better days will comesoon enough so that, at the next World Summit on


142

Sustainable Development in Johannesburg, in August/September 2002, there will be more concrete resultsand better commitments than those made here.

My 5-minute speech will not do much, butif you add up the 5-minute speeches of 49 LDCs, youwill come out with a long speech about their plea toget out of poverty. It is a plea for a new internationaldeal – a grand bargain, as Mr. Mike Moore puts it inhis speech yesterday.

I would like to add a few viewpoints to theprevious speakers for your consideration. I am notasking for a quick decision but I am asking for a far-reaching political decision on the following matters:

Why are there now more LDCs than at thetime of the Rio World Summit? I think the solutionsthat were provided since then were not comprehensiveenough to help the LDCs out of poverty. You may talkabout developed countries lowering their tariff barriers,simplifying import procedures etc. etc. You may talkabout some of them being still very protectionist. Butthis is just one side of the coin. The other side of thecoin is that from the LDCs’ side, they too have notbeen able to perform well. Because of their lack ofskills and knowledge of the world’s markets, they havenot been able to build up their supply capacity nor arethey able to meet international standards. Therefore, Ipropose that further consideration be given to extendODA to building capacity for trade in the LDCs.

There are 49 LDCs in which some areHIPCs and some are not HIPCs. This is not related toa horse race; it relates to public debt. There are someLDCs like Cambodia that tried to be less HIPC thanthe others. Why is the HIPC initiative going to beimplemented only for those HIPCs and not also to therest of the LDC group? Why are the rich countries notwilling to reward those LDCs that tried hard not to beheavily indebted? Therefore, I propose that if any debtcancellation is under consideration by the rich coun-tries – like those in the Paris Club – it should beextended on a non-discriminatory basis to all LDCs.

Mainstreaming trade into development poli-cies has been neglected in the past. But nowadayspeople start to acknowledge that trade is a tool fordevelopment, the engine of growth. The IntegratedFramework on Trade-related TA for the LDCs whichwas designed by the 6 Core Agencies – IMF, ITC,UNCTAD, UNDP, WB and WTO – is the right mecha-nism to assist the LDCs to master their own develop-ment. Therefore, I propose that further considerationbe given to this initiative.

Making our voices heard in thisInternational Conference is just one thing, but theother thing, which is more important for us, is how tobe able to move the hearts of all the world’s promi-nent leaders who are gathered here in Monterrey andto be able to develop their political will and theircourage to shape a better future for the billions andbillions of people who are still living under extremepoverty conditions? There is still some room forimprovement and we do count on your commitmentand your courage to materialize last year’s BrusselsAction Plan for the LDCs and the Doha MinisterialDeclaration on WTO Development Agenda.

The Royal Government of Cambodia,through the voice of Prime Minister Samdech HunSen, committed itself to achieving the MillenniumSummit Development Goals (MDGs) which empha-sized the importance of efforts to integrate peace anddevelopment, and called for a coordinated and com-prehensive approach by all partners to support eco-nomic growth, social sector investment, environmentalprotection, peace-building and the promotion of goodgovernance. Your assistance is now needed more thanever if those Millennium Development Goals are to beachieved in 2015.

CameroonStatement byHis Excellency François-Xavier NgoubeyouMinister of State for External Relations, the Republicof Cameroon*

First of all, I would like to convey to President VicenteFox, his people and all the participants in this confer-ence cordial greetings from His Excellency Mr. PaulBiya, President of the Republic of Cameroon, whom Ihave the honour of representing here, and the wishesfor success that he has made for this very importantmeeting.

My delegation pays tribute to the spirit ofMonterrey that you have managed to breathe into ourdebates. We would like to take this opportunity to con-gratulate all those who have contributed to the imple-mentation of the Monterrey Consensus. In this respectwe support the declaration made by the President of


143


the Group of 77 and China. At the same time, wewelcome the commitments made by the leaders ofinternational economic and financial institutions.

Eighteen months ago, the Heads of Stateand Government adopted the Millennium Declaration,which aims at the eradication of poverty, sustainabledevelopment, promotion of peace and internationalsecurity. In this Declaration, they made a commitmentto pay particular attention to the specific needs ofAfrica. For their part, African leaders have sized upthe challenges that face their continent. They designedand adopted the New Partnership for Africa’sDevelopment (NEPAD), which is both a strategy andplan of action for increasing economic growth andreducing poverty along the lines of the MillenniumDeclaration and promoting the integration of Africanin the world economy.

Cameroon, like other countries, expectsthat this conference will provide a clear and construc-tive definition of the ways and means of mobilizing theresources necessary for implementing the objectives ofthe Millennium Summit.

At this point in my statement, the essentialquestion is whether we have met this expectation.There are various ways of assessing this. ButCameroon believes that there are some positive ele-ments that should be pointed out. First of all, there isthe Monterrey consensus that follows up on theMillennium Declaration. Then there are the decisionsannounced by the countries of the European Union,the United States and Canada in favour of increasingofficial development assistance. Finally, there is theagenda of international economic and financial organi-zations, in particular the World Bank, the InternationalMonetary Fund and the World Trade Organization.

Cameroon associates itself with theMonterrey Consensus. Beyond the announcements,we expect specific measures that will allow Africa toimplement NEPAD successfully. These measuresinvolve in particular debt cancellation, an increase inofficial development assistance to rapidly reach theobjective of 0.7 per cent of gross national product andquestions related to international trade such as marketaccess, the development of trade capacities and theelimination of agricultural subsidies. In other words, wemust remain committed as one of the themes of ourprogramme has stated.

ChinaStatement byHis Excellency Mr. Xiang HuaichengMinister of Finance and Representative of thePresident of the People’s Republic of China

As the curtain of the 21st century and new millenniumis raised, it is opportune for all the Heads of State andother delegates to gather at Monterrey to discuss theissue of financing for development, which has a directbearing on the future of mankind. Naturally, all thepeople who long for happiness are concerned aboutthe outcome of the conference. On behalf of PresidentJiang Zemin, I wish to congratulate the convention ofthe conference. I also wish to express our sincere grat-itude to President Fox for his kind invitation and theMexican Government for all it has done in making thispossible. Taking this opportunity, I wish to share withyou the views of the Chinese Government on issues ofdevelopment and its financing.

I. Establishing a global coordination mechanism for development in response to the challenges facing the world in achieving common development

At the turn of the new century, the world is faced withgreater historical opportunities and unprecedentedchallenges in pursuit of its goal of common develop-ment and prosperity. The cold war era of half a centu-ry is over. The people all over the world share thecommon aspiration that peace should replace war, anddevelopment overcome poverty. The world is nowaccelerating in its trend towards multi-polarization andeconomic globalization, and the modern technology isprogressing rapidly. Mankind holds a bright prospectin its lofty causes of promoting development.

The overall international situation at thisstage remains in a state of peace and stability, butsome regions are still ravaged by military conflicts,chaos, tension and uncertainty. Benefits brought aboutby modern science and technology have not reachedout to all of the nations in this world. Global develop-ment is getting ever more uneven.

Of the entire world population, 1.2 billionpeople live under the poverty line, with less than adollar a day. The developed countries takes a share of86% in gross global product, and 82% of export mar-ket, whereas the developing countries take only 14%


144

and 18% respectively. While some countries have todeal with their internal problems which are part of thetroubles, the primary cause lies in the absence of a justand equitable economic order that facilitates the fairdistribution of the benefits of globalization.

Globalization facilitates the free flow andallocation of resources across the world, contributingto their efficiency. However, it has its inherent asym-metric weakness, as is particularly demonstrated bythe uneven mobility of different economic factors,which tends to induce uneven development globally.Globalization per se is not the key factor, one way oranother; what matters is the way it is managed with aview to maximizing its benefits and minimize its nega-tive effects. Regrettably, however, the existing interna-tional economic order has failed to address the prob-lems inherent in the process of globalization. Worse, ithas intensely exacerbated the irrationality of theprocess, thus becoming the root cause of the wideninggap between the North and the South.

To break way from the difficult situationand to respond to the challenges of development, it isnecessary for each and every member of the interna-tional community to do their best to roll back all barri-ers, internal or external. To this end, we call for theestablishment of a global coordination mechanism fordevelopment between the North and the South. Sucha mechanism should follow the following principles:

• Firstly, it is necessary to establish a newinternational economic order that gets along well withthe economic globalization to provide a favourableexternal environment for all the countries for develop-ing their full potential. The new international econom-ic order should address the issue of redistribution ofthe gains of globalization and require a developmentassistance mechanism in the context of globalization.

— Ensure equal status of and participation byall members of the international communi-ty and require that all international institu-tions listen to different voices, and take into account the interests of all the parties concerned in rule-making.

— Be supported not only by developing coun-tries, but also by developed countries that must demonstrate their political will, which is critical for the viability of this economic order.

— History is rich in evidence that helps all sober-minded people recognize that prosperity cannot be enjoyed by anyone exclu-sively behind closed doors; that peace is dependent on development; and that lop-

sided development, if unchecked, will jeop-ardize the security, prosperity and welfare of mankind. We solemnly appeal to the developed countries that they should demonstrate their political wisdom and determination by adopting practical and effective measures to improve significantly the environment for the development of developing countries.

• Secondly, developing countries shouldaffirm their ownership of their development pro-gramme.

— The international community should fully respect the rights of the countries to choose the road to development of their own volition and their right to undertake reform in a way that they deem fit. It should be fully recognized that a diversity of approaches to development exists, and that development moves in phases. There is no such thing as a stereotyped develop-ment mode or a one-size-fits-all solution that can be imposed on developing coun-tries.

— In the final analysis, developing countries –have to rely on their own efforts to devel-op. It is necessary for them to place a pri-ority on development and carry out eco-nomic restructuring and implement eco-nomic reform, opening up on the basis of political and social stability. Meanwhile, they should strengthen mutual cooperation and keep pace with global development by taking advantage of whatever favourable international conditions are available to them.

• Thirdly, It is necessary to improve coordi-nation of development efforts at the global level.There must be a clear objective to guide the efforts toestablish a global coordination mechanism for develop-ment. This objective is to promote productivity,improve the living standard of the people and theoverall national economic strength of the countries inthis world. With this in mind, efforts should be madeto establish development partnership between thedeveloped and developing countries, different interna-tional organizations, international donors and recipi-ents and other related parties. It is necessary toenhance understanding of both development theoryand practice, reach consensus and coordinate activities.

145


II. Strive to establish an effective GeneralFramework of Financing for Development

Monterrey offers us a historic opportunity. This hasenabled us to move closer towards the long-awaitedideal of setting up a global coordination mechanismfor development. To make such a mechanism viable,the most pressing task at hand is to establish an effec-tive framework of financing for development.Countries have to rely on their own powerhouse fortheir growth. An effective mobilization of its domesticresources constitutes one of the fundamental elementsof the development financing framework.

To fully mobilize domestic resources, thereare three necessary conditions:

• The first is a sound and stable domesticpolitical, economic and social climate. Effective mobi-lization of domestic capital and economic developmentis only possible under such a climate.

• The second is institutional innovation.Reform needs theoretical guidance and internationalexperience. And a successful innovation in institutionsin a country comes out of nothing but its people’sunfettered thinking and creative practice.

• The third is a market system suited to itsdevelopment stage and a macroeconomic regulatoryframework chosen on the basis of the actual situationsof a country. What is also required includes a soundpublic finance system, a highly efficient banking sectorand an equitable social security system to meet theneeds of development, and a series of appropriate fis-cal and monetary policies to be implemented at theright time with a view to creating an enabling econom-ic environment for sustainable growth, job opportuni-ties and poverty reduction.

The core of establishing a general frame-work of financing for development is to build a newinternational economic order in alignment with therequirement of a global coordination mechanism fordevelopment. To establish such a new internationaleconomic order, it is necessary to restructure the exist-ing international financial, trading and economic sys-tems. As an integral component of the internationaleconomic order, the international economic systemconstitutes the critical institutional base that deter-mines the way the developing countries get their equi-table right to development. We stress that the follow-ing should be done for that purpose:

• To explore approaches to readjusting andreforming the international monetary system in orderto provide a stable, transparent and predictable mone-tary environment for steady global growth. Majorreserve currency countries should undertake their dueresponsibilities. They should take into account theinterests of other countries, in particular the develop-ing ones, in formulating their own macroeconomicpolicies and ensure the relative stability of theexchange rates of the major reserve currencies. Wemake it clear that a one-time special allocation ofSDRs has to be completed at the earliest possibledate. And we support the IMF in its efforts to make ageneral allocation in a timely manner.

• To reform the international institutions. Inthis connection, IMF needs to improve its membercountries’ representation and their status of participa-tion. The Bretton Woods Institutions and the WorldTrade Organization need to strengthen coordinationbetween the international monetary and financial poli-cy and the international trade policy, and also thecoordination between the two sets of policies and theirdevelopment goals.

• To explore the possibility of establishing aninternational tax cooperation forum. In such a forum,exchanges of ideas and views can be conducted on taxpolicy, administration and other tax-related matters,and technical parameters and specifications can betentatively formulated.

• To promote the broad-based participationby members of the international community, includingdeveloping countries, in the formulation of financialstandards and codes. And the implementation of thefinancial standards and codes should be done on a vol-untary and step-by-step basis.

• To crack down on financial crimes, such asmoney laundering and financing for terrorism.

• To strengthen international support forcooperation in the field of finance, trade and invest-ment at regional and subregional levels, as a responseto the challenges of globalization. And MDBs have anactive role to play in this respect.

• To establish such a new international eco-nomic order, the international trade arrangementsshould take into full consideration the interests ofdeveloping countries.


146

Trade is the engine for global growth, andthus is vital for development of any individual country.Therefore, we maintain that protectionism of variousdescriptions should be eliminated and markets furtheropened. Meanwhile, special attention should be paidto the market access for textile products and clothingsector. And trade barriers for agricultural productsshould be rolled back, and tariff peaks and tariff esca-lation which hamper the exports of the developingcountries be eliminated. Non-EU developed countriesshould actively join EU in offering duty-free and zeroquota access for non-arms exports from all the leastdeveloped countries and highly indebted poor coun-tries. We support the multilateral trading system, andhope that such a trading regime will represent to agreater extent the interests and desires of the develop-ing countries. We expect that the Uruguay RoundAgreement will be implemented through effective andconcrete measures. We hope that in the process ofthe new round of negotiations, the special develop-ment stages of the related sectors of the developingcountries should be taken into consideration, andthese countries should be granted concessions and dif-ferentiated treatment in the extent and pace of theirmarket liberalization. The negotiations should be con-ducted on the basis of consultation on an equal footingso as to ensure that the ultimate outcome will reflect ageneral balance of interests among all the partners.

• To establish such a new international eco-nomic order, the developed countries need to demon-strate their political sincerity and vigorously engagethemselves in cooperation for the international devel-opment assistance. Globalization makes it imperativeto establish a mechanism for income redistribution andbenefit sharing at the global level, and to increaseresource transfers from the developed to the develop-ing ones. This mechanism should at least facilitateresource transfer through two channels. The first isthe developed countries’ ODA flows, at the targetedlevel of 0.7% of their GNP, to developing countries.And for that purpose a timetable must be set to reachthis level as soon as possible. As a near-term goal, wecall upon the donors to increase their contribution byUS $50 billion over and above the current level. Weappreciate the political commitment that has recentlybeen indicated by some donor countries in thisrespect. Secondly, the multilateral development banks(MDBs), as an important link in the internationaldevelopment assistance system, should strengthen

rather than weaken their role of resource transferagainst the backdrop of globalization. The MDBsshould rigorously observe their respective Articles ofAgreement and regard their operational work for rais-ing productivity and reducing poverty as their coremission and discharge their responsibility in resourcetransfer at the global level.

• To establish such a new international eco-nomic order, the developed countries are required toplay a greater role in resolving the formidable debtissues facing many developing countries so as to helprelease more resources needed for their development.Over recent years, some countries and internationalinstitutions have made efforts to help reduce the debtof the HIPCs. We appreciate what they have done andhope that all the parties involved will take a step fur-ther in simplifying terms of debt relief and exercisingmore flexibility to bring benefit to HIPCs promptly. Itshould be noted that in reducing the huge debt burdenon the developing countries, it’s necessary to takepractical efforts to address the systemic causes of thedebt problem. Furthermore, debt relief should not betranslated into additional burden for other developingcountries.

• To establish such a new international eco-nomic order, the international community is requiredto help reinforce the efforts of the developing coun-tries in attracting sustained, stable and orderly flows ofprivate capital. In the present-day world, private capi-tal flows have become an important driving force foreconomic development. We hold that the followingshould be done.

Efforts should be made to ensure increasedFDI in the developing countries. While the developingcountries should strive to create a sound investmentclimate, the developed countries should also try toremove restrictions they have imposed on investmentintended for the developing countries.

Close attention should be paid to theimpact of private investments on development; andtechnology transfer and dissemination in the develop-ing countries should be encouraged.

Short-term capital flows should be subjectto effective regulation and monitoring. In encouragingdeveloping countries to tap the international capitalmarket, the international community should strengthenregulation and monitoring, and enhance transparencyso as to prevent any recurrence of financial crisis.

147


III. China's development is a major contributionto the development of the world

China remains a staunch supporter for the cause ofglobal development. For over half a century and par-ticularly since the launching of China’s reform andopening-up programme two decades ago, our eco-nomic position and aggregate national strength havebeen markedly improved. The Chinese population,over 1.2 billion strong, have basically met their needsof food and clothing. And their living standards haveimproved substantially. China’s stability and develop-ment constitute a tremendous contribution to worldpeace and development. Nevertheless, China remainsa developing country. China still faces formidable chal-lenges in many fields of endeavour for development.We have yet a long way to go and arduous tasks totackle to achieve the goal of common prosperity forthe entire nation.

We will continue to accord priority todevelopment and structural readjustment propelled byreform and opening-up as well as scientific and tech-nological progress. We will place the improvement ofpeople’s life at the heart of all policies and pro-grammes and continue to promote progress in all oureconomic and social dimensions. At the Doha confer-ence last November, China became an official memberof the World Trade Organization. China will furtherdeepen its reform, open wider to the outside worldand present itself as a more active member of theworld community.

As the biggest developing country, Chinawill as always be committed to the common develop-ment and prosperity of the world. China’s reform andopening to the outside world itself offers a tremendousopportunity for the global economic development. Wewill continue to be actively engaged in cooperationwith the rest of the world on an equal and mutuallybeneficial basis.

In international affairs, China will continueto play its role as a major peace-loving, just andresponsible country. It will also join hands with othermembers of the international community in dedicatingthemselves to reforming the current international eco-nomic order and safeguarding the equitable develop-ment of all the countries. China is willing to share withother members of the international community, partic-ularly the developing countries, the experiences andlessons of development practice. In October 2000,China provided a debt relief in the amount of RMBYuan 10 billion to the African countries. In the future,

as its own economy grows, China will continue tooffer assistance to other developing countries to theextent possible.

“When rationality reigns, the whole worldbecomes one coherent community.” This axiom, aspropounded by an ancient Chinese sage as early asover two thousand years ago, expressed the nobleideal of the mankind for solidarity and peaceful co-existence for common interests. The world todayleaves much, much room for improvement. Thisregrettable reality makes it all the more worthwhile tomake our dream come true. The Chinese people willstand by all the peace-loving people in this world andstrive for common development and prosperity.

A thousand-mile long journey starts withthe first step. Let’s begin from Monterrey and embarkon the road leading to the development and prosperityin the 21st century.

Côte d’IvoireStatement byHis Excellency Mr. Aboudramane SangaréMinister of State and Minister for Foreign Affairs,Republic of Côte d’Ivoire*

The delegation of the Republic of Côte d’Ivoire, whichI am honoured to lead, wishes to convey its warmestcongratulations to you, Mr. President, on your electionto the presidency of the International Conference onFinancing for Development. We commend you on theperfect organization, which I am certain will ensureour success. The President of the Republic of Côted’Ivoire, Mr. Laurent Gbagbo, has not been able toattend and has asked me to convey to you and to thepeople of Mexico his fraternal greetings and the trib-ute of the people of our country.

Côte d’Ivoire is happy to participate in theInternational Conference on Financing forDevelopment, a major event intended to set thecourse for a new partnership between rich and poorcountries at a time when Africa, through the NewPartnership for Africa’s Development (NEPAD) initia-tive, is establishing a coherent framework to build itsfuture. We are aware of the fact that poverty and des-titution are a threat to the international community.



148

The Heads of State or Government of the 189nations that make up the United Nations agreed at theMillennium Summit to spare no effort to ensure thesuccess of this meeting, which will undoubtedly helpnarrow the ever widening gap between North andSouth. Côte d’Ivoire also fully associates itself withefforts to implement the commitments made to eradi-cate poverty in all its forms and pays tribute to theUnited Nations and Secretary-General Kofi Annan fortheir work in convening this Conference.

We also wish to salute the developmentpartners, such as the World Bank, the InternationalMonetary Fund, the World Trade Organization, theInternational Labour Organization, the regional devel-opment banks and all others who have invested insuch an outstanding way in developing the MonterreyConsensus, which has been adopted.

The African continent has been hard hit bypoverty and has the largest number of least developedcountries. Our peoples have great expectations for theconclusion of this meeting and they look forward to agenuine launching of their economies.

My country agrees with the G-77 andChina that improvement of the social situation, livingstandards and protection of the environment throughthe mobilization of resources in a framework of newand appropriate partnership between developing andrich countries could effectively help eliminate poverty.To that end, my country believes that steps need to betaken in three major areas.

• First, all debt-relief initiatives that are aheavy burden on our financial capacities should bestrengthened. In this regard, we welcome the variousinitiatives, including those that favour the highly indi-gent poor countries. Côte d’Ivoire, with a public debtstock of $8 billion and an annual servicing thatabsorbs more than half of its earnings, expects toreach the point of deciding quickly this year, once ithas prepared its Poverty Reduction Strategy Paper.

• The second major focus is increasing pri-vate direct investment, which has a more significantimpact on wealth creation and involves fewer condi-tionalities. Direct investments create employment andmake a lasting contribution to poverty reduction. Butthis assumes that our countries enjoy peace, stability,security and a transparent physical and legal frame-work. Similarly, an increase in public investment infra-structure and basic services, transport, education,health, energy and telecommunications is necessary.These direct investments need to be carried out in aspirit of partnership between the private sectors of theNorth and the South within an appropriate institution-al framework.

• The third focus is removing trade barriersand liberalizing trade, particularly in the agriculturalsector to permit the trade of African countries todevelop and to take advantage of the opportunities ofglobalization. In this regard, we need to strengthenregional and subregional groupings, which will make itpossible to draw greater benefit from a more signifi-cant economic space and support partnership agree-ments between the South and the North. These initia-tives will not exclude immediate measures aimed atincreasing official development assistance and particu-larly budgetary assistance with a bonus for countrieswith a strong capacity of absorption and that try toachieve good governance.

In this area, in view of the low repaymentcapacity of debtor countries, the resources shouldessentially be concessional and include a high propor-tion of grants. These efforts will demonstrate the goodwill of rich countries, as well as of the developingcountries that have their share of obligations andresponsibilities to bear. All these steps, if they areeffectively put into place, will, between now and2015, lead to the eradication of absolute poverty, asstated in the Millennium Declaration.

Côte d’Ivoire is gradually returning to therightful place it held in the family of nations and todayhas fruitful economic and political relations with all itsregional and international partners. It is committed tothe principles of good governance and democracy,which should become a system of daily management.

I wish to take this opportunity to expressour gratitude to the entire international community,which, by continuing to place confidence in Côted’Ivoire, has enabled it to make a successful comebackto the international scene. This is also an opportunityto reaffirm the commitments made by the President ofthe Republic at the national reconciliation forum.These will be scrupulously respected.

Rather than just hope, Monterrey should offer us certainty.

149


CyprusStatement byHis Excellency Mr. Sotirios ZackheosAmbassador and Permanent Representative to theUnited Nations, Republic of Cyprus

Cyprus fully supports the Monterrey Consensus whichwe consider as instrumental for the achievement of theMillennium Declaration Development Goals of sus-tained economic growth, poverty eradication and sus-tainable development. The warm endorsementextended to it at the highest political level is trulypromising. We sincerely hope that the commitmentsmade will be implemented in full.

For, we must not lose sight of the fact thatdevelopment means breaking away from the miseryaffecting millions of unfortunate people around theworld. The most recent statistics are indeed stagger-ing. Some 815 million people, including 150 millionchildren, suffer from hunger and malnutrition. Wemust always remember that behind each and everyone of these numbers there is a human being entitledto a better future and we should not rest until every-one’s inalienable right to food is secured.

The developing countries and countrieswith economies in transition have an obligation totheir people to decisively deal with issues like goodgovernance, the fight against corruption, full respectof human rights, peace, and social stability. These aresine qua non conditions for development. The exam-ple of the associated countries with the EuropeanUnion has provides ample proof of this fact.

Despite the fact that the main responsibilityrests with the countries concerned, the developedcountries can play a significant role in creating aninternational environment conducive to developmentand the elimination of poverty. They must ensure ade-quate and predictable development aid and broadermarket access for products and services from develop-ing countries. They must continue their efforts towardsalleviating their debt burden. The declining trend infinancial contribution through ODA by the developedcountries must be reversed so that the necessary fundswill be available for poverty alleviation and develop-ment. The developed countries should strive towardsthe realization of the target of 0.7% and the lifting ofany bureaucratic obstacles. I take this opportunity towelcome the important commitments made at

Barcelona by the European Union, the major partnerfor the Least Developed Countries, as well as byPresident Bush for increased development assistance.We sincerely hope that other actors will take a similarapproach.

Particular attention is required in order toaddress the special needs of Small Island States, whichface certain critical challenges related to their uniqueeconomic, social and environmental vulnerabilities.Cyprus shares many of their concerns and calls uponthe international community to support wholehearted-ly their efforts to achieve sustainable development.Cyprus, itself a prospective EU member, is currently inthe process of overhauling its aid programmes and isexamining ways to increase its already existing techni-cal and emergency relief assistance.

The grave daily reality of poverty andunderdevelopment must be confronted with an openmind and determination. The precarious state of theless fortunate of our planet inhibits the prospects ofeconomic growth at the global level and restricts theprospects for gaining the most out of globalization. Aserious engagement on the part of the internationalcommunity will not only demonstrate an emergingglobal ethos of compassion and solidarity but moreimportantly, it will constitute an act, which will, in thefinal analysis, serve our common interests.

Czech RepublicStatement byHis Excellency Mr. Jan KavanDeputy Prime Minister and Minister of ForeignAffairs of the Czech Republic

On behalf of the Government of the Czech Republiclet me first thank the government and people ofMexico for hosting this important meeting. I firmlybelieve that this conference will help the internationalcommunity solve current challenges of the globalizedworld.

The Czech Republic places great impor-tance to the international development goals adoptedby the UN Millennium Summit. As candidate for thepresidency of the 57th GA, we are committed to con-tribute, as much as possible, to successful fulfillment ofsuch Millennium Development Goals as: Halvingpoverty, universal access to primary education, reduc-tion of maternal and child mortality and reverse of the


150

spread of HIV-AIDS by the year 2015. In order tomake progress in resolving these complex issues it isnecessary for partnerships and effective cooperation totake place between all the interested parties. Theseinclude the governments, international financial andtrade organizations, non-governmental organizationsand the private sector. The Czech Republic supportsthe process of financing for development with thehope that it will encourage the mobilization of bothdomestic and international efforts and resources andtheir efficient and cost-effective use.

The Czech Republic is convinced that thepreparatory process for this conference by itself hasmade a significant contribution to improving partner-ships between all the key stakeholders on the nationaland international level.

We are also convinced that the primaryresponsibility for the creation of a framework for sus-tainable development will always rest with the coun-tries in question. Clear national strategies for thepoverty reduction are, in my opinion, the necessaryprerequisites for the subsequent engagement of donorcountries, international organizations as well as thenon-governmental organizations and private sector inthe development efforts. To an increasing degree thedeveloping countries are accepting responsibility forgood governance, transparent decision-making andsound economic and legal environment. In this contextwe welcome recent initiatives, such as ‘NewPartnership for Africa’s Development’ and ‘PovertyReduction Strategy Paper’.

The process of financing for developmentrepresents, by its comprehensive scope, a fresh andholistic approach by the international communitytowards the sustainable development worldwide. TheCzech Republic considers all elements of financing fordevelopment, i.e. domestic resources, private invest-ments, international trade, official development assis-tance and debt relief, to be mutually supportive andbeneficial.

The Czech Republic faced numerous chal-lenges in its transition towards market driven economyin the 90s. We have achieved many accomplishmentsbut we also missed some opportunities. Experience ofour country as well as some other countries from ourregion shows how important coherence, credibility andappropriate sequencing of respective policies are. Forinstance, privatization, which is not preceded by estab-lishment of adequate legal, regulatory and institutionalframework can lead to economic losses with negativesocial implications. The absence of such an importantlegislation can also be conducive to corruption.

The Increase in foreign direct investmentsin the late ’90s in the Czech Republic is a good exam-ple as to how the comprehensive reforms, transparen-cy and good governance become the best way toattain a greater involvement of foreign investors.

The Czech Republic, as a candidate for EUaccession, accepts its share of responsibility whensolving the problems of the international communityand is prepared to contribute to their resolution. As anemerging donor the Czech Republic intends to activelyengage in international cooperation. The Governmentof the Czech Republic has accepted the ‘Policy forForeign Development Assistance for the Period 2002-2007’, which supports the international developmentobjectives and development practices in theDevelopment Assistance Committee of the OECD.

I am of the opinion that, in particular, thegroup of the least developed countries deserves specialattention. The Czech Republic supports measures toeliminate the marginalization of the least developedcountries. As an active member of the WTO, theCzech Republic emphasizes that the Organizationshould take into account the requirements and justifiedneeds of developing countries, namely the least devel-oped ones, and supports their deeper engagement inthe multilateral trade system. The Czech Republicendorses the importance of the Integrated Frameworkfor Trade-Related Technical Assistance to the leastdeveloped countries. And we believe its pilot pro-gramme will bring tangible results in the near future.The Czech Republic is displaying its support for theleast developed countries in the area of foreign tradeby not applying any duty or quota limitations onimports of goods originating from these countries. TheCzech Republic also welcomes the enhanced HIPC ini-tiative, to which it makes active contribution, as a real-istic tool for debt relief of the poorest countries.

Although I am sure that there is no directcausal link between poverty and terrorism, I am at thesame time convinced that they share a common base.Unsolved extreme poverty, same as unsolved long-term political conflicts, (and especially a combinationof both) can lead to feelings of powerlessness, frustra-tion and anger which create fertile soil of sympathiesfor fundamentalist, radical or even terrorist behaviour.We therefore have to implement the Millennium devel-opment goals and fight poverty not only for moral andhumanitarian reasons but we should also perceive it asan integral part of a struggle against terrorism andextreme intolerance of all kinds, as a struggle for sta-ble, secure and more just world.

151


Allow me in conclusion to emphasize thatthe Czech Republic supports the efforts of the interna-tional community for full and effective cooperationwithin the framework of the process for financingdevelopment and for this reason is ready to supportthe adoption of the ‘Monterrey Consensus’.

DenmarkStatement byHis Excellency Mr. Per Stig MøllerMinister for Foreign Affairs, Kingdom of Denmark

1.2 billion people around the world live in extremepoverty. They live on less than one dollar a day. Theyconstitute approximately one fifth of the world popula-tion. In the United Nations Millennium Declaration wedecided to reduce this share by half in 2015.

Who are the poor? What do they need? Tomeet the challenge we need to know whom we aretargeting.

The poor are:— smallholder farmers — landless labourers — urban slum dwellers — households headed by women — and they are people displaced by

conflict or natural disasters.

Three out of four poor people work andlive in rural areas.

How can each of them break the viciouscircle of poverty? How can the smallholder farmerimprove his production and market his products?Especially if roads are lacking, transport costs high andprices low.

We need to focus much more carefully onthe development of rural areas. On jobs, on small-scale industry and a conducive business climate. At thesame time access to health and education is vital toimprove the lives of the poor. Women – in particularin rural areas – continue to be the most potentialagents for change. The tasks and responsibilities ofmany women in developing countries are enormous:From production of food to being the masters ofhealth, education and raising a family.

The Monterrey Consensus underlines thatthe gender perspective must be mainstreamed intodevelopment policies in order to strengthen the globaleconomic system. We have failed to support womenproperly in the development process. Still today cus-tom and civil law does not allow women to own andinherit land. They do not have access to finance. Inrural areas, poor women bring with them even fewerassets and rights than men do.

Governments must make clear commit-ments in order to improve the possibilities for thepoor population. They must provide the necessarysupportive policy, institutional and legal framework.And they must guarantee the rights of the individualAccountable institutions and good governance are nec-essary to facilitate the efforts of promoting the poten-tials of the poor.

The link and the dialogue between the indi-vidual and the public sector need to be strengthened.The public sector must respond to the needs of civilsociety and of the private sector. Otherwise economicand social development is hampered. The conse-quence is insecurity – a feeling of being left out. Wemust change this through a real partnership. A part-nership that develops at the grassroots level in therural village, in urban communities, as well as at thecentral level.

We – the international community and itsinstitutions – must be open to work in partnership, topool our resources and to cooperate much closer. Wemust expand a true global partnership to pave the wayfor a Global Deal to be struck in Johannesburg. TheMonterrey Consensus represents a fine example of apartnership at the national as well as the internationallevel. To release the potential of the poor, govern-ments have to be responsive to their needs. Only thencan sustainable development be achieved.

At the international level we must continueto improve market access, reduce subsidies and pavethe way for a more open, liberal and fair trade system.We see a close link between trade and aid. Forinstance through support for the establishment ofsmall enterprises, private sector development andassistance to ensure real and open access to interna-tional markets. International trade agreements must betranslated into reality in developing countries. Thedonors must be ready to assist this process.

Private investment should be recognized asa very essential element in fostering growth and devel-opment. But we – the rich nations – must fulfil ourinternational commitments. It is not impossible: Theyearly sales of Coca-Cola and Pepsi-Cola are $40 bil-lion. We just need $15 billion more than that to meetthe target of halving the number of poor by 2015.


152

The target of 0.7% of GDP as OfficialDevelopment Assistance must be honoured. Concreteand determined effort by the rich world is long over-due. Denmark urges other donor-countries to establishconcrete time frames for meeting their commitment.The decision last week by the European Union is animportant step in that direction.

In the 21st century, prosperity and thewell-being for all is a global concern. The goals havebeen set at the Millennium Summit. Now it is up to allof us to meet the challenge. The Millennium Goals canbe reached, if we in partnership are ready to makethem come true.

Denmark is fully committed to this new partnership.

EcuadorStatement byHis Excellency Dr. Carlos Julio EmanuelMinister of Economy and Finance, the Republic ofEcuador*

Concern for the economic and social progress of ourpeoples has been on the United Nations agenda sinceits inception. The founders of the Organization under-stood that international peace and security depend toa large extent on poverty reduction, employmentgrowth and a set of conditions that makes it possibleto improve a population’s quality of life.

Despite these aims, economic historyrecords a growing gulf between developed and devel-oping countries. Not only have the policies of theindustrialized countries and the multilateral financialagencies failed to bridge these differences, in somecases, they have helped, on the contrary, to intensifythe frequent economic crises by ignoring the socialcosts stemming from the implementation of adjust-ment programmes.

Ecuador is attending this Conference withthe conviction that only a serious international effortcan help make progress towards a world economicsystem based on equity. Failing that, the commitmentsthat we may reach at this Conference will once againbe no more than rhetorical utterances, which will nothelp to relieve the situation of millions of children,women and men around the world.


The level of external debt in many of ourcountries has reached unsustainable levels and becomea factor that has slowed down development. Efforts tofind a lasting solution to this problem have not beensuccessful in that they have been driven and controlledby creditors, always in accordance with their interests,and have represented isolated ideas that have not tack-led the underlying problems. This is the case with theBaker Plan, the Brady Plan and the Paris Club negoti-ations, which at the time of their presentation wereseen as panaceas for resolving the problems of indebt-edness of developing countries.

The economic history of the twentieth cen-tury shows that when there is political will, it is feasibleto find lasting solutions to the problems of countriesthat at one time were highly indebted. The need for aglobal solution to current problems of financing andindebtedness should inspire the same creativity andimagination that gave birth to the Marshall Plan 50years ago. It is important to remind this audience thatthe Marshall Plan proposed by the victorious countriesof World War II proved to be an effective instrument,which was the reason for the recovery and develop-ment of post-war Europe.

The best example is the LondonAgreement signed on 27 February 1953, whichenabled Germany once and for all to resolve its exter-nal debt problem thanks to the terms that it receivedfrom its creditors, which I shall succinctly outline.These included: An official discount form 50 to 75 percent of its debt; a drastic reduction in interest rates,which was set between 0 and 5 per cent; a generousgrace period for initial payments of interest and capi-tal; the extension of deadlines for scheduled payments;and other excellent terms that were set at that time.

It is important to highlight that the ratio ofGermany’s debt servicing to its exports peaked in1959, and amounted to 4.2 per cent, which comparesvery favourably with what has been happening inLatin American countries. At the end of 2000, forexample, Latin America had an external debt amount-ing to approximately $750 billion, the servicing ofwhich cost $166 billion, which is to say 45 per centof its total export earnings. In the case of Ecuador,external debt payments absorb more than 40 per centof the State’s annual budget and its exports. Let uscompare that with the 4.2 per cent granted toGermany 50 years ago.

In short, we believe that just as a MarshallPlan was required after the triumph of freedom overtotalitarianism, today, the same kind of imaginationand creativity are required to triumph in the war

153


against poverty. There is no doubt that the economicand social devastation that struggle against poverty has caused in the developing countries is much greaterthan the destruction inflicted on Europe in World War II.

At the same time, notwithstanding theefforts of developing countries on the domestic level toreform and liberalize their economies, there is still aset of international asymmetries, which have made itimpossible to make good use of the opportunities andadvantages of broader and more competitive globalmarkets. The developed countries, for their part, havepreserved market protection and distortion structuresthrough the application of subsidies and tariff and non-tariff barriers to significant products of importance tothe region. This is precisely what the Secretary-General of the United Nations Conference on Tradeand Development described as negative financing fordevelopment.

It is in this context that we make the fol-lowing proposal, which consists in three basic ele-ments of what would be a global scheme:

• Firstly, we propose the creation of an inter-national compensatory fund to improve the debt-serv-icing profile of middle-income countries with debtproblems. The fund would be set up through a specialissue of special drawing rights, and would be used toreduce the payment of interest and capital by thosecountries.

• Secondly, rather than international assis-tance, the developing countries, especially middle-income countries, require fairer international trade,which would seek to eliminate obstacles to trade,including tariff and non-tariff barriers and agriculturalsubsidies, permitting those countries to realize theircompetitive advantages. The developing countries,through a new trading round initiated in Doha, mustbe guaranteed access to the markets of developedcountries.

• Thirdly, the relatively less developed coun-tries require international assistance directed towardscreating the economic, social and political conditionsto overcome their serious problems of poverty. Thedeveloped countries have undertaken to devote 0.7per cent of gross national product to this purpose, butthey have not fulfilled this. Breaking this promise isunethical, and so an urgent rectification is required.

In conclusion, the resolutions that we reachat this Monterrey summit should be strictly applied inthe immediate future. The United Nations, the WorldTrade Organization, the International Monetary Fund,

the World Bank and other international agencies thatare competent in the field should watch over theenforcement of these resolutions and report on theway in which they are being complied with.

To paraphrase Victor Hugo, there is noth-ing more powerful than an idea whose time has come.Therefore, the lasting solution to the problems offinancing for development must be found now. Boththe Heads of State and Government, particularly thoseof the developed countries, mindful of their responsi-bility towards future generations, have today a historicopportunity to undertake new and greater commit-ments to sustainable development, with a view tobuilding a fairer and more equitable world for every-one.

EgyptStatement byHer Excellency Ms. Fayza AboulnagaMinister of State for Foreign Affairs, the ArabRepublic of Egypt*

Allow me at the outset, in the name of H.E. PresidentMohammed Hosni Mubarak of Egypt, to express ourappreciation to H.E. President Vicente Fox and thepeople of Mexico for the tireless efforts they exertedto ensure the great success of this importantConference on Financing for Development.

This high-level event comes to complementa series of important international conferences thatwere held during the last decade. However, theMonterrey Conference is unique compared with previ-ous conferences due to the comprehensive waythrough which it attempts to deal with development interms of financing for development, which is theessential problem for mankind to deal with.

The results of the Monterrey Conferenceare related to sustainable development objectiveswhich we shall be dealing with in Johannesburg. Mr.President, this great challenge is even greater for thedeveloping countries since they are not in a positionto benefit as much as they could. And so we need anew stage, a new phase of international cooperationand common action in order to achieve a more equi-table distribution of opportunities and in order to



154

cooperate more fully and effectively in achieving a bet-ter sharing of responsibility in this effort. The interna-tional community must realize that this stage is in theinterest of all parties since the developed countriescannot continue to benefit from the fruits of economicactivity and technological progress if developing coun-tries continue to experience different problems.Financing for Development gives us the possibility asthe prospects of domestic reform. We must leaveopen the door for developing countries for the sameopportunities that have been available for developedcountries. In the follow up stages after the industrialrevolution, for example, it was necessary to embarkon the reforms that would be compatible with theneeds and the institutional abilities of developing coun-tries. In this situation, we believe that aid for develop-ment will stimulate private sector flows.

Mr. President, in the last few years we haveseen sustained efforts in the parts of developing coun-tries to carry out economic reforms in their countriesand to rehabilitate their institutions and to create aninstitutional environment which is favourable towards alegal environment that is favourable. Initiatives inAfrica represent an implementation of these idealssince these ideas came from the African Continent.These ideas are beginning to bear fruit as we see animprovement in a lot of those peoples. We should beaware, nonetheless, that reform and transformation ofstructures involve a process of trial and error.

We must not overload developing countriesin a way that is unsustainable for them in terms ofreform because then the results will be contrary tothose that we wish. The international community andthe developed countries in particularly must take ontheir responsibility and support authentically thoseefforts. There are limits or margins for reform. Thisprocess must be left open so that the developing coun-tries will have the same opportunities to embark ontransitions. This opportunity is necessary to developreformed programmes in a way that is compatiblewith the needs and the capacities of developing countries.

It is clear that ODA continues to be veryimportant in financial flows because this helps tofinance projects, particularly infrastructure projects andinstitutional capacity-building projects as well ashuman capacity building. We need to encourage thoseprivate sector flows and decide on a higher level ofODA. This ODA should be more efficient and less tiedto conditionalities and different constraints. If foreign

investment is a large part of developmental financing,still in developing countries 75% of those investmentsgo to developed countries while 25% remain in thedeveloping countries.

Monterrey helped clarify several thingsincluding coherence and the importance to increaseand improve coordination between national policiesand national institutions. This will prompt us to havecoherence at the international level and that is wherethe effect will be the greatest, allowing the developingcountries to mobilize their necessary resources fordevelopment.

And we have some policies that are incom-patible with developmental efforts and contrary to therules which certain developed countries have agreed toin the WTO. The developing countries need to opentheir markets within the WTO or in making structuralefforts according to the Bretton Woods Institutions.The products of developing countries cannot reachdeveloped countries if they do not have market access.And we see in the developing countries textiles andother products which are very competitive and whichhave a comparative advantage and yet they have noaccess to markets in the developed countries.

And, finally, I would like to add that thedemocratization of commercial institutions and finan-cial institutions internationally along with better partici-pation in decision making to develop rules and criteriain these institutions must take into account the needsof all countries and, in particular, the developing coun-tries.

The Monterrey Consensus represents aminimum amount of consensus and yet the impor-tance of this document is due to the fact that it is abasis for continued action at a higher level – at theinternational level – in order to put development at thetop of the list of priorities. The follow-up of theMonterrey process is a true test of the will of the inter-national community, as well as of the credibility ofinternational protocol decisions. Policies and effortsand resources to be deployed according to more justand equitable standards which will help the developingcountries allowing them to benefit from the chancesand opportunities that are presented by globalization.That is the only way we can go so that the developingand developed countries can continue in their worktowards world prosperity.

155


EritreaStatement byHis Excellency Dr. Woldal FuturMinister of Planning and Development, Eritrea

At the outset, I wish to express that my delegationassociates with the statement made by His ExcellencyMr. Hugo Chávez Frias, President of the Republic ofVenezuela, as the current Chair of the Group of 77and China. Allow me, however, to make the followingfew remarks on behalf of the State of Eritrea in itsnational capacity. As I do so, I would like to take thisopportunity to congratulate the Government ofMexico, the United Nations, the World Bank, theInternational Monetary Fund, the World TradeOrganization, and all the other development partnersthat assumed leadership in the preparations for thistimely Conference on Financing for Development fora job well done.

The people and the Government of theState of Eritrea appreciate the convening of this con-ference whose underlying objectives is to eradicateworld poverty, enhance global cooperation, and secureinternational peace and security. We believe thatextreme poverty, deprivation, and marginalization ofpeoples anywhere in the world are not only morallyindefensible but also contribute to conflict, humanright abuses, and global instability. Therefore, we wel-come the reaffirmation, through this conference, thatboth developed and developing nations have a stake ineradicating poverty, and the commitments, on a globalbasis, to forge a new partnership for development.

We further appreciate the general consen-sus and commitment reached in Monterrey to establishstronger and more effective developed and developingcountries partnership to eradicate poverty through sus-tained economic growth and development. Morespecifically, we commend the affirmation:

• That effective partnership among donorsand recipients should be anchored on the recognitionby the developed countries that national leadershipand ownership of development plans and policiesshould be the domain of the recipient countries;

• That development should be effected andsustained through accelerated expansion of privateinvestment and trade, and that trade based on duty-

and quota-free market access to the Least DevelopedCountries (LDCs) exports is the engine for sustainedeconomic growth and development; and

• That more generous, more efficient, anduntied development assistance should be made avail-able to the LDCs that undertake concrete policyreforms and actions to substantially reduce extremepoverty.

The people and Government of the Stateof Eritrea strongly believe that a world free of abjectpoverty, diseases, and ignorance is a much safer, morehumane, more democratic, and more peaceful com-munity to live in. Accordingly, we endorse the out-come of and consensus reached in the MonterreyConference on Financing for Development.

Moreover, it will be important to note thatthe Millennium Declaration Goals (MDGs) and those ofthe Conference on Financing for Development arecentral to Eritrea’s development agenda. At liberationin 1991, Eritrea’s development efforts started withscant domestic resources and very little or no externalassistance. Priority was given to rebuilding the produc-tive base of the war-ravaged economy and to establish-ing the legal, social and institutional frameworkrequired for achieving rapid economic, social, culturaland political development. Poverty reduction througha private sector led, rapid and sustained economicgrowth has been, and continues to be, central toEritrea’s development strategy. Eritrea’s commitmentto poverty reduction goals is also enshrined in its con-stitution in three key articles:

• Article 8, paragraph 2 states, “The stateshall work to bring about a balanced and sustainabledevelopment throughout the country, and shall use allavailable means to enable all citizens to improve theirlivelihood in a sustainable manner through their partic-ipation”;

• Article 21, paragraph 1 says, “Every citi-zen shall have the right of equal access to publicityfunded social services. The State shall endeavour, with-in the limit of its resources, to make available to all cit-izens health, education, cultural and other social serv-ices”; and

• Article 21, paragraph 2 further states,“The state shall serve, within available means, thesocial welfare of all citizens and particularly the disad-vantaged”. Accordingly, Eritrea’s overarching develop-ment objectives are aimed at attaining rapid, sustain-able, widely shared economic growth and povertyreduction (in an environmentally sound manner) led bya dynamic private sector.


156

The strategy being pursued to achievethese objectives involves four main elements:

• Inducing widely-shared sustained economicgrowth by establishing a competitive environment inwhich efficient, export-oriented private firms thrive;

• Raising the skills and well-being of theEritrean people by investing in education, capacity andinstitution building, nutrition, health care, and waterand sanitation systems;

• Paying special attention to rural povertyreduction by investing in rural infrastructure, agricul-ture and livestock and pasture management; and

• Adhering to zero tolerance to corruption inboth public and private sector management and estab-lishing sound governance.

We have made real progress in all sectorsof the economy since 1991. The war-devastated trans-port and communication services have been restoredand expanded. The private sector responded toopportunities by investing in the services, constructionand other resources-based industries. As a result, anaverage economic growth of over 6% per annum wasachieved during 1992-2001. This was realized despitethe negative impact on the economy resulting fromthe unfortunate border conflict between my countryand Ethiopia.

While much progress has been made inincreasing access to basic social services since libera-tion, the coverage and quality of social services is stillpoor in Eritrea. As a consequence, Eritrea’s status ofhealth, nutrition, and education is among the poorestin the world, and will require substantial investmentsand the support of Eritrea’s development partners ifthe MDGs are to be achieved as planned.

The Eritrean Government believes that theprimary responsibility for Eritrea’s development lieswith the Eritrean people and their government.Accordingly, mobilizing domestic financial and humanresources for development is given top priority.External financial and technical assistance resourcesare also mobilized in order to supplement domesticefforts, mainly in those areas where they could beeffectively utilized in advancing the country’s develop-ment programmes.

In conclusion, I wish to reiterate thatEritrea welcomes the principles of true partnership asoutlined in the Monterrey Consensus. We believe thatonly a strong partnership between the developed andthe developing world can provide a reasonable chancefor achieving the Millennium Declaration Goals. My

Government looks forward to the urgent and concreteimplementation of such a partnership and I wish toassure you, Mr. President, that when the MonterreyConsensus is implemented – and it must – Eritrea willbe prepared to meet its obligations and benefit from itin advancing its development efforts towards reducingpoverty and achieving the Millennium DeclarationGoals.

EstoniaStatement byHer Excellency Ms. Kristiina OjulandMinister of Foreign Affairs, the Republic of Estonia

Estonia assigns great importance to the ongoing devel-opment processes dealing with trade (in Doha), financ-ing (here in Monterrey), and the environmental aspectsof globalization. I’m sure that you will all agree withme if I say that this is an enormously complex systemof interrelated activities. But I hope that if we make aserious effort, the Millennium Development Goals, orMDGs, and even more, are achievable.

Estonia, along with some other countries(usually referred to as new, donor countries or emerg-ing donor countries), is in a very untraditional positionin the midst of these development processes. Namely,we ourselves have started providing assistance to othercountries. According to World Bank criteria, our econ-omy has passed the transitional period and we havebecome a regular Western economy. But, on the otherhand, we are still involved in several capital-intensiveprocesses, which are being financed by other donors. Ibelieve that this also puts us in a unique position tocontribute to the on-going development dialogue.

First, with your kind indulgence, I wouldlike to address the developing world:

Some 10 years ago, Estonia was, in theopinion of many expert observers and economists, awildcat. Some even went so far as to say that wewould have been better off staying in the SovietUnion, since we couldn’t possibly be successful on ourown. But we believed otherwise, and were able toprove our convictions to the sceptics. Our key to suc-cess was the liberalization of trade, and radical democ-ratization. I am not claiming that if our model were tobe copied, step-by-step by others, similar results wouldbe achieved. But rather, my message is that differentmodels and possibilities have to be thoroughly exam-

157


ined and analyzed, so that every nation can choosetheir own unique path to follow. But to do that, themost important thing is to know where one wants togo! Only then can specific and realistic targets be setfor 1-year, 5-year, 10-year, and even 50-year periods.I can’t stress enough the fact, that having a detailedplan is rather essential for successfully executing adevelopment programme.

Despite all the external factors that maycome into play, success lies mainly in one’s commit-ment to implement changes according to the pre-setdevelopment plan. That commitment may also requirethe making of choices and decisions that may, at themoment, not be popular with the populace. Theseunpopular decisions and resulting measures wouldprobably include the elimination of all so-called ‘blackmarket’ trade, the enforcement of all legislation regu-lating business and trade, and the fight against corrup-tion. These actions would definitely raise the ire ofthose that benefit from, or are used to just evenaccepting the aforementioned illegal activities. But aslong as sound policies regarding governance, and anindependent legal system and the rule of law are notimplemented, I believe that no nation has a realchance of carrying out a rapid, or even stable, devel-opment programme.

On the other hand, with the successfulimplementation of these, and other, essential reforms,an efficient administrative capacity is created, whichhelps to ensure the effective use of aid rendered fromabroad. In other words, development recreates devel-opment recreates development, ad infinitum. The say-ing “help comes to those who help themselves” is oneessential key to successful development.

I would, with your permission, also like toaddress the international donor community:

As I stated earlier, Estonia is in a ratherawkward position between the developing and devel-oped worlds. But we are definitely progressing towardsthe latter. An integral part of that progress is to takeresponsibility for supporting others who are strivingtowards the same goal.

Estonia considers trade liberalization to bea crucial precondition for sustained global develop-ment, a matter which we also emphasized in Doha.There is a direct link between trade liberalization andeconomic development. Estonia, with a volume of for-eign trade nearly twice the nation’s GDP, is a primeexample of that. I think that, after the initial shock oftrade liberalization to producers, everybody will gainfrom a freer world market. If developing countries canproduce products cheaper, and would be permitted toexport them freely, all consumers would benefit.

I sincerely think that development shouldbe a ‘positive sum game’. This means that if, for us,the cost of providing assistance is smaller than thebenefits to the recipient countries, we should definitelyprovide it. To enhance the commonweal of the wholeworld, we should all be ready to give up a marginalpercentage of our material wealth. This will not affectour daily lives by lowering our everyday living stan-dard, but can make a radical difference to the develop-ing world. Therefore, Estonia strongly supportsincreasing official development assistance, or ODA, tothe levels needed to reach the MDGs.

The process of development, in the middleof which we now find ourselves, is of the utmostimportance for the achievement of the MillenniumDevelopment Goals. This requires all of us to makevarious very tough decisions. Estonia is willing to makethe effort! And, I believe, that all of you, are as well.

EthiopiaStatement byHer Excellency Ms. Mulu KetselaMinister of State, Ministry of Finance and EconomicDevelopment, Federal Democratic Republic ofEthiopia*

May I also join my colleagues in thanking the MexicanGovernment for hosting such a historic meeting. Iwould also like to express my appreciation to theUnited Nations for organizing such an importantmeeting in partnership with the InternationalMonetary Fund, the World Bank and the World TradeOrganization.

This is indeed an exceptional and promis-ing accord. The Monterrey Consensus acknowledgesthe linkage between Financing for Development andattaining the goals and objectives set out by worldleaders, including those contained in the MillenniumDeclaration.

The summit has reaffirmed that the part-nership between developed and developing countriesmust be based on a firm and meaningful footing. Thesummit has provided an opportunity to review theprogress made so far and reinforce the support ofdeveloped countries for the aspirations and efforts ofdeveloping economies.



158

In recent years, a handful of African coun-tries have embraced a sectoral development pro-gramme approach, while many are moving towardsthis direction. An effective sectoral programmerequires that donors streamline and harmonize theirimplementation procedures through establishing jointsupervision and standardizing their reporting, financialmanagement and procuring assistance.

I believe that international conferencessuch as this one will enable donors to get seriousabout joining forces with recipient countries in theirefforts to effectively manage foreign aid. They can doso by designing schemes appropriate for budget sup-port for specific projects and move towards multi-yearprogramming.

It has increasingly been recognized bymany that to accelerate the pace of economic growthof developing economies, the relationship betweendonors and recipient countries has to be based onmutual trust and respect. As indicated in the draft out-come document, donors should support recipientcountries to formulate their own development strate-gies and set up their priorities for implementing them.

We are greatly inspired by the emergingconsensus reached by African leaders to play a deci-sive role in analyzing and fine-tuning the existingobstacles to Africa’s development by discerning thedevelopment needs of the continent as reflected in theNew Partnership for Africa’s Development (NEPAD).NEPAD aims to focus on poverty eradication, sustaineconomic growth and development, minimize the mar-ginalization of Africa and achieve lasting peace, securi-ty and stability. NEPAD seeks to unequivocally rede-fine the partnership arrangements between developedand developing economies.

The declining trend in export earningsresulting mainly from the volatility of the internationalprice of primary commodities and the sluggish trend ininvestment in export items has intensified the indebt-edness of less-developed economies. Furthermore,developed countries have been applying non-tariff bar-riers against the products of developing economies bygiving reasons such as lack of standards, dumping andcountervailing duties.

During the past decade, official develop-ment assistance exhibited a continuous decline and anuncertain future, consequently triggering foreignexchange and fiscal constraints to be more binding inmany less-developed economies. We are howeverencouraged by the recent decisions of the EuropeanUnion and the United States to increase the presentaverage percentage of official development assistance

in relation to their gross national product. I have nodoubt that the summit will help in influencing all devel-oped countries to attain the internationally agreedminimum official development assistance average of0.7 per cent of gross national product and to trulyopen their markets to the products of less-developedeconomies.

An assessment of the trend of Ethiopia’sdebt over the last decade revealed that the debt owedto multilateral financial institutions compared to claimsof other official bilateral and commercial creditors hasconsiderably increased. As noted in the MonterreyConsensus, debt relief should strictly be additional tothe net inflows already being received by the heavilyindebted poor countries (HIPCs). Moreover, HIPCs willonly attain the desired level of debt sustainability if,and only if, the terms of trade for primary commodi-ties do not deteriorate on the international market. Ifon the other hand the terms of trade exhibit a declin-ing trend countries have to wait for some additionalyears to see reduction in their debt services.

Therefore, less developed countries willneed to receive not only HIPCs debt relief, with maxi-mum front, but also grants to help them reduce theirindebtedness. To this effect international financial insti-tutions and donors need to revisit and re-evaluate theexisting debt-reduction mechanisms and prepare a bet-ter agenda for broader, deeper and faster debt relief.

Finally, we hope that we will find theresources required to implement these noble develop-ment goals incorporated in the Monterrey Consensus.

FijiStatement byMr. Amraiya NaiduChairman of the Delegation, Republic of Fiji

Fiji is proud to be participating in this important eventat the International Conference on Financing forDevelopment. My Government thanks theGovernment and the people of Mexico for their warmhospitality, excellent organization and facilities in host-ing this landmark event.

The issues before us this week are criticalfor future global sustainable development. Small IslandDeveloping States (SIDS) like my own country, Fiji andother developing countries, hold great hopes for themeeting’s outcomes. The draft declaration provides an

159


excellent platform to advance the challenges ofaddressing sustainable financing issues for develop-ment. Therefore the Monterrey Conference will be thelaunching pad for mobilizing global awareness andcommitments by all stakeholders, and to engender suc-cessful and tangible development results.

Fiji recognizes the need to align any agreedfinancial framework from this conference with theMillennium Development Goals (MDGs) of the UnitedNations, and with the implementation projections thatwill emerge from the World Summit on SustainableDevelopment. We are optimistic that these global ini-tiatives will build on each other’s strengths rather thanto undermine their common and overarching vision ofsustainable development.

As a SIDS economy, Fiji’s participation inthe world economy is beset with numerous challenges.We suffer specific handicaps arising from the interplayof factors such as smallness, remoteness, geographicaldispersions, environmental and economic vulnerabili-ties such as natural disasters, and a limited internalmarket in addition to the general problems faced bythe developing countries.

Today, the twin-forces of globalization andtrade liberalization have quickened global develop-ments to an alarming pace, and widen the gapsbetween the haves and the have-nots. Being small andvulnerable, Fiji has had to sacrifice and struggle to sur-vive. To that end, our collective commitments thisweek must be progressive and visionary to advancethe real concerns and threats to our survival. The cur-rent trend can render developing countries, includingmine, on a continuing downward spiral in the immedi-ate future unless substantive financial and monetarymeasures are put in place by the global financial insti-tutions. At the same time all stakeholders need tomobilize necessary efforts for increased financialresources towards achieving sustainable developmentin the world.

It is imperative, therefore, that theMonterrey Conference is concluded successfully. Tothat end, our collective commitments this week mustbe progressive and visionary to advance the real con-cerns and threats to our survival We envisage realprogress as achievable in all economies if the relevantprocesses are participatory, fully gendered and holistic.Then only can we hope to inclusively share the bene-fits of globalization, which are to be distributed equi-tably amongst all societies and peoples of this world.

Mr. Chairman, making sustainable financ-ing available is a key element in the eradication ofpoverty, through long-term sustained economicgrowth and the promotion of sustainable developmentin all developing countries. The commitments by thedevelopment partners to increasingly mobilize financialresources are crucial. The World Bank estimate of anannual injection of US $40-$60 billion into the systemis conservative yet courageous. We need more actionsif we are serious about meeting the development tar-gets of halving extreme poverty by 2015.

Fiji believes that actions start at home. It isthe responsibility of individual countries to formulateappropriate and effective policies and developmentstrategies that are conducive to sustainable long-termdevelopment. Countries must be in charge of theirown development, and policies must be locally ownedand home grown. This is indeed the underpinningpremise of the MDGs.

Limited resource base and constrainedcapacities for development vis-à-vis the internationalfinancial structures and trading systems and rules pres-ent problems for Fiji nationally, for our region and forthe international community. We need the support ofthe development partners through the mechanismsidentified in the outcome document. We need anincrease in FDIs to our region, predictable marketaccess and transparent trading rules, and raising ODAto internationally agreed levels. In order for developingcountries to cease dependency on ODA and framedurable financial structures, capital outlay is essentialto develop an enabling international, regional, andnational economic and political environment, andbroaden and build their economic base and capacities.That we see as the purpose of this MonterreyConference. It is therefore imperative to implementthe MDGs.

With this thinking, we offer for recognitionand consideration at this conference several criticalissues:

• First, the scarcity of domestic financialresources is a constraint on socio-economic progressand impedes our goals of attaining sustainable devel-opment. For SIDS, these are due to a combination offactors ranging from economic, geographical, andenvironmental, which we inherited not by design butfrom nature and are thus beyond our control.

• Second, strong, dedicated and genuineinternational commitments are in order from thedeveloped world to create new opportunities for devel-oping countries. It is vital that developing countries areassisted with such opportunities that enable us to earnhigher incomes to deal with the perennial problemswe face today such as poverty, HIV/AIDS and so on.


160

• A third priority area for action is to set upcollaborative mechanisms to build and support, capaci-ties of the developing countries, in particular the smalland vulnerable, to participate in international fora,articulate their plights or successes, and to make deci-sions that affect them and their future.

Finally, if we want to make our world abetter place to live in, we should all resolve to beginhere at Monterrey with a firm commitment to directfinancing resources where they are needed most. Onlythen can we meet the needs of the poor and vulnera-ble and give hope and dignity to their lives.

GambiaStatement byHon. Famara L. JattaSecretary of State for Finance and Economic Affairs,the Republic of the Gambia

On behalf of His Excellency, the President of theRepublic of the Gambia, Dr. Alhaji Yaya A.J. Jammehand my delegation, I should like to express our appre-ciation to the Government of Mexico for hosting thishistoric conference and for the warm receptionextended to me and my delegation since our arrival inthis beautiful city of Monterrey. We also commend theUnited Nations Secretariat, the World Bank, IMF andWTO, for their role in the preparation of this confer-ence and for their continued support to LDCs in ourbid to meet the myriad challenges of globalization.

The declining level of ODA is a matter ofgrave concern to developing Countries, especially theLDCs. Even though ODA is critical for meeting ourmany investment requirements and for eradicatingpoverty in the LDCs, most of our development part-ners have not fulfilled their commitments to its sub-stantial increase. On the part of the LDCs, it is imper-ative to improve the utilization and effectiveness ofODA, so as to reduce and eventually phase out ouraid dependency. We are concerned about the persist-ent decline of aid flows and believe that ODA must beincreased to the agreed annual equivalent of 0.7 per-cent of the GNP of developed countries. This needbecomes urgent against the backdrop of the well-known difficulties faced by the LDCs in generating suf-ficient resources domestically, for their developmentrequirements.

External debt is a serious challenge toalmost all developing countries and there is need forappropriate strategies compatible with a range of situ-ations. We should, together, agree on practical, realis-tic and comprehensive solutions to the problems ofexternal debt of developing countries. Debt relief,including debt cancellation, should be provided expedi-tiously for highly indebted poor countries. The HeavilyIndebted Poor Countries (HIPC) initiative should befully financed through additional resources and notfrom resources hived off from outlays already madefor our development priorities.

The HIPC Ministers, meeting on FinancingPoverty Reduction Beyond HIPC II, reiterated theircommitment to mobilizing external and nationalresources for poverty reduction, in ways that wouldensure genuine long-term debt sustainability and finan-cial market development. They also committed them-selves to utilize debt relief proceeds productively andtransparently on poverty reduction programmes,among other things. We will obviously not be able todo all of this by ourselves. We shall require commit-ment from, and partnership with the internationalcommunity. Above all, we shall need substantial newexternal financing in support of our efforts.

In the Gambia, we have been making seri-ous efforts to create an enabling environment toexpand the domestic resource base, and strengthenmechanisms and Institutions to generate moreresources and utilize them more efficiently, and toimprove the trade and investment climate. Our effortshave led to dramatic improvements in recent years asa result of our implementation of comprehensive struc-tural and institutional reform measures, which empha-size greater reliance on market-based mechanisms forthe allocation of resources. These reforms include theliberalization of trading and payment arrangements, infurtherance of Government’s objective to reduce thesize and role of the public sector and correspondingly,make the private sector the economy’s main engine ofgrowth.

We have, however, come to the realizationthat, in spite of our own individual efforts, the mostimportant determinant of success on a sustained basis,is a supportive and conducive international environ-ment.

This conference would therefore have suc-ceeded to the extent that it proves able to lay thefoundation of a new international financial system thatwould be responsive to the priorities of growth, devel-opment and economic and social equity in the devel-oping countries.

161


Although globalization has helped increasegrowth and wealth in certain countries in recent years,it has not done so for the LDCs. A worsening of theimbalances has impeded development and aggravatedpoverty in the LDCs. And while we welcome theopportunities globalization could offer for socio-eco-nomic progress, we fear that as pursued at present, itis threatening to further marginalize the poor in manyof our countries.

Trade is a most important mechanism formobilizing and expanding the resource base for financ-ing development. In my view, an open, rules-based,transparent, nondiscriminatory and predictable multi-lateral trading system is essential for a healthy globaleconomic system and would contribute significantly toworld economic growth and the smooth integration ofthe economies of developing countries into the globaleconomy. The multilateral trading system under theWTO must therefore be sensitive to the particularneeds of LDCs.

The initiative by President Bush to increasethe share of grants (as opposed to loans) in IDA, theconcessional lending window of the World Bank, is astep in the right direction. We fully support the idea ofincreasing the grant element to IDA-only countries to50% in a bid to improve the effectiveness of develop-ment assistance and to increase per capita incomes inthe poorest countries. However, most donors havebeen reluctant to come along with the U.S. on thisissue. I am kindly appealing to the donor communityto support the U.S. in this positive and laudable initia-tive in our fight against poverty. In the same vein, wewelcome the decisions to increase ODA by PresidentBush and the European Union.

We wish to express our faith and confi-dence in the Millennium Development Goals, whichalthough ambitious but are indeed achievable with theconcerted and sustained action by LDCs and theirdevelopment partners. Developed Countries mustunlock the financial resources needed for the develop-ment of LDCs, and for the attainment of theMillennium Development Goals. An effective follow-upand monitoring mechanism should be established forthis Conference with a time-bound action programmeto ensure that aid is delivered to the poor, and ontime.

The task ahead may be daunting, but mydelegation is confident that the collective wisdom ofthis Conference will provide a framework for a strongglobal partnership based on shared responsibility topromote economic growth and development in theLDCs. In this, all countries have a role to play and

none ought, for whatever reason, be left out, least ofall, those countries that have shown goodwill and awillingness to contribute significantly to world trade,employment creation and poverty alleviation. TheRepublic of China (Taiwan)** has done much to con-tribute to these global responsibilities; and their pres-ence here, as a major trading nation and a not-insignificant generator of income earnings for manyaround the world, would have, no doubt, enriched ourdeliberations.

Finally, my Government pledges its fullsupport to the process that is unfolding at thisConference, and looks forward to the early implemen-tation of the many commitments made by developedand developing countries alike, at this historic meetingin Monterrey.

GeorgiaStatement byHis Excellency Mr. David AptsiauriDeputy Minister of Foreign Affairs, Georgia

At the outset, let me welcome all participants of thisimportant forum and express the deep gratitude to theBureau of the Preparatory Committee and theCoordinating Secretariat, the institutions of the UnitedNations for the meticulous preparatory work complet-ed for the smooth conduct of the Conference. We areparticularly grateful to the Government of Mexico, aswell as to the authorities of the city of Monterrey forhosting this historic meeting and also for the elaboratearrangements made for this event. The economicprogress of Mexico, in our view, is a positive exampleto those countries that are taking the hard lessons oftransitional transformations.

For months we had been preparing to con-vene this unique global gathering of both developedand developing countries, the United Nations systemand the Bretton Woods Institutions to consider andaddress challenges of financing for development andpresent to the international community a new agendafor global economic and financial progress with a spe-cific set of measures and goals to be met in a timelyway. And the ‘Monterrey Consensus’ is a good guide-line for all of us.



162

The recent tragic developments in theUnited States and new realities in the developingworld made clear the expediency of establishing com-mon mechanisms against international terrorism,including its global economic and financial impact. Ithas become obvious that sustained economic growth isthe best contributor to international security and thatboth need the unqualified commitment of everynation. Hence, we have to devote not only the politi-cal will but also the resources required to overcomescourges of hunger, illiteracy, diseases and poverty.

For low-income countries, the main factorsfor success of economic reforms and poverty eradica-tion programmes lie in obtaining free access to theworld markets, liberalization of trade and resolution ofexternal debt problems. It is in this domain that boththe United Nations and international financial institu-tions can launch their initiatives.

Poverty alleviation has been a key consider-ation of my Government’s reform programmes.Georgia is among the transition economies that havesuffered most during the past decade. Fiscal collapsein the early 1990s, associated with a catastrophicdecline in GDP, made it impossible for theGovernment to finance its most basic functions, letalone an effective social safety net. A series of boldreforms have been introduced creating the foundationsfor a market economy in the country; but weak imple-mentation of these reforms did not allow society toreap their fruits.

In November 2000, the Government, in itsinterim Poverty Reduction Strategy Paper, has laid outstructural reforms in five main areas to reduce povertyand stimulate economic growth:

1. Social sector reforms to improve allocationof benefits to better target the poor;

2. Supportive macroeconomic policies, such as tax and customs administration, to raise fiscal revenues;

3. Public administration reform based on recommendations of the anti-corruption commission;

4. Private sector development to foster investment in infrastructure as well as other areas; and

5. Agricultural reform.

Recently a draft of the full National PovertyReduction and Economic Growth Programme hasbeen developed. The strategy identifies economicgrowth as the main engine of poverty reduction, butalso recognizes the need for a new focus giving priori-ty to reforms in social sectors.

I should like to make particular reference tothe persistence of the external debt problem and itsnegative consequences for countries, where democrat-ic and market-oriented economic transformations areunder way. We are alarmed by the fact that debt serv-icing has grown at a much greater rate than the debtitself. There are many countries which have noprospect of paying off their debts as the share of theirforeign debt against their GDP and budget expenditureis rather high.

In this respect, let me draw your attentionto the problem related to the considerable volume ofexternal debt of Georgia, as a vivid example of thisglobal problem. Formally, Georgia does not belong tothe group of countries with huge foreign indebtedness,although the share of Georgia’s foreign debts againstGDP reached 431% in 2001. Last year theGovernment’s total debt-service obligations accountedfor 15% of its total revenue. Hence, despite significantreforms, the pension fund remains in an extremely dif-ficult constraint and is unable to finance a basic pen-sion. In addition, it is well known that more than350,000 refugees and internally displaced personsfrom Abkhazia and Tskhinvali region are still a heavyburden for our budget. In this context, debt reductionmay in some cases be a necessary condition for crisesresolution and can play a vital role in freeing resourceswhich can be directed towards programmes carriedout to attain sustainable development.

Georgia, a recent member of the WTO, isdetermined to further contribute to the policy of theliberalization of global trade and considers its participa-tion in the multilateral trading system as an importantstep towards integration into the world economy. Webelieve that a more equitable trading system has amajor role to play in securing poverty eradication. Theinternational financial institutions are an essential com-ponent of the development architecture and have animportant role to play in increasing global prosperityfor all. The World Bank and the InternationalMonetary Fund have already invested a lot to strength-en economic, financial and legal systems of newlyindependent states. We are extremely grateful for thesignificant assistance rendered to Georgia by majordonor contributors that was the backbone for fosteringdemocratic transformations in the country at the mostcrucial stage of national development.

In this regard, we would like to support theinitiative of the United States Government regardingthe increase by the World Bank and other develop-ment banks of the share of their funding provided tothe world’s poorest countries as grants rather thanloans for education, health, nutrition, water supply,

163


sanitation and other human needs thus significantlyenhancing the social security system of the pooresteconomies. We also sincerely appreciate the intensiveefforts and contribution of the European Union to theprocess of financing of overwhelming sustainabledevelopment.

We also underline the extremely importantrole of the United Nations in promoting security andsustainable economic development. The link betweenthe two has never been more evident. Hence, there isa need to devise a new model of interaction and inter-coordination of the UN efforts on these key issues,including the further increase of the role of theLTNDP as a leading structure of consolidation of theseefforts in the field. The universal character of the UNgives us an opportunity to achieve global stability andprosperity on this premise. In this respect, we considerestablishment of a new global economic security sys-tem containing the guarantee for small transitioneconomies, including countries of South Caucasus, forsustainable growth and effective exploitation of theirresources as a major prerequisite for ensuring sustain-ability as a whole.

To conclude, let me express hope that theFfD Conference will become an important stage in theglobal economic processes, leading us to concreteactions for eradication of poverty, and for the sustain-able development of every nation.

GermanyStatement byHer Excellency Ms. Heidemarie Wieczorek-Zeul (MP)Minister for Economic Cooperation andDevelopment, Federal Republic of Germany

First of all, I thank our host, the Mexican Government,for having provided a platform for constructive debatesand for having organized this conference so skillfully.

Six months after the atrocious terrorist actsof September 11, we, the delegates from around theworld, have met at a time when the world is confront-ed with huge challenges. Our debate has to focus onhow to shape globalization to serve the people andespecially the poor – and thus to secure peace andstability.

The world is at a crossroads. The alterna-tives are either to build on progress achieved in manyregions towards a more just world order – or a ‘worlddisorder’ of violence and war, of terror and misery.

This year offers a unique chance for making headwayon fulfilling the Millennium Development Goals, herein Monterrey and later on in Johannesburg. Let ustake steps towards a better world.

The challenges of eradicating poverty,shaping globalization, and securing peace demand atrue partnership with shared responsibility. Partnershiprequires a better representation of developing coun-tries in international economic and political decisionmaking processes and fairer trade rules. All self-privi-leging elements, which the world trade system con-tains, need to be dismantled. Asking developing coun-tries to further liberalize their economies is only legiti-mate if the industrial countries themselves refrain fromapplying double standards to the disadvantage ofdeveloping countries.

With free access to the market for productsfrom the least developed countries under the‘Everything-but-Arms’ initiative last year, the EuropeanUnion set a positive example.

Germany advocates moving forward withthe ‘Doha Development Agenda’. The DohaDeclaration provides for a substantial reduction intrade distortions and the phasing out of all forms ofexport subsidies for agricultural products. This shouldbe achieved as speedily as possible. Subsidizing agri-cultural products at the current levels runs counter toour development goals and lacks justification.

Economic globalization has outpaced politi-cal globalization. In my view the establishment of ahigh level Global Council is a worthwhile proposal toovercome the current inadequate representation ofdeveloping countries in international fora. Such aGlobal Council could discuss major economic andfinancial issues and chart out coherent political strate-gies. This proposal made in the Zedillo Report willremain high on the political agenda.

The financial resources available for devel-opment are too low by far to reach the MillenniumDevelopment Goals. The Monterrey Consensus setsout ways and means of mobilizing funds from privateand public, as well as from national and internationalsources. Trade and investment are crucial for develop-ment financing. However, especially for the leastdeveloped countries and countries only marginallyintegrated in the world trade system, increased OfficialDevelopment Assistance is indispensable.

An additional amount of some US $50 bil-lion in ODA each year is needed to halve the numberof people living in absolute poverty. The MemberStates of the European Union just committed them-selves to reach an average of 0.39 per cent of ODA


164

as a proportion of its Gross National Income by 2006.It is a concrete step towards achieving the 0.7% tar-get, to which the German government is also firmlycommitted. Further steps will have to follow within theforeseeable future. The European Union’s decision willtranslate into an increase of the annual amount ofODA from currently US $25 billion to US $32 billionin 2006, an additional US $7 billion.

In view of the enormous demand for finan-cial resources, an open and transparent discussion oninnovative sources of financing and global publicgoods is necessary, as outlined in the MonterreyConsensus.

In this context, the German DevelopmentMinistry has presented a feasibility study on a tax onforeign exchange transactions. The study shows howsuch a tax could work in practice. Developing coun-tries would benefit through reduced volatility of finan-cial flows and more stable financial markets.Speculative transactions could be fought off. In addi-tion, the tax would generate significant resources to beused for development purposes.

The Monterrey Consensus has been criti-cized by some stakeholders. However, I am of the viewthat the Monterrey Consensus contains a comprehen-sive agenda of policies for financing sustainable devel-opment. If the proposals are fully implemented, sub-stantially more resources can be mobilized for develop-ment. Presently, huge amounts of funds are oftenmobilized for military actions without delay. Whyshould this not be possible in fighting the world’sgreatest enemy, absolute poverty? It must be achieved.Only partnerships for global development will guaran-tee common security in the 21st century.

GhanaStatement byHis Excellency Mr. Joseph Henry MensahSenior Minister, Republic of Ghana

It is my honour to represent His Excellency PresidentJ.A. Kufuor at this landmark summit on Financing forDevelopment and to convey his regrets at not beingable to attend it personally. I wish also in his name tothank the UN and other organizing agencies, and youyourself, Excellency, our Mexican brothers and espe-cially, the people of Monterrey, for the warm hospital-ity and the excellent facilities provided for thisConference.

The United Nations stands today as a tow-ering symbol of the universal recognition that we areeach our brother’s keeper and must face together thechallenge of making the world a better place for all.The sceptics and critics cannot take away the fact thatpast United Nations conferences and summits havebeen able to build on the vision of the founding fathersto consolidate many important gains for humanity:fundamental human and political rights; the dignityand equality of women; protection of children; theright to education, work and shelter; preservation ofthe environment, and equity in international economicrelations. But we know through the bitter experienceof repeated economic reversals and continuing insecu-rity, through the widening economic and social gapsbetween and within countries, that addressing the con-ditions for financing development in a comprehensivemanner holds the key to building a world that we canall be proud of.

To justify all the expense and trouble oforganizing this conference, we in the delegation ofGhana think that, together, the nations of the worldshould – and believe that they can – fashion powerfulnew instruments and relationships for mobilizing themassive volumes of financing that will be required justto address the deficiencies in the economic and socialinfrastructure of Africa alone. And yet unless the hun-dreds of millions of people subsisting in needlesspoverty in Africa are brought within the mainstream ofthe global economy as other nations race ahead underthe stimulus of modern technology, the whole worldwill be the loser.

We, therefore, take heart in noting that theimpulse of solidarity is still alive among the world’sleaders. The government of Ghana salutes thePresident of the United States for reversing a long-lived downward trend and offering substantial amountsof additional financing for international development.We salute equally the decision of the governments ofthe European Union to break the long stagnation infulfilling the commitments made between 1968 and1972 in New Delhi and Santiago to allocate 0.7% ofGNP to official development assistance.

It feels as if we stand on the threshold of anew Marshall Plan era. We trust that innovative modal-ities for channelling this solidarity will be fashioned inthe follow-up work to this Conference. In particular,the delegation of Ghana would offer the idea of a thirdgrant aid window at the World Bank as a possibleinnovation. We recall that the IDA window itself wasadded to the Bank’s structure in the light of the expe-rience with that first window. Monterrey could prof-itably lead to another step forward in these institution-al arrangements.

165


Our country is well acquainted with the suf-focating effects of unsustainable debt and the traumaof seeking debt relief. Some of the modalities andprinciples of financing that went into the reconstruc-tion of Europe after 1945 must surely go into the pro-grammes of partnership that are negotiated afterMonterrey to bring Africa and other developingregions into the mainstream of the world economy. Inthe absence of some such bold initiatives, it is difficultto envisage how the lofty humanist goals of theMillennium Declaration could be attained.

If the private sector is to perform the lead-ing role now universally assigned to it in internationaldevelopment, then the public authorities need to pro-ceed rapidly with their task of building the infrastruc-ture, training the manpower and enforcing the rule oflaw under secure democratic governance.

Time does not permit me to do more thanmention the crucial contribution that freer and fairertrade should also make to this enterprise of changingpeoples’ lives. But we trust that other opportunitieswill offer themselves to further pursue that dialogue.

GreeceStatement byHis Excellency Mr. Andreas LoverdosVice-Minister for Foreign Affairs of the HellenicRepublic

On behalf of the Greek delegation, I would like toexpress my deepest appreciation to the people andthe Government of Mexico for their warm hospitalityin hosting this Summit. I would also like to extend myappreciation to the Secretary General of the UnitedNations for his tireless efforts to make the outcome ofthis Conference successful. This is a positive steptowards our common goals set by the United NationsMillennium Declaration.

The European Union’s contribution for theyear 2000 reached US $25.4 billion, which is morethan 50% of all Official Development Assistance.Furthermore, the European Union seized today’s his-toric opportunity and decided, during the EuropeanSummit in Barcelona, to further increase its annual aidvolume by $7 billion by 2006. This is a significantstep towards the 0.7% target which strengthens ourcollective solidarity towards the developing countries.

In view of the above, Greece fully associ-ates itself with the statement delivered by thePresidency of the European Union. Furthermore, wewould like to affirm our willingness to increase ourOfficial Development Assistance from 0.2% to 0.33%of GNI until the year 2006. In the next four years, wewill spare no efforts to make substantial progress sothat, collectively, the European Union reaches an aver-age of 0.39% by the year 2006.

Greece, a few years ago, was considered adeveloping country. Today, it is a member of the euro-zone and a donor country. Our Official DevelopmentAssistance has been raised by 300% since 1997 andour growth rate of 4% is one of the highest in Europe.We are making our first steps as a donor state, but wecherish our recent experience as a recipient country.

Greece believes that development effortsshould be based on the following seven key principles:participation, solidarity, equity, co-responsibility, fore-sight, ownership and partnership. Let me elaborate onthe one that we consider most important, based onour own development experience. In our view, part-nership is the key principle for the following two rea-sons:

• First, partnership is the most effective andefficient working scheme. It promotes coordination,coherence and complementarity of actions. It is alsoknown to assist the promotion of good governance, tolimit unpredictable bureaucratic procedures and to fos-ter an enabling environment for investment.

• Second, partnership is a prerequisite forbuilding trustworthy relations between all stakeholdersby cultivating mutual understanding and enhancingtransparency. We are aware that partnership bearsobligations and sets responsibilities for all partiesinvolved. At the same time, it requires the establish-ment of independent monitoring and evaluation proce-dures. In addition, the design and implementation ofintegrated programmes, as opposed to randomlyselected projects, promotes aid-effectiveness by ensur-ing that the end receiver is the real beneficiary.

The lessons we have learned, both as arecipient and a donor country, proves the validity ofthese thoughts. They became the foundation of ourphilosophy while elaborating our recent DevelopmentAssistance Framework for the years 2002-2006, with-in the context of DAC. This means that our effortsmust reach beyond our borders regardless of whetherit is a child suffering in Africa, an Afghan refugee fac-ing starvation, or promoting good governance prac-tices in the Balkans.


166

We hope that the International Conferenceon Financing for Development, under the auspices ofthe Secretary-General of the United Nations, couldbecome a first step towards a new Global Deal, basedon effective partnerships, aiming to promote the equi-table development of our global village. In this context,we welcome all efforts to implement the conclusionsof the Doha Ministerial Declaration, as well as to fur-ther enhance the HIPC initiative. We wholeheartedlybelieve that we could elaborate sustainable solutions topoverty, hunger and malnutrition that affect more than1.2 billion people every day on earth.

Inequalities in today’s international econo-my may lead to fear of social and economic exclusion,risking to transform any new form of internationalalliance into a scheme of isolation. In the era of glob-alization, a fractured world of insiders and outsiders isnot a safe and prosperous world. Our challenge aheadis to turn grievances into opportunities and opportuni-ties into reality.

GrenadaStatement byHis Excellency Dr. Lamuel A. StanislausAmbassador and Permanent Representative to theUnited Nations of Grenada

It is more by accident rather than by design that I findmyself in the unenviable position of speaking onbehalf of my Foreign Minister of Grenada, who hashad to cut short his stay in beautiful and hospitableMonterrey due to extenuating circumstances. Mr.President, the night is far spent; therefore I propose togovern myself by five B’s! Be brief, be bright, be gone.

However, I must present the Minister’sshort statement which follows:

Much preparation has gone into this high-level event taking place in this beautiful setting inMonterrey. It is the hope of my delegation that theimplementation of the outcome document will be com-mensurate with the many months of meticulous prepa-ration.

Financing for Development as a conceptand as an attainable goal is highly desirable, especiallyif a partnership can be forged between developed anddeveloping countries to alleviate poverty, achieve sus-tained economic growth and promote sustainabledevelopment. Financing for Development can be seenas part of a process of implementation of the

Millennium Declaration, to which world leaders com-mitted themselves in terms of the values of equality,solidarity and social justice. They promised to ensurethat globalization would become a positive force for allpeoples, especially those in developing countries.

If Financing for Development andSustainable Development, which are mutually reinforc-ing, are not to be regarded as just pious pronounce-ments, every effort should be made to promote themin a practical and meaningful way, to ensure that the21st century will become the century of developmentfor all.

The 20th century has been called the cen-tury of outer space because of the remarkable achieve-ments and discoveries. The 21st century can be thecentury of inner space, if the human condition, whichwe are addressing, can take centre stage, by beingmoved to the top of the international agenda. The factthat the international community is represented hereat the highest level makes the occasion auspicious, his-toric, exciting and hopeful.

Financing for Development and SustainableDevelopment are two sides of the same coin – theeradication of poverty, which is key to developmentand peace. Achieving this laudable goal will of necessi-ty be incremental. If, however, poverty can be halvedby the year 2015, that would be a major step towardsits alleviation.

Of the six leading actions identified to bestadvance the financing for development agenda, mydelegation, due to the time constraint, will touchbriefly upon three:

1. Mobilizing domestic financial resources fordevelopment, presupposes “the importance, soundpolicies and good governance as prerequisites for theefficient mobilization and allocation of domesticresources,” based on the principle of national owner-ship of development strategies.

One such strategy is Capital Formation,which is largely dependent upon domestic economicmobilization. However, domestic economics are inter-twined with the global economy, so that nationaldevelopment efforts need to be supported by anenabling international economic environment. Andhere is where Foreign Direct Investment (FDI) andOfficial Development Assistance (ODA) can play a cat-alytic role. The level of ODA is at an all-time low inthirty years, and one of the best outcomes of thismeeting would be to restore ODA to its former levelof 0.7% of GNP.

167


Moreover, while capital formation isenhanced by domestic savings, small economies andeconomies in transition are adversely affected by capi-tal flight from developing to developed countries,caused in large measure by external debt, which is thegreatest inhibitor to development.

2. The international community should beconcerned that poor developing countries are com-pelled to mortgage their future with high cost of debtservicing, which is a millstone around their necks. Thereverse gross flows from developing to industrial coun-tries are approaching $400 billion. This constitutes adrain on scarce resources that are sorely needed forsocial programmes such as health, education, welfare,and infrastructure development.

While debt repayment is both moral andlegal, consideration should be given to the internal andexternal constraints that have caused many developingcountries to become trapped in the vicious cycle ofdebt. Debt servicing can be the Achilles heel of heavilyindebted poor countries (HIPC) whose vulnerabilityfosters political instability and social unrest.

3. Trade remains today, as it was since thedays of the Phoenicians, the engine and the barometerof growth and development. Without trade, the eco-nomic misery index of many developing countries con-tinues to spiral.

• The Secretary-General in his report pointsout how market access protection by developed coun-tries currently imposes costs on developing countrieswhich they can hardly bear. Such a trade barrieradversely affects products of export from LDCs, SIDS,landlocked and transit developing countries, as well ascountries with economies in transition – all of whichhave difficulties in attracting financing for develop-ment,

• Because of their vulnerabilities, natural andman-made, trading partners should liberalize trade ingoods and services of particular interest to developingcountries.

• The MITO Agreements, with respect tospecial and differential treatments for some developingcountries, should be implemented in a more equitablemanner. However, developing countries should makeevery effort to their economies to include light manu-facture of primary products, while developing a strate-gy of intra-regional trade.

In the matter of trade, my delegation com-mends WTO for admission of the People’s Republic ofChina and the Republic of China on Taiwan** intothe organization. Their combined industrial might withrespect to goods, services, information, technologyand communication will strengthen WTO’s capacity toserve the international community better. With respectto the economic miracle, which Taiwan has performedin a little more than four decades, there is no questionthat it is ready, willing and able to put its vastresources and reserves at the disposal of the interna-tional community as it has been doing in certain smallcountries in Africa, Latin America, the Caribbean andthe Pacific.

As we leave from this time and place, maywe be reminded that this is not a time for optimismthat sees no problems, nor a time for pessimism thatsees no possibilities; it is a time for hope. Thereforewe must not permit FfD to become a dream deferred,to dry up as a raisin in the sun – as did the new eco-nomic order and the peace dividends which readilyevaporated.

Finally, the journey to Monterrey and laterto Johannesburg in search of the link between financ-ing far development and sustainable developmentbrings to mind the words of the immortal WilliamShakespeare: There is a tide in the affairs of men,taken at the flood leads on to fortune. Omitted thus,all the voyage of their lives are bound in shallows andin misery. On such a sea are we now afloat; we musttake the current while it lasts, or lose the voyage ofour lives.

Mr. President, there can be no turningback. Forward ever, backward never!

** The statement has been reproduced as rece ived. The des ignat ions employed do not imply the express ion of any opin ion whatsoever on the part of the Secretar iat ofthe United Nat ions concern ing the legal s tatus of any country, terr i tory or area, or of i ts author i t ies


168

GuineaStatement byHis Excellency Mr. El Hadj Oumar KouyatéMinister of State for Planning, the Republic ofGuinea*

First of all, with your permission, I would like to con-vey two messages.

The first one is that on behalf of my dele-gation, I would like to express to the people and theGovernment of Mexico, and the President of Mexico,our thanks and our deep appreciation for the warmwelcome given to us since we arrived in this great andbeautiful country.

The second message is on behalf of HisExcellency my President, General Lansana Conté,President of the Republic of Guinea. He was not ableto make the trip for reasons of time, and his messageis that he wishes to thank you for the invitation madeto his Government to attend this important meetingand for the positive initiatives sponsored by the UnitedNations to promote International Cooperation inFinancing for Development.

Guinea, along with most developing coun-tries, is basically an exporter of raw materials, in par-ticular, minerals like bauxite, aluminium, gold and dia-monds, as well as agricultural products. These prod-ucts, which fuel our export income, are those whoseprices are determined by developed countries. Theresulting deterioration of the terms of trade has a neg-ative impact on the balance of payments and thereforeon economic growth. This justifies Guinea’s member-ship in a group of countries which believes that theWorld Trade Organization (WTO) should embark on anew cycle of liberalized trading, namely:

• To review certain counter productive regu-lations for developing countries in the framework ofagreed measures,

• To eliminate export subsidies and to limitthe support to producers in the global framework ofliberalized agricultural trade;

• To reduce protectionist measures which aredetriment to developing countries and which essential-ly affect trade of manufactured goods such as textilesand clothing.


We take this opportunity offered by theConference to reaffirm the appreciation of theGovernment of Guinea and thank the American gov-ernment for making us eligible for the African Growthand Opportunity Act (AGOA).

As regards international cooperation forFinancing for Development, it appears that the lack ofinternal resources in developing countries means thatOfficial Development Assistance (ODA) and direct for-eign investment flows have become indispensable toolsfor cooperation in order to implement our pro-grammes and developmental policies.

Unfortunately, the shortfall in terms of vol-umes and amounts of transfers of financial resources,and the financial drag caused by debt servicing, contin-ue to be factors, which impede growth and the eco-nomic renewal in these developing countries. It shouldbe noted that the support given by donor countries ismost often affected by the burden and cost of techni-cal foreign assistance, which does not always promotethe transfer of national competencies. We shouldimprove this situation in the following ways:

• By developing an integrated and consistentpolicy for international cooperation based on nationalpriorities;

• The promotion and development of theapproach of national execution, in the development,implementation, follow-up and assessments of pro-grammes and projects for cooperation;

• Implementation of the policy and pro-gramme of technical cooperation in order to achievebetter management and technical assistance, and atransfer of technology which is bolstered by compe-tence.

The leaders of developing countries areconvinced that it is crucial to improve access to mar-kets in developed countries for products in which theyare competitive. In spite of clear improvements in low-ering customs charges in the last few years, there arestill important tariff and non-tariff barriers in place,which are still major obstacles. Any progress made inthis area would enormously improve economicgrowth, diversification of production and exports ofthe countries concerned. We would reduce depend-ence on ODA, and infrastructure projects wouldbecome more viable because we would be acceleratingour economic activity.

In terms of foreign debt, the Governmentof Guinea welcomes the proposal of the AmericanPresident calling on the World Bank to provide 50%of its assistance in the form of grants. In this respect

169


we are gratified with the aid of $5 billion to develop-ing countries over the next three years, as announcedby the American government, as well as the commit-ment made by the European Union (EU). In fact,greater reliance on grants would help also the long-term liability of developing countries, as it would sparethem a large debt burden. The initiatives having to dowith access to resources for Highly Indebted PoorCountries (HIPCs) is one of the major means toreduce the burden of the poor countries.

African countries recognize the importanceof the initiative as their means of procuring resources,which they very much need to have debt relief, whichhas compromised their economic growth. Therefore,we hope that this initiative will become more flexibleand will prompt a review of grant conditions as well asproviding more flexible eligibility criteria in the interestof providing debt relief.

This conference dedicated to Financing forDevelopment gives us great hope. I wish that theimplementation of the Monterrey Consensus will helpreinvigorate international cooperation in the fightagainst poverty and for a more just world that is with-out HIV/AIDS – a world of peace and security.

GuyanaStatement byHis Excellency Rt. Hon. Samuel InsanallyMinister of Foreign Affairs, Republic of Guyana

Like so many countries gathered here in Monterrey,Guyana had hoped that this historic Conference onthe Financing for Development would unlock thefinancial resources needed to promote development toallow our peoples to “live in larger freedom”.

We are rather disappointed therefore thatthe outcome has fallen so short of our expectationsand indeed of the level of assistance required for devel-opment. Admittedly we have done well in fashioning arough consensus on how the development agendamay be advanced. This is important, since without ashared vision and strategy we will not go far. Wewould therefore wish to warmly congratulate all thosewho made the Monterrey Consensus possible – themember states of the United Nations both developedand developing – the Bretton Woods Institutions, otherUN agencies and civil society. More particularly, wewould wish to thank His Excellency the President of

Venezuela, Chairman of the G77 – of which Guyanais a proud member – for promoting the cause of thedeveloping countries. We would also wish to thank theGovernment and people of Mexico for hosting thishistoric event.

Admittedly too, some major donors like theUSA and the European Union have announced on theeve of the Conference their intention to increase theirofficial development assistance. We acknowledge andencourage these efforts. Still it must be a matter forregret, if not sorrow, that at a time, when we speak ofthe interdependence of peoples and when poverty isso rampant everywhere, there is not enough generosi-ty of heart on the part of those who have for thosewho have not.

We would, therefore, like to think that thisConference is not a one-off event but rather part of aprocess that will quickly lead to more substantialresults. We are, nonetheless, pleased to note that, atMonterrey, there has been a reaffirmation of theimportance of financing for global economic growth.But, though dynamic and sophisticated, internationalfinancial markets are altogether too concentrated andselective. In some cases, trade in short-term financialassets has proved to be a recipe for financial chaosand contagion. We should seek to ensure that financialmarkets generate new assets that can create thewealth and employment so desperately needed forlong-term development. To this end, we must pursuethe campaign for reforming the international financialarchitecture to make it more congenial to our needs.

Equally important, the international com-munity must now commit itself to ensuring that thedebt burden, which continues to overwhelm so manydeveloping countries, is made more sustainable. Itwould of course be helpful if more development assis-tance could be given in the form of grants instead ofloans provided that:

• It takes into account the access and quantum of resources needed by poor countries; and

• It does not jeopardize existing soft-loan facilities.

Similarly, although much is made of marketaccess as a panacea for all that ails the developingcountries, it is for many small economies a useless keyto a door that cannot be reached. Without assistanceto satisfy such basic prerequisites as adequate infra-structure and investment, these countries cannot hopeto compete in the global economy. More has to bedone by way of providing not only special and differ-


170

ential treatment for our exports but also for develop-ment funds that will generate economic enterprise andtransformation.

There is no need for further technicalanalysis as the United Nations Secretary-General hasindicated in his ‘road map’ report on achieving thegoals set by the UN Millennium Summit. “What isrequired is that all member states demonstrate thepolitical will to carry out commitments already givenand to implement strategies already worked out.”

It is therefore imperative both politicallyand morally that the highest priority be given by devel-oped countries to honouring their commitment to allo-cate 0.7 per cent of their gross national product(GNP) for Overseas Development Assistance (ODA).At the same time consideration has to be given tofinding new and additional forms of financing tobridge the shortfall.

Mr. Chairman, the development modelsfollowed thus far have clearly been deficient. We haveno option but to look for alternatives. It has becomefashionable to speak of partnership as the lynch-pin ofthe development process. And indeed, such partner-ships could place international cooperation on a moreequitable basis and provide for greater assurance andpredictability of financing. But, as with any otherhuman partnership whether matrimonial, commercialotherwise – it must be clearly defined and go beyondmere words to firm commitment.

More immediately, we must promotecoherence and country-specific policy measures tostrengthen the linkages between trade, investment,economic growth and poverty alleviation. Only by sodoing can we help developing countries to avoid therisks of globalization and enable them to integratemeaningfully into the global economy.

It would be sad if this Conference in whichwe had placed so much hope were to produce only aformal declaration full of good intentions but devoid ofany practical measures for development.

Our people – especially the poor – havebecome impatient with such promises. At the veryleast, this Summit should come out with some con-crete assurances that before long, more will be doneto end the vicious cycle of poverty in which many mil-lions are still trapped. We would, therefore, hope Mr.Chairman, that even at this late hour, our Heads ofGovernment present here, with the persuasion of ourdistinguished host, President Fox of Mexico, will beable to build on the Monterrey Consensus so that theaspirations of our peoples for a better life will not bedeceived.

Holy SeeStatement byHis Excellency Archbishop Renato MartinoApostolic Nuncio of the Holy See

This is truly a momentous occasion. World leaders andexperts in the field of financing and development havecome together to discuss those issues that will helplead to finding realistic and workable ways to addressthe elimination of poverty and the advancement of thehuman family.

The very fact that this meeting is beingheld is, in a way, an achievement in itself. The journeyto Monterrey has its beginnings in 1997 with theadoption of the Agenda for Development and hasbrought us to reflect and design ways to finance devel-opment. Also, during each of the recent UnitedNations Conferences, Summits and Special Sessions,discussions in the areas of economic and financialdevelopment have been held. At the MillenniumSummit, Government leaders recommitted themselvesto meeting a series of development goals, amongthem the eradication of poverty and providing accessto basic social services including health, education andclean water.

Too many families in today’s world areforced to be concerned with survival and do not havethe luxury of participating as actors in their develop-ment; too many people continue to be burdened byabsolute poverty and live in countries where debt bur-dens make it impossible to gain access to basic socialservices and social safeguards. In this perspective,Financing for Development must touch all aspects oflife, the individual, the family, the community and theworld.

The events of the past few months, played-out before our eyes, have forced all of us to recognizethe oneness of humanity. These events which continueto have an effect on our lives and touch the lives of somany, bind us together on our common path towardenhancing the well-being of all people. Everyonehopes to witness a renewed collective desire to helpthose living in poverty-transcending ideological, politi-cal and geographic boundaries.

Development is first and foremost a ques-tion of people. Human beings are at the centre of ourconcerns for sustainable development. Through devel-opment, the people of the world are offered opportu-nities for advancement. These opportunities are oftenthe product of human ingenuity and, in many cases,through development the human spirit of ingenuitycan be released for the benefit of all humankind.

171


172

Historically, financing has had its placewithin the discussion of development. However thetask is too great for one community or nation toaccomplish on its own. The underlying challenge is theadoption of an attitude of solidarity between andamong all people. Financial decisions and their soundplanning clearly contribute efficaciously to develop-ment and, in that sense, to the common global good.Good intentions and good will, while essential compo-nents, will not be sufficient to bring about true andsustainable development. Financing for development isa mix of good intentions, resources and variedapproaches with the potential to contribute to thedevelopment and well-being of each and every person.

The Holy See has constantly shown itsconcern for the social and economic development ofthe world’s people and the means to achieve thatdevelopment. More than a hundred years ago, PopeLeo XIII issued the first great social Encyclical Letter,Rerum Novarum. In it the Pope stated the ideas thatwould become an inspiration for social policy for yearsto come: “Every programme geared to increased pro-duction must have no other end in view than to servethe human person, namely: to lessen inequalities, toremove discrimination, to free men from the bonds ofservitude and to enable them to improve their condi-tion in the temporal order, achieve moral develop-ment, and perfect their spiritual endowments. Whenwe speak of development, care must be given both tosocial progress and economic growth.”

In 1967, in his Encyclical Letter,Populorum Progressio, Pope Paul VI reinforced theposition of the Church regarding the connectionbetween peace and social and economic development:“Therefore, when we combat misery, and struggleagainst injustice we are providing not only for man’sprosperity but also for his spiritual and moral develop-ment and are therefore promoting the welfare of thewhole human race.”

For this reason, the Holy See continues toinvolve itself in the on-going process of the develop-ment of peoples. Twenty years after PopulorumProgressio, Pope John Paul II addressed the work thathad been accomplished in the recent past and lookedforward to the work that would ensue, including thework of this Conference: “It should be noted that inspite of the praiseworthy efforts made in the last twodecades by the more developed or developing nationsand the international organizations to find a way outof the situation, or at least to remedy some of itssymptoms, the conditions have become notably worse.Responsibility for this deterioration is due to various

causes. Notable among them are undoubtedly graveinstances of omissions on the part of the developingnations themselves, and especially on the part of thoseholding economic and political power. Nor can wepretend not to see the responsibility of the developednations, which have not always, at least in due meas-ure, felt the duty to help countries separated from theaffluent world to which they themselves belong.Moreover, one must denounce the existence of eco-nomic, financial and social mechanisms, which,although they are manipulated by people, often func-tion almost automatically, thus accentuating the situa-tion of wealth for some and poverty for the rest.These mechanisms, which are maneuvered directly orindirectly by the more developed countries, by theirvery functioning favour the interests of the peoplemanipulating them and in the end they suffocate orcondition the economies of the less developed coun-tries. Later on these mechanisms will have to be sub-jected to a careful analysis under the ethical-moralaspect.”

The Holy See strongly believes that anyeffort in favour of development must analyze themoral ramifications of economic activity and its financ-ing in light of a comprehensive vision of the humanperson. This is an absolutely essential interplay, amoral imperative, which has all too often been neg-lected in the dialogue over the ethics of economic life.A true concern for the development of peoples cannotafford to be reductionistic, but must respect the gen-uine claims of both economics and morality. Humandignity must be the central value for the financing ofdevelopment. Such an authentic concern must prizethe close relationship between the centrality of thehuman person and economic activity, stressing thesubjective character of human work and its place inhuman creativity. As Pope John Paul II said, “Themoral causes of prosperity...reside in a constellation ofvirtues: industriousness, competence, order, honesty,initiative, frugality, thrift, spirit of service, keepingone’s word, daring – in short, love for work well done.No system or social structure can resolve, as if bymagic, the problem of poverty outside these virtues.”

One of the fundamental ethical principlesof the social teaching of the Holy See is the principleof the universal purpose of created goods. A clearexpression of this principle was proposed by PopePaul VI: “God destined the earth with all that it con-tains for the use of all men and nations, in such a way


that created things in fair share should accrue to allmen under the leadership of justice with charity as acompanion. All other rights, whatever they are, includ-ing property rights and the right of free trade must besubordinated to this norm; they must not hinder it, butmust rather expedite its application. It must be consid-ered a serious and urgent social obligation to referthese rights to their original purpose.”

The world of today is overshadowed by afragile peace and marked by broken promises. Toomany people live lives without hope, with little oppor-tunity toward realizing a better future for themselves,their children and future generations. It is the searchfor a healing of this lack of hope, this darkness ofdespair, that must fuel the continuing work of theworld community, and which helped Governments todeclare at the World Summit for Social Development,“We gather here to commit ourselves, ourGovernments and our nations to enhancing socialdevelopment throughout the world so that all men andwomen, especially those living in poverty, may exer-cise the rights, utilize the resources and share theresponsibilities that enable them to lead satisfying livesand to contribute to the well-being of their families,their communities and humankind.”

Governments cannot afford to allow theMonterrey Consensus document, nor the results of thediscussions and deliberations held during these days tobe forgotten or set aside. We cannot allow the work ofthis Conference to end here, but rather we must seethis as the renewal of commitment that it truly is. Andfinally, the Family of Nations cannot allow one moreday to pass wherein a real attempt to meet goals andmake measurable progress toward the eradication ofpoverty are not pursued with all of the energy andresolve that it can muster.

Good progress has been made in the dis-cussions that have led to the successful outcome ofthis Conference. Let those who watch what we havedone and look forward to the next steps in implemen-tation and cooperation, realize that there is hope, thatthere is commitment, and that there is an honestmovement toward the elimination of poverty, thedevelopment of all peoples and societies, and a goodfoundation for building a better future for all humanity.

173


HungaryStatement byMr. Gyula NemethChairman of the Delegation of the Republic ofHungary

It is a great pleasure and honour for me to address theConference on Financing for Development. The issuesbeing discussed during this week are of great impor-tance for all states participating, for the developed anddeveloping world and countries in transition.

The basic precondition for the eradicationof poverty is the sound and sustainable growth of theeconomy, For economic growth, both a high level ofinvestment and efficiency thereof are needed. A rela-tively high level of domestic savings should be themost important source of investments. Foreign savingsis also a key for the countries with a significant lag ineconomic development. It is to be emphasized thatforeign capital should be additional to domestic sav-ings, rather than replacing that. It follows that eco-nomic policy should create an environment to increaseand mobilize domestic savings and to attract foreigncapital. In that respect some lessons could be learnedfrom the results and failures of the Hungarian eco-nomic policy in the last decades, which I shall try tosummarize in the following:

Hungary's Economic Direction

Hungary is one of the Central and Eastern Europeancountries that have made a transition to a marketeconomy since the early nineties. The Hungarianeconomy is specifically an open one with a small inter-nal potential while strongly lacking capital. Therefore,it had always come up for international funds, and thestructural transformation involved in the enormouspolitical and economical changes in 1989 would havebeen impossible without international financial assis-tance. However, the starting position, i.e. the heritageof the ‘ancien regime’ made up a heavy burden inevery aspect. The resilience and adaptability to theworld market environment of the Hungarian nationaleconomy was poor and the domestic producers facedincreasing difficulties in the sharp competition.

As a consequence of poor adaptation skills,the economic growth was coupled with permanentimbalances. Finally, the Hungarian economy was closeto the debt trap condition by the early ’90s. Our netexternal debt approached 50 per cent of GDP and

130 per cent of exports. In that situation, the eco-nomic policy management put the cause of substantialreforms at the forefront to achieve, in several succeed-ing stages:

• The legal and institutional framework of the market economy to be established;

• The national economy to be stabilized through structural changes and increasing competitiveness;

• Then, the sound and balanced economic growth to be implemented permanently.

Over the past ten years Hungary has madeserious progress with a view to these objectives. Thestructural reforms to cause the necessary microeco-nomic attitude were the following:

• By now the private sector is dominant inHungary. Its contribution to the GDP makes morethan 70 per cent as a result of the new business estab-lishments supported by the government and elimina-tion of all obstacles to the market access and privatiza-tion of state-owned enterprises.

• Privatization was linked to such a bankrupt-cy law as to contribute to the liquidation of inefficientcapacities, thereby introducing a radical structuralchange.

• Economic role by the State essentiallyreduced including income centralization dropped tojust over 40 per cent from 55 per cent while the rateof redistribution fell to about 45 per cent from 60 percent.

• The fiscal policy had a large part inincreasing the funds available to the enterprises withinthe total of GDP, thus creating an essential conditionof the business sector expansion.

• All obstacles to market forces in determin-ing prices, costs and the free competition wereremoved. At a fast pace, wages and external economywere also liberalized. The Hungarian economy hasbeen open to international competition bringing abouta radical adaptation constraint.

In view of stabilization and following mod-ernization, strengthening the financial sector was ofvital importance. The entry into force of the laws con-cerning bankruptcy, the credit institutions and financialenterprises as well as the re-codification of the centralbank law have provided for clear rules in accordancewith international money market standards.

An important objective of Hungarian eco-nomic policy since 1990 has been to create an envi-ronment attractive for foreign investments. The yearlyFDI inflow in the last decade has been in the range of3-5 per cent of GDP. It has been facilitated by a legalsystem based on international standards; therefore, theinvestors are familiar with those.

As a result of structural reforms, the rate ofdomestic savings in the last 5 years has been about24-25 per cent of the GDP and the investment/GDPratio has been even higher. There has been a substan-tial improvement in the efficiency of investments, forexample the growth of productivity in the manufactur-ing sector in the last 10 years has been over 10 percent on an annual average basis. The problem ofindebtedness ceased to exist. The possible capitalinflow of the Hungarian economy is clearly subject tothe profitability of investment. The equilibrium prob-lems were eliminated. We managed to leave the ‘stop-go’ track and, since 1997, we have permanently goneon a growth path with the characteristics of 4 to 6 percent of annual rate based on productivity gains of over3 per cent above the EU average.

Hungary, while successfully passingthrough the transition period within a historically shorttime, is ready to share her many-sided experiences inreinforcing democratic institutions and market econo-my with the partner countries. We are convinced thatsharing our own way of practicing the requirements ofgood governance especially in the fields of privatiza-tion, financial and banking consolidation, running oflocal governments etc. could constitute an effectiveform of support to the interested partner countries.

Importance of Common Development Goals and Concluding Remarks:

The foregoing may give sufficient reasons that thelegal environment to provide incentives and safety asappropriate for the development of enterprises, thepredictable macroeconomic regulation, the system oftaxation causing efficiency to improve as well asstrengthening the financial discipline all allow for theinternal sources of development to be mobilized andexternal ones involved.

Hungary fully shares the development goalsas internationally agreed including those contained inthe Millennium Declaration and is committed to collab-orate with all the stakeholders to eradicate poverty andpromote sustainable development. Hungary is, withinits powers, ready to share its many-sided experiencesin building democratic institutions and establishingmarket economy with the partner countries in thedeveloping world; to participate in the international


174

efforts to mobilize financial resources for development;to promote the equitable multilateral trading systemand to increase official development assistance.

In the last year, the Government ofHungary took a decision to launch a gradually expand-ing national programme of development cooperationfocusing on the bilateral ODA activities towards thetraditional developing partner countries. We intend toincrease our development cooperation capacities withthe purpose of actively contributing to the implemen-tation of the international community’s objectivesmentioned above.

In addition, Hungary welcomes and sup-ports, inter alia, the efforts of the international com-munity taken by international financial institutions, aswell aimed at creating a functioning structure in whichreducing the long-term debt burden, social and eco-nomic development of the poorest countries can alsobe realized through both bilateral contribution and debtrelief.

Hungary is determined to participate inbuilding a global alliance for development engaged toensure that the agreements and commitments reachedin this Conference are properly implemented.

IcelandStatement byHis Excellency Mr. Geir H. HaardeMinister of Finance of the Republic of Iceland

We live in an interdependent global community.Globalization is now a fact for most nations, not anoption. It has contributed to greater prosperity andincreased growth. But it has also brought new chal-lenges and raised new questions. How are we toensure that all countries reap the full benefits fromglobalization? How can we ensure a more equitableglobal economic environment? These are some of themost pressing challenges facing the international com-munity today.

Global partnership for financing for devel-opment is a key element in this endeavour. I wouldlike to commend Secretary-General Kofi Annan forbringing together the UN agencies and the BrettonWoods institutions as well as the private sector toaddress this important global issue. I also thank theGovernment of Mexico and President Fox in particularfor the hospitality we have enjoyed during our stay.

Iceland’s position as regards the mainissues of this conference is very clear. We fully supportthe proposed text of the Monterrey Consensus. Asstated in the draft text the internationally agreed devel-opment goals, including those contained in theMillennium Declaration, call for a new partnershipbetween developed and less developed countries. Thisshould, inter alia, include a firm commitment tosound, free-market economic policies, good gover-nance in a proper constitutional environment, humanrights and gender equality as well as transparencythrough the rule of law.

We must recognize that the global econom-ic environment is a decisive factor in development. Weknow that unimpeded international trade is an enginefor growth and development and that foreign directinvestment is a means for transferring capital, technol-ogy and know-how. To take advantage of theseopportunities, the developing countries and theeconomies in transition must be fully integrated intothe global trading system and assisted in building adomestic environment that attracts investment and fos-ters prosperous economic activity.

The opportunities of globalization do not,so far, benefit all countries equally. For some of themarginalized least developed countries, OfficialDevelopment Assistance is still the largest source ofexternal financing and often critical for meeting theirdevelopment goals. It is imperative that we focusspecifically on harnessing the forces of globalization tothe benefit of these countries.

How can this be brought about? There areno easy solutions. But many small things can add upto something bigger. That is why I believe a smallcountry like my own can make a difference. Webelieve that the least developed countries shouldreceive duty-free and quota-free access for theirexports. Iceland has granted unilateral tariff conces-sions to the least developed countries, putting them onpar with our partners in the European EconomicArea. I encourage those developed countries that havenot already done so to improve their market access forexports from the least developed countries. The bene-fits from such actions are obvious.

It is also imperative that debt servicing ofthe developing countries does not hinder their effortsto provide essential health and education services thatform the basis for a healthy development of the econ-omy. We are encouraged by the progress in imple-menting the enhanced HIPC initiative. It remains ourhope that external debt relief will enable the poorestnations to use the funds that have been channelled

175


into debt servicing to stimulate economic growth,combat poverty and strengthen their infrastructure. Atthe same time we should acknowledge that the fightagainst poverty could only be successful if the poorcountries themselves lead the way while the BrettonWoods Institutions are there to support them.

The time has come for a unified effort bypolitical leaders as well as civil society and the privatesector, to reverse the trend of marginalization andunderdevelopment. We stand before an unprecedentedopportunity to make a real difference in the lives ofmillions of people throughout the developing world.

The Monterrey Consensus is probably oneof the most important documents in the history ofinternational development cooperation. It lays a foun-dation for partnership between the developed and theless developed countries in dealing with the challengeof poverty eradication and sustainable development.The document, furthermore, puts into focus the needto place development issues in the forefront of inter-national politics much as economic policy is a majorpart of political life at the national level in most coun-tries.

I do hope that this conference will make adifference and will help create the necessary condi-tions for future financing for development.

IndiaStatement byHis Excellency Mr. Arun ShourieMinister for Privatization, Republic of India

Mr. President, First of all, please accept our deepappreciation for the warm hospitality of theGovernment and people of Mexico, and for all thework they have put in to make this Conference such asuccess.

We have had an extensive, open andrewarding encounter over the week about the ways wewish to shape our collective future. Recent events havereminded us, the Conference has underscored, thatour future is indivisible. When we hear of a catastroph-ic train wreck, Mr. President, we do not ask how manypeople were travelling first class. It is no different forhuman society on planet earth. Today this realizationunites us, and with this Conference we have taken abig stride in delineating what steps should be taken tosafeguard, and fashion that future.

We believe that following are among thecontours of the ‘new partnership’ that is envisaged inthe Monterrey consensus document:

First and foremost, the primary responsibil-ity for improving the state of our affairs lies with ourown societies. We have to mobilize our own resourcesin greater measure. We have to ensure that thoseresources, as well as what is received by way of aid, isused better.

Nor do I detect, Sir, the moral hazard thatsome others do in linking aid – like devolutions withinour own governmental structures – to performance.The argument seems to be that the enforcement ofperformance criteria will inflict hardship on ordinarypeople, specially the poor – who are in no wayresponsible for malfeasance or inefficiency. The recipi-ent country should be the most concerned, as it is themost affected, by the conduct that leads to thoseresources being wasted or siphoned off. Given the vastpool of talent and experience that is available in thedevelopment community and in our countries, I amsure it is possible to devise criteria that achieve bothobjectives simultaneously: they help improve conduct,and at the same time insulate the people at large.Such criteria will ensure that resources are better used,and therefore the resistance to raising resources foraid will be softened; and the people in our societies –the poorest, most of all – will reap greater benefitsfrom those resources.

We must own up to and scrutinize our ownworking: it is entirely right, of course, to remind othersof what they are doing, of what more they should beand are not doing, but we too must own up to whatwe inflict on our own people. True, many thingsremind everyone today of how intertwined their fate iswith that of others. The consequences of a territoryand of resources becoming available to terrorists, of abreakdown of public health systems in one region, ofa polluting industry, affect people far and wide. Thishas quickened compassion and concern. But we can-not bank on this as a solution. Each society hasenough problems of its own to contend with and tomeet them. And no one owes us a living.

That is what I would want people fromcountries like mine to be mindful of, with whom I am one.

My counsel to friends from the developedworld is naturally the converse! That today there is anet transfer of resources from many poorer countriesto the North is a grave reproach. A house with suchvast chasms between rooms cannot stand, any morethan one divided against itself – indeed, such a houseis bound to be not a dwelling at all. But those chasms


176

cannot be bridged; the campaign against the impover-ishment and indignity that afflict vast sections ofhumanity cannot be won, without resources. It waswell said at the time the size of the Marshall Plan wasbeing debated that it is no use extending a ten feetrope to a person drowning in twenty feet of water.The target of assistance established three decades agois not an excessive call on the means of rich countries.

The announcements that have been madeby the United States and by the EU are most wel-come. They are the ‘headline news’ of thisConference. But we must also remember that they arebut a fourth or fifth of what panel after panel has esti-mated is required for meeting just the MillenniumGoals: Goals to which the Heads of State andGovernment of the world committed themselves in theGeneral Assembly, Goals which themselves are mod-est as can be.

We must proceed on the assessment of theleaders of the US and EU that this is the most that thepeoples in those countries can be persuaded to partwith in the coming years by way of aid. That assess-ment redoubles the argument for innovative methodsof raising resources. A variety of them have beenbroached and others can be devised. Many involvesmall levies but generate enormous amounts throughthe volume of transactions they catch. We should notlong postpone seriously evaluating these proposals:adopting them will raise resources, of course; it willalso help change the content and direction of‘growth’.

We do hope that a substantial part of theseenhanced flows will be channelled through multilateraldevelopment agencies, including the regional banks.These agencies have done exemplary work. They havepervasive acquaintance with countries and societiesthat need to be helped. Every dollar that they get, theycan leverage to mobilize three dollars from privatefunds. And they manifestly do not have the resourcesthat the tasks that have been assigned to them require.Can the current funds at the disposal of the IMF meetthe typhoons that sweep financial markets these days?Are the funds and programmes of the United Nationsnot struggling for more resources? Surely the WorldBank can expand its operations.

In their turn, the multilateral agenciesshould deepen the introspection they have com-menced about the policies and conditions they havebeen prescribing. Were the conditions appropriate?Were they too onerous or too numerous? What wasthe assessment of these agencies of countries in SouthEast Asia, what had they concluded about Argentina –

just before these countries went into a tailspin? Surely,each of twelve revival packages to a country musthave been justified on the ground that it would lead toa string of improvements. What happened in fact?This introspection should probe deeper, as I said. Andthe results should be made public as well. Few meas-ures will build confidence in the expertise of these vitalinstitutions as doing so will.

Important measures have been proposed atthe Conference. Important proposals have beenadvanced, important announcements made toenhance the flow of aid. Everyone has also stressedthat the important thing now is to implement them.

Sir, even as we urge closer monitoring ofdevelopment programmes, we should set up a mecha-nism, a device for monitoring the implementation ofwhat is agreed upon at our gatherings. In the last fewyears we have had the Rio Summit on the environ-ment, and the one in Kyoto. We have had the confer-ence on population and development in Cairo, theone on women in Beijing, on human rights in Vienna,on the social agenda in Copenhagen, on the habitat inIstanbul, there has been the UN meeting on smallarms, the General Assembly has met and agreed uponMillennium Development Goals. We will soon bemeeting in Johannesburg to consider ways to makedevelopment sustainable. We should task a group ofexperts to prepare an annual ‘Action Taken Report’ –with a chapter per conference – that sets out the deci-sions that were taken at the conference, and what hasbeen done in regard to each decision and goal.

Another factor affects the quantum ofresources that are ultimately available for develop-ment: corruption. The donors complain that leadersand civil servants of the poor countries eat away thefunds. The latter point out that the firms that bribe arefrom the rich countries, that the funds soon find theirway back to banks and properties in the latter. Eitherway, concerted, cooperative action is required. After9/11, information is being exchanged about financialoperations of terrorist groups. Exactly the same sort ofcooperation should be instituted to exhume moneysspirited away from poor countries. To invoke banksecrecy laws in this regard, and simultaneously toengage in elaborate debates about amounts that canbe made available for aid, is to mock the poor whohave been robbed – as it is to mock taxpayers in thericher countries from whose contributions aid is beingfinanced.

177


As important as the quantum of funds isaccess to markets of the North. Removal of tariff andsubsidy protection in even a few sectors will release avast flood of sustained resources for the South throughexports: the subsidies to agriculture alone that aregiven in the rich countries exceed $1 billion a day.You will recall that till just a few years ago India wasdependent on food imports. Today, governmentgodowns alone have more than sixty million tonnes offoodgrain stocks. That is far more than we require forfood security. But as we cannot export them –because of non-tariff barriers and because of theeffects subsidies in the potential markets have onprices there – the stocks are becoming a heavy burdenon governmental finances. We must also bear in mindthat acute misgivings have been expressed about manyfeatures of and about the impact of globalization. Theone way to allay these is to ensure that there is global-ization not only of markets in the South and of capitalflows, but also globalization of equity and opportunityeverywhere.

Great emphasis has been placed in ourdeliberations on creating conditions that would enableand induce private capital to flow to developing coun-tries. That is but right. And the fact is that many adeveloping country is striving today to become anattractive investment destination. Indeed, there is acompetition to outdo each other in this regard. Ourcountries recognize that it is not enough to lift barriersto foreign direct investment. Today they actively wooit.

Private capital will be effective – and it willbe most naturally welcomed – when it works to pro-duce goods that meet the felt needs of the people inthose countries – rather than when it merely replicatesgoods which have sold well in rich societies, and whenit churns them out with technologies devised for thevastly different factor proportions of those latter coun-tries. It will be effective – and it will be most naturallywelcomed – when it comes for long-term engagement,rather than when it is merely seeking to profit quicklyfrom differentials in interest rates or exchange rates.

There is also a telling irony. The reasonthe market is thought of so highly is that it compels allwho enter it to be efficient. It exposes them to theperil of failure. Bearing risks is of the very essence ofa market economy – and in the rich, developed coun-tries private firms combat risk at every turn. But everso often when these very firms come to developingcountries, they demand – and are often able to wrest –agreements by which host governments take over thefull risks that they may encounter down the road. We

have placed great emphasis in our deliberations ongood governance, and coherence. Good corporategovernance is as important, as is coherence betweenthe goals private capital pursues and the needs of ourpeople.

We greatly welcome the partnershipbetween governments, global economic institutions,business and civil society which has been one of thehallmarks of this conference – as it was of the processleading up to the meeting. The cooperation must con-tinue along the constructive lines we have seen.Fashioning performance criteria that will nail the con-duct that needs to be altered, preparing an annualaudit that documents what action has been taken onthe results of each of the dozen conferences like thisone that have been held during the last decade – thereis enough work for all of us, it is work that is bestdone by our working together.

The United Nations and its allied bodieshave a special and central role in this global engage-ment. We consider the multilateral processes we col-lectively generate within the United Nations, as in thisConference, as a global public good which we mustpreserve and advance. We regard the institution of theUnited Nations itself as the principal global publicgood in its own right, as both the symbol of universali-ty and the vehicle for the delivery of our aspirations.Let us cherish it and strengthen its democratic work-ing.

In conclusion, Mr. President, the tasks thatour deliberations have thrown up brook no delay. Weshould attend to them – as the Buddhist savants wouldsay – with the urgency of a person whose hair is onfire.

IndonesiaStatement byHis Excellency Dr. Makarim WibisonoVice-Minister for Foreign Affairs for ForeignEconomic Relations, Republic of Indonesia

It is a distinct pleasure and honour for me to partici-pate in this unique and first-ever international confer-ence on financing for development. Allow me at theoutset to congratulate you Mr. President and, throughyou, all the members of the Bureau on your respectiveelections to preside over this historic conference. Theconference, as I see it, offers a golden opportunity totackle the formidable challenges presented by the


178

rapid pace of globalization and interdependence, torethink and reshape our world and particularly tounlock the potential of development by revitalizing itsfinancing.

We meet today against the backdrop of aglobal economy caught in the grip of a prolonged eco-nomic slowdown with uncertain prospects for the nearfuture. Poverty is still rampant with over half the worldsubsisting under $2 per day, underdevelopment iswidespread and a widening gap between the havesand have-nots threatens to undermine progress andstability. Such developments demonstrate the vulnera-bility and fragility of the global economy in the worldwe share, forcing us to realign our thinking on theissue of peace, security and development.

In seeking to redress these trends and tobolster development, the international community hasundertaken many initiatives and commitments particu-larly through the outcomes of the major UNConferences including the Millennium Summit.However, in all cases the lack of adequate financialresources proved to be a persistent constraint on theefforts of the developing countries. It thwarted theireffective integration into the global economy andrecurring financial crises disrupted and crippled theireconomies and social fabric. Clearly, central to theseproblems was the failure of the international financialsystem to meet their development needs from the per-spective of financing for development.

The central challenge therefore facing all ofus at this International Conference is how to generateadequate finance for development at both the domes-tic and international levels while averting financialcrises in this era of globalization. In addressing thatchallenge, I see the Monterrey Consensus documentas an excellent basis for our deliberations by helping tochart our course towards viable solutions and to forgea genuine partnership to effectively put developmentat the centre of global financial reforms.

Domestic financial resources represent theprimary source of financial resources for developmentin most countries. Their mobilization requires thestrengthening of public and private sources of financ-ing. To achieve this, conducive internal conditionsmust pertain. Those include such initiatives as the pro-motion of sound macroeconomic policies and gover-nance and it is the national government that has theprimary responsibility for ensuring this.

However, in this era of globalizationdomestic efforts alone cannot be successful. Theyrequire a conducive external environment. With therapid liberalization of finance and trade together withthe end of the cold war, national economies have been

increasingly dominated by global financial markets andmultinational corporations. But the truth is that suchfinancial markets grew at such a pace and in suchstrength that they outpaced and outgrew the institu-tions that were designed to contain them. From thisemerged distortions and imbalances that now abound.

From our experience in mobilizing financesfor development in Indonesia, we have clearly seenthe two faces of globalization in action. On the onehand we have reaped the tremendous rewards of theopportunities it certainly affords. On the other handwe became a victim of its enormous risks.

For almost two decades prior to the crisis,our economy had bounded ahead at unprecedentedrates, reducing our country’s poverty levels from over60% to less than 15% of the population by 1997.Then, in that year, as the Asian financial crisis struckwith crippling speed and impact, our economy camecascading down and resulted in enormous social andpolitical upheaval. Poverty and unemployment soared,children left school in droves and the national debtreached new and staggering heights.

The challenges Indonesia had to meet in itsefforts to recover are, I believe, instructive. In ourefforts to rebuild and strengthen our economy, socialand political institutions and procedures, we havefaced the formidable task of addressing multiple crisesin the economic, social and political fields all at thesame time.

The task that we face is more difficult inthis period of time. The economic crises in Indonesiaopened the doors to a systemic transformation. Suchtransition towards a multiparty democracy and a rulesbased market economy was to involve and enterpriseof national regeneration in which no aspect of politi-cal, social and economic life was to be left unchanged.A major challenge for the Monterrey Conference ishow to define and to deal with development financechallenges within the context of historic, systemic tran-sitions.

The transmission of severe economic shockacross national boundaries will no doubt unleash suchlarge-scale transformations in the future. In thisregard, we urge this conference to recognize thatthese situations are fundamentally different to thosewhere countries are trying to overcome the moremainstream obstacles of long-term economic develop-ment.

To effectively address these combined diffi-culties required designing the right mix of policiestogether that would successfully move the economyforward without sparking further unrest. One of thefirst steps taken by our country was to embark on a

179


transition process to a more democratic form of gov-ernment which, though still at a fragile state, has suc-cessfully undergone a number of peaceful transitions.In the reform process we have undertaken a series ofmeasures, with international support including advicefrom the IMF, which committed our economy to a rig-orous programme of national recovery.

Since our country’s political transition lastJuly the new government has sought to impart newmomentum to our reform process. This has involvedimplementing a comprehensive strategy to reactivatethe economy, restore investors’ confidence and reducepoverty. Among these measures was the adoption ofsound macroeconomic policies which were specificallydesigned to achieve high rates of economic growthand employment, price stability and balanced externalaccounts.

Let me add a further point on Indonesia’srecovery programme, that is the centrality of povertyeradication. We are committed to achieving the goalsof the Millennium summit, particularly the reduction ofpoverty levels by half by the year 2015. Programmesmerely designed to boost economic growth alone havenot been proven successful. We have therefore soughtto expand beyond economic policies to embrace socialand sustainable dimensions of development. Thisshould help ensure the sustainable financing of educa-tion, human resources development, capacity building,health, nutrition and social security. We are payingspecial attention to the care of children, the promo-tion of gender sensitivity, the full inclusion of the ruralsector and all disadvantaged communities into thenational economy.

While each country is primarily responsiblefor its own development, it is also recognized thatnational economies are increasingly interwoven in abroad web of international economic activities. Thus, itis obvious that domestic efforts must be complementedby a conducive and supportive international frame-work.

For example, in the field of financial flows,such flows have increased at exponential rates reach-ing billions of dollars on a daily basis worldwide. Inseeking to attract a share of such flows we recognizethe importance of engaging the relevant internationaland regional institutions. It is crucial that they increasetheir support for private foreign investment particularlyin priority areas such as export credits, co-financingand venture capital among others. For this reason,Indonesia has actively engaged a broad spectrum ofstakeholders including the United Nations, the BrettonWoods Institutions as well as many other relevant enti-ties at the global regional and domestic levels includingthe private sector and civil society in the process.

It should be added in this regard that theefforts undertaken by business should not be solelyaddressed to economic growth. Rather, the social,gender and environmental implications of such under-takings should also be taken into account. Small entre-preneurs and small and medium-sized enterprises(SMEs) must be encouraged. These steps, we believe,have been pivotal in Indonesia’s experience and itsongoing efforts of reform and recovery.

That is not to say that ODA should playany lesser role than that of private financial flows. Formany developing countries especially those unable toattract adequate private flows for social and sustainabledevelopment purposes, ODA is considered indispensa-ble. That means that substantial increases in ODA arenecessary. They are also crucial for successfully fulfill-ing agreed international development goals, includingthose of the Millennium Declaration. For this reason, Iwould like to compliment the donor countries whohave already fulfilled their commitments in this regardand in some cases have exceeded the target of 0.7%GDP. At the same time I would call on those whohave not done so to renew their commitments.

Another key issue that needs internationalaction is international trade. As trade is considered asa vital engine for development, unilateral actions bythe developed countries to improve access for prod-ucts of and to provide technical and financial assis-tance for capacity building in the developing countriesis urgently needed. In this context, the comprehensiveDoha Declaration must be implemented in full.

The issue of indebtedness of most develop-ing countries is a compelling one in the context offinancing for development. The magnitude of theproblem is staggering. Debt burdens continue to con-stitute a heavy drain on available financial resources,thereby jeopardizing development efforts. It under-mines the efforts of many developing countries tocombat poverty, promote their development goals andtheir pursuit of the Millennium Goals.

From our perspective in Indonesia, debtburdens incurred by government and private externaldebt payments have had a crippling impact on ourability to implement our development programme.Indonesian external debt totaling about US $132 bil-lion will exact a major human cost in absorbing fundsthat could be used to foster economic growth and alle-viate poverty. It is clear that Indonesia needs to get‘breathing space’ to obtain its budgetary condition inorder. To overcome this problem, the Government hasgone twice to the Paris Club, in 1998 and 2000,respectively. This was followed by a meeting with the


180

London Club. In the case of private debt, the govern-ment has facilitated its restructuring by establishing theIndonesian Debt Restructuring Agency (INDRA) andthe Jakarta Initiative Task Force (JITF). These are fornon-bank private debts.

Nevertheless, international investors arelikely to continue to perceive a relatively high level ofrisk in Indonesia. This is in part due to some unre-solved external problems resulting in a number of debtburden indicators remaining high. Struggling with thedebt-servicing problem, Indonesia will again meet withthe Paris Club in April this year and hopefully securebetter terms and conditions. The success of the forth-coming Paris Club III negotiations and commitmentsto reform in the field of privatization are expected toimprove investor confidence this year.

While debt-reducing strategies play animportant role in freeing up financial resources fordevelopment, what is equally important is the need tomake such indebtedness sustainable. This wouldrequire putting in place preventative national andinternational measures including sound macroeconom-ic policies and public resource management. Technicalassistance is important in this context in order to avoidthe unsustainable accumulations of debt at both theprivate and public levels.

For these reasons and more, I greatly wel-come the consideration by all relevant stakeholders ofan international debt workout mechanism that wouldengage debtors and creditors together in the processof restructuring unsustainable debts in a timely andefficient manner. In addition, it is also important forthe international community to seriously consider thecreation of a specific debt relief mechanism to supportdeveloping countries in achieving sustainable develop-ment. These could include debt-swaps-for-nature, debt-swaps-for- equity and debt-swaps-for-development,which Indonesia would wholeheartedly support.

In this context, we appreciate theenhanced HIPC Initiative by the BWIs. At the sametime we call on the BWIs to further strengthen theenhanced Initiative so as to ensure its speedy, effectiveand full implementation. We believe the Initiativeshould be further improved by enhancing its flexibilitywith regard to the eligibility criteria. We believe thatthe Initiative should also be extended to other debt-overburdened developing countries.

Over and above domestic and internationalefforts is the need to bolster the financial system itself.Failure to put finance for development on an assuredand predictable basis and the sudden eruptions offinancial crises points directly to systemic failure at theglobal level. Therefore, there is an urgent need to

build and ensure good governance at the internationallevel and effective transparency in the financial, mone-tary and trading systems if the mobilization of domes-tic and international financial flows are to be success-ful. This will require increased coherence of the inter-national monetary, financial and trading systems.

While the ongoing reforms of the interna-tional financial architecture have been initiated inmany areas, there is still a need for further strengthen-ing if development is to be adequately supported andif the most vulnerable members of society are to beprotected. To achieve this, we need far greater trans-parency, improved governance and greater participa-tion by the developing countries in the process. Themultilateral financial institutions, particularly the IMF,are in a position to reinforce these measures. This canbe done by strengthening both the underpinnings ofinternational financial stability as well as their ability toidentify and prevent potential financial crises. Theseongoing efforts should be supported so as to achievegreater stability through well-designed surveillance andearly warning systems.

In seeking to resolve the financial crisis inIndonesia, we welcomed the advice and supportreceived particularly from the IMF on domestic macro-economic reforms. In this regard, it must also bestressed that the needs of the poor and vulnerable –with little or no safety nets – should be fully taken intoaccount. This should include an assessing and meas-ures to counter the impact of the social costs of adjust-ment programmes on the poor. In this connection it iscritically important that the consequences of the crisisare shared in a fair manner. While burden sharingshould be promoted, it is also important that thedilemma of moral hazard should be minimized.

Before concluding let me just say that toachieve our objectives, I can see no alternative toengaging in genuine partnership and staying engaged.This is necessary for putting financing for develop-ment onto a more assured and predictable basis. It isalso crucial that such partnerships require the partici-pation of all relevant stakeholders in the negotiationsand decision-making on all relevant issues and policiesaffecting their well-being. To achieve this, constructivedialogue based on mutual interests and shared respon-sibilities is imperative. Therefore I strongly believe thatcloser cooperation with the United Nations, particular-ly the General Assembly and ECOSOC, is urgentlyneeded.

181

Beyond the Consensus and the adoptedagreements of this conference, little will be achieved inthe short or long term if we do not seriously commitourselves to staying the course, to continuing themomentum generated here and to ensuring that thefollow-up is faithfully carried out. To facilitate thesepurposes, we fully agree with the recommendation ofthe Consensus document that the current High-levelDialogue on Strengthening International Cooperationfor Development through Partnerships should bereconstituted to become the intergovernmental focalpoint for general follow-up to the conference and relat-ed issues.

In conclusion, Mr. President, let me addthat I hope this international conference will achieveits declared objectives by bringing real hope to thepoor and underdeveloped, that finance for develop-ment will be put on, a sustainable basis and that wewill not falter in following through on our commit-ments.

Iran (Islamic Republic of)Statement byHis Excellency Mr. Tahmaseb MazaheriMinister of Economic Affairs and Finance, IslamicRepublic of Iran

Let me at the outset express our sincere appreciationto the people and government of Mexico for hostingthis important Conference and for the hospitalityextended to my delegation.

Financing for Development has andremains to be a daunting challenge. Today, at the timeof rapid globalization, the Monterrey Conference pro-vides us with a historic opportunity to address this in aholistic manner. It also sets the stage for a thoroughexamination of essential steps in promotion of interac-tion and coherence amongst all major players in devel-opment at the national as well as at the internationallevel.

It is a fact that each country has primaryresponsibility for its own development and that domes-tic resources should constitute the lion’s shares offinancial resources for development. However, nationalundertakings alone do not suffice. They need to besupplemented with a breeding international environ-ment to foster national economy and to enhance thecapacity for mobilization of resources.

Another major source of financing fordevelopment is private international capital flows par-ticularly foreign direct investment. These flows areoften oriented towards a small number of countriesand regions. To increase the number of beneficiaries,there exists the need for developing countries toreceive necessary technical assistance so as tostrengthen their financial and corporate sectors andimprove their institutional capacity to attract andabsorb more private flows.

Trade is the most important vehicle forfinancing of development. A universal, rule-based,open, nondiscriminatory and equitable multilateraltrading system is a prerequisite for economic growthand development of developing countries and theirintegration into the global economic system.Moreover, bold actions should be taken to removetrade barriers and tariff peaks, in particular in areas inwhich the developing countries have a comparativeadvantage and competitive edge. WTO should becomea truly universal trade organization by easing accessionand refraining from political consideration of applica-tions for accession.

In the last decade or so, in the face ofnumerous international agreements, ODA has experi-enced a steady decline. The developed countriesshould abide by their commitment and take concretesteps to achieve the target of 0.7% of their GNP for ODA.

Good governance at the international levelin various financial, monetary and trade fields is vitalfor sustained economic growth and sustainable devel-opment. Enhancing coherence and consistency in gov-ernance of the international monetary, financial andtrading systems in support of development should finda prominent place. In this respect, the internationalfinancial architecture is in dire need of reform. Itshould promote further transparency and broader andmore meaningful participation by developing countriesin the global economic governance and norm setting.They, meanwhile, ought to become more responsiveto the growth and development needs of developingcountries and promotion of economic and social jus-tice and equity. Need I note that such participationwould enhance the sense of ownership and gives awider array of insights and perspectives to theseprocesses?

The multilateral surveillance of the eco-nomic and financial policies should be done in a sym-metrical manner and particularly should take intoaccount the global impact of economic policies ofmajor industrialized countries on the world economy.Developed economies, all relevant financial markets


182

and institutions, including highly leveraged institutionsshould also be subject to prudential standards and reg-ulations. In addition, timely detection of external vul-nerability through well-designed surveillance and earlywarning systems by relevant multilateral institutionsand regional bodies is crucial to prevent contagioneffects of financial crises.

In conclusion, coordination among variousinstitutional stakeholders, particularly the BWIs andWTO with the United Nations, as well as continuedinvolvement of civil society, including NGOs and busi-ness sector is a key to attaining the goals and objec-tives of the Monterrey Conference. I would like also toemphasize the importance of the review and follow-upmechanism of the Conference as it offers an examina-tion of the fulfillment of the commitments and the per-formance of all actors.

Let us work hand in hand to makeMonterrey an exemplary start of joint undertaking torespond to the global challenges defying humanity.

IraqStatement byHis Excellency Dr. Mohammed Mahdi Al-SalihMinister of Trade, Republic of Iraq

It is a great honour for me to represent theGovernment of the Republic of Iraq at thisConference. Allow me, Sir, to start my statement bythanking the government and people of Mexico fortheir warm hospitality and for the excellent prepara-tions for this important event.

I would also like to congratulate you, Mr.President, upon your election as president of this con-ference. I am fully confident that your wise leadershipand rich experience will guarantee its success.

The delegation of Iraq attaches importanceto the outcome of this conference especially that it isbeing held at the beginning of the new millennium andat a time when the international economic order is fac-ing new changes and undergoing extremely importanttransformations. This fact places on us, our countries’representatives at this conference, a major responsibili-ty for formulating effective strategies for internationaldevelopment cooperation.

The signs of instability in the world econo-my and other negative factors such as the deteriorationof the terms of trade, the fluctuations in the prices ofcommodities, the decline in Official Development

Assistance, and the widening gap between Developedand Developing countries are all a cause of concernfor our developing countries.

The Monterrey Consensus has defined thechallenges facing our countries. Paragraph 1 of thesection “Confronting the challenges of financing fordevelopment” states that our goal is to eradicatepoverty, achieve sustained economic growth and pro-mote sustainable development. The section on mobiliz-ing financial resources refers to the need to establishthe international and national economic conditionsnecessary for the achievement of the internationallyagreed development goals. This was precisely whatIraq had endeavoured to do before the imposition ofthe unjust embargo on it.

Iraq used to be an important driving forceof international economic relations. Iraq has the sec-ond largest oil reserves in the world. It is expected tohave the largest such reserves among oil producingcountries. Iraq was among the first oil producing coun-tries to provide oil to developing countries at preferen-tial prices to help them finance their development.Iraq also played a recognized role through its clear andcommitted approach to the pricing of oil in a way thatensures the stability of the international economic situation. In the mid 1970s, H.E President SaddamHussein of Iraq was the first to call for the price of oilto be acceptable to both producers and consumers andto serve the economic interests of both parties alike.

I believe it is appropriate to reiterate theproposal of H.E. President Saddam Hussein of Iraq forthe establishment of a long-term global fund to assistdeveloping countries. The industrialized developedcountries, irrespective of the nature of their politicaland economic systems, and the oil-exporting develop-ing countries should contribute to that proposed fund.In our opinion, this proposal offers a practical solutionto some of the fundamental problems of financingdevelopment and to the problems of developing theeconomies of developing countries, particularly theLDCs. It constitutes an important endeavour toaddress the economic challenges facing developingcountries.

In the seventies and the eighties, prior tothe imposition of the unjust embargo on it, Iraq hadbeen promoting the financing of development in manypoor developing countries in Asia, Africa, and LatinAmerica. It did so through the provision of grants andconcessional loans without any political or economicpreconditions. In providing such grants and loans,Iraq’s aim was to contribute effectively to the financingof the development of the economies of those coun-

183


tries and to the building of their capacity in the fieldsof infrastructure, financial resources and the creationof economic projects. Iraq also provided expertise tostrengthen such projects. The number of loans provid-ed by Iraq to developing countries was 42 concession-al loans to the tune of more than $1.7 billion.

Iraq also contributed to the financing of thedevelopment of the financial resources of developingcountries through its contributions to the capital of102 regional and international financial institutions.Those contributions exceeded $1.25 Billion.

During the same period, Iraq made aneffective contribution to the encouragement of invest-ment through its cash deposits of more than $4 Billionin the banks of sisterly and friendly countries. In mak-ing those deposits, Iraq's aim was to see them investedin the development of the social and economic infra-structure of those countries. Iraq also provided reliefassistance to many countries afflicted by disasters.

Paragraph 32 of the Draft MonterreyConsensus commits our countries to enhancing therole of regional and sub-regional agreements. In thisregard, we must recall the proposal of H.E. PresidentSaddam Hussein of the Republic of Iraq to establish aninstitutional grouping of the states of the East. It wouldprovide a framework for cooperation in economic andpolitical fields.

In August 1987 Iraq and the USA signed abilateral agreement on the development of economic,trade, scientific and technical cooperation. The Iraq-Iran war ended in August 1988. Iraq emerged from iteconomically and industrially strong. However, amonth later in September 1988, the US Congressadopted a resolution to impose economic sanctions onIraq by its act number 2763.

In view of its abundant natural resourcesand of having a political leadership capable of taking itto advanced stages of development to join the ranks ofdeveloped countries, Iraq had started to make hugestrides forward. Facts prove that the real objective ofthe imposition of sanctions on Iraq is to destroy itsability to achieve socio-economic development andprogress.

In the seventies and the eighties, Iraq wit-nessed rapid progress in the rates of growth andsocio-economic development. The second panel estab-lished by the note of the President of the SecurityCouncil (S/1999/100) dated 30 January 1999 reflect-ed that progress in its report on the humanitarian situ-ation in Iraq. It stated that “The economic and socialindicators in Iraq were generally higher than those

achieved by other developing and neighbouring coun-tries.” The GDP in 1989 was $75.5 billion for a pop-ulation of 18.3 million. The average rate of growth ofthe GDP was 10.4% for the period 1974 -1980.

According to FAO, during that period Iraqhad the highest indicator of per capita food availabilityin the region. The average daily calorie intake percapita was 3120 calories. According to WHO, before1999 health care coverage had reached 97% of theurban population and 78% of the rural population.UNICEF stated that, from the mid 1970s until 1991,the Government of Iraq had invested large sums ofmoney in the education sector. Central and SouthernIraq had a highly developed water and sewage sys-tems. WHO estimated that 90% of the population hadaccess to large quantities of safe drinking water.

The Draft Monterrey Consensus refers tointernational trade as an engine for development inview of the fact that it is the single most importantexternal source of development financing. In thisregard, we must remind the participants in thisConference of the unprecedented, unjust embargothat has been imposed on my country, Iraq for morethan 11 years. Not only has that embargo deprivedthe people of Iraq of the opportunity to finance theirdevelopment, it has also deprived many countries,with whom Iraq had wide economic relations, of simi-lar opportunities. Since the imposition of the unjustembargo until now, Iraq’s losses in oil revenues areestimated at $200 billion. This sum could have beenused for the socio-economic development of the peo-ple of Iraq. It could have also been used to developinternational trade and hence finance the developmentof other countries.

The Thirty-State aggression of 1991, inaddition to the continued daily aggression of the USand British warplanes in the so-called ‘no-fly zones’,imposed without a Security Council mandate and incontravention of international law, have destroyeddevelopment projects and infrastructures worth morethan $200 billion created by the government for itscitizens before the embargo. The embargo has alsodeprived the people of Iraq of their most basic humanrights. It has caused a sharp decline in their annualincome. The per capita income used to be more than


184

$4000 per annum. It has declined to less than $150.In addition the rates of inflation and unemploymentare on the rise. The government has been providingfood and medicine and other basic necessities at tokenprices subsidized by it. By its own efforts andresources, the government has rebuilt what wasdestroyed by the military aggression. Had it not beenfor that, the people of Iraq would have faced circum-stances much more difficult than the ones they havelived under since the embargo.

The Oil for Food Programme has turnedinto a programme to finance compensations, to coverthe expenses of the UN and to stabilize oil pricesrather than a programme to provide for the needs ofthe people of Iraq. Iraq exported oil worth more than$52 billion. The UN deducted $18 billion for its ownexpenses and for compensations while Iraq received$17 billion, that is to say $10 per person monthly.The remaining amounts are mostly contracts put onhold by the US and Britain. Iraq was prevented fromfinancing its development through the programme.

The continued imposition of this unjustembargo runs counter to the leading actions proposedin the Draft Monterrey Consensus particularly thosepertaining to the eradication of poverty and theachievement of sustained economic growth. Theembargo has caused a marked deterioration in thesocial situation. It has killed more than one and a halfmillion Iraqis. Development, which is one of the mostbasic rights of any country in the world, has been setback by it. This makes it incumbent upon the coun-tries participating in this Conference to support theefforts aimed at lifting that embargo. Thus, Iraq will beable to play its role in the development of its peoplewith its own resources. It will also be able to contributeto the financing of the development of other countriesas it had always done before the imposition of theembargo.

We also call for the lifting of the blockadeimposed on the peoples of Palestine, Libya, Sudanand Cuba. We call for an end to be put to the use ofembargoes and blockades as a means to punish devel-oping countries and their peoples. No such blockadehas ever been imposed on a developed country up tothis day.

IrelandStatement byHer Excellency Ms. Liz O’Donnell, T.D.Minister of State for Development Cooperation atthe Department of Foreign Affairs, Ireland

I would like to thank the Government and people ofMexico for the warm welcome they have extended tous and for the magnificent facilities they have placedat our disposal. I should also like to express my sup-port for the statement given to the Conference by thePresident of the Government of Spain on behalf ofthe European Union.

Our mutual interdependence, in a global-ized world, requires mutual solidarity and a huge col-lective effort to address poverty and injustice – theroot causes of violence, conflict and terrorism.However, it would be shameful if the security and eco-nomic self-interest of rich countries were seen toreplace humanitarianism as the key motivation fordevelopment assistance.

We support the poor, the weak and the dis-possessed not because they represent a menace orthreat to our contented lives. We help them because itis morally and ethically the right thing to do as mem-bers of the human family. The human capacity andinstinct to help a fellow human being in need is whatmakes us civilized. The retention of that basic humani-tarian value has never been more important to stateand affirm. It would be to diminish the legacy of thou-sands of humanitarians, and many decades of develop-ment cooperation, to allow that motivation to be dis-placed or downgraded.

ODA must also be made more effective.Donors must end the proliferation of donor driven aidprojects. We should align our activities in support ofcountry owned poverty reduction strategies. The bestdevelopment is owned and inspired by developingcountries themselves. To maximize its impact, ourdevelopment assistance should be completely untied.

In order to fulfil their part in the new devel-opment partnerships, our developing country partnersneed to make a reality of the Monterrey Consensusprovisions on good governance, democracy, the ruleof law and market oriented policies.

Ireland believes that it is time for the donorcommunity to take concrete steps to implement thelong-standing commitment to the UN ODA target of0.7% of GNP. In Ireland’s view, it is inconsistent forthe international community to identify a series of

185


time-bound development goals without also makingcorresponding time-bound financial commitments toensure that the goals are achieved. The goals willremain purely aspirational without the money to makethem a reality. Ireland, therefore, made a commitmentto the UN Millennium Summit that our ODA wouldreach the UN target by 2007. This commitment hasbeen reflected in our national budgetary process.Ireland’s programme of development cooperation willincrease by 55% in 2002 to meet an interim target of0.45% of GNP.

Health, particularly the fight againstHIV/AIDS, and education are the key priorities in ourpartnerships with developing countries. We agree thata healthy and educated workforce is not a by-productof development, but a prerequisite for achieving theMillennium Development Goals through economicgrowth that lifts the poor out of poverty and developssocial capital. We support an inclusive global processfor the identification of an agreed list of Global PublicGoods.

Our NGOs and Missionaries have made ahuge contribution to development through the imple-mentation of effective programmes delivered at lowcost and with total commitment to support for thepoor. Our partnership with them will deepen as weincrease our funding to meet the UN target.

The Doha WTO Ministerial meetingdemonstrated how developing countries can effectivelypromote their interests while making a major contribu-tion to global trade negotiations. We are committed tothe effective implementation of the DohaDevelopment Agenda. Ireland will contribute an addi-tional €1.5m in 2002 to trade capacity building indeveloping countries. Developing countries, particular-ly the Least Developed, must be in a position to pro-mote their rights and interests in the new trade roundif we are to make further progress towards a fair worldtrade order.

Ireland recognizes the achievements to dateof the HIPC Initiative. We are, however, unconvincedabout the adequacy of relief, particularly for countrieswith high HIV/AIDS burdens. We sympathize with theproposal in the New Economic Partnership for AfricanDevelopment that the long-term objective should be tolink debt relief with costed poverty reduction out-comes. We believe debt relief for the HIPC countriesshould be considered in relation to the finance neededto achieve the Millennium Development Goals. Thismeans that human development indicators should betaken more fully into account in the debt reliefprocess.

Ireland’s national development experiencedemonstrates that, given the right domestic conditions,globalization, powered by trade and investment, cantransform an economy and raise living standards dra-matically.

The Monterrey Consensus provides thefoundation for a global effort to mobilize developmentfinance, from all sources, to achieve the MillenniumDevelopment Goals. What is needed now is resoluteaction and ethical political leadership. We must deliveron our promises and rhetoric if we are to ensure thatthe twenty first century sees measurable progress inreducing poverty and ending the huge income gaps inour very unequal world.

IsraelStatement byHis Excellency Mr. Roni MiloMinister for Regional Cooperation of the State ofIsrael

Please allow me to congratulate you on your electionto chair this important forum and your skillful leader-ship of the Summit, as well as to convey my gratitudeto the Government and People of the Republic ofMexico for the warm hospitality extended to the Israelidelegation. I am sure that under your leadership theSummit will leave its mark on this most important ofissues.

The issues discussed at this Summit –mobilization of internal savings, encouragement of pri-vate flows, promotion of trade, reduction of debt andODA (Official Development Assistance) – are compo-nents of a complex whole. We ourselves have imple-mented many of these policies and are willing to shareour experiences, to help other emerging economiesavoid the mistakes that we experienced.

Israel believes that the MonterreyConsensus being discussed this week provides animportant roadmap for the work ahead of us towardsthe elimination of poverty and the consolidation ofeconomic independence for all nations. All measuresmay not be implemented immediately by all parties –but as parts of a whole, these elements contribute tothe fundamentals upon which strong economies arebuilt. A number of the activities of Mashav – Israel’sCentre for International Cooperation – have beeninstituted to promote the values echoed in this


186

Summit. Mashav’s individual programmes not onlywork to transfer basic technologies and capabilities forsustainable growth, but also seek to implant a largenumber of principles mentioned at this summit overthe past few days.

Israel is reinvesting a part of its ODA indevelopment of the areas discussed at this summit. Toour thinking, there can be no better use of ODA thanthe support of programmes designed to address cardi-nal issues of financing development. This investmenthas a self-reinforcing effect and creates a positivedynamic of development of growth. Israel has main-tained a positive growth rate in its ODA over the pastyears. While maintaining official statistics only since1999, the past three years have shown a steadyincrease in the sums allocated to development assis-tance, reaching the level of 0.15 per cent in 2001.Israel is taking its place among the donor nations com-patible with the economic situation in which it findsitself. Israel has participated in the last threeReplenishments of the IDA (International DevelopmentAssociation), lending its hand in the effort to assistStates in the critical fields of public health, HIV controland education.

Israel also began to participate in the HIPC(Heavily Indebt Poor Countries) programme of theWorld Bank, assisting certain States in reducing theirdebt. Israel is currently involved with three HIPC coun-tries as an official creditor of the Paris Club. Althoughunder no obligation to do so, Israel participates in theeffort to ease the financial load of the nations, whichare hardest-hit.

As Minister for Regional Cooperation, Iwould like to stress Israel’s perception that the promo-tion of joint projects and consolidation of economicties is important to the attainment of peace in theworld and in our region in particular. Increasing thetrade and investment between the States and peoplesof our region will enable us to build more competitiveeconomies and enhance the interaction between com-munities. We are working to further infrastructureprojects with our neighbours in order to attain greaterregional integration.

The ancient Jewish moral imperative ofgiving back to the community has already foundexpression from the early years of Israeli foreign poli-cy. Israel has taken upon itself to share with otherStates from its experience in nation-building – be it byway of cooperation programmes, technology transferor by active participation in international fora such asthese. This is rooted in our tradition, and we constant-ly ask ourselves how, rather than if, we can lend ahand.

ItalyStatement byHis Excellency Mr. Alfredo ManticaVice-Minister for Foreign Affairs, the ItalianRepublic*

The slow-down in world economic growth observed in2001 and the impact of the tragic events of 11September have had negative repercussions on pursuitof the objectives of the Millennium Declaration. Whatwe need to do today is to find innovative and moreeffective forms of resource mobilization in order toaddress the situation of the poorest countries, and inparticular certain regions such as sub-Saharan Africa.At the same time, we reaffirm the close link that existsbetween peace, democracy and combating poverty.Italy regards diplomatic action and maintenance ofpeace of peace as interrelated with development coop-eration. This is fully in keeping with the proposal of aMarshall Plan for Palestine.

The Group of Eight (G-8) Summit inGenoa underscores the importance of an integratedstrategy on the part of the international community tostimulate economic growth, which will be more robustand eliminate poverty in developing countries. Thesupport given to the New Partnership for Africa’sDevelopment initiative (NEPAD), which was stronglyboosted at Genoa by the launching of an African planof action, is an example of partnership in which Italywill be playing a leading role.

Here at Monterrey every institutional pri-vate actor is called upon to define its commitment inthe context of a common vision. We must first of allensure that donor countries increase official develop-ment assistance. The Italian Government, in keepingwith the decisions of the Council of the EuropeanUnion in Goteborg and Laeken, intends to pursue theobjective of 0.7 per cent of gross national product bymeans of the progressive increase in the assistanceagreed at the European Union Council meeting inBarcelona as described by President Aznar on behalfof the European Union.


187


By the same logic, we need to work to fos-ter the growth of the private sector. Italian coopera-tion can draw on solid experience in support of smalland medium-sized enterprises in developing countries.In rural areas, the spread of microcredit schemesbecomes of key importance in stimulating the emer-gence of the informal economy. A solid private sectoris essential in order to stimulate sustainable develop-ment. It is a decisive factor in making it possible totake full advantage of the opportunities of the processof the internationalization of production and services.

As far as debt write-off is concerned, theItalian Government takes the view that somethingmore and something better could be done. The credi-tor countries as well as the debtor countries must doeverything necessary to achieve the targets set by theenhanced initiative of the Heavily Indebted PoorCountries (HIPC). The debtor countries that are under-going conflict should arrive at a peaceful settlement oftheir disputes. Those that have not yet reached thedecision point should rapidly draw up efficient andlasting policies, improve governance, bolster initiativesrelated to productivity and growth and work togetherwith civil society to prepare the poverty reductionstrategy papers.

Creditor countries accordingly shoulduphold their commitments with regard to debt write-off. In this respect, Italy has adopted provisions for thepoorest and highly indebted countries, which willenable it to go beyond the agreements concluded onthe multilateral level and write off all these loans. Italycould furthermore sign debt conversion agreementsconcerning assistance, loans and programmes thathave a social and environmental impact. We thereforecall on all creditor countries to do their utmost on abilateral level so as to fully realize the goal of riddingall these countries of the burden of debt once and for all.

The Italian Government is also pursuingnew forms of resource mobilization in order toincrease flows of assistance and at the same time bol-ster the support of public opinion for international sol-idarity. In this regard, I would note the proposal of theItalian Ministry of the Economy for an innovativemechanism called ‘de-tax’, which would allocateresources to the financing of African initiatives in sup-port of development projects or programmes. This de-tax system is based on voluntary decisions of con-sumers and commercial circles to devote one per centof the value of purchases to development projects.While the State at the same time undertakes toexempt such contributions from direct and indirect tax-

ation, the new element in this mechanism is the factthat it involves the private sector on a completelybasis. By contrast with other kinds of international tax-ation that have been proposed, de-tax does notrequire any multilateral approach, because it can infact be introduced individually by any country wishingto do so.

Technological innovation must also play akey role. Through appropriate initiatives, it is possiblenot only to narrow the digital divide, which is likelyotherwise to exclude two thirds of humanity fromprogress, but also to take advantage of the opportuni-ties offered by e-government. For this reason, Italy, incooperation with the United Nations, will be organiz-ing an international conference at Palermo on 10 and11 April 2002 to promote the use of computer tech-nologies to enhance efficiency and transparency in theadministrations of developing countries and in generalto bolster participatory and democratic structures.

In order to support the development of thepoorest countries, it is not enough to raise the level ofresources. We must also raise the level of the qualityand efficiency of that assistance. Without respect forhuman rights, the rule of law and good governance,the Millennium Declaration Goals will not be achieved.These are universal principles and not a Eurocentricapproach. It is incumbent on the Governments ofdeveloping countries to create an economic and insti-tutional context capable of encouraging growth, theefficient use of assistance and attracting private invest-ment. According to a recent World Bank study, coun-tries applying appropriate policies have a growth ratein foreign investment approximately ten times that ofthose adopting less sound policies. Moreover, democ-racy is the best way of preventing conflicts.Approximately 90 per cent of current conflicts arisewithin States where there is a lack of democratic structures.

The Monterrey Consensus document,which we fully endorse, falls within the approach of anew partnership among industrialized and developingcountries, United Nations agencies, internationalfinancial institutions, the private sector and civil socie-ty. It sets out to strengthen the coherence of the poli-cies that influence the development of the countriesconcerned.

Official development assistance is increas-ingly a catalyst in qualitative terms, rather than inquantitative terms. We need to concentrate our actionto a greater extent on areas such as reform of thefinance and banking sector of developing countries,the debt write-off process and market openness. Inthis respect, the new trading round launched by the


188

Doha conference should lead to extensive and bal-anced negotiations to bring about a growing liberaliza-tion of markets, with specific measures designed togive access to developing countries. Italy, togetherwith its partners in the European Union is ready tomake available the financial and human resources ofits own countries’ system in order to give effect to theconclusions of this Conference. In order to speed upour advance towards equitable development,Monterrey sends three clear messages: strengthencommitment; enhance coherence; and heighten thecapacity for innovation.

JamaicaStatement byHis Excellency Rt. Hon. K. D. Knight, M.P.Minister for Foreign Affairs and Foreign Trade,Jamaica

When world leaders met for the United NationsMillennium Summit, they gave renewed political impe-tus to establishing a more equitable international finan-cial and monetary system, and creating an environ-ment that is more conducive to sustained economicand social development.

The critical situation of escalating povertythroughout the world has been a pressing issuedemanding our full attention and collective action asan urgent priority of the world community.Globalization and the widening disparity between thedeveloped and developing world dictates the need forsome coming together to assess where we are andhow we should plan for the future. In this Conferenceon Financing for Development we bear witness to thereaffirmation of the universally shared commitment ofmeeting the challenges of the MillenniumDevelopment Goals. These goals will not be achievedwithout urgent and substantial improvements in themobilization of national and international resources.

It cannot be emphasized enough thatendemic poverty and underdevelopment in their mani-fold manifestations pose dangers which transcendgeography and therefore stability and internationalsecurity. The issue of development is therefore one ofglobal concern and shared responsibility. Solutionshave to be found and they are best arrived at througha cooperative effort within the framework of theUnited Nations. Our goal should be to seek to build an

economic order which promotes equity and provideseach nation with the opportunity to enjoy the benefitof economic development and progress. The principalmessage from this historic initiative is the importanceof a comprehensive approach to the mobilization ofresources for development and the need for greaterflexibility and partnerships that ensure that divergentneeds are taken into account.

All of us recognize the importance of goodgovernance in harnessing and attracting capitalresources through prudent policies promoting macro-economic stability, efficiency and facilitating theexpansion of the private sector as the engine ofgrowth But experience has shown that this is notenough. Over the past 20 years, in many developingcountries, substantial reforms were undertaken andpainful social sacrifices made under structural adjust-ment and other programmes toward economic liberal-ization, deregulation and privatization. Yet the expec-tations have not been realized. Even where somemobilization of domestic savings have resulted, inflowsof foreign direct investment have not made up for theinsufficiency in domestic savings. There has been nosignificant change in the overall pattern of capitalflows which remain heavily concentrated and confinedbetween developed countries and a few strategicallyplaced developing countries. It seems evident to usthat some special initiatives may have to be undertak-en to broaden the investment flows through specialincentive programmes in developed countries.

The other vehicle for effective transfer ofresources is through international trade. Free tradeand the opening of markets have been heralded as thenew dynamic for generating export surpluses andinflows of capital to service the development process.However persuasive may be the theoretical arguments,the trade regime under the WTO Agreement hasproven to be not more than a mixed blessing.Reductions in tariffs have been accompanied by theimposition of non-tariff barriers and those of us whohave benefited from preferences are now placed injeopardy in relation to major agricultural exports.Above all, the simple fact is that most developingcountries lack the productive capacity and are unableto reach the level of competitiveness to benefit fromthe opening of overseas markets while at the sametime they are losing ground in their domestic marketsto foreign competition. The truth is that it is the devel-oped countries that are reaping the benefits of freetrade while developing countries continue to struggleto compete with the dominant economies.

189


The other factor is debt which remains aheavy burden in developing countries and a cripplingdrain on domestic resources desperately needed fordevelopment. What all of this means, Mr. President, isthat in the current realities, we are imperilled when wesimply rely on the invisible hand to ensure any equityin the distribution of resources and benefits. Itbecomes the survival of the fittest; the rich grow rich-er, and the poor, poorer or remain stagnant.

It is therefore important for the internation-al system to take into account this reality and arrangefor compensatory mechanisms. It is in this contextthat concessionary financing through multilateral insti-tutions and through ODA assumes significance asstrategies to correct the disequilibrium in the interna-tional economy. These capital flows remain an impor-tant source for capacity building in the physical andsocial infrastructure as well as a source for the allevia-tion of poverty spawned by underdevelopment.

In the face of these immense resourceproblems, the Monterrey Consensus which is before usfor adoption, can only be regarded as a modestresponse which falls short of the needs of the momentand the expectations of developing countries. Itshould, however, mark a beginning and serve as abase on which to build further, developing partnershipsbased on its principles and moving forward to moreambitious programmes of cooperation. On this basiswe can accept the Consensus in a spirit of optimismby placing great emphasis on the implementation ofthe commitments made, in particular in relation to theagreed ODA target of 0.7% of GNP. We congratulatethose countries which have already attained that targetand urge other developed countries to follow theirgood example. We also emphasize the importance ofthe strengthening of coherence in the internationalsystem through regular interaction involving the inter-national agencies in the field of development in theannual meeting of ECOSOC of the United Nations.

It is our expectation that this process willincrease the levels of sensitivity to the needs of devel-oping countries; broaden the vision of developmentbeyond the dogma of free markets; increase apprecia-tion of the diversity of experience and economic cir-cumstance in the world community; and contribute toa new thinking on development prescriptions based onconcrete realities. We also see these new institutionalarrangements as part of the process of reform of thesystem of international governance, providing greaterparticipation of developing countries in decision-mak-ing affecting international economic relations. This is

the direction that the Monterrey Consensus shouldlead us and as such it would give meaning and signifi-cance to the document as a milestone in multilateralrelations. All will be lost if the commitments are notfaithfully implemented.

On this basis, Jamaica joins in thecovenant towards building a global alliance for devel-opment. We are resolved to remain engaged to ensurefollow-up in all aspects of the implementation of theConsensus. It will be a test of the international politicalwill to provide the requisite resources and put in placethe appropriate mechanisms to achieve the objectivesof poverty reduction and sustained growth, and toensure that the benefits of globalization are moreevenly distributed.

This is an important moment in time forthe international community. Let us together, take thenext step forward.

JapanStatement byHis Excellency Mr. Shigeru UetakeSenior Vice Minister for Foreign Affairs, Japan

It is my pleasure as the representative of the JapaneseGovernment to speak to you today on the issue ofdevelopment. I should like to express my appreciationfor the efforts of the Government of Mexico as thehost country, and also of the people of Mexico, forthe success of this conference.

I speak here today as the representative ofthe world’s largest donor. But in the years immediatelyafter World War II, Japan was dependent on aid fromother countries, even for its food. At the time I was ajunior high school student. And when I think back tothat time, I confess I become rather emotional.

That Japan has been able to recover fromsuch a plight to achieve its current prosperity is due tothe heartfelt and continuing commitment to peace ofevery Japanese citizen, and to their search for a betterlife. It is the striving of every individual in a societybased on a belief in the future that is the most power-ful driving force behind nation-building. The founda-tion of Japan’s development was its ‘ownership’ ofthat development – that is to say, we undertook ourown development with our own efforts.


190

Of course, Japan also amply enjoyed thebenefit of ‘partnership’ in the form of support fromother countries and international organizations – thewhole world joining hands in mutual support andcooperation. The Shinkansen ‘bullet train’ railway sys-tem, known throughout the world, began operation atthe time of the Tokyo Olympics in 1964 with the helpof a loan from the World Bank. Perhaps I might men-tion here, since possibly it is not well known, that therepayment of Japan’s debt to the World Bank contin-ued until as late as 1990.

Japan understands from its own experiencehow important for development both ownership andpartnership are. When Japan subsequently becameprosperous, it embarked on a programme of develop-ment aid founded on this understanding, which I amsure is still correct. Our friends in Asia, to give anexample of the successful application of the principleof ownership, have achieved development. Today,Japan feels greatly encouraged when it sees itsSoutheast Asian friends on the way to changing theirstatus from recipients to donors of aid. Japan has alsocontributed to strengthening both the ownership ofAfrican countries and partnership by the internationalcommunity for Africa’s development, by organizingthe first Tokyo International Conference on AfricanDevelopment (TICAD I) in 1993. In the latter half of2003, we want to encourage further efforts by theinternational community aimed at African develop-ment by holding the TICAD III.

Now that we are in the twenty-first century,we see a widening gap between the rich and the pooras a result of advancing globalization. The climate sur-rounding development issues has changed significant-ly, affected by increasingly serious concerns aboutinfectious diseases and environmental problems. It isour perception that in the area of development, theeradication of poverty and the promotion of sustain-able growth in developing countries on the basis ofgood governance are of the greatest importance. Atthe same time, in addressing these issues, what isneeded now is to intensify the efforts not only of gov-ernments – both of industrialized and developing coun-tries – but also of all such relevant entities as interna-tional organizations, NGOs, and private-sector enter-prises. In this connection, I would like to emphasizethree points:

First, in order to reduce poverty andachieve successful development, setting clear goals isessential. It is important for the international commu-nity to set up firm goals, and make every possibleeffort to realize them so that optimum outputs can be

achieved. The Millennium Development Goals set atthe United Nations Millennium Summit in September2000 were precisely such goals.

Particularly important, in Japan’s view, forachieving these goals are the areas of education,health care, and the environment. For example, in thefield of health care, Japan as the host country of theG8 Kyushu-Okinawa Summit in 2000, stressed theimportance of measures to deal with infectious dis-eases and at the same time announced a three-billion-dollar support programme over five years which hasbeen implemented steadily. On top of that, in thecourse of subsequent discussions and debate, it wasdecided to establish the Global Fund to Fight AIDS,Tuberculosis, and Malaria. In this context, too, Japanhas been playing a central role.

Second, nation building cannot be accom-plished without sustainable growth. It is therefore nec-essary to make use of diverse financial resources. Itgoes without saying that official development assis-tance plays an important part in development, andJapan has up to now disbursed some $200 billion inODA to that end. Moreover, whereas the total amountof aid from the international community as a wholehas declined over the past 10 years, Japan hasincreased its official development assistance by 49 percent. The amount disbursed for the year 2000 was$13.5 billion.

On the other hand, we must not forgetthat private flows, which amount to three times asmuch as ODA, also have a significant role to play indevelopment. Trade, too, is important, and the valueof Japan’s imports from developing countries is worth$200 billion per annum. In advancing development, itis necessary to skillfully combine diverse resources:domestic resources, international resources (includingforeign direct investments), trade, and aid. I believethat the Monterrey Consensus that we have agreed onrepresents an appropriate balance as regards the uti-lization of a variety of development resources.

Third, it is important to adopt an approachthat places people at the centre. The foundation fornation-building is ‘human resource development.’Human resource development is essential if a develop-ing country is to assert ownership of its own develop-ment. Even when the time comes at some point in thefuture when a developing country no longer needs aid,it will still be true that people are a country’s mostvaluable asset. We have a duty to strengthen andenhance human resources – so important for a coun-try’s economic and social development. One example

191


of this is a support for trade-related capacity building.At the same time, the concept of ‘human security,’which calls for greater importance to be attached toeach individual’s viewpoint and for intensifying effortsto protect the individual from such threats as poverty,environmental problems, drug abuse, and infectiousdiseases – all of which are growing increasingly serious– this concept, I believe, has become increasinglyimportant.

Japan finds itself in a difficult economic sit-uation at present. To break out of it, my Governmentis implementing a programme of structural reform. Itwill resolutely carry out the necessary reforms, andonce the country’s economy recovers its vitality, Japanis determined to continue to play a leading role inaddressing the world’s development problems. On thatbasis, we hope to form even closer partnerships withother countries.

The terrorist attacks of last Septemberbrought home once again to all the world’s peoplethat we live on one and the same planet and shareone and the same fate. Let us all work together andtackle our common task.

KazakhstanStatement byHer Excellency Ms. Madina B. JarbussynovaAmbassador and Permanent Representative to theUnited Nations, Republic of Kazakhstan

It is a great honour for me to address the first everInternational Conference on Financing forDevelopment. First of all, I would like to express ourgratitude to the government of Mexico and the peopleof Monterrey, for their generous hospitality.

The conference offers an opportunity totackle the formidable challenges presented by therapid pace of globalization and interdependence, torethink and reshape our world and particularly tounlock the potential of development by revitalizing itsfinancing. Globalization and regionalization of theworld economy involve a new level of interaction andinterdependence of states. Along with obvious bene-fits, globalization entails a danger of a lopsided distri-bution of these benefits.

We meet today against the backdrop of aglobal economy caught in the grip of a prolonged eco-nomic slowdown with uncertain prospects for the nearfuture. Poverty is still rampant with over half the world

subsisting under $2 per day, underdevelopment iswidespread and a widening gap between the havesand have-nots threatens to undermine progress andstability. Such developments demonstrate the vulnera-bility and fragility of the global economy in the worldwe share forcing us to realign our thinking on theissue of peace, security and development.

As it is important for developing countriesand countries with the economy in transition to have astable, conducive external environment, we call on thedeveloped countries to vigorously adopt appropriatefiscal and monetary policies to stabilize their domesticeconomy, open the markets to developing countries,increase development assistance, and promote tech-nology transfer so as to create a more favourableexternal environment.

My country has entered the new millenni-um with all the problems characteristic to countrieswith the economy in transition. Reduction of the pub-lic sector and structural changes in the economy pro-duced unemployment and loss of income. TheGovernment, conscious of the urgent need to addressthe poverty problem, has adopted the state pro-gramme on fighting poverty and unemployment withspecial focus on nutrition, health and educationalneeds.

Now, the economy of the country is on therise as GDP grew over 13 per cent during last year.The growing economy allows solving social problems.The number of working places is growing. The level ofemployment of the economically active population hasreached 90.2 per cent.

But all these positive facts must not createan impression that all current and strategic problemshave been solved and it is even time to rest on ourlaurels. However, in this era of globalization domesticefforts alone cannot be successful. We recognize chal-lenges that present considerable threat to independ-ence and security of our country. These are sequel ofeconomic crisis in the world, instability on our south-ern borders, growth of terrorism, drug trafficking, HIVspread, and escalation of criminality in many coun-tries.

Therefore we pay special attention to theformation of an efficient system of regional securitybased on such institutions as Collective SecurityTreaty, Shanghai Organization for Cooperation, andthe Conference on Interaction and Confidence-Building Measures in Asia. The latter, being initiatedby President of Kazakhstan N. Nazarbaev, will have itssummit in June this year.


192

We acknowledge the primary role of effec-tive domestic policies in ensuring domestic growth andthat the flow of international financing must bematched by improved governance as well as soundmacroeconomic and fiscal policies. At the same time,international assistance and external financing stillremain an essential factor for development of manycountries, especially the most vulnerable, landlockeddeveloping countries among them. Therefore,Kazakhstan welcomes the ‘Monterrey Consensus’which highlights the essential nature of internationalfinancing, especially ODA, for this group of countries.

Trade is the most important and multidi-mensional mechanism for almost all developing coun-tries to mobilize and expand their domestic and exter-nal bases of resource for financing of development.Trade is also the major instrument of integration to theinternational economy, expansion of domestic savings,promotion of economic growth and the eradication ofpoverty.

The process of shaping the internationaltrade system unprecedentedly contributed to interna-tional economic growth. At the same time, despite theprogress achieved in the development of internationaltrading relations, direct and indirect tariff barriers con-tinue to affect a considerable number of goods, someof which are important export items for the develop-ing countries. In this connection, there is in our view aneed for further multilateral efforts to establish a dia-logue between the participants in trade relations toensure further liberalization in the sphere of interna-tional trade.

To reach our high goals we also needimproved cooperation between multilateral institutions:UN, WTO, Bretton Woods Institutions as well as theirreforms so as to better meet the new challenges.

We are now in a new century when eco-nomic globalization intensifies, mutual economic inter-dependence deepens, and information technology iswidely applied. Let’s hope that all countries of theworld as a whole join hands together for cooperationso as to make our world a better place to live in.

KenyaStatement byHis Excellency Mr. Christopher M. Obure, M.P.Minister of Finance, Republic of Kenya

I wish to thank the government and the people of theUnited Mexican States for the warm welcome andhospitality extended to the Kenyan delegation sinceour arrival in this beautiful city of Monterrey. I wouldalso like to thank President Vicente Fox Quesada forhosting this important conference. I commend theSecretary-General for successfully organizing this first-ever Summit-level forum on the important agenda ofFinancing for Development. Kenya notes with appreci-ation the efforts by the Secretary-General in imple-menting the United Nations General Assembly resolu-tion that seeks to address issues of financing for devel-opment.

The UN Millennium Declaration adoptedby the UN General Assembly endorsed the interna-tional development goals for 2015 and highlighted thetask of mobilizing the financial resources needed toachieve these goals. In line with that declaration andthe new African initiative under the New Partnershipfor Africa’s Development (NEPAD), Kenya firmlybelieves in the need to reconfigure the global financialarchitecture and trade arrangements. In this process,Africa must not remain marginalized and should befirmly integrated into the world economy.

The major challenge confronting develop-ing countries is the increasing levels of poverty. It isdisappointing that little progress has been achieved inpoverty reduction since the World Summit on SocialDevelopment held in Copenhagen in 1995. Meagerresources have so far been committed on reducingdebt burden, improving market access, building capaci-ty, tackling the HIV/Aids pandemic and other infec-tious diseases. Even after preparation of comprehen-sive Poverty Reduction Strategy Papers (PRSPs),resources have remained a constraint as developmentpartners have not delivered on their commitments. Weneed a genuine approach to the fight against poverty.

The existing global financial system and thearrangements for financing development have demon-strated their inability to deal adequately with the needsof developing countries. ODA flows to Africa declinedsubstantially in the 1990s at a time when poverty wason the increase. More than 340 million people inAfrica live on less than US $1 a day at a time whenthe continent has to deal with the high incidence and

193


consequences of HIV/Aids. There is an urgent need toput in place a new framework to create the enablingconditions for developing countries to achieve highand sustainable economic growth The new frameworkneeds to emphasise more concessionary financing andgreater use of grants. Kenya strongly supports the callto industrialized countries to raise their ODA to meetthe target of 0.7 per cent Gross National Product(GNP) over the next five years.

It is Kenya’s view that conditionalities tiedto the release of aid should be realistic, achievable andsufficiently flexible to take into account changing con-ditions and circumstances. We also advocate a morepragmatic approach in assessing achievement of tar-gets to take into account overall progress rather thaninsistence on achievement of individual benchmarks.We urge the development partners and particularly theBretton Woods institutions to be more sensitive to theneeds of developing countries.

The current global trade arrangementshave mostly benefited the industrialized countries. Atpresent, Africa’s share of global trade is less than 2%.It is unfair, for example that while industrialized coun-tries continue to provide substantial subsidies to theiragricultural sectors, they, together with the BrettonWoods institutions, make it a conditionality for supportthat developing counties liberalize their economies.This unfair situation makes it difficult for our agricul-tural exports to compete and for our agriculture to sur-vive. We hope that, in the spirit of Doha, we shall seepositive developments towards a reduction of thesesubsidies.

The current global economic system hasresulted in high-income inequalities. Rapid advances intelecommunications and information technology, andthe increasing digital divide threatens to further mar-ginalize developing countries and deny them theopportunities of globalization. This conference mustbuild on the momentum achieved in Doha, whichembraced a development round of trade negotiations.Kenya supports an inclusive multilateral trading sys-tem. We fully support the current initiatives aimed atproviding increased market access for African coun-tries such as the African Growth and Opportunity Actand the European Union/African, Caribbean & Pacifictrade arrangements.

Kenya, alongside other developing coun-tries, has experienced a net outflow of resources overthe past five years. The main contributor to these out-flows is the heavy debt service burden. Under theenhanced HIPC initiative, Kenya is among four coun-tries classified as having sustainable debt levels. Since

this has denied us access to debt relief. We call for afundamental change to the debt sustainability criteria.Funds released from such debt relief will be critical infunding core poverty reduction programmes.

Africa faces urgent challenges whichinclude the HIV/Aids pandemic, inadequate infrastruc-ture and capacity building requirements. Our efforts intackling poverty have been undermined by theHIV/Aids scourge and other infectious diseases.Without an effective effort to overcome HIV/Aids, allour socio-economic development gains will bereversed. We will require massive resources to mountan effective multi-sectoral HIV/Aids programme inorder to realize a more positive impact on HIV/Aidsprevention and care. We support the international ini-tiatives focused on a comprehensive and long-termpartnership between governments, civil society, inter-national organizations and pharmaceutical companiesin the fight against HIV/Aids. We call upon the inter-national community to accelerate its support to theglobal fund on HIV/Aids, malaria, tuberculosis andother infectious diseases.

The poor state of infrastructure in Africa isa major impediment to economic development in thecontinent. Without good road networks, railway sys-tems, ports, reliable and affordable energy, good air-ports, telecommunication systems, water and sanita-tion, it is very difficult to attract private sector invest-ment. The cost of building this infrastructure is colos-sal and is difficult to finance on a fragmented country-by-country basis. It is imperative to finance it throughregional initiatives, including regional integration. Wealso see opportunities for combining ODA supportand FDI through private public partnerships. If proper-ly packaged, these investment opportunities will attractprivate sector participation.

Kenya recognizes that an important com-ponent of the financing for development is the mobi-lization of domestic resources. We have embarked onfinancial sector reforms in order to encourage domes-tic savings. These reforms include liberalization of thefinancial sector with a view to broadening and deepen-ing the financial markets and developing appropriatesavings instruments.

To overcome the persistent implementationweaknesses, Africa needs support in building appropri-ate capacity to design and implement good policies,programmes and projects. Africa requires internationalsupport for its continuing efforts for comprehensivecapacity building including basic education, institutionbuilding, technical, professional and managerial skillsat all levels.


194

Let me conclude by emphasizing that theMonterrey Consensus is an important step towardsachieving the UN Millennium Goals. Kenya calls forgenuine commitment and partnership between thedeveloped and developing countries in the implemen-tation of the Monterrey Consensus for mutual benefitof all parties in what can only be a win-win outcome.There is, however, need to agree on an effectivemechanism to monitor the implementation of the out-come of this important international conference.Ultimately, our success will be measured by the extentto which we implement this consensus.

KuwaitStatement byHis Excellency Mr. Mohammad A. AbulhasanAmbassador and Permanent Representative to theUnited Nations of the State of Kuwait

Mr. President, I wish first to congratulate you, onbehalf of the State of Kuwait, on your election to pre-side over this milestone conference. Your election, Sir,is a testimony to the experience and skills, which, wetrust, you would bring to the stewardship of our delib-erations towards meeting our common goals. A wordof thanks and gratitude to our friendly country forhosting the conference and for the remarkable organi-zational work.

My delegation associates itself with thestatement made by His Excellency President HugoChávez of Venezuela on behalf of the Group of 77and China. We wish his country and people moreprogress and prosperity. Also, let me pay tribute tothe Islamic Republic of Iran, a sister state, for theenormous efforts it made during its chairmanship ofthe G-77 and China.

Since its independence in 1961, the Stateof Kuwait has vigorously sought a better life in termsof stability, security and economic prosperity for itspeople. The focus of our national constitution and thesound governance practices of the ruling family haveall along been geared towards ensuring a dignified lifefor our people. Our leaders, represented by the suc-cessive Emirs of the State of Kuwait, have always rec-ognized that consolidation of democracy, upgrading ofphysical infrastructure, domestic stability, respect forhuman rights and the rule of law are crucial pillars ofsustainable economic and social growth. Thus, elimi-nation of poverty and illiteracy were on top of ournational economic and social agenda.

Building on this national dimension, Kuwaitestablished only a few months after our independence,the Kuwait Fund for Arab Economic Developmentwith a view to help the development efforts of devel-oping countries in general and the sister Arab states inparticular. The aim of this orientation is to alleviatehuman suffering as well as to help economic andsocial progress by steadily increasing the rates of eco-nomic growth. Looking back at that modest but boldinitiative, we notice that the Fund has been in exis-tence for over four decades during which it offered616 loans covering some 97 countries. The value oftechnical assistance provided to 84 institutions andstates was in excess of US $11 billion. This putsKuwait in the lead of development aid donors sincethe total assistance given by Kuwait represents 8.2.per cent of our gross national product (GNP). Thesefigures demonstrate my country’s keen commitment tomaking effective contribution towards the improve-ment of the living conditions in the developing world.Kuwait is also determined to pursue this course simplybecause we believe that reaching out with help isimperative upon the capable. Furthermore, the devel-oping world is in dire need to feel the genuine benefitsof economic globalization. Obviously, this will not pre-clude cooperation among various economic blocks andregions, which is essential for invigorating the pace ofdevelopment, expansion of markers and intensificationof free competition. All these factors will help in build-ing a more interdependent world, a set up that wouldensure a more equitable spread of dividends of global-ization, which is undoubtedly our common objective.

The new parameters of the world todayhave largely been defined by the ongoing informationand communications revolution that shortened theintercontinental routes and channels of human interac-tion. Unilateralism and isolationism have become out-moded. Thus we have to work more closely togetherin order to lay the foundation for the structures thatwould help in bringing about welfare and progress.Creating windows of opportunity and hope can beachieved through the provision of technical assistanceto the developing nations. This in turn would help infostering national capabilities of each state.

There must be a new spirit for dealing withthis phenomenon. Our efforts should emanate fromour recognition of the need to share benefits andresponsibilities between the developing countries, onone hand, and the developed nations, on the other.Within this framework, conscious efforts must bemade to ensure effective and fair participation by thedeveloping countries in the international decision-mak-

195


ing process. We must forge ahead in our drive tochange the international financial system with a viewto make it more democratic and transparent through amore meaningful dialogue between the South and theNorth. Our Heads of State and Government pledgedin the United Nations Millennium Declaration to workcollectively towards ensuring transparency in the finan-cial, monetary and trade systems and creating open,equitable, nondiscrimination multilateral trade andfinancial systems based on predictable arrangements.

Here, my delegation wishes to underscorethe importance of seeing the developed countriesmaking their markets more accessible to the exportsof the developing world, including the removal of cus-toms and other barriers to their manufactured goods.This would help these countries to mobilize their ownresources for meeting the requirements of sustainabledevelopment.

Furthermore, we call upon the developedcountries to increase their official development assis-tance and to honour their commitments to allocate0.7 per cent of their GNP for this purpose. Also, weappeal to the developed countries to pay due attentionto the harsh conditions facing the heavily indebtedpoor countries. In this context, there is a pressingneed to write off all government bilateral loans ownedby these countries in return for explicit commitment toeliminate poverty. This effort would be bolstered bythe provision of adequate technical assistance, includ-ing the transfer of technology to these countries, inorder to address the growing disparities between theNorth and the South.

My country, Kuwait, is a coastal seafaringnation. We managed to survive the rigours of a harshdesert environment by patience, steadfastness and thedetermined will to succeed. That national resolveturned parts of our desert into a hospitable green landthrobbing with modern life. We have exploited ourGod-sent oil wealth to the benefit of our people andour brethren in humanity. It is the same will thatalways enabled Kuwait to face up to oppression and todefeat aggression. It is the same spirit fuelled by ourdynamism whether in repelling aggression or in fight-ing our battle of construction and development. Theevents of the recent past are a testimony to that willand spirit.

Kuwait, with its known track record, willalways remain faithful to its time-honoured principlesand traditions, loyal to its friends and respectful for itscontractual obligations. From this podium, may I makethis appeal? All of us must meet our commitments toensure a better future. Our road map is already set in

the Millennium Declaration and the MonterreyConsensus. These two documents will define the pathfor all peoples wishing to live in peace, for all futuregenerations aspiring for security, knowledge andadvancement, for a humanity seeking harmony andcooperation.

Lao People’s DemocraticRepublicStatement byHis Excellency Mr. Soukanh MahalatMinister of Finance, the Lao People’s DemocraticRepublic

It is an honour and a great pleasure for me to repre-sent the Government of the Lao People’s DemocraticRepublic to participate in this important and meaning-ful International Conference on Financing forDevelopment. Please allow me, on behalf of the Laodelegation, to congratulate you on your brilliant elec-tion to the presidency of the present Conference aswell as for the successful opening of this big event. Wewould also like to express our sincere thanks and grati-tude to the Government and People of Mexico for thewarm welcome extended to us and for the excellentarrangements made for the Conference.

We have gathered today with the strongenthusiasm to address the challenges of financing fordevelopment around the world, particularly in develop-ing countries, including the Least DevelopedCountries, the Landlocked Developing Countries andthe Small Island Developing States. Our goal is toeradicate poverty, ensure sustained economic growthand promote sustainable development. In order torealize these goals and objectives, it requires a newpartnership of cooperation between developed anddeveloping countries. The ‘Monterrey Consensus’ con-stitutes an important framework for the internationalcommunity in dealing with the challenges of financingfor development. We should dedicate ourselves and doeverything possible to ensure full and effective imple-mentation of the said and unanimously adopted docu-ment.


196

The Government of the Lao PDR hasmade the improvement of living standards and thealleviation of poverty of its multi-ethnic population theessence of its development goal in order to rid ourcountry from the status of the Least DevelopedCountries by the year 2020. To achieve this goal, ourGovernment has identified sustained economic growthwith equity as the main instrument. In this context, wehave defined eight National Priority Programmes toserve as the main reference for our investment andplanning system. Based on the capacity and the reali-ties of our country, these eight priority programmesare food production, commodity production, stabiliza-tion of shifting cultivation, rural development, infra-structure development, expansion of external econom-ic relations and cooperation, human resource develop-ment and services development.

In order to translate these priority pro-grammes into action, there is a need for enormousfinancial resource. To this end, we have put up all ourefforts and placed priority in the mobilization ofdomestic financial resource for development, the cre-ation of better investment conditions and atmosphereto facilitate foreign direct investment, as well as theencouragement of the participation of the private sec-tor in the development process. In spite of all theseefforts, due to the smallness and the limitations of theLao economy, the challenges faced by the country asLeast Developed and Landlocked, The Lao PDR stillneeds support and assistance from outside. During thepast years, we have received valuable support andassistance from friendly countries, InternationalDevelopment Agencies within the United Nations sys-tem, International Financial Institutions and Non-Governmental Organizations for the social-economicdevelopment of country. On behalf of the Governmentand the People of Lao PDR, I would like to expressour sincere thanks and gratitude for those valuableassistance and support received.

For a number of developing countries,being landlocked, not a member of the World TradeOrganization, and the lack of infrastructure and goodroad systems are among the main obstacles to socio-economic development. The opening of a freer mar-ket has not yet led to trade and investment promotion.Therefore, we appeal to the international communityto increase assistance and support in order to enablethem to integrate into the world economy.

The Group of Landlocked DevelopingCountries, which Lao PDR currently chairs, is verypleased to see their special problems being recognizedin the Monterrey Consensus, particularly on the issuesrelating to domestic resource mobilization, the foreign

direct investment, and the international financial andtechnical cooperation for development. We are equallypleased that the Monterrey Consensus has recognizedthe importance of enhanced and predictable access toall markets for the exports of Landlocked DevelopingCountries. We urge for the full and effective imple-mentation of the Monterrey Consensus, as it will helpthis group of countries to further develop their respec-tive economies.

As we enter the 21st century, The world isfacing numerous difficulties and challenges. As for theLao PDR, we believe that the implementation of thenew economic mechanism, the reform of our econom-ic structure based on the uniqueness and the capacitiesof the country, the integration into the region and theworld, and the support from friendly countries andinternational organizations, will greatly assist us inachieving the goal of exiting from the Least DevelopedCountries status by 2020, and thus will turn our coun-try into a truly self-reliant one.

LatviaStatement byMr. Maris Riekstinsv

Secretary of State, Ministry for Foreign Affairs,Republic of Latvia

Allow me on behalf of the Government of theRepublic of Latvia to express my pleasure for havingthis opportunity to address the InternationalConference on Financing for Development.

Everyone will agree that mobilizing andincreasing the effective use of financial resources has apivotal role to eliminate poverty, improve social condi-tions and raise living standards, and protect environ-ment in the developing countries. More importantly,the development assistance makes an effective contri-bution to peace and stability in developing and transi-tion economies. Promoting sustained growth anddevelopment is especially important in view of theSeptember 11, 2001 terrorist attacks that reducedworld economic growth and caused economic slow-down in many countries. We are convinced that onlybringing resources together will restore economic con-fidence and strengthen world economic, financial andtrading systems.

197


Latvia regained its independence only 11years ago. Since then we have taken enormous strainsto implement macroeconomic and structural reformsand complete the transition to the functioning marketeconomy. Now, despite the global slowdown, Latviaexperiences robust economic growth and sustainableeconomic development on its path to membership inthe European Union. The positive developments werelargely based on our readiness to absorb the assistanceprovided to Latvia by developed countries at thebeginning of the Nineties.

Our experience tells that it is not enoughto receive international help; it has to be well admin-istred. Now Latvia stands ready to share its knowledgein the transition to a market economy and also pro-vide financial assistance to those countries that need itmost.

In assisting developing and transitioneconomies, Latvia both grants development andhumanitarian aid and participates in the aid pro-grammes provided by international organizations. Theexamples of the bilateral development assistanceinclude help to the countries in the Balkan region and,most recently, a decision of our government to conveyhumanitarian aid to ease the pain of Afghan refugeesand civilians. As regards the multilateral assistance,since 1999 Latvia has become a contributor to theUnited Nation Development Programme.

Latvia is interested in continuing its partici-pation in the aid programmes provided by the UnitedNations Development Programme, The World Bank,and the International Monetary Fund (IMF). With theaccession to the European Union, just in a couple ofyears, Latvia will become an integral part of theworld’s largest contributor to the development-cooper-ation assistance. As a member country, Latvia will beready to join the EU in financing the EuropeanDevelopment Fund, which provides financial aid todeveloping countries.

We are convinced that international tradeshould act as an important engine for development.During the WTO Fourth Ministerial Conference, Latviastrongly supported the view that the new round ofmultilateral negotiations should be directed at provid-ing more benefits to developing countries, especiallythe least developed among them.

Latvia not only declares but also takespractical steps to support the integration of the devel-oping countries into the multilateral trading system.Following its commitments under Doha Ministerial

Declaration Parliament of Latvia has adopted a lawgranting duty-free and quota-free market access forproducts originating from 49 of the world’s leastdeveloped countries.

In conclusion, let me assure you that eachcountry with efficient and continuous efforts, goodgovernance may change its own course and reach sig-nificant improvement in economic and social develop-ment. We believe that the Monterrey Consensus willhelp to achieve these goals.

LebanonStatement byHis Excellency Mr. Nouhad MahmoudAmbassador to Mexico of the Lebanese Republic

Mr. President, I would first like to commend the effortsmade by the Preparatory Committee which hasenabled us to have the final draft for this conferenceon financing for development. Lebanon identifies withthe ideas expressed in that document, especially thepoints raised in the draft by our group, the Group of77.

Development is an issue of central impor-tance for all nations, North and South. It is the startingpoint where all progress, growth, and bettermentemerge. It is a point that all of us seek, but one whichmany of us do not have. Development, furthermore, isnecessary on both levels: local and international.Locally, because it allows for the creation of employ-ment, better living standards for the population’sgroups and individuals, and because it helps us releaseour creativity in a flourishing society. It is equallyimportant on the global level for it has become morethan obvious that the widening socio-economic gapamong nations is only a recipe for conflict and troublefor this generation and for those to come. A balanceor equilibrium of some sort is crucial, now more thanever.

Development, in order to succeed, musthave a healthy and normal environment whereinpeace, security, and a commitment to internationallaw are the norm. Growth and betterment are notpossible in conflict-ridden environments; nor are devia-tions from provisions of international law in states’relations and marginalization of democratic values con-ducive to the right conditions for development. Andthough the issue of terrorism is dominant at this time,


198

let us not forget that international law is our commonheritage, born from the calamity of war and humansuffering, throughout history. It is, therefore, theframework that we must hold on to regardless of thecircumstances.

Development relies on financing. Action isnecessary. It is stated in the second section of the draftthat mobilizing international resources for develop-ment by use of private flows is one of the most impor-tant methods by which to realize development. Wepropose, however, to take this particular point onestep further and emphasize the idea that multinationalcorporations should actively participate in the financ-ing for development. With the vast amounts of avail-able capital and the extensive presence and influencethese transnational corporations attain, it is only rea-sonable that they play their part in this financialendeavour. After all, it is the multinational corporationthat benefits most from a developed world – a worldwhere the number and value of markets are substan-tially higher than what we encounter today.

This idea of financial contribution bytransnational corporations is already partially and spo-radically practiced and greatly appreciated. The philan-thropic acts by some symbols within the transnationalsystem reflect humanism and vision. However, we lookforward to the day when these acts of participation inequilibrated global development are mandatory, regu-lated, and institutionalized in an international fundwherein financial assistance for development is nottied to political considerations from one side or theother. We propose a freer system of financial contribu-tions that does not only rely on government aid in thepublic realm and foreign direct investment in the pri-vate; participation of multinational corporations in aglobal system to finance development is just, reason-able, and feasible.

The issue of financing for development isan all-important one, not to be forgotten once thisconference is finished. Nevertheless, it is only the firststep in our attempt to modify this world. For today’spoor human conditions are the plain result of an ego-istic train of thought that is threatening the same plan-et we all inhabit. We must try to rid ourselves of thegreed and selfishness when addressing global issues.And though Financing for Development is today’smatter, let us make tomorrow’s agenda more ambi-tious. Let us change our behaviour and give, notbecause of compliance to any pressures, but because itis for the overall benefit of all humanity.

LesothoStatement byHis Excellency Mr. Mpho Meli MalieMinister of Industry, Trade and Marketing, Kingdomof Lesotho

On behalf of the government and people of Lesotho,and on behalf of my delegation, I wish to express ourheartfelt gratitude to the people and government ofMexico for hosting this august meeting. Mr. President,allow me to congratulate you upon your election aspresident of this important summit on financing fordevelopment. Further, I wish to pay a special tribute tothe Secretary-General of the United Nations, Mr. KofiAnnan for his sterling guidance, continued dynamicleadership and commitment to our organization in itsquest to tackle the challenges of our time, and shapethe futures of nations of the world.

There is global consensus that sustainabledevelopment is difficult to achieve in the absence oftrue democracy, good governance, respect for humanrights, peace, security, and the rule of law. In recentyears, we have witnessed a rapidly growing movementaway from dictatorship and authoritarianism.Democracy and good governance on the political frontremains incomplete unless it is replicated in socio-eco-nomic development, trade and other decision-makingprocesses at the global level. At both subregional andregional levels, governments are pulling resourcestogether for the creation of a political environmentuntenable to political dictatorship, coup d’etats andother undemocratic systems of governance.

Many governments are enacting anti-cor-ruption legislations and establishing institutional andadministrative structures to combat corruption, drug-trafficking, terrorism, including proliferation of smallarms, etc. The ultimate objective of these initiatives isto create at national, regional, and global levels anenvironment that is conducive for the promotion ofdemocracy, good governance, respect for humanrights, peace security and the participation of peoplein the moulding of their destiny. The end result of allthis should be increased investment in development.

The new partnership for Africa’s develop-ment (NEPAD) is a clear commitment of African lead-ers to individually and collectively, put the continenton a path to sustainable growth and developmentwhile actively participating in the world economy andbody politic. Africa’s continued marginalization from

199


the globalization process remains a serious threat toglobal stability and to good governance. NEPAD is,therefore, Africa’s call for a new and stronger partner-ship with the international community, to hold andreverse decades of inequitable distribution of wealthand unfair trade relations.

More and more developed countries andinternational organizations have demanded that devel-oping countries should put their houses in order withrespect to democracy and good governance. Whilethis is understandable, it is important that achievementof these is duly rewarded by more meaningful financ-ing for development by cooperating partners.

In May this year, the people of Lesotho willgo to the polls to freely elect a government of theirchoice, and our borders are open to those who wishto come and observe this process. Our journey totransparency and popular participation and the foster-ing of the rule of law and good governance is irre-versible. In this regard, we request our cooperatingpartners for increased and unconditional support(financial, material and otherwise) for strengthening,deepening and broadening the tenets of democracy.

HIV/AIDS and poverty are some of themajor challenges confronting us today. Their contin-ued existence does not augur well for the sustainabilityof our development objectives and to mankind’s sur-vival. Lesotho has adopted a national strategy foraddressing HIV/AIDS and has established the LesothoAIDS Programme Coordinating Authority under thePrime Minister’s office. Lesotho’s policy on HIV/AIDSemphasises the involvement of all stakeholders in the fight against this scourge. We welcome thesupport extended to our national strategy against

this pandemic. As a commitment to addressing poverty,

the government of Lesotho is at an advanced stage offormulating a poverty reduction strategy paper whichincorporates views from all stakeholders. This strategywill be ready by the end of this year, and will form thebasis for targeted poverty reduction programmes.

An increasing number of major internation-al conferences have registered commendable successestowards a closer and stronger international coopera-tion. Many nations acknowledge that poverty, lack ofeducation, absence of human and political rights, lackof equal opportunities for individuals and groups con-

tinue to be a major threat to peace and security andcan become a root cause for terror, despair and poorgovernance. The Monterrey Conference on Financingfor Development offers us a unique opportunity totranslate words into concrete actions.

The unfortunate events of 11th September2001 in New York and Washington have once againdemonstrated an urgent need for the establishment ofthe United Nations International Criminal Court todeal with crimes against humanity. All nations of theworld, large or small, rich or poor should engage theirbest efforts to ensure that gains in multilateral cooper-ation are consolidated and broadened. While unilater-alism is abandoned in favour of stronger multilateral-ism in our efforts to fight terrorism, it is incumbentupon us all peace-loving nations to join hands in soli-darity to combat it. Terrorism does not only under-mine world peace and security, but drains away thescarce resources needed for economic developmentand social progress.

The fulfillment of internationally agreedofficial development assistance (ODA) targets by alldeveloped countries will generate increased resourcesfor development financing. In this regard, we expressour gratitude to those developed countries, which havemet their ODA targets. However, we do urge that alldeveloped countries meet these targets since ODAremains the largest source of external financing forlandlocked, resource-poor LDCs like Lesotho. Duecognizance needs to be accorded to the UnitedNations Millennium Declaration as a guiding principle.

We are appreciative of the efforts beingmade in support of the HIPC. It is our considered viewthat if external debt relief could also be targeted to lessindebted poor countries like Lesotho, it would leave atour disposal significant resources to invest in povertyalleviation programmes, human resource development,economic and social infrastructure. Cancellation ofLesotho’s debt, coupled with the availability of ODAand other development assistance, would give us therequired capacity to invest in economic developmentprogrammes, and help us integrate into the globaleconomy.

Lesotho is committed to sound macroeco-nomic policies that are aimed at achieving key objec-tives of sustained economic growth, employment cre-ation and poverty reduction, while taking into accountthe need to ensure low inflation and sustainable fiscaland current account balances. It is with this commit-ment in mind that Lesotho continues to implement acomprehensive economic reform programme whichincludes privatization of state owned enterprises,


200

reform and restructuring of public utilities sector andthe establishment of a revenue authority. In order forthis reform programme to achieve its broad aims, weinvite the international community to extend supportin the form of increased technical, financial and otherforms of assistance.

Developing countries should give high pri-ority to strengthening macroeconomic institutionscapacity building requirements through training pro-grammes and provision of technical know-how andtechnological infrastructure. Emphasis should beplaced on strengthening institutional arrangementsthat bring the main elements of macroeconomic policyinto the public domain. As a result, full consequencesof those policies, including their social dimensions, canbe discussed in a way that helps to achieve a balancebetween economic and social priorities.

It is a priority policy of my government topromote the creation of jobs. However, Lesotho’ssmall economy is confronted with formidable chal-lenges and constraints such as lack of capacity to takeoptimal advantage of benefits accruing from trade lib-eralization, enhanced market access, human and insti-tutional capacity exacerbated by a weak business sec-tor. Whilst we recognize the private sector as anengine of growth, we realize that it continues to faceserious shortages of entrepreneurial skills and financewhich undermine its ability to contribute meaningfullyto the country’s economic activities. Unless its capacityis urgently strengthened and expanded, the sector’spotential in job creation and foreign exchange earn-ings through exports will continue to be under exploit-ed, thereby minimally contributing to poverty reduc-tion.

Promotion of both foreign and domesticinvestments requires the existence of a conducive andenabling investment climate. Many developing coun-tries have made significant progress in facilitating afavourable investment climate. However, foreigninvestment flows continue to be very low, partly due toinstitutional capacity constraints, and highly volatiledefinitions of ‘favourable investment climate’ by ourpartners in the north; and poor economic infrastruc-ture particularly in the least developed countries. Wecall upon the developed countries to review theirinvestment policies in a way that directs financingtowards infrastructure development, in order to attractforeign direct investment in these countries.

Trade liberalization plays a vital role in pro-moting economic growth, employment and develop-ment among nations. Lesotho encourages developedcountries that have not liberalized their markets to doso. In order to address specific constraints faced by

developed countries, should take into cognizance thereview of special and differential treatment provisions,with a view to strengthen. And make them more pre-cise, effective and operational.

We subscribe to a notion of a universal,rules based, open, non-discriminatory and equitablemultilateral trading system under the. Auspices of theWTO, as a tool to a meaningful trade liberalizationthat can substantially stimulate economic growth. As aresult, here is a dire need for the international finan-cial institutions and developed countries to generouslyand substantially contribute to capacity-building initia-tives of developing countries, in particular those of theLeast Developed Countries in accordance with theDoha agreement, and for an enhanced participation ofthese countries in the multilateral trading system.

Lesotho has embarked on a programme ofdeveloping a long-term national vision to address themany problems that face her economy. Continuedimplementation and the consolidation of the gainsfrom the macroeconomic reform programme support-ed by the IMF are awarded high priority. The govern-ment believes that implementation of prudent fiscaland monetary policies capable of maintaining inflationand exchange rates at acceptable levels, creates a con-ducive climate for political stability, increased invest-ments and creation of employment. It is in line withthis belief that the government continues to vigilantlycurtail wasteful expenditures and abuse of publicassets. In addition, Lesotho is in the process of imple-menting a public sector improvement and reform pro-gramme aimed at improving financial managementand public service delivery, including rationalization ofthe civil service. We would highly appreciate increaseddonor assistance and support to these initiatives.

May I end my statement with a plea thatthe Monterrey Consensus should become a guidinglight, a unifying theme and a source of fresh hope andenergy. As we forge and implement strategies that willenhance the achievement of a better world in whichthe global common wealth is distributed more equi-tably for the common good of all humanity.

201


Libyan Arab JamahiriyaStatement byMr. Abdurrahman Mohamed ShalghemSecretary of the General People’s Committee forForeign Liaison and International Cooperation ofthe Socialist People’s Libyan Arab Jamahiriya

Mr. President, I would like at the outset to extend toyour Excellency our congratulations on being chosenPresident for this high level event, embodied in theInternational Conference on Financing forDevelopment. I am confident that your wisdom andexperience will lead this conference towards theachievement of its objectives.

This international event takes place toensure the realization of the aims and purposes of theUnited Nations Charter in the enhancement of inter-national cooperation to seek solutions for all economicand social issues. It also embodies the principles indi-cated in the International Declaration of HumanRights, and implements the outcome of the major con-ferences and summit conferences held by the UnitedNations over the past few years, chief among whichwere the Millennium Summit, and the United NationsThird Conference for the Least Developed Countries.All peoples of the world, particularly in the developingcountries, have great expectations of this event, whichwill address national and international issues, as wellas system-wide issues related to comprehensiveFinancing for Development, in the context of global-ization and interdependence. Furthermore, this eventwill address the issue of development from the per-spective of financing, and the mobilization ofresources in order to implement fully and effectivelythe results reached internationally over the past fewyears.

The mobilization of financial resources con-stitutes an integral part of the comprehensive effortsthat must be undertaken to achieve growth, sustain-able development, and the eradication of poverty.Such efforts cannot be made except through theestablishment of a conducive local environment inwhich all members and groups of the society truly par-ticipate in the setting of general policies, and controltheir overview implementation. Each of the actorsinvolved will undertake this task within a political andorganizational framework which suits it, and in a man-ner which leads to the realization of freedom, peace,

security, internal stability, respect for human rights,including the right to development, the rule of law,gender equality, the establishment of just and demo-cratic societies, the enhancement of public finance,through the introduction and execution of effectiveand equitable tax systems, the increase of publicexpenditures to develop the infrastructure, social devel-opment, capacity-building, and technical assistance. Inthis connection, the Great Jamahiriya has taken lead-ing and unique measures in the world since 1977, theyear when it declared the establishment of thePeople’s Authority. Under that declaration, the Libyanpeople took control of all organs of government, thuspossessing authority, wealth, and arms. Through theirexercise of authority, the Libyan people could drawthe general policies of the State for all bodies andinstitutions, implement these policies, and controlthem. They were also able to establish public and cor-porate enterprises, as well as partnerships, on an indi-vidual and family level. Concessional loans to set upsmall and medium enterprises were also made avail-able in order to achieve economic, social, and humandevelopment for all members of the society.

The mobilization of international resourcesfor development constitutes a vital factor that comple-ments national and international initiatives, throughthe flows of private international capitals, and theincrease of the Official Development Assistance,which, in turn, augments local resources. This assis-tance remains the biggest source of external financingfor developing countries in Africa, the LeastDeveloped Countries, Small Island Countries, andLandlocked Developing Countries. In this respect,Libya calls upon the developed countries to exert theirutmost efforts to implement the internationally agreedtargets of allocating 0.7% of their GNP to the OfficialAssistance given to developing countries, and a rate of0.15% to 0.20% of their GNP to the Least DevelopedCountries. It also calls upon the recipient and thedonor countries, as well as the international institu-tions, to work together to render official financialassistance more effective. Multilateral developmentinstitutions, as well as regional ones, must, in theirturn, perform their role in the service of providing thedevelopmental requirements for developing countries.They should also contribute to the provision of ade-quate funds to countries that face poverty challenges,and lack sufficient accessibility to capital markets.Furthermore, these institutions should harmonize theiroperational procedures on the highest level in order to


202

reduce the cost of transactions, and achieve greaterflexibility in the process of providing and developingOfficial Development Assistance. The needs andobjectives of national development, within the frame-work adopted by the recipient country, should also betaken into account. Moreover, they should endeavourto lift restrictions put on assistance given to the LeastDeveloped Countries: improve the capacities forfinance management in the recipient countries and thecontribution of these countries to the design of techni-cal assistance programmes, including the purchaseprocess, and enhance the effective use of local techni-cal assistance resources.

The alleviation of the burden of externaldebt plays a major role in the liberalization ofresources that can be subsequently invested in activi-ties commensurate with the achievement of sustainablegrowth and development. My country calls, therefore,for the adoption of more national and internationalmeasures in this respect, including, if necessary, thecancellation of debts, and other arrangements, aimingat the alleviation of poverty in the recipient countries.We emphasize, at the same time, that both the IMFand the World Bank should take into consideration,when putting forward recommendations concerningpolicies, including the alleviation of debt burdens, thebasic changes in the ability of countries to sustaindebts because of natural disasters, shocks in trade-exchange terms, and conflicts. We stress also theimportance of setting a number of clear principles tomanage and resolve financial crises in a manner thatguarantees an equitable sharing of burdens betweenthe public and private sectors, and between debtors,creditors, and investors. Donor countries are calledupon to take steps to ensure that the resources theyprovide to lessen debt burdens do not adversely affectthe resources intended to be provided to developingcountries from Official Development Assistance. Theyshould also work to expand and enhance the partici-pation of these countries in all the relevant interna-tional institutions such as: the International MonetaryFund (IMF), the World Bank, World TradeOrganization (WTO), Bank of InternationalSettlements, and the Ad hoc Groups which providerecommendations concerning policies that have inter-national consequences.

Libya attaches top priority to the revitaliza-tion of the UN system, as this is a basic matter in theenhancement of international cooperation for develop-ment, and for the establishment of a just and equitableworld economic order. We stress also the necessity ofenhancing all the major organs of the organization to

perform their mandated principal roles, including theGeneral Assembly, in its capacity as a parliamentarianand representative organ entrusted with the enactmentof major UN policies. The Economic and SocialCouncil should also be revitalized to be capable of per-forming the role assigned to it by the UN Charter.Furthermore, Libya urges the acceleration of thereform process of the Security Council, and its meth-ods of work, in a manner that achieves justice anddemocracy in the adoption of its resolutions. Theseresolutions should reflect the will of the majority of theinternational community members who wish toachieve justice and enhance international peace andsecurity. This Council should not be exploited by turn-ing it into a tool of coercion used against small andvulnerable states, and an organ through which unjustsanctions are imposed. Such sanctions have been amajor cause for the increase of poverty and diseases,and have led to the deaths of millions of peoples inmany parts of the world, including my country in thelast decade, and the current suffering of Iraq. Mycountry calls upon the International Community tostand firmly in the face of super powers which haveconstantly violated the UN Charter and other rules ofinternational law by imposing unilateral coercive eco-nomic measures on some developing and least devel-oped countries, which considerably obstructed theefforts of the affected countries in the field of econom-ic development and sustainable development.

My country is a developing country that isvery much in need for all its available resources toachieve economic, social and human development forits people. However, given its leading role in theAfrican continent, and out of its sense of responsibilitytowards several friendly and sisterly countries. Libyahas, since the start of the Great El-Fateh Revolution in1969, contributed to the support of developing coun-tries in general, and the least developed countries inparticular, through financial flows in the form ofgrants, as well as concessional and unconditionalloans. Most African countries, and a number of coun-tries in Asia and Latin America, benefited from theseflows. Several developmental projects were estab-lished, including the building of schools and hospitals,as well as the undertaking of joint investment projects,bilaterally and multilaterally, in the financial, banking,agricultural, mining, fishing, and maritime transporta-tion fields. Libya also contributed to the establishmentof numerous petrol stations, power plants, airports,and the drilling of wells for drinking water. Furtherassistance was given to the building of roads and theestablishment of health centres to combat AIDS, andother endemic diseases.

203


The maintenance of international peaceand security, and the reinforcement of stability, consti-tutes an essential condition for the achievement ofeconomic development and sustainable development,and an effective factor in the mobilization of local andinternational resources for the financing of develop-ment. This has prompted my country to make intensi-fied efforts to put an end to disputes among somestates, particularly in Africa and Asia. These effortswere successful in bringing about peace and achievingnational reconciliation in several countries, turningtheir national energies and capabilities to the realiza-tion of development and construction Out of my coun-try’s belief that integration is one of the means thatwill lead to the eradication of underdevelopment andthe achievement of comprehensive development, ithas been honoured to initiate the Sahilo-SaharianCommunity of States, and the African Union declaredin Sirt Second Summit held in the Jamahiriya in theyear 2000.

In conclusion, I wish to express sincerestthanks and appreciation for the commendable effortsof the Mexican government and people who hostedand organized this important event. We are mostgrateful to them for providing all means to ensurecomfort for the participants.

LithuaniaStatement byHer Excellency Mrs. Dalia GrybauskaiteMinister of Finance, Republic of Lithuania

It is a great honour for me to speak today at thisConference, which will have a significant contributionto addressing the challenges of Financing forDevelopment in the world. Perhaps it is symbolic, butthis year Lithuania has started implementing its owndevelopment policy and is gradually transforming froma recipient to a donor country. As a strong democracywith a fast growing economy, Lithuania might serve asa good example in this process.

After regaining its independence in 1990,Lithuania has started to implement its political, demo-cratic, social and economic reforms. Foreign assis-tance to the country has played one of the essentialroles. Nonetheless, mobilization of local resources,commitment for good governance and ownership, and

guarantees of the ability to absorb the assistance forthe implementation of reforms represent significantachievements of Lithuania. Of course, human rights,the rule of law, and democratic principles, have servedas the basis for sustainable growth of the country. Theliberalization of the economy, promotion of free trade,creation of favourable conditions for foreign invest-ments as well as strict anti-corruption measures haveestablished Lithuania as a reliable country in the world.

With the prospect of membership in theEuropean Union (EU), North Atlantic TreatyOrganization (NATO) and the Organization forEconomic Cooperation and Development, Lithuaniamust now prepare for taking on additional internation-al obligations.

This year Lithuania’s development cooper-ation policy has been identified as an integral part ofLithuania’s foreign policy, which aims to promoteglobal security, human rights and democracy, sustain-able growth and poverty reduction in the world. Assuch, it stands alongside and complements other poli-cy instruments, such as support to international peace-keeping, regional cooperation and good neighbourlyrelations. In the process of reforms, Lithuania haslearned a lot about the modalities of developmentcooperation and has forged new partnerships.

Involvement in incoming aid programmes(EU Phare, UNDP, World Bank and bilateral/NGO)has led to the acquisition of relevant aid managementskills by a range of officials and private sector consult-ants. The pool of unique skills and experience is aresource, which can be made use of in the implemen-tation of outgoing trilateral and multilateral pro-grammes in the world.

Lithuania strongly supports the process ofglobalization, Millennium Development Goals and isfirmly committed to the aims of the MonterreyConference. I do hope that the results of Monterreywill contribute to better living in the world.


204

LuxembourgStatement byHis Excellency Mr. Charles GoerensMinister for Cooperation and Humanitarian Action,Grand Duchy of Luxembourg*

Luxembourg is quite aware of the noteworthy progressachieved in the world in the past 30 years. Thisprogress illustrates that poverty eradication is not anillusion. A child born today can expect to live 8 yearslonger than had been the expectation 30 years ago.But let us not forget that at the end of the year 2000approximately 36 million people tested positive forAIDS or are carrying it. At that time, some 90 percent of them lived in the developing world, and 70 percent in sub-Saharan Africa.

As for the progress achieved, howeverinsufficient, it shows the existence of real means thatwe already have at hand. There is no question of chal-lenging what has been achieved. And there is no ques-tion of letting this progress stagnate through a global-ization process that is too exclusive. Let me list someof the many elements – more equitable trade; generalaccountability as concerns combating climate change;a true North-South partnership benefiting the ampli-tude of the effort and its effectiveness; a global policyof health care that would bridge the gap that unfortu-nately continues to separate physicians from patients,the sick from medication and hospitals from the peo-ple who really need them – that can correct a global-ization which is too unbridled and which can be mademore humanistic through world governance, still toounstable today.

Together with our partners in theEuropean Union (EU), we were not waiting for thetragic events of 11 September last. Nothing, ofcourse, can justify the need for introducing far-reach-ing structural change on our planet. The Governmentof Luxembourg is alarmed over the drop in world offi-cial development assistance (ODA) over the past 10years. Average ODA indeed has declined to a criticallevel, corresponding to only 0.22 per cent of GNP ofthe Organization for Economic Cooperation andDevelopment (OECD) countries. Thus, ODA to Africa,which in 1990 was still $25.4 billion, dropped to$15.7 billion in the year 2000.


My Government, which has over 10 yearsregularly increased its ODA, in the year 2000 devoted0.74 per cent of its gross national income to that end.We decided to continue the increase of ODA, whichshould reach one per cent of its GNP between nowand the middle of the decade. The European Unionand its member States, which provide more than 50per cent of ODA, bear considerable responsibility. Wewelcome the recent conclusions reached at theEuropean Council in Barcelona; these are aimed atincreasing the average ODA of member States to0.39 per cent between now and the year 2006.

Luxembourg has actively participated in thework done in the European Union and in the UnitedNations Preparatory Committee in organizing thisConference. We consider that the MonterreyConsensus is inclusive and balanced, because it setsout a number of proposals that make it possible tomobilize new national and international resources ondebt, trade and the role of the private sector in financ-ing for development. It is important for developingcountries to carry out the necessary reforms in orderto ensure good governance. It is particularly a questionof promoting the proper operation of public institu-tions, eliminating corruption, reducing inequalities andsetting up fiscal and administrative systems that areefficient and transparent.

The international community will be judgedmore in the light of what happens after Monterrey –and in this respect I welcome the recommendationsset out in the chapter entitled ‘Staying Engaged’. Wemust intensify our efforts to ensure the coherence ofpolicies at the international level. This means that theobjectives of sustainable development and combatingpoverty must be supported by all policies pursued atthe multilateral level, whether it is a question of agri-culture, trade, environment or finance.

Lastly, Mr. President, I would like toexpress my very best wishes to you for the successfulcompletion of these deliberations.

205


MalawiStatement byHis Excellency The Honourable Friday JumbeMinister of Finance and Economic Planning,Republic of Malawi*

Let me, on behalf of my delegation and myself, joinother speakers in thanking the Government and thepeople of Mexico for hosting this very important andhistoric event and for their hospitality. I also thank theUnited Nations for the excellent facilities placed at ourdisposal at this Conference.

This Conference has opened the gates ofhope for the poor of the world. It is a declaration ofhope to them that the leadership of nations andorganizations of the world are committed to eradicat-ing poverty, adhering to sustainable economic growthand development, as well as to a fully inclusive andequitable global system.

We acknowledge that official developmentassistance has assisted poor countries in their effortsto meet some development challenges. Over the pastfour days, the discussions have converged on the factthat considerable amounts of resources are required tomeet the Millennium Development Goals. In thisrespect, we welcome the statements made by devel-oped nations to increase their commitment to officialdevelopment assistance.

However, for least developed countriessuch as Malawi, with a small landlocked economy andwith 65 per cent of the population living below thepoverty line, significant amounts of official develop-ment assistance are required to make a positive impacton the economy. While the efficiency of aid is of con-cern, our view is that the effectiveness of aid onpoverty levels needs to be united with flexible andtransparent conditionalities. In most instances, percep-tions undermine facts and are largely used to shiftgoals, thereby making official development assistancecontradict the very objective of poverty eradication.

Official development assistance should begiven in a context of country needs and priorities.With the advent of democracy, many sub-Saharancountries have established democratic institutions toensure good governance and transparency, with aview to consolidating democratic values. These areindeed preconditions for any meaningful sustainable


economic focus. However, we note with concern that,in the absence of transparent and universal measuresregarding the rule of law, good governance and trans-parency, double standards often arise to the disadvan-tage of developing countries. We urge the bilateral andthe multilateral institutions to establish meaningfulacceptable measures, which can act as a road map forenforcing good governance issues. We believe that thesustainability of democratic institutions and good gov-ernance depends on adequate resources to supporttheir structures.

Malawi is among the six countries wherethe Millennium Development Goals were analyzed andcosted. A minimum of about $4 billion is required toachieve the Millennium Development Goals. Theytherefore need commitment on the part of cooperat-ing partners to ensure that these resources are avail-able.

During these deliberations we have notedthe need for political and economic will on the part ofdeveloping countries in order to achieve povertyreduction. In Malawi in particular, when the newGovernment came to power in 1994, poverty allevia-tion was pronounced as its overarching developmentstrategy. In the recent past, preparation of the povertyreduction strategy paper has complemented thisprocess. What we now require is a complementarypolitical will on the part of our cooperating partners inorder to win our war against poverty.

MalaysiaStatement byHis Excellency Datuk Azmi bin KhalidMinister of Rural Development, Malaysia

Let me first congratulate you Mr. President on yourelection as Chairman of this Summit Segment of theInternational Conference on Financing forDevelopment. We are confident, Mr. President, thatunder your able chairmanship, the Conference wouldcome to a successful outcome. I also would like to takethis opportunity, on behalf of the Government andpeople of Malaysia, to thank you Mr. President andthe people of Mexico for the warm and generous hos-pitality that you have accorded to us during our stay inthis beautiful city of Monterrey. My delegation also isgrateful to you Mr. President for the arrangements thathave been made to make our stay here comfortableand memorable.


206

This is a historic moment for all of us todayas we stand on the threshold of a new partnership forthe financing for development which has been themost critical issue facing developing countries. Thestate of affairs on financial aid is lamentable. A recentWorld Bank publication pointed out that while richcountries’ incomes have grown, their foreign aid as aproportion of their income has declined to a historical-ly low level of 0.2 per cent. Over the decades, manydevelopment models have been tried out. Lack of suc-cess is not for want of programmes or plans. It is thelack of financial resources that has stymied efforts ofmany developing countries towards attaining successin their development goals.

The road to Monterrey had been long anddifficult but many obstacles had been overcome. ThisConference holds the great promise of reinstating onthe international agenda the importance of a genuinepartnership between the developed and developingcountries along with the universal recognition that sus-tainable development should be people-centred in itsobjective, scope and focus. The Conference also pres-ents the greatest opportunity to adopt a new interna-tional framework to support the development effortsof both the poorer and more advanced developingcountries. The Conference also provides an opportuni-ty for the international community to strengthen coop-eration for development by addressing internationaland systemic issues including the reforms of the inter-national financial architecture, in a holistic manner inthe context of globalization.

The subject of development cannot be dis-cussed in isolation without reference to globalization.The globalization process has been a source of greatconcern for developing countries. The rapid phase ofglobalization and the increasing instability in the inter-national economic environment has made the issue offinancing for development ever more critical. For allthe exaltations and salutations of globalization, theeconomic disparity between the North and the Southhas widened and the benefits disproportionately dis-tributed. The income gap between the richest andpoorest has significantly widened and the number ofpeople living in absolute poverty has been increasingdespite unprecedented prosperity in the developedworld. Globalization even affects the notions of state-hood and government as it weakens the basis foreffective domestic government and the scope of eco-nomic policies at the international level. Globalizationalone does not lead to growth and development nordoes it solve the problem of poverty. Rapid or prema-ture liberalization has, in many cases, damaged emerg-ing economies in Asia and Latin America.

Asia’s experience of globalization has notconvinced us that this is the answer to economic illsfor economic growth. Globalization need not be aboutfree capital flows only. There can still be globalizationbut it should not be absolutely free, it should not bepurely market driven. Regulated globalization, whichtakes into account specific country circumstances, canstill be compatible with the idea of globalization.

One of the goals of the Conference is toeradicate poverty as we advance to a fully inclusiveand equitable global economic system. For manydeveloping countries, rural development is almost syn-onymous with poverty eradication. In Malaysia,planned and concerted efforts to develop the ruralareas and eradicate poverty have started since ourIndependence in 1957. As a result of the govern-ment’s efforts and high economic growth, the inci-dence of poverty has decreased substantially from52.4 per cent in 1970 to 6.1 per cent in 1997.However, poverty eradication efforts were hamperedto a certain extent, due to the East Asian FinancialCrisis in 1997. The incidence of poverty rose to 7.5 per cent in 1999.

The East Asian financial crisis underscoredthe risks and challenges posed by globalization todeveloping countries. The crisis was perpetrated bythe free exit of capital. It was clear that the bitter les-sons of the Asian financial crisis showed that globaliza-tion was not the universal solution it was touted to be.The crisis had also shown that the present internation-al financing system is badly equipped to deal effective-ly with the new complex challenges of globalization.

Furthermore, part of the problem thatbrought the financial crisis was the inherent defect ofthe international financial architecture which was inad-equate to cope with the effect of huge and volatilefinancial flows. It was seen that even countries regard-ed as success stories of development and those withsound economic fundamentals were vulnerable toshocks generated in the international financial mar-kets.

In order for globalization to be better man-aged, a new global order to correct the effects of mar-ket failure and marginalization is required. Malaysia ispleased that the Conference has recognized the urgentneed to enhance coherence, governance, and consis-tency of the international financial system. The reformneeds to focus on international action and issues ofgovernance of the international system including trans-parency and disclosure, capital flows, currency trading,highly leveraged institutions and reform of the interna-tional financial institutions.

207


The issues of financing are particularly rele-vant and vitally important in solving the challenges ofdevelopment for many developing countries. We knowthat adequate and relevant infrastructure can facilitatethe development of countries. The presence of basicphysical infrastructure is vital and adequate resourcesshould be channeled towards this purpose. As such,the need for dedicated pool of international financingfor the development of infrastructure in developingcountries must be given serious consideration. Themere construction of infrastructure can provide jobsand contracts for the local people. For example, theconstruction of roads and railroads will help landlockedcountries to reduce the cost of transportations of rawmaterials and the imports of needed manufacturedgood. The cost of infrastructure is very high and thepoor countries cannot themselves build the infrastruc-ture so critically needed by them. The current officialdevelopment aid is also inadequate. New and reliablesources of funds must be found to finance infrastruc-ture projects in poor countries. Malaysia, therefore,welcomes the decision of the Conference to study inthe appropriate fora, on possible innovative sources offinance.

The challenges facing developing countries,in integrating themselves into the international tradingsystem, lies in their ability to fully and actively partici-pate in the multilateral trading system. Regrettably,many developing countries have yet to fully benefitfrom global trade liberalization because of their inabili-ty to access meaningfully the markets of developedcountries. Although the WTO carries with it the objec-tive of freer trade, many developed countries maintainprotectionist regimes and subsidies as basic instru-ments of economic policy, even as they insist onopening up the markets of the developing countries inthe name of globalization and liberalization.

In this regard, we would like to see that theWTO adheres to trade-related issues, which have alegitimate place within a system of multilateral traderules. These rules and the system must primarily bedesigned or re-designed to benefit developing coun-tries, which form the majority of the WTO member-ship. Towards this end, it is imperative that the imbal-ances and asymmetries, which include the lack ofimplementation of existing obligations by developedcountries in the area of textiles and agriculture; lack ofmarket access for products of special interest to devel-oping countries and the need to effectively opera-tionalize the provisions for special and differentialtreatment, be given high priority.

The Monterrey Consensus, the documentthat is before us for adoption, is the beginning of thenew partnership on the financing for developmentamongst the developed and developing countriestogether with the leading financial and trade institu-tions, the business sector, non-governmental organiza-tions (NGOs) and interest groups to unlock and har-ness the financial resources, both domestic and inter-national, so critically needed for development by thedeveloping countries. National governments haveundoubtedly a key role to play in the mobilization ofdomestic resources by displaying good governance,sound macroeconomic policies, fiscal discipline, rule oflaw and political stability. Political stability is vital inensuring continuity of government policies as well ascreates greater certainty and confidence in the econo-my. At the same time, a stable and predictable inter-national environment must be able to support and pro-mote sustained growth and development and providegreatest certainty by being able to avert excessivevolatility. Towards this end, a combination of strength-ened domestic resilience and a new internationalfinancial architecture are needed for developing coun-tries to enjoy sustainable development.

Malaysia believes that mobilizing interna-tional private capital flows can generate rapid econom-ic growth and prosperity. In this respect, judiciousmanagement of private flows is necessary to ensurethat incipient domestic industries and businesses aregiven adequate time to mature and do not face unfaircompetition. In addition, foreign investors should alsoinitiate and nurture the development of host countriesproducers to supply their inputs and components. Inthis way, the linkages with the host countries will bestrengthened. We also note that countries must alsoprovide a conducive environment to attract foreigndirect investment (FDI).

In this information era, the role of themedia in supporting development cannot be overem-phasized. The media has tremendous control andinfluence in shaping the perception of people about anation and its policies. We urge that the media contin-ue to exercise greater responsibility in disseminatingaccurate, well-balanced and timely information. Theymust be careful to avoid biases and imposing unfound-ed value judgements in their reporting. Inaccurate andunfair reporting has on many occasions adverselyaffected development efforts of national governments.In some instances, it has caused the loss of potentialcapital inflows as well as the outward flight of capitalfrom the country.


208

The holding of this Conference hasstrengthened and renewed our resolve to eradicatepoverty and bring sustainable development and pros-perity to all mankind. If we commit ourselves to imple-ment the proposals of the Monterrey Consensus, I amconfident that we will achieve a more inclusive andequitable global economic system. The MonterreyConsensus has reflected some of Malaysia’s concernsand views. However, we wish the document couldhave more concrete measures to implement the pro-posals and decisions. Furthermore, it will all come tonaught if there is no proper follow-up mechanism toimplement the proposals made in the MonterreyConsensus. We must therefore keep up the momen-tum that we have gathered and move on full gear torealize the Monterrey Consensus. Each and every oneof us – nation states, multilateral institutions, businesssector and NGOs and interest groups – has a role toplay in this regard.

The implementation of the MonterreyConsensus and an effective institutional framework forthis purpose within the United Nations is urgent. Thisdocument provides a new spirit of cooperation to rein-vigorate our efforts in overcoming existing obstacles todevelopment. Let us therefore take this august occa-sion to match words with deeds.

MaldivesStatement byHis Excellency The Honourable Mohamed JaleelMinister of Finance and Treasury, Republic ofMaldives*

I am honoured to read out this message from HisExcellency Mr. Maumoon Abdul Gayoom, President ofthe Republic of Maldives, to the InternationalConference on Financing for Development.

“I had indeed been looking forward toattending this momentous Conference in Monterrey,but important engagements at home have not made itpossible for me to be there today. Nevertheless, withyour indulgence, I would like to share with you someof my thoughts and ideas on the vitally importantissues before this forum. But let me begin by wishingthis historic gathering success in its urgent and chal-lenging endeavour.


“You are meeting at a time of global eco-nomic downturn. The terrorist attacks in the UnitedStates last September had aggravated the difficultiesthe world economy had been experiencing for the pastyear or so. The economy of my country, the Maldives,has also been severely affected by these problems.Indeed, times are hard globally. But they will becomeeven tougher unless a concerted effort is made toaddress the crippling economic difficulties being facedby many developing countries.

“The Monterrey Consensus that had socarefully been crafted in the months proceeding thisConference identified several key practical measures tomobilize development funds. But as the high-levelpanel chaired by the former President of Mexico, Dr.Ernest Zedillo, has reported, there is no substitute forfinding additional resources, especially in official devel-opment assistance. Proposals to increase SDR alloca-tions and replenish IDA funds and appeals to meet the0.7 per cent target of official development assistanceneed to be implemented. Likewise, ideas of fundingglobal public goods, especially those that will con-tribute to arresting environmental degradation, particu-larly global warming, must be fully explored.

“The Maldives is a very small country of270,000 people. We have very limited naturalresources and face many developmental constraints.Our economy is primarily based on tourism and fish-eries. We have very little scope for economic diversifi-cation or for mobilizing sufficient domestic capital.Financing our further development requires continuedand enhanced preferential access to markets and capi-tal. Despite the structural impediments that we face,we have for many years managed to sustain a healthyrate of economic growth and development.

“Thanks to the hard work of our peopleand the support of the donor community, we areaccelerating structural reforms to increase the flow offoreign investment into the country. However, the suc-cess that we have so far been able to achieve throughthe prudent management of our limited resources hasled to calls in some quarters for the withdrawal of con-cessions that currently contribute to our development.Doing that would amount to a serious penalty. Itwould be one that would impose huge costs on oureconomy, for the structural problems that constrainour development have not been overcome.

“There is a need to be more sensitive tothe individual circumstances of specific countries whendecisions of a general nature are taken. Fightingpoverty and deprivation is a serious challenge. It isestimated that approximately 900 million people inthe Asian and Pacific region alone belong to the

209


world’s poor and earn less than the equivalent of $1per day. It is vital that we recognize the pressing needto address this challenge and forge a common strategyin achieving the global development goals agreed inthe Millennium Declaration.

“As the Zedillo panel has pointed out,attaining those targets alone would require at least anadditional $15 billion in official development assis-tance per annum. Every effort must be made toachieve the agreed target of 0.7 per cent of the grossnational product in official development assistance.Similarly, we, the developing world, must undertake touse these limited official development assistanceresources wisely and efficiently and work in real part-nership with the donors.

“In a global village, development becomesa public good – one from which everyone benefits, fordemocracy, peace and development are all ultimatelyinterrelated.”

MaltaStatement byHis Excellency Mr. John DalliMinister of Finance, Republic of Malta

At the outset, I would like to convey my delegation’sappreciation to the Government and the people ofMexico for hosting this Conference as well as for thewarm welcome and hospitality extended to us by thecity of Monterrey.

During the past decades humanity has wit-nessed unprecedented socio-economic development,which has enhanced the lives of millions of people. Itis a disconcerting reality that the benefits of this devel-opment were not evenly distributed amongst allregions of the globe. We are witnesses to the unfold-ing reality that the divide, between the comfortableand the deprived is widening. We are seeing thepoverty trap engulfing more and more of the earth’spopulation.

We are here today because we know thisto be unacceptable and because we want to try to actin an effective manner to redress this situation. Maltafirmly believes that, through the necessary political willand commitment, the Millennium Declaration develop-ment goals, which enjoy the support of the generalmembership of the United Nations, could succeed incontaining the scourge of poverty by the year 2015.

The Monterrey Conference should strive toachieve a comprehensive agreement on the financialmechanisms necessary to achieve the noble goalsenshrined in the Millennium Declaration. However letus not presume that financial mechanisms alone aresufficient to achieve the changes in culture, theupgrading of the human resource, the strengthening ofthe economic fundamentals, the capillary expansion ofthe distribution channels and the infrastructural build-up that are required to achieve the Millennium Goals.

It is my government’s firm belief that onlyfunctioning governments, broadly committed to sus-tainable development could significantly acceleratepoverty eradication. The achievement of adequate lev-els of financing for development requires, first of allconcrete actions at the national level to maximize themobilization of domestic financial resources.

This is witnessed in the development of anenvironment founded on the tenets of democracy,respect for the rule of law and human rights as well asthe promotion of peace and security are prerequisitesfor achieving socio-economic progress. We believethat good governance, sound macroeconomic policies,transparency, adequate domestic institutions, sustain-able fiscal balances, coherence, social safety nets andthe fight against corruption as crucial for building theright environment, which harnesses domestic financialresources. However, we do recognize that some coun-tries have specific constraints and vulnerabilities. Theseinclude Least Developing Countries (LDCs),Landlocked Countries and a number of Small IslandDeveloping States (SIDs). They face huge difficulties ingenerating sufficient domestic financial resources.

In this regard, developed countries shouldrealize that a sound international financial and eco-nomic environment is essential to support their ownefforts to achieve sustainable development.

A sound domestic environment is impera-tive in promoting and encouraging private sector ini-tiatives as well as to attract international financialresources including Official Development Assistance,Foreign Direct Investment and trade opportunities. Inthe latter context, we must strive hard to renew thosecommitments which were previously made in themeetings held in Marrakesh, Singapore, Geneva andrecently in Doha, to help LDCs secure beneficial andmeaningful interpretation in the multilateral tradingsystem and the global economy. It is our firm belief


210

that international trade plays a major role in the pro-motion of economic development and the alleviationof poverty. In this context we appeal for the removalof barrier to exports and the elimination of trade-dis-torting subsidies.

We are noticing with some apprehensionthat developed countries, which are the main motorsof the global economy, seem to have lost their nerveand are building protective barriers around their homemarkets. This, when they continue to assume anaggressive stance towards trade liberalization to openforeign markets to their businesses. Trade is an enginewhich activates growth in developing countries.Developing countries need to enhance their capacitiesin view of future World Trade Organization (WTO)negotiations in order to promote a level playing fieldin the international trading system. They should beassisted in doing so.

In the context of laying the groundwork forsustainable development, one should not overlook theimportance of debt relief. Every effort should be madeto ensure the implementation of the Heavily IndebtedPoor Countries (HIPC) Initiative.

Notwithstanding its limited dimension, insu-larity and lack of natural resources, the developmentprocess in Malta has yielded positive results. Since itsindependence my country, through sheer resolve aswell as investment in human and institutional capacity-building, succeeded in harnessing its domestic financialresources and in attracting adequate levels of interna-tional private flows and trade opportunities. Thesehave significantly contributed towards sustaining devel-opment in the Maltese Islands. Political stability, soundmacroeconomic policies and a well-educated and skil-ful work force have proved to be the basic elementsfor the promotion of sustainable development.

In a rapidly emerging globalized world,national crises may have ripple effects impactingwhole regions. This contagious influence calls for ade-quate mechanisms aimed at enhancing existing oppor-tunities and ensuring an equitable distribution of thebenefits emanating from a globalized economy.

It is only through synergistic efforts at boththe national and international level that nations canachieve a sustainable future for all.

MauritaniaStatement byHis Excellency Mr. Mohamed Ould NanyMinister of Economic Affairs and Development,Islamic Republic of Mauritania*

In speaking to this group, I would first of all like tothank the United Nations and the Mexican govern-ment for their excellent organization of thisInternational Conference on Financing forDevelopment and for the invitation given to our coun-try to participate in it. I would also like to convey thegreetings of the President of the Republic, HisExcellency Mr. Maaouya Ould Sid Ahmed Taya andhis wishes for full success in these deliberations.

The Conference, which brings us togethertoday, is a unique opportunity to measure the state ofimplementation of the undertakings of September2000 of the Millennium Summit and to strive to mobi-lize the resources necessary to make them a reality.The objective of a 50% reduction by 2015 of extremepoverty is historic and will require an effort of solidari-ty, which is unprecedented in the international com-munity.

The success of the Conference onFinancing for Development depends on our ability tofind solutions which are appropriate in areas such asOfficial Development Assistance (ODA), the sustain-ability of foreign debt, the mainstreaming of develop-ing countries’ international trade, and the reduction ofthe widening technological gap between the industrial-ized and developing countries – which we call the digi-tal divide.

Concerning ODA, it must be greatlyincreased in the next few years to guarantee that thedeveloping countries will have concessional resourcesthat are compatible with the objective of povertyreduction by 2015. The World Bank and theInternational Monetary Fund (IMF) say we need US$54 billion per year, which would imply a doubling ofthe amounts given by the member countries of theCAAD moving to 0.45 per cent of their GrossDomestic Product (GDP) from 0.22 per cent.


211


It is a concern to us to note that public aidgiven to developing countries has actually declined by22% in real terms between 1991-2000 and thisreduction has mainly impacted Sub-Saharan Africawhere the proportion has fallen from 37.2% to 22.2%in the 1990’s. Reversing this trend is essential.Therefore I would like to talk about the American gov-ernment’s initiative to increase ODA by US $5 billionover the next three years and the decision made bythe European Union (EU) at the last summit inBarcelona to bring up to 0.39 per cent of the GDPthe aid that they give to developing countries.

We noted with great interest the proposalof the US President to increase the proportion ofgrants in the operations of the multilateral banks.This proposal gives pride of place to financing aidwhich is not reimbursable in form of grants for educa-tion projects, for heath, for drinking water, and whichwill help reduce poverty and improve the condition ofthe poorest countries. We are of the opinion thatthese proposals should be seriously considered and acompromise must be found for us to conclude the dis-cussion in having resources from aid and the Africandevelopment fund to help the poorest countries, inparticular Sub-Saharan African countries.

The debt burden is a major obstacle to theefforts made for sustainable development and povertyreduction. The initiative for the poor countries, HIPC,is a major advance in solving this problem and willhelp make our debt loads more sustainable accordingto our economic indicators. This initiative must beconsolidated and the foreign debts of the poorestcountries must be followed carefully to prevent a slideof the efforts that we made to eradicate poverty andimprove the living conditions of our people.

For international trade this can be a potentfactor for development as long as we improve accessfor developing countries to the markets of developedcountries, eliminate the tariff and non-tariff barriers,and eliminate subsidies which impede exports. Theagreement reached recently at the 4th MinisterialConference in Doha in November 2001 could be anopportunity to improve this trade situation in a sub-stantial way. The objective must be to have a newcycle of development in order to stimulate progress onthe world scale to help both industrialized and develop-ing countries.

In terms of the digital divide and the tech-nological gap, the international community must helpdeveloping countries improve access to new informa-tion and communication technology to encourage abetter spread of knowledge and to help implementand promote conditions which will increase foreigninvestment (FI) flows.

NEPAD, which was launched in October2001, is a framework for cooperation that is adequatefor Africa and its partners. In this initiative, the Africancountries will bring the necessary conditions to acttogether at all levels to implement programmes andimprove the conditions of their people. We hope thatthese partners will help us in this initiative, which willbe useful for the confidence of the people.

In recognizing the importance of the multi-faceted support of the donor countries and the inter-national agencies representing the Conference, thedevelopment of our countries in improving our livingconditions is just as much our responsibility and ourduty. Therefore, with determination and vigour, theIslamic Republic of Mauritania has worked since themid 80’s under the wise leadership of its President,Mr. Maaouya Ould Sid Ahmed Taya, in developingand implementing an ambitious developmental strate-gy based on more political freedoms, improving sus-tainable human development indicators, bolstering therole of the private sector as an engine in income gen-eration and in complying with the rules of good gover-nance.

The reforms instituted in the last 15 yearshave allowed us to restore economic balance insideand out, to spur economic growth which has been 4.6per cent from 1992-2000, to bring down inflation andto improve social indicators such as education, health,drinking water, and literacy, and to reduce povertywhich has declined to from 56 per cent in 1990 to 46per cent in 2000.

We are determined to take up the chal-lenges of development such as poverty. TheConference, which brings us together today, has beenfollowed with much interest in our country. It is essen-tial that we make recommendations which are perti-nent so we can reassure our people as to the will andthe commitment of the international community tohelp the developing countries in their efforts to get outof the cycle of underdevelopment as well as institutingconditions for a true programme of economic promo-tion and development and a social programme whichwill help us fight poverty. The Monterrey Consensushas conclusions and decisions, which constitute in ourview a coherent and integrated process, regardingFinancing for Development. The document shows theimportance of mobilizing national financial resources,the role of the FI flows, the private sector, the worldinternational trade in stimulating growth and develop-ment, the strengthening of ODA, as well as the consis-tency of monetary, financial and international com-mercial systems.


212

The document reaffirms the commitmentof international communities to support the efforts ofdeveloping countries to realize the objectives containedin the Millennium Declaration and other world sum-mits.

It’s an important innovation. The docu-ment calls for establishing a mechanism to follow-upon the decisions of the Conference, which will bemeasured at regular intervals to see that agreed under-takings are respected in the hope that these proposalswill be implemented effectively in the challenges weface together. I would like to wish great success to ourdeliberations in this Conference.

MauritiusStatement byHis Excellency the Honourable Anil Kumarsingh GayanMinister for Foreign Affairs and RegionalCooperation, the Republic of Mauritius

My country is deeply honoured to be in this beautifulcity of Monterrey to participate in the United NationsConference on Financing for Development. May Iexpress on behalf of my delegation and on my ownbehalf our heartiest thanks and appreciation to thePresident, the Government and people of Mexico, forthe very warm welcome and hospitality extended sinceour arrival.

The uniqueness and the historical dimen-sion of this Conference cannot be overemphasized.Monterrey provides an opportunity to re-focus on thegoals set out in the Millennium Declaration and to cor-rect the unacceptable development imbalances in theworld today. Thirteen years separate us from the year2015 when the commitments made with respect tothe Millennium Development Goals will be assessed.For the sake of the record, those commitments referto the halving of world poverty, achieving a two-thirdreduction in child mortality, a reversal of the speed ofHIV/AIDS and the provision of primary education toall children around the world.

These goals will only be met if OfficialDevelopment Assistance (ODA) is substantiallyincreased. In view of the wide margin that existsbetween the target of 0.7 per cent of donor GNP andthe present level of ODA and the constant decline inODA in real terms over the last years, we are con-

vinced that a major effort and commitment must comefrom the donor countries if they are sincere in revers-ing the poverty escalation.

We do, however, appreciate that PresidentBush has announced a US $5 billion increase in for-eign aid for poor countries from 2003 over a periodof three years. This amount which is inadequate forthe challenges which we face is all the same importantfor its psychological dimension. Likewise, we welcomethe pledge made by the European Union to increasedevelopment assistance by US $4 billion by 2006 – a0.03% increase in their current average which willtake it to 0.39%. We would have wished the US andthe EU to pledge outright that they would double theiraid fund since that would come close to what theWorld Bank estimates is necessary to help poor coun-tries meet the UN Millennium Development Goals. Weconsider that the fight against poverty cannot bewaged on the battlefield of ideology and subjectivitysince poverty is ideology-free, objective and neutral.Already there are too many conditionalities attachedto aid without the necessity of adding further to them.

For the first time in recorded history,mankind has not only the resources and the meansbut also the knowledge to win the war against poverty.The mistakes committed both by the donor countriesas well as the recipient ones have been learnt and notforgotten. The poverty-trapped countries expect theindustrialized countries to be generous committed forthe long term. The prosperity of the developing coun-tries can only increase the wealth of their developedpartners! But the untied aid package is still far short ofwhat is needed.

Developing countries, for their part, arewedded to sound economic policies, good governance,a right mix between the public and private sectors anda determination to eradicate corruption. Indeed, theNew Partnership for Africa’s Development (NEPAD) isa model of the policies that developing countries inAfrica, including the least developed among them, arealready adhering to.

Good governance is a two-way process,and this is why we feel strongly that the request whichAfrican developing countries have made to their devel-oped partners to return all ill-acquired wealth investedin the West should be favourably entertained. All suchill-gotten money belongs to the developing countriesand this money represents untied resources for financ-ing our development. While we subscribe to the neces-sity of accountability, we believe also that suchaccountability must be based on reciprocity. Thereshould be a real partnership for accountabilitypurposes.

213


Mauritius believes that Financing forDevelopment should not be looked at only as a rela-tionship between the rich countries and the poor ones.There are a sizable number of countries which are inthe middle income, and they are in serious danger ofbeing sidelined by a simplistic approach to financingfor development. We support the initiative for HeavilyIndebted Poor Countries (HIPC) but we are also con-cerned that middle-income countries must not bedenied access to concessional loans and other facili-ties, terms and conditions the lending institutionsmake available to poor countries. There should be no‘punishing’ of these countries which are sidelined onaccount of their relative positive performance.

As we in Africa embark upon the construc-tion of the African Union and the implementation ofthe underlying philosophy, principles and policies ofNEPAD and as we reform and modernize our eco-nomic structures in conjunction with the private sector,our legal system and other institutions, we need toknow that there will be no major policy shifts on thepart of the developed countries. Africa’s developmentstrategies will need to have bearings which need to bestable for the long term. It is for this reason that wecannot contemplate a situation where those whopreach free trade and competition for others alsopractise protectionism for short-term domestic politicalinterests. Such policy shifts damage our confidenceand adversely impact upon our long term planning.

The recently formed Investment AdvisoryCouncil which provides the business response toNEPAD will also help in achieving closer interactionand collaboration between the lending institutions,business leaders and governments. Foreign DirectInvestment (FDI) is critical for Africa to escape thedouble trap of poverty and debt. But as I have saidearlier, along with FDI, there is a dire need for it to beaccompanied by Official Development Assistance atleast for the foreseeable future.

Monterrey is a new beginning as it breaksthe cycle of dashed hopes. The Monterrey Consensusis indeed a welcome step forward. We need to buildon it and take concrete action to implement its com-mitments. As we prepare to proceed to Johannesburglater this year for the World Summit on SustainableDevelopment, let us express the wish that the industri-alized countries will sustain their interest in rescuingthe poor countries and empowering them to becomegenuine players and partners on the globalizationstage.

Just like September 11 galvanized theinternational community to wage relentless war againstterrorism we have the conviction that Monterrey willheighten the awareness of the same internationalcommunity to wage an equally relentless war againstpoverty.

MonacoStatement byHis Excellency Mr. Jacques Louis BoissonAmbassador and Permanent Representative to theUnited Nations of the Principality of Monaco*

I wish to thank President Fox and the Mexican author-ities, as well as the Government of Nuevo Léon andthe city of Monterrey, for the remarkable organizationof this Conference and for their warm welcome. I alsowish to thank the Secretary-General and all the mem-bers of the Secretariat who are here or atHeadquarters. I wish to convey to you, Mr. President,the regrets of our Minister of Finance and theEconomy, who was to attend this Conference but hadto cancel his trip because of a special meeting of theNational Council, our Parliament. Of course, democra-cy obliges.

Roughly more than a century ago, thePrincipality of Monaco, a narrow, arid terrain withoutnatural resources, would have been among the poorestcountries of this Conference. Under the well-guidedimpetus of its Princes, and thanks to the ingeniousnature of its population of different origins, it hasbecome a developed country. That is why it is able tounderstand the problems that are faced by developingcountries.

It is seriously determined to provide assis-tance within its capabilities to less advantaged coun-tries. Its determination can be seen primarily at twolevels: First, through a steady increase in its financialcontribution to multilateral development programmessince its succession to the United Nations in May1993; and secondly, through the strengthening of itsbilateral cooperation that is characterized by partner-ship agreements with developing countries and coun-tries in transition. This has been possible thanks to therecently established department that is under theauthority of the Head of Government and led by aPlenipotentiary Minister.



214

Our Government is perfectly aware of theexceptional importance of this internationalConference of historical scope and, therefore, wefirmly support the Monterrey Consensus adopted thismorning, which culminates our work, so that commit-ments made by our Heads of State or Government atthe Millennium Summit can promptly take shape.

A State of modest dimensions facing thesea, the Principality of Monaco is naturally interestedin small States, island States, landlocked States andthe least-developed countries. While encouragingmany non-governmental organizations based inMonaco to do the same and to increase their effortsfavouring these States, these organizations, whichmostly benefit from steady financial support from ourGovernment, strive primarily to implement, throughmicrocredits, development of microprojects that arewell integrated into their environment with specificand concrete objectives and that are accompanied bya simple yet reliable evaluation process.

Because of current financial and economicglobalization, our Government is convinced that offi-cial development assistance must be accompanied byprivate investment. That means that in order to attractprivate investment, we must develop institutions, legal,administrative, scientific and technical establishmentsin recipient countries, as well as training in various dis-ciplines for men and women in these countries whomust tackle the demands of the world economy.

Functional literacy projects, as well as adulteducation programmes, directed towards meaningfulwork such as that designed and carried out successfullyby the United Nations Education, Scientific andCultural Organization must be encouraged and under-stood by companies that invest or that are consideringinvestment in these countries. The prospect that linkslong-term commitment of donors to improving publicaffairs management and conclusive results in recipientcountries seems to be an interesting approach, as isthe proposal to promote trade and financial integra-tion at the regional level with the support of financialinstitutions and banks in the regions concerned.

Debt is a great concern to the Governmentof Monaco. In our opinion, it must be a priority issueto be followed up at this Conference, because, if it isnot resolved, there can be no hope for the consistentlong-term development expected by many countries.

Finally, the Principality of Monaco – andthis is a traditional policy of its Princes – is devoted torespect for nature and the great balances withinnature. Sustainable development, fully respectful of theenvironment and natural resources, as well as of the

creativity and cultural diversity of peoples – our mostauthentic asset – is, in our opinion, crucial. The dis-cussion undertaken on the concept of ‘global publicgoods’ deserves to be followed up and deepened inthat spirit.

A maritime State deeply respectful of thesea and the oceans and its flora and fauna, thePrincipality of Monaco believes that this new concept,as well as that of the common heritage of mankind,which is mentioned in the United Nations Conventionon the Law of the Sea with regard to polymetallicseabed resources, should, within a proper legal frame-work, be able to contribute to protecting world foodresources, non-renewable energy reserves and thewealth of the exceptional biodiversity of our planet. Asa living, fragile and dependent being whose survival asa species could be endangered by its own behaviour, isit not our duty to pay attention to the very sources ofthat development, which we wish to correctly ensuretoday with consistent, long-term financing?

MongoliaStatement byHis Excellency Mr. Chultemin UlaanMinister for Finance and Economics, Mongolia

At the outset I wish to express our sincere gratitude tothe people and Government of Mexico for their warmhospitality and organization of this important confer-ence in Monterrey.

Mongolia attaches great importance todevelopment financing and has been actively engagedin this process since its very beginning. We believethat the Monterrey Conference will be a crucial lever-age for implementing the objectives of the MillenniumSummit. For landlocked Mongolia with a transitioneconomy, the outcome of this conference, in particu-lar the Monterrey Consensus, is of utmost importance.

More than a decade has elapsed sinceMongolia joined the international community byupholding freedom and democratic principles. Duringthese years we have made enormous efforts to pro-mote human rights and good governance, to open upits economy on a market basis. Our achievements inbuilding a democratic society are substantial and thereforms are irreversible. However, the transition hasnegatively affected the social infrastructure, especiallythe health and education sectors as well as the mostvulnerable groups of the population. During these diffi-

215


cult years of transition, poverty has emerged as a phe-nomenon and today it has turned into one of the criti-cal issues facing society. At the national level, we aretaking decisive, step-by-step measures to reduce pover-ty. That is why we are seriously working to turn thePRSP into a national programme.

As we place the human being at the centreof development, the Government of Mongolia haselaborated a national programme on ‘GoodGovernance for Human Security’ and is presentlyworking hard to implement it. From this perspectivewe consider the concepts of good governance andhuman security as two sides of the coin. In order toachieve this goal Mongolia places high importance tohuman development and structural reforms. That iswhy we believe that the efforts of the countries thatpromote human security should be supported by prac-tical deeds, and not merely by lofty recommendations.We express the hope that the Monterrey Conferencewould make an important contribution in this regard.

Trade and investment are an integral partof the concept of development. In many developingcountries, especially in landlocked developing coun-tries, trade and investment flows are much less thanwe wish to see. The two major obstacles to this are:First, underdeveloped infrastructure and, second, hightransit transport costs for their goods. Moreover,smallness and vulnerability of economies, recurringnatural disasters as well as decreasing world prices onexport commodities hamper greatly the pursuit ofsound economic policies and add further pressure tothe already limited domestic resources.

Although developing countries and transi-tion economies pursue liberalization of theireconomies, the multilateral trading system is not doingenough to facilitate their trade. As for landlockeddeveloping countries, we believe it is important tofocus on development of the physical infrastructure inthese countries and formulate a concrete internationalaction strategy. In this context it should be noted thatthere are grounds to address the problems of land-locked developing countries at the new developmentround of negotiations that is to start soon, in line withDoha Ministerial Declaration. We express the hopethat the forthcoming international conference on tran-sit transport cooperation, to be held in 2003, wouldmark an important step in this respect.

Mongolia believes that the decisions takenin recent days by the European Union, the UnitedStates and some other developed partners could playan important role in promoting poverty reduction andfurther strengthening democracy, human rights and

free enterprise. That is why Mongolia welcomes thesedecisions. At the same time we believe that immediateimplementation of these initiatives together with thecommitments taken by the Monterrey Consensuswould help improve the living standard of millions ofthe poor and fully achieve the noble goals of theMillennium Declaration.

Let us launch a genuine partnership fordevelopment here in Monterrey.

MyanmarStatement byHis Excellency U Khin Maung TheinMinister of Finance and Revenue, Union of Myanmar

It gives me great pleasure to have this opportunity toaddress the first ever International Conference onFinancing for Development. I would like to express mydeepest appreciation to the Government and the peo-ple of Mexico for the warm hospitality extended to thedelegations and the excellent arrangements made forthis occasion in this beautiful city. I would also like tothank the Organizing Committee for taking efforts tomaterialize this conference.

Although there have been recent indica-tions that the global economy may be on the road torecovery after the events of September 11, it is evi-dent that the situation remains delicate, particularly forthe developing countries. This is also true in worldfinance. Therefore, the holding of the presentConference is both timely and appropriate. As a devel-oping country, Myanmar could not entirely escape theimpact of recent international economic and financialturmoil. However, we have undertaken a number ofsystematic measures to mitigate the negative influ-ences.

I would now like to briefly touch on theeconomic performance of Myanmar. In recent years,Myanmar has been able to achieve progress andadvancement in every sector and every region of thecountry. In order to attain our main objective ofachieving a peaceful and developed nation, measureshave being taken for economic development by formu-lating and implementing short-term plans.

The first four-year short-term plan spannedfrom 1992/93 to 1995/96 and the second five-yearshort-term plan was from 1996/97 to 2000/2001.During those periods we have been successful in


216

achieving substantial economic growth due to the abili-ty to mobilize relatively high levels of investments forthe Agriculture Sector, along with good weather condi-tions and thus we are able to increase the volume ofexports of agricultural produce. A third five-year short-term plan, which runs from 2001-2002 to 2005-2006, is in the course of implementation. In themeantime, all necessary measures are being taken toimprove the economy including permitting wider participation of the private sector in the productivesectors.

As Myanmar is an agro-based country, pri-ority is being given for the improvement of the agricul-tural sector and at the same time the industrial sectoris also being developed by establishing industrial zonesin the States, Divisions and in major cities. Strong pri-vate participation has been encouraged in these (2)main sectors by giving incentives such as reductionsand exemptions on taxes, easy access to low-cost bor-rowing from the banks, and also providing manage-ment and technical assistant by the Government. Also,I would like to mention that to keep abreast withInformation Technologies in the region, anInformation and Communication Technology Park hasbeen established, and the private sector is participatingactively in this area.

In Myanmar, even though investment andsavings ratio to GDP is still low when compared tosome countries in the region, there has been notice-able increase in investment and savings during theyears 1989 to 2000/2001. In order to finance thedevelopment of our country we have been layingdown sound macroeconomic policies to mobilize sav-ings, attract foreign investment and also to utilize themeffectively for the productive sectors. Myanmar will bestriving harder for improvement in investment and sav-ings so as to be able to catch up with its neighbouringcountries.

May I take the opportunity to mention thatalthough Myanmar has always met its obligations,international organizations have suspended their assis-tance to Myanmar over the past decade. Myanmar hasnot received any external financial assistance since1988 and therefore the success that we have achievedup to the present has been gained with our ownresources through our own efforts. In order to meetthe required financial needs, we have allowed the pri-vate sector to have wider participation in the economyand, at the same time, we have been encouraging pri-vate financial institutions to extend loans and advancesat concessional rates to the productive sectors to stim-

ulate the momentum of growth. We are determined todevelop our country on a much larger scale and willtake all necessary measures to achieve our goals.

It is noted that with only political considera-tion some developed countries have imposed varioussanctions on developing countries, which have limitedthe much needed foreign private financial flows andinvestment to those countries. In order to have sus-tained economic growth in the developing countries aswell as countries in transition, we are of the opinionthat those sanctions should be lifted. Sanctions blockproductivity and therefore they do not benefit eitherthe imposing countries or the imposed countries andthey also have negative impacts on the countries thathave economic relations with the imposed countries.

Myanmar is cooperating closely with otherASEAN member countries to facilitate smooth flow oftrade and services. Agreements on avoidance of dou-ble taxation have been signed with several countries inorder to benefit bilateral trade and investment.However, developing countries are facing the problemof various barriers and restrictions from some devel-oped countries. I would like to urge the developedcountries to open up their markets further for productsfrom developing countries.

Official Development Assistance (ODA)constitutes a crucial important source of financing forthe development of the economy as well as for allevi-ating poverty. I would therefore like to take thisopportunity to encourage developed countries, whichhave pledged to contribute but which have not doneso, to fulfil their obligations. In order to maintain debtsustainability, efforts should be continued to reduce thedebt burden of the poor developing countries. Wewould also like to call for relief and cancellation ofbilateral debts of developing countries so that theirexternal debts can be contained at sustainable levels.Accelerating debt relief complemented by increasedODA would assist the developing countries in theirquest for achieving sustained economic growth.

External private flows would also be ofassistance in our efforts of building a peaceful, devel-oped country. However, as capital flows carry risk,they need to be monitored carefully so as not to createdifficulties for monetary policy management. In thisrapidly globalized world where there are opportunitiesas well as challenges, it seems that only the developedcountries are enjoying the benefits of globalization atthe expense of developing countries. Therefore,Myanmar, which is also one of the developing coun-tries, intends to strive further so as to reap benefitsand opportunities that globalization offers for thedevelopment of its economy.

217


We are making efforts not only for themodernization and development of the future nationbut also making sure that the basic needs of the peo-ple are met so that the new generation would be freefrom any hardship and troubles. I would like to addhere that if there are no disturbances and obstacles,the pace of development of the nation will be quickerand so will the work to build a democratic nation.More disturbances and blockages will only mean that itwill take longer to reach our objective of a strong andpeaceful nation.

As Financing for Development would bemeaningful and equally beneficial to all the countriesonly if and when the requirements of the developingcountries are met, I would like to urge the developedcountries to give due consideration to the needs to thedeveloping countries.

Before concluding, I would like to onceagain thank the Organizing Committee and the peopleof this beautiful city of Monterrey for making all thenecessary arrangements for this auspicious conferencea success, as well as for the warm welcome extendedto us since our arrival.

NamibiaStatement byHis Excellency Mr. Martin AndjabaAmbassador and Permanent Representative to theUnited Nations, Republic of Namibia

With accelerated globalization and the participation ofdiversified stakeholders in the international develop-ment arena, African countries have been striving toachieve sustainable development by strengtheningownership of their development and solidify partner-ship with the international community. We, therefore,believe that this International Conference on Financingfor Development will strengthen our commitment tothis course.

In Africa, and more specifically in Namibia,we are faced with the problems of low economicgrowth, high rate of unemployment, high level ofpoverty, and unequal distribution of income. The loweconomic growth rate stems from a narrow productionbase and a deliberate act by the previous political dis-pensation, which marginalized the majority of thepopulation from fully participating in economic activi-ties. This caused a huge skewed income distribution.

About 70 per cent of our populationderives their livelihood from subsistence agriculturewhich heavily depends on erratic rainfall. Furthermore,the manufacturing base of our country is narrow andtherefore unable to absorb the majority of the schoolleavers. The unemployment rate in Namibia is estimat-ed at 34 per cent.

The foundation for mobilizing domesticfinancial resources hinges on sound macroeconomicpolicies and strategies that should expand economicactivities and widen the resource base of our countries.Most African countries have adopted these policies inrecognition of the private sector as the engine ofgrowth and that the role of a government is to providea conducive environment and legal framework inwhich the private sector can flourish. It is, therefore,our earnest conviction that enhanced efficacy, coher-ence and consistent macroeconomic policies are vitalfor mobilizing domestic resources, increasing produc-tivity, reducing capital flight and inducing private sec-tor initiative as well as attracting quality foreign directinvestment and other private financial flows.

In Namibia, we have adopted a principlebased on Peace, Security, Justice and Democracy.This principle constitutes a decisive condition withoutwhich no meaningful development can take place. Theneed for a sustainable, peaceful, and secure democra-cy under the environment of the rule of law is funda-mental in realizing the country’s human developmentgoals and achieving international development goalscontained in the Millennium Declaration.

In this regard, we have achieved some suc-cess in increasing access to and improving the qualityof our education system, giving priority to women andchildren. We will continue to promote civil educationfor the prevention of infectious diseases, especiallyHIV/AIDS, which continue to decimate our productivecitizens at an alarming rate.

We, therefore, strongly support that inorder to compliment national efforts, there is need forthe relevant international and regional institutions aswell as appropriate institutions in source countries toincrease their support for foreign investment in infra-structure development and other priority areas, includ-ing projects to bridge the digital divide, in developingcountries. To this end, it is important to provideexport credits, co-financing, venture capital and otherlending instruments, risk guarantees, leveraging aidresources, information on investment opportunities,


218

business development services to facilitate businesscontacts between enterprises of developed and devel-oping countries.

The role of ODA to developing countriescannot be overemphasized. ODA has been used todevelop human capital and to enhance the capacityfor production and exports. In Namibia, we havedeveloped medium-term to long-term plans and it isessential that ODA be channelled to complimentdomestic resources in the implementation of theseplans. To accomplish that, we endeavour to fosterinternational partnership with donor countries to makeresources available.

We support systematic issues as addressedin the Monterrey Consensus. Enhanced coherencewith regard to good governance, consistency of inter-national monetary, financial and trading systems willcompliment national development efforts. The condi-tionalities of the financing and lending institutions haveoften impeded the effectiveness of the developmentassistance provided to developing countries. We needto remove these barriers to smoothen the flow ofdevelopment assistance.

The reduction of poverty is central in ournational development efforts; therefore we embracethe international efforts, which are underway toreform the international financial architecture basedon greater transparency and effective participation ordeveloping countries.

It is then important that debtor and creditorcountries should be mutually responsible for prevent-ing and resolving unsustainable debt situations, In thisconnection, we call for the urgent enhancement of theHIPC Initiative. This would release some of thedomestically mobilized resources to be directed todevelopment and help to alleviate poverty and otherforms of social evils that continue to afflict our people.However, debt relief measures should not impose fur-ther burden on those countries affected. Some coun-tries may have been forced to walk down an unsus-tainable debt path because of unforeseen and/orunavoidable circumstances such as natural catastro-phes, conflicts and severe terms of trade shocks. It isin the interest of all nations that the World Bank andthe IMF consider these situations in pursuing debtrelief.

In conclusion, Mr. President, we call forbroader and strengthened participation of developingcountries in international economic decision-makingand that developing countries will be assisted to build their capacity to participate effectively in multilat-eral fora.

NauruStatement byMr. Fredrick W. PitcherChairman of the Delegation of the Republic ofNauru*

I will begin simply by stating that my country, officiallythe world’s smallest republic, attaches a great deal ofsignificance to this conference and to the Financingfor Development process in general, primarily becauseof the pivotal role it could play in facilitating the inte-gration of small economies like my own into the worldeconomy. It can do this not only by opening upfinancing opportunities for us where none existedbefore but also by supporting existing initiatives gearedspecifically towards our development.

In this respect, my delegation welcomesthe reaffirmation at this conference of the BarbadosProgramme of Action for Sustainable Development ofSmall Island Developing States and also the call forthe implementation of the commitments made inDoha to examine issues related to the trade of smalleconomies.

We accept that domestic resources remainthe primary source of financing for development.However, as well documented in the twenty-secondUnited Nations special session on Small IslandDeveloping States, structural frailties and institutionalincapacity continue to constrain us, forcing continuedreliance on official development assistance. The pover-ty of opportunity means that without the importantfunction of donors and investors, small island develop-ing States cannot presume a painless transition intothe new global economy. Unfortunately, such patron-age has become fewer and farther between.


219


Wealthy countries have to live up to theirobligations and commitments, while economies thathave outgrown their aid dependence should them-selves begin contributing to the progress of others lesswell off. This latter point is important, because therewere and are countries willing and able to do just that.Excellent examples include Japan, the Republic ofKorea, Singapore and the Republic of China.

Aid was particularly critical to Taiwan**whose experience from its early years before itbecame the world’s seventeenth largest economy hasnot been forgotten. Today, Taiwan contributes morethan $200 a year to the official-development-assis-tance pool. We should be encouraging such involve-ment, not politicizing it.

As the world economy continues to under-go rapid change, small-island economies are beingforced to fundamentally change the way in which weview our economic relationship with the rest of theworld. As global trade becomes increasingly integratedunder the World Trade Organization (WTO) umbrella,small economies like Nauru face a number of dauntingchallenges, including dealing with the erosion of pref-erential market access for our very limited number ofexports. This raises questions of whether we canafford the cost of joining the WTO and converselywhether we can afford not to and the difficulties in try-ing to diversify and develop niche markets in areaswhere we have comparative advantage, whateverthose turn out to be. The challenges will not be easilyovercome without significant structural change, andthat much we acknowledge.

We also recognize that we need technicaland financial assistance to help us make the difficultadjustments. But to be clear, we are not asking forcharity. We are asking for help to help ourselves sothat we might at least have a decent chance.

Some small economies have very littleaccess to development assistance and have beenforced to look at alternative means of generatingincome. Instead, the donor community has hog-tiedthose of us who look to generate such resourcesthrough offshore financial centres and other innovativeschemes. Some of the world’s smallest and leastendowed economies, including Nauru, have been iden-tified under the harmful-tax-practices initiative of the

** The statement has been reproduced as rece ived. Thedes ignat ions employed do not imply the express ion of anyopin ion whatsoever on the part of the Secretar iat of theUnited Nat ions concern ing the legal s tatus of any country,terr i tory or area, or of i ts author i t ies

Organization for Economic Cooperation andDevelopment (OECD) and are being sanctioned by thefinancial action task force. We are doing our best tomeet their ever-changing demands. But it is important,of course, that the OECD be committed to consulta-tive and inclusive process that allows for a mutuallyaccepted outcome and a level playing field for all. TheOECD should therefore ensure that its own membersfollow the rule first. Indeed, this should apply to allconditions set by donors. Let them lead by example.

Finally, the initiatives announced by theUnited States and the European Union during thecourse of this conference are positive developmentsindeed. But the momentum generated here must becarried forward meaningfully. The World Summit onSustainable Development will be the first test of ourresolve to translate our commitments into reality. Letus not waste that opportunity.

NepalStatement byHis Excellency Dr. Ram Sharan MahatMinister for Finance, Kingdom of Nepal

We heartily congratulate you, Mr. President, for theoutstanding leadership you have given to this confer-ence and thank the government and people of Mexicofor the reception and hospitality we have been accord-ed here. Secretary-General Mr. Kofi Annan deservesour appreciation for the admirable dynamism andinsight that he has brought to this conference.

We have come to Monterrey with greathope. Though short of meeting our expectations, thedraft Monterrey consensus does constitute a significantstep forward in the continuum of our collective effortsto promote prosperity and peace. Particularly, it offersa useful framework for us to embark on new initiativesand to pursue new patterns of global partnerships forfunding development and helping realize theMillennium Development Goals.

Today, democracy, freedoms and free mar-kets have become the defining features and globaliza-tion the dominant theme for the world. However, theyhave not yet become irreversible. It is incumbent onleaders to bring statesmanship and commitment tomake these values work for all through the emergingpartnerships.


220

Developing countries must own and leadcoherent and consistent effort to raise more domesticresources, attract investments, foster trade, andimprove governance. But they cannot do it alone.They require, from development partners, increasedaid, debt relief, access to markets, support to improvetheir governance, and an equitable voice in globaldecisions that impact their destiny.

Nepal, as most other developing countries,has been doing all in its powers to reduce poverty andpromote sustainable development through innovativemeans. The government is investing in people on pri-ority basis by focusing public expenditure on educa-tion, health and drinking water as well as in infrastruc-ture. It is also engaged in active and broad-based part-nerships with the private sector, non-governmentalorganizations, community groups and ordinary menand women in a synergistic interface for comprehen-sive progress.

We need resources to implement quick-impact projects in rural areas where poverty is mostacute. And we also require sustained and increasedassistance to bridge our chronic resources gap to com-plement our development efforts and to strengthendemocracy and foster a just society. We believeNepal’s generally satisfactory macroeconomic andhuman development performance in the last decadequalifies it for more aid and support on merit.

Rich nations can and must assist the poorto eradicate the worst forms of poverty, promote edu-cation, tackle HIV/AIDS, malaria and other diseases,and create physical infrastructure as well as to managetheir conflicts, crimes and environment. Such help willadd to the security and well-being of the rich and be amorally right thing to do in view of wide disparity inwealth and income. They should sincerely strive tomeet the agreed development assistance targets. Somehave done it and we salute them. We also welcomethe fresh initiatives of the EU and USA to boost theiraid budgets as a step in the right direction. We urge alldevelopment partners to show political will and resolveto make these targets a reality.

Low- and middle-income countries are reel-ing under an unsustainable debt burden. The HIPC ini-tiative must be expanded to provide relief to all thatare in dire need. Particularly, the poorest countries likeNepal should not be asked to wait for help until theystumble into bankruptcy. We, therefore, support pro-posals for debt cancellation of all least developednations and for grant-funding of their social sectors infuture.

Aid has helped in increasing literacy, eradi-cating some diseases and arresting others, and evenreducing poverty in many countries, including Nepal.Small pockets of scepticism in the North should notget the better of progress that improved aid perform-ance and debt relief can bring to the poor in theSouth.

Foreign direct investment throws a blankstare of loud neglect to poor, small and geographicallyhandicapped states. Advanced countries will have totear down their tariff and non-tariff barriers and opentheir markets to spur investment and spark innovationin developing nations. We must ensure that the Doharound accelerates development without distortions.

Least developed countries from Asia andAfrica are facing the most precarious predicament.They need urgent help through the prompt implemen-tation of the Brussels Programme of Action in itsentirety. Their products must be given duty-free andquota-free access to all advanced markets and particu-lar attention to build their capacities to trade. We seekearly measures for market opening under theEuropean Union’s ‘Anything-but-Arms’ scheme andunderline the necessity for other developed countriesto take similar measures.

Nepal from its own painful experienceknows that peace, democracy and development areinextricably linked and one cannot be secure withoutthe other. We must all join forces to promote themtogether.

We share common humanity and commondestiny in the global village. In the post-September 11period, we have all become deeply conscious that con-flicts and poverty, even far away from our homes,directly and seriously affect us. By working together,the world community is winning victory in the battleover terrorism. But terror and insecurity will not bedefeated and lasting peace will not be won until wewin the war against poverty. And at Monterrey wemust declare that last war.

221


NetherlandsStatement byHer Excellency Ms. Eveline Herfkens Minister for Development Cooperation, Kingdom of the Netherlands

As my written statement will be distributed, I justwould like to highlight a few additional points. I thinkthis was a wonderful week! Never before in one con-ference have we gathered so many stakeholders.Never before did we have such a very constructiveinteraction between the UN, the IFIs and the WTO.Never before did we discuss poverty in such a compre-hensive and holistic way with the presence of ministersof Finance, Trade, Foreign Affairs and DevelopmentCooperation, joined by the private sector, profit andnon-profit. Never before was the plight of the poor sohigh on the international political agenda.

And indeed, in the spotlight of internation-al public opinion, OECD countries made a start withliving up to the commitment they made when signingthe Millennium Declaration in 2000. Last weekend theEU collectively decided to increase its ODA, structural-ly linking it as a percentage to GNP. It will amount tosome $20 billion for the coming few years. This is bigmoney, and therefore the glass is half full.

But it is small in terms of GNP percentage,and therefore the glass is also half empty. There is areal and urgent need now for all OECD countries tocommit themselves to live up to the 0.7 objective, andfast. Only then do we fulfil our side of the MonterreyConsensus to fund the achievement of the MillenniumDevelopment Goals.

I simply cannot accept that heads of Stateand Government would have signed up to halving thenumber of poor by 2015, but at the same time allowpart of their cheque to still be in the mail at that time.

But there is good news. I see a new emerg-ing ‘Coalition of the Willing.’ Yesterday five EuropeanPrime Ministers declared, “The rich can do better.”Yes, five! For a quarter of a century, the small exclu-sive club of the G 0.7 consisted only of the four usualsuspects: Norway, Sweden, Denmark and theNetherlands. Today I pay tribute to Luxembourg,which has joined the G 0.7. I also pay tribute toIreland, which will reach the 0.7 in 2007. I also paytribute to Belgium, which will join us in 2010. Amongcountries that have not yet announced a final date toreach the 0.7, there is good news too. France hasannounced that it will continue to stay above the ever-increasing EU average.

I pay tribute to some G-7 finance ministers,like Gordon Brown and Paul Martin, who haveexpressed very often their commitment to fightingglobal poverty. I would not be surprised to see thempulling their checkbooks the coming months.

What we definitely did in Monterrey isfinally, after decades, a reversal of the vicious down-ward spiral of ever-dwindling ODA into a virtuousupward spiral. Furthermore, I by now see an evenwider group of donor countries signing onto the com-mitment not to allow that any low income country willfail to achieve the Millennium Development Goalsbecause of lack of external funding.

What a fantastic challenge for these low-income countries! I urge you all to call our bluff. Byimplementing your part of the Monterrey Consensus,to develop and implement credible poverty reductionstrategies, to improve your governance and to fundyour part of the compact by increasing domestic sav-ings and by making your expenditures more pro-poor.

Let me conclude. We will take our planesthe coming hours. But let us keep up the Spirit ofMonterrey. Let us commit ourselves, all of us, and inparticular the UN system, the IFIs and civil society, tocreate effective mechanisms to monitor country-by-country, poor and rich, the extent to which we live upto the promises we made this week, promises wemade in the absence of the most important stakehold-ers: the billions of poor women and men living inextreme poverty. After all, the only thing that matters,in our New Global Partnership to achieve theMillennium Development Goals, is not to let THEMdown.

Statement Distributed by Her Excellency Ms. Eveline Herfkens

More than ever before there is recognition that har-nessing development in poor countries is an essentialcondition for a peaceful and sustainable world. Weneed less poverty and more democracy.

In September 2000 the UN GeneralAssembly adopted the Millennium Declaration.Through this declaration rich and poor countries haveaccepted a shared responsibility to realize the eightMillennium Development Goals. This is crucial in thefight against global poverty.

The joint goals and the specific targets that go along with them facilitate the monitoring of progress and obligate countries to live up to theirpromise to work towards these goals. The most


222

prominent among them must be realized in 2015: thereduction by half of extreme poverty. Now is the timeto make good on those fine promises.

Much has changed for the good in thedeveloping world over recent decades. Some countrieshave managed to break free from poverty and toachieve reasonable levels of development. Lifeexpectancy in poor countries has risen by as much as20 years over the past four decades. Infant mortalityhas fallen, and more children than ever go to school.More countries have democratically elected govern-ments. And over the last 30 years, average per capitaincome in developing countries has more than dou-bled.

The Netherlands government considersFinancing for Development a unique opportunity totake another big step forward in our common fightagainst poverty. Unique because:

• For the first time, we are taking an inte-grated, holistic look at all the components going intofunding the development process. Aid and domesticsavings, trade and investment, the level of aid and itseffectiveness.

• For the first time, all parties involved aremaking a contribution. UN diplomats as well as theleaders of the Bretton Woods institutions and theWTO. Governments as well as private investors andNGOs. Foreign financiers as well as domestic investorsand creditors.

• Since the terrorist attacks in the US, peo-ple all over the world have become even more awareof their interdependence. We cannot isolate ourselvesand safeguard peace, democracy, stability and pros-perity in our own enclave. We cannot ignore wholeregions. A growing number of people now understandthat we have to invest more in poverty reduction.

• Clearer than ever before, developing coun-tries acknowledge their own responsibilities, that theycannot blame all their woes on evil outsiders or a hos-tile international climate.

Good policies and good governance, par-ticipatory and transparent decision-making and pro-poor choices – these are their responsibility. At theUN ECA Big Table meeting in Amsterdam in October2001, the African finance ministers made this veryclear. Good governance is not just our latest hobbyhorse. Africans themselves expect, yes require, it fromtheir governments. It is one of the basic principles ofAfrican leaders’ New Partnership for Africa’sDevelopment.

Effective poverty reduction means that wemust be prepared to tackle the three main deficits inour system of global governance.

A coherence deficit

Our policies – national and global – should be coher-ent. We have to stop giving with one hand and takingwith the other. If we underscore the importance of asound enabling environment in developing countries,we should also enable these countries to export to ourmarkets. The new WTO round should become a realdevelopment round contributing to the achievement ofthe MDGs. The Doha agenda is a positive first stepbut the proof of the pudding is in the eating. Thewealthy nations still put roadblock after roadblock onthe way to development. The clearest example is agri-culture policy.

Coherent policy also means helping coun-tries to build trade capacity as well as effectively man-aging and funding the remaining debt problems.Consideration at the level of the IMF Board of a bank-ruptcy procedure for debtor countries was a realbreakthrough.

The lack of coherence between multilateralorganizations is primarily due to incoherence andcompartmentalization of our own governments in thenational capitals. The health ministry deals with theWHO, the central bank with the IMF, the finance min-istry with the multilateral banks, the trade ministry withthe WTO and the social affairs ministry with the ILO.When two or more national actors disagree they sim-ply export their conflicting points of view to the inter-national level; the ILO, WHO and WTO headquartersin Geneva become the battlefield. The same goes forthe IFIs (finance ministries) on the one hand and theUN (foreign affairs ministries) on the other. Ensuringcoherent policies is a primary task of ministers fordevelopment cooperation.

Also (although things are moving in theright direction) the international organizations them-selves have not yet fully integrated their own insightsregarding poverty and poverty reduction in theiractions. This applies in the first instance to the WorldTrade Organization (WTO). It should send a strong signal of its commitment to poverty eradication byendorsing the MDGs and acknowledging that trade is a means rather than an end in itself. The IMF hasbecome more committed to poverty reduction inrecent years. This is reflected in its endorsement ofthe MDGs and its close collaboration with the World

223


Bank on the PRSPs. Despite sometimes-excessive redtape within the UN institutions, their internecinesquabbles about overlapping themes and their chronicshortage of funds, a number of them have made sub-stantial progress with internal reform.

Attempts to pander to institutional egosundermine efficient poverty eradication. Internationalinstitutions have to put an end to turf battles and mis-sion creep in order to improve global governance.

A democratic deficit

The lack of democratic control and participation with-in the international financial organizations and theWTO is another major obstacle to pro-poor globalgovernance. Parliamentarians should get engagedwhen governments formulate their input in interna-tional institutions including the World Bank, the IMFand the WTO. I warmly welcome recent initiatives ofnetworks of Members of Parliament, evolving intointerparliamentary assemblies dealing with IFIs and theWTO.

Where the private sector becomes more ofan actor in global governance, it should recognize its‘democratic deficit’ as well and improve accountability.NGOs, non-profit organizations, should not just claimto represent ‘the poor’, ‘the women’ or any other ill-defined group. They should acknowledge that theyhave a specific constituency, and be in constant dia-logue with that constituency. For the profit-making pri-vate sector, their voluntary codes of conduct –although non-enforceable – might reduce the demo-cratic deficit by improving reporting obligations on acompany’s track record. Both the OECD guidelinesand the World Bank/UN initiatives on corporate gov-ernance could well serve as starting point for moreelaborate and effective codes of conduct.

A compliance deficit

Many instruments can enhance the impact of develop-ment assistance and reduce its transaction cost: untiedaid, policy coherence, harmonization of procedures,and a sharper focus on poor countries with sound eco-nomic and social policy and strong institutions. Butdonors will have to give the poor countries what theyalso need: cash. No low-income country with a credi-ble poverty reduction strategy should fail because oflack of external funding.

To achieve the Millennium DevelopmentGoals development aid will at least have to increase byan estimated hundred per cent. That is, by fifty billiondollars a year. To bring about this increase, the bestand most logical strategy is to comply with existingagreements.

All UN members, with the exception of theUS, have accepted a long-established standard volumeof ODA for donor countries: 0.7 per cent of GNP. Infact, the Netherlands, Sweden, Norway, Denmark andLuxembourg are the only OECD members that meetor exceed the ODA standard. Together they make upthe G-0.7. This week we have seen a remarkablereverse after many years of shrinking ODA. A viciouscircle down turned into a virtuous circle up.

Commitments made account for one thirdof the additional funding required for the MDGs.There is a growing coalition of the willing amongOECD countries, which have committed that no coun-try with a credible poverty reduction strategy would failto implement it due to lack of external funding. This isa great opportunity for low-income countries to live upto their part of the Monterrey Consensus.

Developing countries themselves areresponsible for the quality of their policies and thefunctioning of institutions. They will have to put theirhouse in order; no one else can do it for them. Anincreasing number of developing countries acknowl-edge this responsibility. However, when developingcountries have their internal affairs in order and havecome up with a good national poverty reduction strat-egy, then adequate, untied and timely funding must beavailable to fund these strategies.

Now I call on the UN system, IFIs and civilsociety to closely monitor, country-by-country-by-coun-try, progress in reaching the MDGs. And to live up tothe promises made this week in the absence of themost important stakeholders who were not present:the billion people living in absolute poverty. After all,the only thing that matters in our new global partner-ship to reach the MDGs is not (again!) letting THEMdown.


224

New ZealandStatement byHis Excellency Hon. Matt RobsonMinister for Disarmament and Arms Control andAssociate Minister for Foreign Affairs and Trade(Official Development Assistance), New Zealand

New Zealand welcomes the holding of the UnitedNations Conference on Financing for Development.

This landmark meeting has brought theinternational community together to examine in a trulycohesive way, how to better generate, mobilize andutilize resources for development. The MonterreyConsensus marks a milestone in development think-ing, in that it recognizes and values the many differentstrands of development financing.

We need to pull all the right financinglevers if we are to achieve effective development andmove the world out of poverty.

We need to pull all the right policy levers ifwe are to address the root causes of terrorism, one ofwhich is poverty.

In New Zealand I am both Minister forDisarmament and Minister responsible forInternational Development. One of my goals is to cre-ate a greater public awareness of the contribution aidcan make towards regional security in our own area ofthe Pacific. The point is, aid and development policiescannot be seen in isolation. The international commu-nity must stop giving with one hand and taking withthe other. If care is not taken, national trade, econom-ic and defence policies can undermine our develop-ment efforts.

We need to ensure that there is coherencein policy development at all levels.

There is little point in building up, say tradecapacity in developing countries, if donors maintainstrict market access restrictions for products of keyinterest to those same developing countries. That iswhy the New Zealand Government decided in 2000 toremove all tariffs on goods from least developed coun-tries. We see this as a practical step that developednations can take to improve the livelihood of theworld’s poorest producers.

Fundamentally, coherence is all aboutensuring that the left and right hands are in synch. Inattempting to achieve a consensus, there haveinevitably been matters left out, because it would stillbe impossible to get agreement on them.

I would have welcomed for example, refer-ence in the Monterrey Consensus to the global imbal-ance between military and defence expenditure andexpenditure on aid and development. And yet all of ushere today know that reducing poverty is our bestchance of reducing violence. Buying and supplyingweapons of war is not.

We know this in our own region of thePacific where we have seen coups in Fiji and SolomonIslands, brought about by the misuse of armaments inthe hands of small groups of men behaving like ban-dits.

Like many others, New Zealand wouldhave preferred to see the Monterrey Consensusinclude references to Global Public Goods. NewZealand supports the establishment of an internationalworking group to develop an agreed working defini-tion of GPGs and to identify their parameters. I hopethat we will be able to address Global Public Goods atthe World Summit on Sustainable Development inSouth Africa later this year.

The Monterrey Consensus is a wake up callto everyone in the development debate. Developmentfinancing issues are now firmly and very visibly on theinternational agenda. For our part, this visibility couldnot have come at a better time. We have just createda new aid agency in New Zealand – the New ZealandAgency for International Development or NZAID –while semi-autonomous within our Ministry of ForeignAffairs and Trade – will give primacy to developmentthinking and aid effectiveness. As a result it can focusprimarily on poverty elimination and support for goodgovernance, particularly in our own region of thePacific.

Poverty is not merely the absence of anincome adequate to meet the basic necessities of life.In the Pacific, it can mean poverty of opportunity – alack of the essential elements that facilitate a normalexistence. As the 2000 Report of the CommonwealthSecretariat/World Bank Task Force on Small Statesshowed, small states – which dominate the Pacific –are systematically more vulnerable to poverty thanlarger countries, regardless of income. The report rec-ognizes, however, the need for more work to be doneon the ecological aspects of vulnerability, and itsbroader impact on sustainable development.

In these difficult times, the issue of partner-ship is key. The international donor community can-not simply walk away from helping countries where,because of conflict, poor governance and other prob-lems, the cause seems hopeless. While the notion ofworking in partnership is not easy in situations where

225


the government is no longer functioning effectively,the donor community can and should seek to workthrough alternative delivery mechanisms.

We have a moral obligation to do so.

New Zealand has successfully worked withlocal civil society, community and church groups inPapua New Guinea, the Solomon Islands and Fiji inperiods following conflict and political upheaval. Let usnot forget the commitment within the Consensus doc-ument to promote greater participation by civil societygroups in processes which concern them.

Follow-up is critical to the success of thisConference. Present and future generations will judgeus on our actions not our words. The Consensus docu-ment before us challenges us all to do more – interna-tionally and domestically – and to do it better.

New Zealand is committed to increasing itsaid expenditure from the current level of 0.24 percent of GNI to the 0.7 per cent target as revenue andresources allow. The challenge I face on my return,and I am know I am not alone in this room is to givesubstance to the commitments made here this week.

If we are serious about targeting poverty indeveloping countries, then we must:

• Open our markets to goods fromdeveloping countries;

• Provide suitable and timely technical assistance, as we agreed in the Doha Development Agenda;

• Dovetail governmental efforts with the private sector, acting as good corporatecitizens;

• Help to build systems for good governance; • Explore innovative sources of finance; and • Continue our efforts to address Third

World debt relief. New Zealand believes that continuing unsustainable levels of debt undermine developing countries’ ability to meet the Millennium Development Goals.

Partnership implies mutual ownership andresponsibility by both developing countries and donorcountries. Some developing countries have to take agood hard look at their domestic policies and the func-tioning of their institutions, and set their house inorder. For developed countries we need to do morethan talk about coherence. We need to hold ourselvesaccountable for achieving it.

Just as we use an index to measure humandevelopment progress, perhaps we need a ‘PolicyCoherence Index’ to make sure that we are not takingaway with one hand, for example trade barriers ortrade subsidies, what we give with the other throughODA. Then we will be able to say we have achievedreal coherence and true partnership in the interests ofachieving the Millennium Development Goals.

PakistanStatement byHis Excellency Mr. Shaukat AzizFinance Minister, Islamic Republic of Pakistan

At the outset I would like to convey to all the distin-guished delegates the warm greetings and good wishesof President General Pervez Musharraf whose vision ofa modern, dynamic and economically vibrant Pakistanwill play its due role in creating a peaceful, stable andprosperous world – a world free from hunger, depriva-tion, and poverty. I would like to take this opportunityto express my appreciation to the Government ofMexico for their warm hospitality and making excel-lent arrangements for this Conference.

We have gathered here in Monterrey to ini-tiate a process of genuine partnership between allstakeholders in pursuit of our shared goal of eradicat-ing poverty, achieving sustained economic growth andbuilding a fairer and more equitable global economicsystem.

The existence of widespread poverty in themidst of global prosperity is undeniably the most seri-ous challenge confronting the world today.Regrettably, we have viewed poverty thus far, in thecontext of income poverty alone. We believe thatpoverty should be viewed in a holistic manner. Lack ofeducation, basic health facilities, safe drinking water,sanitation, shelter, rule of law, access to justice, publicrepresentation and participation in addition to lowincome, give rise to the feelings of human deprivation,resulting in extreme behaviour which can threatenglobal peace and prosperity. The challenge before theworld is, therefore, to fight human deprivation by tak-ing a broad-based view of poverty.

Official Development Assistance (ODA)remains an essential supplement to domestic resourcemobilization for low-income countries. The presentlevel of ODA is lower than what is required to fightpoverty and human deprivation. Furthermore, not


226

only have ODA flows declined over the years, thetransaction costs of aid delivery have tended to riseinexorably, thereby eroding the effectiveness of aid.Should we allow the present state of affairs to contin-ue? The answer, Mr. President, is certainly not. Thereis a clear need to increase the quantum, quality, andeffectiveness of aid for eradicating poverty and humandeprivation, achieving sustained economic growth andpromoting sustainable development. Mr. President, weare already witnessing some positive developments.We welcome the initiatives of the European Unioncountries for agreeing to raise their ODA contributionto 0.7% of GNP in a phased manner. This is a majordevelopment, which should be welcomed by all thestakeholders. The recent announcement by the UnitedStates to increase their development assistance by 50per cent is yet another significant development whichwill encourage other donors to follow suit. However,we believe that much more needs to be done to bridgethe poverty gap which in many cases exists because oflack of adequate and timely flows of economic assis-tance. At the same time the effectiveness of aid shouldbe measured by outcomes and not necessarily by thequantum of aid. We do recognize that ODA alone isnot the only funding source available; equal impor-tance needs to be given by the host countries by creat-ing an enabling environment to promote private capi-tal flows.

We believe aid should not be used as per-manent crutch but as a means to allow the recipientcountries to stand on their own feet. Raising the effec-tiveness of aid through creating a sound environment,an appropriate framework for investment, initiatingstructural reform, ensuring good governance, achiev-ing high standards of transparency, eliminating corrup-tion and involving civil society is the prime responsibil-ity of developing countries. They should learn to walkon their own but need assistance to get there. Bothdonors and recipients need to share a common goali.e. improving the lot of humanity and aid recipientsshould be driven by the motto “help us to help our-selves”. Aid recipients and donors should be partnersin development and the recipients should not bedependent on donors forever.

Debt relief is an integral part of a compre-hensive concept of poverty reduction. It has a criticalrole to play in helping poor countries attain sustain-able growth and development. While we welcome thesignificant progress achieved so far in implementingthe Enhanced HIPC initiative, it is equally essential toevolve an effective mechanism for managing debtoverhang of heavily indebted non-HIPC countries that

are willing to redirect savings on debt service paymentfor human development, improving social indicatorsand governance. Countries which are currently makingefforts to reform their economies but are loaded withhuge debt overhang need substantial debt relief tofinance credible and home grown reform pro-grammes. Meaningful and substantial debt relief will,therefore, go a long way in helping countries that aretrying to help themselves.

Trade is an important source of growth,employment, and poverty reduction. It is also the sin-gle most important external source of financing devel-opment. Active promotion of trade in developingcountries could boost economic growth, generateemployment, and reduce poverty. Increased marketaccess is an effective way for developing countries toreach sustainability. Developing countries need a levelplaying field with all other market players thus encour-aging market based competition and helping produc-ers and consumers alike. Every extra dollar of exportsfrom a developing country feeds a poor family andbuilds a better future for them.

Fighting corruption at the global level ishigh on the agenda of the international community. Inmany countries higher incidence of poverty and poorgovernance is linked to high levels of corruption. Thewar against corruption needs to be globally coordinat-ed and bad money should not find a safe haven any-where. More concrete global action is needed to curbmoney-laundering, flight of capital, tax evasion andillegal payments by bidders on Government contracts.

We have embarked on a journey at theMillennium Summit to fight poverty and build a part-nership for sustainable development. Shared goals andvision of a better future will get a further impetus as aresult of the Monterrey Conference. We now need fol-low up and serious implementation on part of all thestakeholders. Pakistan has actively participated,through our Permanent Representative at the UN, asCo-Chair of the Preparatory Committee leading to theMonterrey Consensus. We remain committed to work-ing with all those present here towards creating aworld free of hunger, poverty, deprivation and inequity– a world which offers hope, and a world we will all beproud to bequeath to our future generations.

227


ParaguayStatement byHis Excellency Mr. José Antonio Moreno RuffinelliMinister for Foreign Affairs, the Republic ofParaguay

Allow me to express my delegation’s pleasure at see-ing you chair this important conference, and at thesame time to extend a special thanks to theGovernment and People of Mexico, our hosts, fortheir traditional hospitality and the valuable effortsaimed at the success of this historic event.

The imminent adoption of the MonterreyConsensus by the delegations present here todayexpresses the political commitment for the formulationof a new agreed international strategy aimed at deal-ing with the complex problem that Financing forDevelopment in all its aspects represents. TheMonterrey Consensus is destined to become the essen-tial instrument necessary to combat poverty and thusto allow our peoples to legitimately gain access to bet-ter standards of living, compatible with basic humandignity. For this reason, we must be conscious of thefact that this conference is only the beginning of along trip that both developed and developing countriesmust travel together, in a spirit of solidarity. The con-sensus that we have achieved also constitutes the ethi-cal and moral commitment to faithfully uphold andcarry out new development strategies, being fully con-scious of the danger that the constantly widening gapbetween rich and poor countries implies for interna-tional peace and security.

Violence in the form of terrorist acts cannever, in any way, be justified as an acceptable meansof demanding the closing of this gap. Therefore,Paraguay once again condemns this criminal conductthat is incompatible with humanity itself.

We should not allow this conference tolimit itself to mere declarations and expressions ofintent. We are here today to give light to a globalvision that must contemplate, with the urgency thatthe matter requires, the generation of new measuresand programmes capable of establishing a more justand equitable economic, financial and commercialglobal system. The inherent inequities and injustices ofthe current international order must be corrected,along with the outdated and ineffective formulas thathave clearly not produced the desired results.

It is also essential to point out that the newvision of Financing for Development must recognizethe existence of clear differences among developingcountries in terms of their respective levels of develop-ment. It would be a serious mistake to presume that alldeveloping countries have similar circumstances andneeds. Some developing countries are more vulnerablethan others, and due to particular and geographic fac-tors find themselves at a greater disadvantage in termsof their capacities to benefit from globalization. Wetherefore demand special treatment for landlockedcountries, as is the case of Paraguay. Strategies forfinancing development must contemplate the needs ofall involved actors in fair measure.

We are well aware that the levels of OfficialDevelopment Assistance (ODA) have fallen substantial-ly in the last several years, and that they are at theirlowest point in decades. Official DevelopmentAssistance is undoubtedly an important element ofFinancing for Development, and in this regard we arehopeful that starting with Monterrey, concrete com-mitments will be made to increase ODA. Having saidthis, it is essential to point out that ODA is not, norshould be, the panacea for the problems we are fac-ing. The developing world cannot depend solely onODA. Developing countries are fully aware that theymust make the necessary internal effort to guaranteetheir own development and that ODA is necessary tocomplement this development. But this can only bepossible when the involved actors find the necessarybalance to share the inherent responsibilities of sus-tainable development.

Paraguay believes that all of the efforts thatwe can make in favour of development would be invain if we do not give priority to establishing an equi-table and non discriminatory global trading system thatwould allow developing countries access to interna-tional markets under open and transparent conditions.

For Paraguay, as well as many other coun-tries, trade is the most viable and realistic means foreconomic growth and for creating investment, but atthe same time the area that poses the greatest obsta-cles. If protectionist measures, especially agriculturalsubsidies and other non-tariff barriers, are not lifted,no effort to foment growth and reduce poverty willhave the expected success.

The concept of a fair trading system hasbeen enunciated in innumerable occasions and forums,and has been consecrated in the MillenniumDeclaration and in the Declaration of the Fourth WTOMinisterial Conference held in Doha. But it is worth


228

repeating until all involved actors implement it. TheDoha process and the new round of WTO trade nego-tiations must be fully integrated into the Financing forDevelopment agenda. Furthermore, the importance ofregional and subregional integration agreements indevelopment processes must be recognized, as is theSouthern Common Market (MERCOSUR), whichshould be given all the necessary support.

Furthermore, we understand that develop-ment is conditioned on the preservation of our naturalenvironment, a necessary element for a better globalquality of life. For this reason, developed countriesshould give priority and importance to those projectsdestined to allow developing countries to reconvertpart of their often heavy debt into environmental protection. This in turn will have a significant socialimpact.

Nor can we lose sight of the indispensableneed for reforming the current international financialsystem, which in recent years has clearly demonstratedits insufficiencies and inherent risks, with devastatingresults. A new financial architecture is necessary tocreate stability and confidence at a global level. Theachievement of this high objective, in concert with theestablishment of a fair trading system, will not onlycreate a world with more fairness and solidarity, butwill also give way to an environment more conduciveto private investment, another important instrumentfor financing development.

I cannot conclude this intervention withoutmentioning the importance of education in the devel-opment of our countries. Education is the most effi-cient instrument in the fight against poverty. We aretherefore convinced that this significant social issueshould receive priority attention from internationalfinancial institutions, as well as from more developedcountries. Our children have the right to receive quali-ty primary education as the first step towards improv-ing educational systems, and therefore their quality of life.

We must depart from Monterrey to ourrespective capitals with a message of hope and confi-dence. Our peoples need this. A renewed spirit of soli-darity must accompany this new global vision. Wemust overcome the disenchantment of recent timesand be assured that the solution is within our reach,but only if we can guarantee the right conditions andreaffirm the right to development of all peoples.

PhilippinesStatement byHis Excellency Mr. Teofisto Guingona, Jr.Vice President and Minister for Foreign Affairs,Republic of the Philippines

‘The Challenge of Poverty’

Señor Presidente, La República de Filipinas le felicitasinceramente por su elección. Somos ciertos que bajosu liderazgo, nuestra conferencia gozará un estupendoéxito. A la vez, la delegación Filipina agradece alpueblo y gobierno Mexicano por la calurosa bienveni-da y los preparativos excelentes para nuestra reunión.

Me quedo profundamente honrado poresta oportunidad de dirigir palabras, en nombre delgobierno Filipino, en esta conferencia, en la ciudadhermosísima de Monterrey, abrazada por las mon-tañas y el ardor de su amable pueblo. Reconocemos laimportancia de participar en el comienzo de un proce-so muy importante para el desarrollo de nuestrospueblos.

I am a Filipino. I come from thePhilippines in Southeast Asia. Our land is rich, but ourpeople are poor.

Our advance to relative progress was dis-rupted by the global financial crisis in July 1997. Morethan 30 million have fallen below the threshold ofpoverty. Many of them live without adequate food,clothing, and shelter. Many cannot finish grade school,and many of those who graduate often cannot findjobs.

We have a new government dedicated toalleviating poverty. We are pledged to shape our poli-cies in line with the historic Millennium Resolve of theUnited Nations to eradicate poverty by the year 2015.

We want development. We want technolo-gy in many vital sectors – in food, in medicine, in edu-cation. But it seems that technology is generated byrich nations and corporations to suit the demands ofthe market not the needs of the poor.

Multinationals invest in research. Theycome up with costly medicines. Their expenses arecarried over to all products, making them more expen-sive. Cough medicines, antibiotics, pills for the heart,tuberculosis and immunization shots – are basic curesfor the poor, which the poor want but cannot afford.Necessity compels them to borrow, in order to buythese medicines. In the process, the poor becomepoorer. And the development we desire is dampened.

229


We aim to modernize agriculture, especiallybecause the bulk of our population still relies on ruralenterprises. We want to empower our farmers – teachthem how to raise high-value crops; how to increaseyields through biotechnology. However, the AsianDevelopment Bank reports that biotechnical researchis done by a handful of multinationals that cater toproblems of rich farmers and developed consumers.

For example, biotechnological research hascome up with crop varieties resistant to insect pests.But to be effective, the farms need surrounding buffersrequiring space to raise crops that are not pest resist-ant. Not cheap. Not feasible to our poor farmers.

We want technology transfers. We want touse the Internet as a vehicle to educate our teachers,our students, our entrepreneurs. But brand computersare still costly. Software remains expensive. Licensesfor exclusive operations are still binding for 20 years.

The commitments made to promote tech-nology transfer to developing countries seem paperpromises thus far, often negated by profits. How thendo we eradicate poverty, as envisioned by the UnitedNations Millennium Declaration?

We should seek a just and workable solution.

1. A developing nation like ours is not seek-ing a dole-out. We want technology because it is vitalto lift us from poverty. We will implement policies tomake technology transfer from rich nations more con-venient. We will build roads, communication channels,infrastructure needed to support a computer I.T. indus-try.

Advanced countries concentrate on hightechnology. They design electronics, computer, andother operating systems. Then they locate the assem-bly and manufacturing plants in a developing countrywith skilled and cheaper labour. The Filipino is a fastlearner. He is a good factory worker, and adept tech-nician, and able computer operator. He has the poten-tial to create new software; service likes data ware-housing; backroom operations to animate cartoonsand programmes; accounting systems for client firmsabroad.

Thus, the transfer of technology and train-ing to the Filipino may mean less expense for devel-oped nations, but they mean a significant empower-ment for us. They mean more jobs and more opportu-nities to lift people from the dregs of poverty.

Yet such progress may not suffice. Today,we do not have enough classrooms; we do not have

enough books; we do not have enough teachers. Helpus to leap beyond this hurdle. Sell us computers thatwe can afford – even if they are second hand. Sell uspertinent software that we can adjust. Then we canturn this dream into reality: computers that compen-sate for classrooms: that can span distances and teachpupils vital subjects like mathematics and science;complement vocations with skills and education thatwill empower them to face life.

Today, our farmers face a bleak future. Nomoney; no training; no real knowledge on how tobreak off from traditional products like rice and corn.They can hardly survive. Help us to overcome this bar-rier. We need computers and pertinent software forthem. Give them a fighting chance to overcome. Thenwe can turn dream into reality. I envision farmers intattered clothes, grouping together beneath trees inthe Philippines, to watch lessons about a new productunfolding on a computer screen. The extension work-er explains: chili. Asparagus. Other varieties instead ofrice and corn. At cheaper cost! Generating moreincome! Competitive in the market!

Yes, even today, here are many coconutfarmers who own two or three hectares of land. A fewof them have had the courage to experiment on cashcrops planted between trees and have been rewardedwith success. They constitute the exception. But if wegive them technology transfer on a massive scale, itwill benefit them. It will benefit the consumers ofdeveloped nations. It will bridge the gap between thegreat divide.

2. On intellectual property rights, like patentsfor medicines, we ask that developed nations andmultinationals consider different pricing for developingcountries.

Many of the poor cannot afford them. Thespectre of a sick boy dying in a hovel because he can-not buy needed antibiotics is real. Since the main costof pharmaceuticals is in research, not in production,then perhaps rich nations and corporations can makenecessary adjustments. The fear of distorted trade isunderstandable, with lower-priced products findingtheir way to rich consumers, thereby defeating theobjective of alleviating poverty.

But if rich nations and corporations sell tous at affordable prices – without fixed costs involved inproduct development – the Philippines pledges toimplement laws that would prevent the exportation ofproducts, with technological subsidy, to other marketsother than our own. Examples of these are modernmedicines to cure diseases such as diabetes, heart andneurological problems. They will help save lives,diminish the scourge of poverty.


230

In 1997 the Philippines was on the way toprogress. But in July of that year, a severe financialcrisis struck us. Our foreign debt swelled. It now totals$50 billion – depreciating the peso from P26 to P50to the dollar; shrivelling incomes; causing the discon-tinuance of development projects, laying off people bycompanies.

Poverty has worsened. Before, the thresh-old of poverty affected only slightly over 30 per centof the population. Today, forty per cent of Filipinosare poor. Our national debt service is heavy: about250 billion Pesos – equivalent to US $5 billion – ayear. We have imposed austerity measures. However,we maintain good relations with our creditors. We payour debts; no defaults; no delays; no write-offs.

In the wake of continuing crisis – we sug-gest to our valued creditors: give us a rational swap –debt-for-technology transfer.

Instead of servicing the debts for the year,allow us to utilize the equivalent fund for technologytransfer, for education, for social services. Give us themeans to modernize our agriculture; to buy seedlingsand grandparent stocks for high-yield corn; to growbetter hogs and chicken; to set up laboratories to meetour phytosanitary requirements; to initiate pro-grammes like improved fisheries and low-cost housing.

Instead of paying 250 billion Pesos, or US$5 billion, allow us to help our farmers and fishermenand small entrepreneurs give meaning to life.

For example, part of our debt-service pay-ments to certain banks can be channelled for the pur-chase of satellites or telecommunications equipment orcomputers or computer software. In return, thesecreditor banks will be given the business of sourcingsuppliers; handling importation, export credits, andthe insurance of these purchases.

Creditors can also consider debt-for-shelterprogrammes. A portion of debt-service payments canbe directed to housing. There are many technologiesfor pre-fabricated materials – from the US, Europe,Japan, Canada. Some of plants can be brought to thePhilippines. With proper adjustments, they could pro-duce affordable housing units – in a matter of days orweeks.

In turn, creditor banks can be given thefirst opportunity to source the suppliers; to get thebusiness for the housing materials, the supplies, theinsurance, the freight, etc. If the banks are interested,they can have the right of first refusal to finance thepurchase of these houses by the buyers. The risks canme minimized through guarantees from our housingguarantee corporation or take-outs from pension andhousing loan (PAGIBIG) funds.

More importantly, debt service can beploughed back to agricultural research, to increaseproduction. Private companies can be given incentivesor start-up funds to develop high-yielding varieties, ornew methods for growing fruits for export, or new,more efficient processes for extracting more by-prod-ucts from coconut.

Today, I stand and plead for your support.When you transfer technology to us, you empower us.When you sell pharmaceuticals at affordable prices,you alleviate pain and save lives. When you swap debtfor socialized housing and modernized agriculture andfisheries, you open the windows of opportunity.

And when you implement the 20/20arrangements agreed upon in Copenhagen in 1995and the official development aid of 0.7% of GNP fordeveloping nations agreed upon in Rio de Janeiro in1992, you truly help the people in developing coun-tries.

Mr. President, honoured colleagues, ourpeople are poor not because they are destined to bepoor, but because of deprived opportunities. We decrythe plight of millions who cannot find jobs, the hun-dreds of thousands of tattered children who cannot fin-ish school, the scores of farmers and fishermen whocannot make both ends meet. But open the windowsof technology, and they will respond. Empower themwith the means to improve their skills and they will usethat power to grow new seeds and generate new jobs.Give us the instruments, and we lift from povertymore than thirty million people.

Just as a house divided cannot stand, sowill a world divided break. Yet if we follow the man-date of the United Nations Millennium Resolution toeradicate poverty by 2015, we preserve the progressof the rich even as we elevate the poor – and preventthe tragedies that even now are tearing peoples andnations apart.

Give us those opportunities. Empowerfarmers. Educate our young. In turn, we pledge you –we will overcome!

231


PolandStatement byHis Excellency Prof. Marek BelkaDeputy Prime Minister and Minister of Finance,Republic of Poland

At the outset let me express our gratitude to all thosewhose efforts made this conference possible, mostparticularly to the host country and people of Mexico, the State of Nuevo Léon and through you, Mr. President, to the City of Monterrey.

The Polish delegation wishes also toexpress gratitude to all those who contributed to theelaboration of the ‘Monterrey Consensus’. It repre-sents a proper balance between the needs and capaci-ties of the UN family and provides a good basis forstrengthened cooperation among developing, transi-tion economy and developed countries aimed at stimu-lating sustained growth and improving living conditionsof the poorest member states.

We share the views reflected in the report,including the substantive analysis it offers on regionalinitiatives. We also support reforms needed to fosterfurther cooperation between the UN, the WTO andthe Bretton Woods institutions that could provide forbetter governance of globalization for the benefit of allcountries, those least developed in particular.

Globalization has made individual nationaleconomies much more dependent on the externalenvironment. A key policy challenge is how to benefitfrom increased openness while at the same timereducing and better controlling the risks, including vul-nerability to financial crises and backlash of nationalistand isolationist sentiments.

In his message to the MinisterialConference of the WTO in Doha, last November,Secretary-General Kofi Annan pointed out that: (Iquote) “After the tragic events of 11 September, theworld faces two possible futures: a mutually destructiveclash of so called civilizations turning in upon them-selves, or a global economy rooted in universal values.The latter must be our choice but it can only beachieved if the global market is genuinely open to all,and offers real hope to those currently trapped inpoverty” (unquote). We fully share this view.

The Government of Poland and its PrimeMinister L. Miller consider the cooperation with thedeveloping countries as one of top priorities of ourexternal policy. Development cooperation is becomingan integral part of the Polish foreign policy. Activeparticipation in efforts to resolve the financing fordevelopment is our moral and political obligation,especially to the inhabitants of the poorest countries,as well as those who are victims of conflicts and natu-ral disasters.

For many years, Poland received foreignassistance. In fact we are still a net recipient. However,the situation is gradually changing. In the early1990’s, we were helped by the international commu-nity (mainly through debt reduction and technical assis-tance). We think that we have managed to use thisopportunity properly, and now we start paying back.This fortunate sequence would not be possible withoutstrong domestic efforts, sometimes causing social ten-sions and requiring a lot of determination andcourage.

Economic reforms in Poland consisted inbuilding up the institutional and legal framework of amarket economy, including privatization, liberalizationand industrial restructuring. They resulted in macro-economic stabilization. Transformation proved to be ageneral success. Poland regained its creditworthinessand started attracting significant volumes of foreigndirect investment.

Poland successfully continues economicreforms. In 1996 we joined the OECD. At present weare finalizing negotiations on accession to the EU.Looking back at our own experience, we concludethat for a country to efficiently absorb foreign assis-tance it is necessary to enforce good governance,founded on sound legal and institutional basis, toensure political stability and a possibly broad socialconsensus behind the goals pursued by the country.

Although Poland is currently experiencinga temporary slowdown in the economy, we intend toincrease our economic assistance for developing coun-tries. Poland has been involved in programmes ofinternational assistance for developing countries formany years, both in bilateral aid as well as in multina-tional programmes. This aid was equal to US $29 mil-lion in 1998, US $37 million in 1999, and US $40million in 2000. Poland has put aside resources forthis year in the form of highly preferential tied aidcredits, equal to US $245 million.

The success of this Conference and thecoming Johannesburg summit will not be measured bythe number of officials attending or by the quality ofstatements made. Its success or failure will become evi-dent in the near future by assessing whether we have


232

succeeded in increasing the volume of assistance andthe efficiency with which it is absorbed. So far wehave managed to change our approach to the issueand take lessons from the sometimes frustrating expe-rience of the past.

We know that we must take a holistic view– covering trade, debt relief, technical assistance, inte-grating private flows, but above all we know that wehave to provide more. The discussions that we leadingat this conference on who gives more, how muchmore should be given, in what forms and throughwhich channels can only benefit our cause and bringus closer to the fulfillment of the MillenniumDevelopment Goals.

Another lesson we have learned is thatglobalization has its dark side. It could have been, infact it was a fast track for development for some coun-tries, but it also deepened disparities and producedfrustrations, on the global scale. I deeply believe thatour joint efforts, as reflected in the ‘MonterreyConsensus’, will show a better, more humane face ofglobalization. In fact, we learned something from theso-called antiglobalists.

I do hope that Monterrey soon gains a newsplendid reputation as a city of the successful confer-ence that helped to translate a good spirit – the Spiritof Monterrey – into action and real achievements.

Let us do everything within our possibilitiesto fulfil this vision in the coming years.

PortugalStatement byHis Excellency Mr. Luís Marques AmadoMinister of State for Foreign Affairs andCooperation of the Portuguese Republic

I am deeply honoured to represent my country –Portugal – in this historic Summit in Monterrey.

My first word is one of gratitude to theUnited Nations, to the Government of Mexico, to allparticipating delegations and to those who haveworked over the past few years towards this Summit.

From the beginning, Portugal has beendeeply involved in the preparatory work. In particularat the level of the European Union, we have soughtover the past few years to contribute towards strength-ening the development policy as a whole. We believe

deeply that the dimension and nature of the challengeswe face requires the concerted action of all of us,rather than isolated or individual initiatives. We are,therefore, proud of the commitments established atthe recent European Council in Barcelona which wasyesterday formerly announced to this Conference bythe current President of the European Union, JoséMariá Aznar, the President of Spain.

The Barcelona Commitment renews, forthe European Union, the commitments that manymember states had already made in the past in inter-national fora. However, many countries, including myown, have unfortunately not been able to deliver onthese commitments.

It has not been easy for many, includingmy own country, to take on higher budgetary commit-ments given the economic slowdown and publicspending pressures. The Barcelona commitment,therefore, shows that there is now a new and deepunderstanding of the critical dimension of poverty andits impact on peace and stability. Nowadays, inEurope, as in much of the developed world, there is aclear recognition that our current levels of well-beingare unsustainable side-by-side with current levels ofpoverty and misery.

The tragic events of September 11th haveclearly shown that the marginalization of large regionsof the globalized world condemns millions of humanbeings to extreme misery and produces political ten-sion. Today, global injustices are feeding dangerousresentments that sooner or later we will have to face.In this context, the Monterrey Conference will certain-ly become the historical reference point in the processof reorganization of the international system requiredby the new conditions which result from the end ofthe Cold War and are imposed by globalization.

Under the heading of Financing forDevelopment, what is at stake is a yet open-ended dis-cussion concerning a new development agenda. Thisnew agenda must respond to the challenges and goalsof the Millennium Declaration. We must all commitourselves to these goals.

The Millennium Development Goals haveto be perceived in their political dimension. We allknow that to achieve these goals, more resources frompublic and private sources are required. But above all, political willingness and determination at all levels,both in rich and poor countries, are also required.

233


This is the true challenge of a new partnership fordevelopment. The Monterrey Consensus and theundeniable success of this Conference have definitelybrought development to the forefront of the interna-tional political agenda. I believe this new partnershipcould evolve around four main pillars.

• First, Political Responsibility. We must allbe able to assume our responsibilities, at the interna-tional and national levels, both as developed anddeveloping countries. This responsibility translates intothe fulfillment of commitments and the respect forprinciples and values that underlie the new partner-ship.

• This takes me to the second pillar: Trust.There is no partnership that will ever survive a lack oftrust, resentment and doubt between partners. Weneed to deepen and consolidate a new relationship oftrust based upon clear principles of sovereign equalityand respect. This new partnership must once and forall put to rest the colonial paradigm that still shapesour relationship. This new partnership should over-come the mistrust caused by continuous rhetoric with-out concrete action. The mistrust nurtured by corrup-tion, violation of human rights, mismanagement,which unfortunately still prevail in some regions. TheMonterrey Consensus and the commitments embed-ded therein are an excellent contribution for a newspirit of trust and confidence among all of us.

• The third pillar refers to Leadership. TheMillennium Declaration sets political objectives thatrequire strong political leadership at the national andinternational level. Here at Monterrey, developmentbecame the centre of the international agenda, con-tributing decisively to the mobilization of public opin-ion and political leaders. Recent decisions by theEuropean Union and the United States are an impor-tant step in the right direction. A strong leadership ofdeveloping countries is also needed to set and imple-ment the priorities and policies that are appropriate toeach country. In this context, I would like to stress thehigh expectations that NEPAD has created as anexpression of a new attitude and political will that issweeping through Africa.

• Finally, the new partnership for peace anddevelopment must also include the strengthening andimprovement of the development system. Here atMonterrey, many and constructive suggestions weremade. We need a more democratic system where thevoice of the poor is heard. We must ensure the com-plementarity of the institutions involved and their

effective coordination. We must seek the effectivecoordination of all partners. The system should becapable of promoting and creating greater coherenceacross the several dimensions of development.

Responsibility, Trust, Leadership andOrganization are the four pillars of the new agendaand partnership for development. The MonterreyConference is a decisive contribution to this process.

QatarStatement byMr. Abdullah bin Khalid Al-AttiyahGovernor, Central Bank of Qatar

It is my pleasure to express my deepest appreciationand sincere thanks to the Government of Mexico forhosting this Conference and the United Nations fororganizing it in a very beautiful City. On behalf of HisHighness Sheikh Hamad Bin Khalifa Al-Thani, theAmir of the State of Qatar, I wish all success to thisconference, and I assure you of Qatar’s full supportand endorsement to this conference’s noble mission.

We are here today to discuss ways to con-front the challenges of financing development in theinternational arena. I hope that this meeting will be aneffective step towards defining the future role of bilat-eral and multilateral finance and development as wellas to increase cooperation and establish new partner-ships between countries.

The terrorist attacks of September 11,2001 markedly increased uncertainties about thecourse of the world economy. Even before these sadevents, international economic conditions had alreadysuffered from weakness spreading to nearly all regionsand across the globe. These circumstances haveundoubtedly made it necessary to review our policiesand increase the level of participation and cooperationin the world economic decision-making for all mem-bers of the international community. The benefits ofglobalization should be shared fairly by nations of dif-ferent stages of economic development.


234

All of us have a great role to play in sup-porting the international effort to ensure that the glob-al systems of finance and trade fully support economicgrowth and social justice for all the people of theworld. Qatar participates and interacts positively withthe international community in the subject matter. Ithas committed itself from the very beginning to be amajor partner among donor countries. Qatar is anactive member in many economic, social, cooperative,development and agricultural organizations. Moreover,Qatar has established a development Fund to provideassistance to the needy countries, and its developmen-tal assistance relative to its GDP is one of the highestin the world.

My Country enters the new century as amodern State where freedom of speech and expres-sion are rights, and democratic principles are realities.Qatar is now chairing the Organization of the IslamicConference. Recently, it has hosted two internationalmeetings: the Summit in 2000 of the Organization ofthe Islamic Conference, and the Fourth MinisterialConference of the World Trade Organization (WTO) inNovember 2001.

The two conferences stressed the impor-tance of encouraging the dimension of development inall multilateral and bilateral trade and finance agree-ments. As you all know, the Fourth MinisterialConference of WTO led to the ‘Doha Deceleration’with a promise of a new ‘Development Round’ ontrade negotiation. We call on this conference toencourage all member countries of the WTO to imple-ment the commitments made in Doha. We also fullysupport the approach to speed up membership appli-cations for the WTO from developing countries.

Serious attention should be paid to thecontinuous decline in official development assistance(ODA) to the less developed countries. Advanced andefficient economies are urged to increase their ODAand concessionality of development financing, includ-ing greater use of grants, to go side-by-side and beconsistent with the current international developmentstrategy.

We stress the importance of finding adurable solution to the problems of external indebted-ness of the developing and least developed countries.Reducing or even cancelling some parts of the exter-nal debt due on poor countries would release someresources that can be directed towards financingurgent social and economic activities in these coun-tries. Qatar has re-scheduled and cancelled parts of itsdebt due on some poor countries.

We call on the developing countries toadopt economic policies that enable them developtheir economies and reduce poverty rates. In thisregard, developed countries should offer full support todeveloping countries to diversify their production andexport base. Foreign direct investment (FDI) is soessential in this matter. It’s very needed to transferknow-how, management knowledge and investment tothe developing countries. Well-off countries’ marketsshould be opened to the products of the developingcountries.

Moreover, we call on the internationalcommunity to avoid adopting policies that negativelyaffect certain groups of countries or that target specificcommodities, such as carbon tariff or tax. Innovativeways and mechanisms are needed to enable develop-ing countries to benefit more efficiently from existingfunds of the bilateral and multilateral financial institu-tions, provided that those do not unduly burden thesecountries, and be at the expense of other countries.

Last but not the least, immediate attentionshould go to strengthening and ensuring the meaning-ful and full participation of developing countries in thebilateral and multilateral regional and internationalfinancial and development institutions.

Republic of KoreaStatement byHis Excellency Mr. Jin NyumDeputy Prime Minister and Minister of Finance andEconomy, Republic of Korea

It is my great honour and pleasure to participate inthis meeting. Let me start by thanking theGovernment of Mexico for hosting this conferenceand also to the Preparatory Committee for theMonterrey Consensus. I hope this consensus will builda coalition for effective financing of developmentthroughout the world. And I believe that it will not belong before we can meet the key challenge facing theworld today, namely overcoming poverty.

As my President, Kim Dae-Jung, noted inhis speech at the Nobel Peace Prize Forum last year,“Poverty is the single most important factor behind ris-ing tensions around the world. We, therefore, muststrive to alleviate poverty and give hope for the better-ment of human beings.”

235


This morning I would like to make severalremarks as to how we can help finance developmentand alleviate poverty based on Korea’s experienceover the past forty years.

Korea’s experience

Korea transformed itself from one of the world’s poor-est countries forty years ago, into one on the thresh-old of becoming an advanced country. Looking backon our early development, three things stand out:

• First, a nation-wide consensus and a strongand effective political leadership, which helped to har-ness the energy of the Korean people to the goals ofeconomic development.

• Second, as a country with limited resourcesand a small domestic market, Korea had to pursueopen, outward-looking strategies. As the strategieswere aiming at free trade and inducement of foreigncapital, the government established a new institutionalframework and adopted good governance.

• Third, Korea of course made its own effortto increase domestic savings in both the public andprivate sectors. It not only revamped tax administra-tion but also provided incentives including higher inter-est rates on deposits. Then, we made many efforts to combine the mobilized domestic resources and for-eign capital to be invested into the nation’s strategic industries.

One of our key development strategies tothis day is the industrialization policy through trade.Although this strategy is by far the best for a develop-ing country, it also comes with some side effects, suchas an urban-rural income gap. Korea encountered thisproblem in the 1970s. The government addressed thisproblem by launching the ‘Saemaeul Movement’, alsoknown as the ‘New Village Movement’.

Thanks to these policy measures, Koreaachieved high growth of over 8% for over threedecades. The World Bank assessed Korea as one ofthe best examples for developing countries since itachieved both high growth and equitable income distri-bution.

Since the financial crisis of 1997, however,Korea has had to deal with many new challenges.While undertaking massive restructuring, we were alsofaced with a surging need for a more comprehensivesocial safety net for the most vulnerable people in oursociety.

Now, the Korean economy is moving fasttoward a knowledge-based economy. The governmentis responding to this new trend by expanding digitalopportunities. Furthermore, we intensified our effortsto address the problems of the so-called Digital Divideby providing IT training and education to the generalpublic, including housewives and residents of remoteareas.

Policy remarks

With the Korean experience in mind, let me discussnow how the international community can helpfinance development and overcome poverty world-wide.

• First, we need to strengthen internationalcooperation to expand the flow of capital from devel-oped to developing countries. Subject to each coun-try’s own efforts to help one self with good gover-nance and sound policies, we need to provide substan-tial aid to meet basic human needs such as foods,health care, and basic education.

• Second, to meet financing needs for fur-ther industrialization, we need to facilitate the flow ofprivate capital, including loans and foreign directinvestment. In parallel, recipient countries shouldmake their own efforts to attract foreign investmentand improve business climate in general.

• Third, industrialized countries need to offerwider opportunities for trade by developing countries,because increased market access is essential for theirsustained development.

• Fourth, industrialized countries also need toshare their development experience, be it success orfailure story, with other countries.

In this connection, the Korean governmenthas initiated the Knowledge Partnership Project jointlyrun by the World Bank and Korea. More recently, asproposed by President Kim at the ASEAN+3 Summitlast year, we launched the IT Capacity-Building Projectfor developing countries. To this end, my governmenthas already committed funds of $5 million to create ITtraining centres and expand IT networks in developingcountries.

Before concluding, I would like to stressone point in particular: For effective development aid,it is the recipient country’s efforts that matter. Nocountry can possibly hope to develop unless it is will-ing to set its own developmental goals and preparedto use resources in a cost-effective and efficient way.Likewise, global community should endeavour toexpand their support for these developing countries.


236

Only then, can we make full use of thespirit of global partnership. And, only then, will thepromises of the Monterrey Consensus be realized inthe near future.

RussianFederationStatement byHis Excellency Mr. Sergei KolotukhinDeputy Minister of Finance of the RussianFederation

First of all I would like to thank UN Secretary-GeneralMr. Kofi Annan and the President of Mexico, Mr.Vicente Fox, for the excellent preparation and organi-zation of such a representative forum designed to pro-vide additional impetus to the efforts of the interna-tional community in the area of development financingaimed at poverty eradication. Against the backgroundof impressive achievements in science and technologyas well as the development of freedom and democracy– that are changing rapidly the face of the planet andproviding unprecedented possibilities for acceleratinggrowth and increasing the standards of living – theexisting spread of poverty represents one of the majorchallenges to modern civilization. The solution of thisproblem within the framework set out in theMillennium Declaration by Heads of State will be adetermining factor for creating a more secure, stableand fair world free from a terrorist threat.

In a globalized world it is impossible tosolve the problem of poverty without joint efforts byall countries and international organizations, withoutenhanced cooperation between the UN, Bretton-Woods institutions and the WTO. Nor is it possiblewithout full utilization of the private sector potential orwithout broad participation of civil society in settingdevelopment priorities. These are precisely the coher-ent efforts among all development partners which arecalled for in the outcome document of our Conference– the Monterrey Consensus – that we are adoptingtoday. It is designed to create favourable external anddomestic conditions for increasing the volume ofresources allocated for development purposes and rais-ing the effectiveness of their use.

There is no doubt that it is precisely themobilization of domestic resources that should play adecisive role in financing for development, based onsound national economic policies and improved public

administration. Official development assistance shouldplay a complementary role and be used most effective-ly to achieve national and international developmentgoals. The soundness of this approach is also con-firmed by the Russian experience of transition to amarket economy. Without denying, in principle, theconsiderable potential and the catalytic role of foreignassistance, we nevertheless believe that it should notbe a substitute for individual efforts of national govern-ments to reform the economy and provide conditionsfor its sustainable development. At the same time, weconsider that foreign assistance could play a key rolein the poorest countries, especially those in crisisareas. It should be provided in a way that would con-tribute to stabilizing the situation and launchingdomestic growth mechanisms against the backdrop offinancial stability.

In the era of globalization external condi-tions for the successful, self-sustained development ofall countries are no less important. The role of inter-national trade as one of the major development fac-tors becomes much more pronounced. That is why itis particularly important to provide stable, predictableand non-discriminatory conditions for market accessand to avoid resorting to protectionism that limitscomparative advantages of exporters from developingcountries and transition economies. According tosome estimates, the removal of direct and indirecttrade barriers could provide these countries with bene-fits many times bigger than the proposed increase ofdevelopment assistance.

There is a need to further enhance the uni-versality of the multilateral trade system by increasingthe WTO membership. However, the accessionrequirements for new WTO members should notexceed the level of commitments undertaken by theexisting ones. This is especially important for Russiawhich is now actively involved in negotiations onaccession to the WTO as soon as possible.

Currently, global development is inconceiv-able without strengthening the stability of the interna-tional financial system. This involves intensified effortsto reduce its vulnerability and to forecast, prevent andresolve crises in an orderly manner.

The problem of foreign debt is a serioushurdle for development, especially for the poorestcountries. We are actively participating in the HIPCInitiative and have written off more than $25 billion oftheir debt even though our country has its own size-able external debt and goes to great pains to service itin due course.

237


Our commitment to international develop-ment goals is being substantiated by Russia’s solidpractical contribution. It takes the form of our subsi-dies to poorer CIS countries along with the restructur-ing of their debt, participation in the HIPC Initiative,as well as in other international initiatives, such ascombating HIV/AIDS and other infectious diseases,replenishing IDA resources, UN programmes andfunds, providing humanitarian assistance, reconstruct-ing Yugoslavia and Afghanistan. Russia has alsoremoved custom duties on the majority of goodsimported from least developed countries. With thestrengthening of Russia’s economic and financial capa-bilities our involvement in development assistance will increase.

RwandaStatement byHis Excellency Mr. Donald KaberukaMinister of Finance and Economic Planning, the Rwandese Republic*

This Conference, culminating in what is now calledthe Monterrey Consensus, has provided us the oppor-tunity to discuss comprehensively the issues of financ-ing for development, the mobilization of resourcesrequired to deliver the needed historically rather highrates of growth in excess of seven per cent, whichmany of our countries will require in order to attainthe Millennium Development Goals.

This Conference is a welcome departurefrom previous discussions on financing that have beenpiecemeal and issue-by-issue; sometimes they dissuad-ed us from focusing on the essential element, theoverall financing problem. This Conference has pro-vided us with the opportunity to pose these questions:Do we need more of the same? Is this business asusual or is it a paradigm shift?

My delegation believes that we must drawlessons from the last 30 to 40 years of grappling withissues of development and poverty. We must look atthe failures, the frustrations and, yes indeed, the occa-sional victories and successes. Discussions about newtypes of partnership are needed. An examination ofdelivery mechanisms is as much needed as is the over-all resources level, which has been the major focus thisweek.


We are encouraged by what we have heardthis week. By this, I mean the increased pledges ofresources and renewed commitments to make aidmore effective. Aid does work, but it is only a smallpart of what is needed to attain the Millennium Goals.Even if additional resources are raised, this on its ownwill not be sufficient, unless the lessons of the past aretaken into account. Aid effectiveness in the past hasbeen diluted by a number of factors. Among these arepaternalism and emasculation of the involvement ofrecipient countries via a complex system of condition-alities that have undermined ownership of the develop-ment agenda in our countries, inconsistencies in poli-cies of donor countries, such as giving aid to promoteexports, while at the same time limiting market access,and tying aid, thereby reducing its allocative efficiency.Also, bureaucratic forms of aid administration havestrained the capacities of recipient countries, makingthe fact of receiving aid a very onerous process in itself.

Thus, an interaction of three factors hasbeen decisive in reducing the effectiveness of aid. Thefirst of these is an external aid-determined agendawhich has driven aid programmes. The second, atleast some of the time, is a set of non-conducive poli-cies – political, economic and environmental – thathave undermined the efficient use of all resources, bethey local or external. Thirdly, by not looking at ODAas a component of a greater resource problem,encompassing ODA itself, market access, domesticresource mobilization and investment, both local andexternal, we have concentrated on simply a small partof the picture, thereby not adequately addressing theother components of the resource problem to syner-gize the aid resources.

Aid is very important for many of ourcountries, but there is not one country in the worldthat has eliminated poverty through aid alone.Countries have diminished poverty by fully participat-ing in world trade and investment. Aid has played acatalytic, although not decisive, role. It is evidentlyclear that, for many developing countries present heretoday, including Rwanda, significant aid resources willcontinue to be needed. We, along with other develop-ing countries, are prepared to play our part in ensur-ing that aid is used effectively to enable us to ‘growout of aid’. Nonetheless, our voice in the internationaleconomic decision-making process must be heard. Toooften we, the principal stakeholders, have not beenadequately listened to. I hope that Monterrey begins tochange this situation.


238

As the President of the World Bankreminded us this morning, fighting poverty is a long-term challenge. There is no magic solution, but thereare many levers within our grasp in this task. A newcompact between poor and wealthy countries is need-ed. That said, provided the conditions are right, theinternational community will provide the resources in aflexible, predictable mechanism for this long-term chal-lenge. We are not looking for short-term fixes basedon the facts of the day; we are looking for long-termcommitment and long-term partnership. It is not theNorth versus the South; it is all of us together.

Such a compact is articulated in The NewPartnership for Africa’s Development (NEPAD). Mycountry is fully committed to this exciting, home-grown African initiative. We Africans are prepared totake charge of our future. This includes reduced costsand minimized risks of doing business in Africa, forboth Africans and foreign investors. We are aware ofthe challenges. For one, even if reality changes on theground, negative perceptions about our continent willremain hard to dispel. Resources, both local and for-eign, will remain limited. Therefore, we will looktowards partnership based on two principles. The firstprinciple is that developing countries of Africa shouldtake charge of their future. Secondly, the internationalcommunity should provide environmental support inthe form of additional resources and market access.

Provided we are connected in this systemof mutual accountability, Millennium Goals can bemet. They can be met if conditionalities are replacedby ownership, if inconsistency in policies are removedboth in donor and recipient countries, if the costs ofgiving and receiving aid are reduced and if the voicesof poor countries are effectively taken into account ininternational forums.

We are encouraged by what has transpiredthis week. We find the Monterrey Consensus a majoradvance. It falls short in some of the areas to which Ihave just alluded; nonetheless, if we manage to turnthis Consensus into an operational plan on whichbasis all of us can measure progress, Monterrey will godown as the beginning of this task towards theMillennium Development Goals.

My country stands ready, along with othernations here, to play its part.

Saint LuciaStatement byHis Excellency Rt. Hon. Julian HunteMinister for External Affairs, International Trade andCivil Aviation, Saint Lucia

Saint Lucia gladly adds its voice to the rising chorus ofcommendation that has greeted your election to pre-side over this important Conference. We are confidentthat you will shepherd this gathering through thethrust and parry of debate to a fountain of rich andlasting conclusions that will redound to the benefit ofpresent and future generations.

Saint Lucia has been resolute in its call forthis Conference. Consequently, it is with a supremesense of pride and satisfaction that its delegation takesits place among the family of nations at this historicevent. Saint Lucia’s full and open support for thisConference has been driven by a deep and abidingconcern about the way in which the global economyhas been evolving over the past two decades in partic-ular, and its effect on the poorer and more vulnerablestates.

The call for an inclusive and equitable global economic system:

Mr. President, Saint Lucia has come to this scenic andhospitable city of Monterrey not to beg for interna-tional financial assistance, but rather to call for a com-prehensive and dispassionate assessment of the struc-ture and functioning of the global economy against theoften repeated aims expressed in numerous UNDeclarations – that of creating a secure, peaceful andprosperous world.

The decision to convene this Conferencewas driven by the recognition that the continuation ofa ‘business-as-usual’ approach will not allow a fullyinclusive and equitable global economic system toevolve. This Conference will have failed if it does notresult in the establishment of the requisite policies andstrategies that can allow all the world’s peoples to leadpeaceful, prosperous and productive lives.

Saint Lucia subscribes fully to the principleexpressed in the Monterrey Consensus, that eachcountry must accept full responsibility for its ownsocial and economic development. However, ourexperience since attaining nationhood 23 years agohas clearly shown that sustainable development at thenational level is not achievable within a global eco-nomic system that relies exclusively on the market asthe alpha and omega of social and economic progress.

239


Saint Lucia has been pursuing many of theactions recommended in the Monterrey Consensus. Anumber of coherent strategies are being implementedin a number of policy areas, aimed at stabilizing itseconomy, diversifying production, increasing produc-tivity and boosting domestic and foreign investmentlevels. This is being attempted within the context of anopen, democratic and accountable system of gover-nance based on respect for human rights and the ruleof law and is supported by a participatory decision-making process, involving civil society and the privatesector.

Recognition of the Special Circumstances of Small States:

But, Mr. President, it has become patently clear thatthese efforts are being stymied by a range of domesticand international factors over which Saint Lucia haslittle or no control.

For example, just what can a governmentdo to energise its private sector in the context of apopulation of less than 150, 000 persons, nearly halfof whom are under the age of 15 years? How can amicro-state successfully overcome the limitations onthe range of activities, skills, and institutional capaci-ties that are presented by a population of this size?How does it deal with the relatively high transactioncosts and the high per capita cost of infrastructureassociated with the absence-of-scale economies?Indeed, our efforts at creating scale economies withinthe banana industry, have served only to furtherrestrict product range and increase vulnerability toearnings fluctuations linked to adverse price move-ments or natural disasters. Given these circumstances,how can a small state accumulate the requisite domes-tic funding for large domestic projects? And how doessuch a state address the high-income volatility arisingout of commodity price fluctuations caused by externaldemand and supply developments, caused by adversedomestic events such as natural disasters?

These questions have dominated the policydialogue in Saint Lucia’s ever since it attained itsIndependence. They are raised here to indicate thatthere are certain conditions – especially those that arerelated to small size – that are not treatable by market-based prescriptions.

Saint Lucia recognizes that the process ofeconomic transformation even in large countries, isnever smooth. However, the point needs to be madethat in small states economic transformation is particu-larly difficult. For example, Saint Lucia does not havethe ability to deal with income volatility arising from

production-related causes by ‘hedging’ in internationalfinancial markets. However, Saint Lucia is continuous-ly seeking to transform its economic and social sys-tems, by utilizing earned, borrowed and grantresources to finance that transformation. While in‘good’ times efforts have been directed at acceleratingthe pace of transformation; in ‘bad’ times such asthose that now prevail, poor credit risk becomes a significant issue.

Challenges to National and Regional Efforts at Sustainable Development:

It must be noted that despite these difficulties, SaintLucia and other Small Island Developing States in theCaribbean are not giving up on the fight. The searchfor solutions is a constant preoccupation. An exampleof the regions’ resolve can be found in the decision toset up the Caribbean Community Single Market andEconomy. While theoretically, this initiative seeks toprovide the region’s private sector with a market of 6million people, the fact that this market is spreadacross 15 countries, means that high transportationand communication costs will severely limit the bene-fits to be gained from such an initiative. But the great-est challenge to the CARICOM Single Market andEconomy initiative comes not from within but fromwithout.

The Monterrey Consensus reminds us thatglobalization offers opportunities and challenges. Butthus far, our energies have been consumed mainly bythe challenges of globalization. The fact of the matteris that, in its present form, globalization is neitherinclusive nor equitable. This is evident in its devastat-ing impact on the organization of production and onthe arrangements for factor movements, trade, invest-ment and financial flows in Caribbean SIDS. Already,the liberalization process that drives globalization hassignificantly reduced the preferential and secure mar-ket access on which small states in the Caribbeandepended to maintain incomes and employment.Further, we have to contend with increasing competi-tion for domestic and foreign investment and humancapital. In the recent past, the region has been strug-gling to adjust to a rapidly depleting pool of skilledlabour caused by the loss of hundreds of its teachersand nurses, who have been lured away by the pur-chasing might of powerful nations, with whom theregion simply cannot compete. And so, the region isleft to struggle to avoid any slippage in the quality ofits health and education services, while it seeks tomobilize the necessary capital to replace those skilledpersonnel.


240

The lowering of trade and tariff barriers,and the increased mobility of capital investment, haveincreased the level of competition faced by domesticproducers in small states, without providing for theabsorption and utilization of production factors dis-placed by such competition. It is one thing to have amore efficient global allocation of resources; it isanother when this leaves pools of unutilized resourcesand reduced income flows in a particular national juris-diction, with the associated social and political conse-quences.

These are among some of the reasons whySaint Lucia wholeheartedly supports the call made inthe Monterrey Consensus for “...a holistic approach tothe interconnected national, international and systemicchanges for financing sustainable, gender-sensitive andpeople-centred development, in all parts of the globe.”

The Case for Special and Differential Treatment:

This Conference will have failed, if the many acknowl-edgments contained in the Monterrey Consensusregarding the special circumstances of small islanddeveloping states. Small states need to be assisted tomeet the relatively higher adjustment costs that areassociated with the negative, short-run outcomes thatattend trade liberalization such as a reduction inemployment and output, and macroeconomic instabili-ty linked with balance of payment difficulties or reduc-tion in government revenue.

Saint Lucia also welcomes the recognitioncontained in the Consensus as well as in theMillennium Declaration regarding the importance ofSIDS being assisted to supply the requisite vocational,technical and management training and educationalopportunities needed to adapt to a knowledge-based,global economy.

Saint Lucia would also welcome undertak-ings that would permit SIDS to undertake internationalcommitments and concessions that are consistent withtheir adjustment capacity, development, financial andtrade needs and their administrative and institutionalcapabilities. Saint Lucia supports the call for increasedlevels of official development assistance to help SIDShaving the requisite policies in place for such assis-tance to be effective. Assistance with risk-poolingarrangements is also needed to complement improveddisaster mitigation and prevention measures which canreduce the costs of disasters when they occur.

The Call for a Transparent, and Inclusive Global Governance:

Saint Lucia agrees that the growing integration andinterdependence of national economies make it imper-ative that collective and coherent action is needed ineach interrelated area, involving stakeholders in anactive partnership.

For its part, Saint Lucia has long recog-nized that there must be joint ownership of theprocess of change and that it is in the national interestfor there to be the widest possible participation insuch discourse. Government has encouraged consulta-tions on financial management reform, private sectordevelopment, health sector reform, public sectorreform, education and culture.

Recently, the Government decided to con-solidate its practice of dialogue and effective consulta-tion among the social partners, on fundamental issuesof economic, social and environmental policy. To thisend, a National Economic and Social Council hasbeen established to serve as a forum for informed dis-cussion among the social partners with the aim ofidentifying key development challenges facing SaintLucia in the short, medium and long-term and recom-mending realistic and cost-effective measures that canassist Saint Lucia to respond successfully to these chal-lenges. The Council is also seen as contributing to theemergence of a shared vision of transformation ofSaint Lucia’s economy and society over the next twodecades.

Similar initiatives are also being pursued atthe regional level within the context of the institutionalarrangements of the Organization of EasternCaribbean States (OECS) and the CaribbeanCommunity (CARICOM).

Saint Lucia would wish to see similararrangements established at the international levelespecially among multinational organizations, such asthe World Trade Organization, the World Bank andthe United Nations. Saint Lucia believes that sucharrangements are critical to achieving coherence andconsistency in the policy decisions that emerge fromthese organizations. To this end, Saint Lucia recom-mends the establishment of a permanent Inter-Organizational Coordinating Committee, under thechairmanship of the Secretary General of the UN.Saint Lucia also calls for the reinstatement of the UNTransnational Corporation Unit to oversee the activi-ties of TNCs.

241


Saint Lucia reiterates its deep concern overthe attempts being made by certain groups, to usurpthe sovereign rights of states to set their tax policies.Saint Lucia is of the view that bodies setting norms,codes and standards on other states should be requiredto ensure the full and effective participation of allstates in their formulation.

Saint Lucia pledges to play a full and activerole in the follow-up arrangements from thisConference. We are greatly encouraged by the resolveof the global community as, expressed in theMonterrey Consensus, to work assiduously towards theestablishment of conditions that will bring about anequitable and inclusive global economy and society.

It is our hope that by the end of thisConference, it will have accepted that while market-oriented policies are a necessary precondition toachieving development, that the market cannot berelied upon as a means of distributing the gains fromthe global economy, neither can it be seen as beingcapable of correcting the systemic constraints posedby small size.

It is also our hope that all states will haverecognized that the market is not perfect and thattransparent mechanisms must be built into the globaleconomic system to guard against market failure.While the rationale behind this system – that of mak-ing the global economy more efficient and increasingglobal welfare through the use of market forces, isoften highlighted – the critical issue of the distributionof these welfare gains has note been addressed, nei-ther are the consequences of market failure.

SamoaStatement byHis Excellency Mr. Tuiloma Neroni SladePermanent Representative to the United Nations ofthe Independent State of Samoa

I have the honour on behalf of my Government toextend warmest greetings and to express our apprecia-tion for the excellent arrangements for thisConference. Let me also say that as a developingcountry, Samoa fully supports the statement deliveredby the distinguished representative of Venezuela asChairman of the Group of 77 & China.

Samoa has been closely engaged in theprocess for financing development from the very start.We are deeply committed to it. Our commitmentreflects our own resolve to do what we can, along withother nations, to reverse the alarming disparities ofincome and wealth and the human insecurities in ourworld today. The condition of 2.8 billion people exist-ing in absolute poverty is simply unacceptable. It is notone we want to bequeath to future generations.Monterrey is the opportunity that needs to be seized.

The international community has set highglobal objectives in the Millennium DevelopmentGoals. The goals are not especially new. But they callfor action and results, notably in fixing clear time-bound targets. There needs to be serious commitmentto these goals, especially the noble pledge to halveextreme poverty by 2015. Failure in Monterrey willput in jeopardy universally agreed aims of theMillennium Summit.

This Conference is uniquely placed to bringabout real and lasting change. We commenced withthe huge advantage of an already approved MonterreyConsensus. Samoa was part of the consensus reachedin New York and we, of course, give it our fullest sup-port. Throughout this week we have had an extensiverange of round tables and other discussions that willhave enhanced understanding of the MonterreyConsensus and served to give direction to concreteaction in its implementation.

The Monterrey Consensus draws attention,in at least six different paragraphs, to the predicamentand precarious situation of small island developingstates. Samoa, as I am sure all other small island coun-tries do, identifies closely with these provisions. Smallisland developing States are located in all regions ofthe globe. Within the membership of the UnitedNations, they comprise some 28% of developingcountries.

The risks associated with smallness and vul-nerability renders countries such as mine largely unat-tractive for commercial and foreign direct investments.This underscores the critical importance of and needfor ODA. Aid by itself is not sufficient. There areacknowledged deficiencies in aid delivery and develop-ment policies; and overall coordination requiresimprovements. These are problems that need to beaddressed, not reason alone to turn off assistance.Samoa is committed to enhancing the scope and qual-ity of aid, and will continue to institute policy and gov-ernance improvements in its own arrangements. Webelieve in linking aid to performance. Our own experi-ence is that ODA works, and that it is indispensable.


242

Rightly, there has been an extensive dia-logue on partnerships in financing development.Smallness does not offer many choices. But Samoa isdeeply committed to developing what we have of ourfew natural resources, and our most precious – ourown people. Government policies are in place toengage our small but growing and robust private sec-tor and civil society, and substantial effort is beingdirected to harnessing the strengths of our traditionalsystems and communities. They are the vital ingredi-ents in national well-being and stability and to sustain-able development. Ultimately, it is Samoa’s responsi-bility to itself.

More broadly, we would commend to thedonor community partnerships on the basis of regionalarrangements. They have significant prospect for out-reach and cost-effectiveness, and are particularly suitedto the conditions of small isolated island communities.There is considerable experience in my country, andin our region, of the demonstrated value of regionalcooperative measures. Certainly there are imperfec-tions that require attention. Overall, the full potentialof partnerships on the basis of regional approachesshould be further explored, both to ensure increasedeffectiveness, and to focus on major issues of health,education and the environment, as well as the larger issues not normally achievable under nationalbudgets like research and development of renewablesources of energy.

We also believe that there is scope toexploit more fully the potential contribution of regionaldevelopment banks. With their long engagement inthe regions, they would be particularly well placed incatalyzing greater private flows, and in helping mem-ber States to acquire more sustained and less costlyglobal markets.

The mid-ocean location of my country, asindeed of other small islands, means that we are at thefrontline of major global environmental risks, rangingfrom sea-level rise and other consequences of climatechange, to marine pollution, fisheries depletion andcoral reef destruction. We face consequences not ofour doing, and we lack the capacity to respond, or toadapt. We must therefore, continue to look to theGlobal Environment Facility (GEF), the only globalfinancing mechanism of the Rio process, for assis-tance in our national and regional response efforts.We join the rest of the developing world in calling forthe full and effective replenishment of the GEF beforeits second Assembly session this year.

We came to this land with hope, and withresolve to do what we can to give meaning to theConsensus document. We leave greatly heartened bywhat we have heard throughout this week, from allsides, from developed as from developing country, ofthe declared determination to give tangible form andreality to the Monterrey Consensus, and therefore tokeep on track what we agreed at the MillenniumSummit.

That we now have not simply declaredintentions, but clear commitments in the form of newand significant initiatives is a source of great satisfac-tion. On behalf of my Government, I want to extendto the gathered political leadership our congratulationsand appreciation.

Allow me, in particular, to thank and topay tribute to His Excellency the President of theUnited States of America, and the member States ofthe European Union for their most timely initiatives,and for the global vision and leadership that these ini-tiatives represent.

Saint Kitts and NevisStatement byHis Excellency Hon. Timothy HarrisMinister for Foreign Affairs, Saint Kitts and Nevis

St. Kitts and Nevis looks to the outcome of thisConference with great hope and anticipation. It is ourdesire that this Conference brings before the interna-tional community, the whole range of issues related toglobalization and trade liberalization that threaten thevery survival of small island states such as the membercountries of the Organization of Eastern CaribbeanStates (OECS). We hope that the ventilation of theseissues will spur international decision-makers to action,and will result in the transfer of resources betweennations in a manner that would ensure that the fruitsof globalization are equitably shared.

Of course, we are committed to the viewthat each country must play the lead role in mobilizingthe resources necessary for its own development.Hence, the members of the OECS, including St. Kittsand Nevis, have been busy integrating and developingtheir capital markets as a means of enhancing domes-tic resource mobilization and attracting foreign capital.Indeed, over the years, we built a solid platform fromwhich to launch our capital market development initia-

243


tive. In particular, our economic performance wascharacterized by impressive real economic growthrates, fiscal surpluses, low levels of inflation, a stablecurrency and the accumulation of healthy levels ofexternal reserves.

However, in recent times, it has becomeincreasingly evident that, in the global village that isemerging, external developments and actions assumeeven greater importance than domestic policies anddecisions, in determining the economic performanceof small island states. Specifically, the watering downof the preferences that our goods enjoy in internation-al markets has devastated banana farmers and hasbrought our sugar industry to the brink of economiccollapse.

We ventured into international financialservices as a means of diversifying our economy andsupplementing our income but the unilateral action ofthe OECD, through its harmful tax competition initia-tive, has stifled the growth of this sector, notwithstand-ing our recent removal from the OECD list of uncoop-erative nations. We have held dearly to the tourismsector that has delivered substantial foreign exchangeearnings and numerous job opportunities, but within amonth of the senseless and gruesome terrorist act onSeptember 11, tourism earnings had declined by asmuch as 40% and we are still struggling to acceleratethe recovery process. These problems have combinedwith a spate of natural disasters and a volcanic erup-tion in one our member territories, to generate largefiscal deficits and push debt levels well beyond the tar-gets that we had set ourselves.

There are many lessons that may be learntfrom the experience of the Eastern Caribbean States.In the first place, globalization dramatically increasesthe risk to which the already vulnerable small islandstates are exposed. Indeed we are like small craft in avast and turbulent ocean. Unfortunately though, in thesea of globalization there are no small-craft advisories.Moreover, the resources required to bolster oureconomies and mitigate the risk associated with global-ization are well beyond the capability of our tiny fragileeconomies, especially during this period when wemust restructure our economies and embark on a pathof transition and reform. Our experience suggests thatthere is a strong case for the enhancement of the lev-els of development assistance to developing countries.We do not view development assistance as a ‘handout’ but we view it as part of the cost of securing apeaceful, harmonious and stable world community to

the benefit of citizens of rich and poor countries alike.We therefore lend our fullest support to the call for adoubling of development assistance in a three-yearperiod.

Secondly, the devices employed to assistsmall island states traverse the stormy waters of global-ization must be pre-emptive rather than reactive. Inparticular, the member countries of the OECS needhelp now. We simply cannot afford to wait for an eco-nomic crisis or disaster before concerted action istaken. The rate at which we have been forced to accu-mulate debt suggests that the distinction between mid-dle-income and low-income countries is artificial in the context of a fast paced global economy, and that even middle-income countries may be in need of substantial resource transfers to avert crises and economic malady.

We feel strongly that the international com-munity must not only devote resources to the allevia-tion of the problems of HIPC countries, but must alsodo everything in its power to ensure that the list ofHIPC countries is not expanded through the additionof other developing countries, including a number ofcountries that are now labeled as middle-income coun-tries. In fact, in view of the high cost of crises and therisk of contamination in a global economy, we areconvinced that multilateral financial institutions mustreorient their operations to focus more on crisis pre-vention and less on crisis management.

Finally, Mr. Chairman, we believe that thisConference must initiate the process of putting inplace mechanisms for equitably sharing the spoils ofglobalization. There is no doubt that globalization, bypromoting the more efficient allocation and utilizationof resources, will yield great benefits. However, what isat issue, and what is generating much fear amongpeople all over the world is the question of “who winsand who loses”. Unless we can construct devices thatfacilitate the transfer of resources through OfficialDevelopment Assistance and other means, and assureour people that we will all be winners, the wheels ofglobalization may grind to a halt because of the fearsand uncertainties of the people to whom we are ulti-mately responsible.


244

Saudi ArabiaStatement byHis Excellency Dr. Ibrahim Al-AssafMinister of Finance and National Economy,Kingdom of Saudi Arabia

It is my privilege to address this international gatheringon behalf of the Kingdom of Saudi Arabia. We wel-come the long, intensive, and innovative process ofconsultation that has brought us to the current situa-tion that had made that consensus possible. At theoutset, we would like to state that the Kingdom ofSaudi Arabia endorses the goals to eradicate poverty,achieve sustained economic growth, and promote sus-tainable development as we advance to a fully inclusiveand equitable global economic system. Moving toachieve this worthy objective will indeed be the firststep in a continuous but ambitious process aimed atensuring that the 21st century genuinely becomes the century of development for all.

One of the most important principles thatwe should agree upon in order to have an efficientfinancing for development is to ensure country owner-ship of, and responsibility for, development andincrease the collective and active participation ofdeveloping countries in international dialogues anddecision-making processes. This in turn implies under-standing of, and respect for, the diverse range of indi-vidual cultures, traditions, and paths to development indifferent regions and at different economic levels. Inthis context, the international donor communityshould be mindful that efforts to support countries toachieve the Millennium Development Goals shouldcomplement countries’ broader development agendasrather than impose externally driven objectives. Theinternational community should also avoid policies thatunduly burden developing countries or target certaincommodities, such as the Tobin and carbon taxes.

In this context, we do not see a need forthe creation of new institutions and new financingmechanisms. What is needed in our view is to explorecreatively how the existing institutions, including theBretton Woods Institutions, can be used more effec-tively. This is something the respective internationalinstitutions themselves should take up for furtherexamination.

One area, which de facto can contribute tosources of development financing, is a reduction oftransaction costs. Efforts to harmonize donors’ opera-tional policies and procedures can in this regard leadto a substantial reduction in the cost of development

assistance and allow recipient countries with limitedinstitutional capacity to better manage aid pro-grammes. In this context, the success of theCoordinating Group, which was established by theArab multilateral institutions, the Islamic DevelopmentBank and the OPEC Fund, is worth noting. TheGroup has successfully developed voluntary commonguidelines in areas ranging from project appraisal toproject evaluation, supervision and monitoring.Positive lessons can indeed be drawn from this experi-ence.

Peace and development are mutually rein-forcing. Without peace, countries may find it impossi-ble to develop and may in fact retrogress. Let me citethe example of Palestine. The escalation of violence,closure, destruction of properties and the extrememeasures taken by the occupying forces have causedmuch pain and suffering to the Palestinians. SaudiArabia spared no efforts to relieve their suffering. Inthis regard, I would like to refer to the recent propos-als advanced by HRH Prince Abdallah bin Abdulaziz,the Crown Prince of Saudi Arabia, which havereceived tremendous positive reaction from the inter-national community.

We agree that the bulk of developmentcapital will continue to be domestically generated. Tothis end, prudent macroeconomic policies and stronginstitutions are needed to generate sustainable private-led growth and raise domestic savings. The above con-ditions will, of course, help attract foreign direct invest-ment which complements domestic resources withassociated benefits such as transfer of managerial and technical know-how and knowledge of externalmarkets.

International trade as an engine for devel-opment is the single most important external sourceof development financing. Unfortunately, policies inthe industrial countries, which erect trade barriersagainst the exports of developing countries, comple-mented by trade-distorting subsidies and other trade-distorting measures, have denied developing countriessubstantial financial resources. Subsidies and othersupport to agriculture alone have been estimated bythe World Bank at well over $300 billion annually,which is roughly six times all official developmentassistance. Thus, elimination of such subsidies enablescountries with subsidies to free more resources fordevelopment assistance, and at the same time openmarkets for developing countries’ exports, therebyfinancing development.

On the subject of increasing internationalfinancial and technical cooperation for development, itis a fact that, developed countries have been slippingeven further back from the target of 0.7 per cent of

245


GNP as ODA to developing countries. The interna-tional community should double its efforts to achievethis target.

Allow me, Mr. President, to say a fewwords regarding the contributions that Saudi Arabia,itself a developing country, has made over the years tothe financing of international development. Since themid-seventies, Saudi Arabia’s assistance developingcountries, through bilateral and multilateral channels,amounted to more than $75 billion. Total assistancerepresents nearly 4 per cent of Saudi Arabia’s averageannual GNP. Such assistance has been extended to 41African, 23 Asian, and nine other developing coun-tries, or 73 countries in all. Some $7 billion alone hasbeen contributed through our bilateral aid agency, theSaudi Fund for Development, which was founded in1974. This has financed 370 development projects in65 developing countries, including many of the poorerones. It is worth mentioning that the Kingdom’s assis-tance is untied, and with a significant grant element. Inaddition to the developmental role, the Kingdom’sassistance has a humanitarian and relief dimension.This is to support for refugee shelters and to providingextensive physical relief and aid in famine and naturaldisaster situations.

Worthy of special mention is the supportthat Saudi Arabia, in addition to bilateral assistance,has extended to Arab, regional, and internationaldevelopment organizations by contributing to theircapital and financing their development projects inorder to advance social and economic development indeveloping countries. Total Saudi contributions to suchinstitutions have exceeded $21 billion. These organiza-tions include, amongst others, the InternationalMonetary Fund, the World Bank Group, the OPECFund, the Islamic Development Bank, the Arab Fundfor Economic and Social Development, the ArabMonetary Fund, the Arab Bank for EconomicDevelopment in Africa, the African DevelopmentBank, and the African Development Fund.

In the area of debt relief, Saudi Arabia hasworked hard on the multilateral front through thoseinstitutions in which it is a major shareholder toadvance the practical modalities of debt relief. TheKingdom has also contributed its full share to theHIPC Trust Fund at the IMF. On a bilateral basis,Saudi Arabia was a pioneer in debt relief when itwrote off $6 billion of poor countries’ debt.

On the topic of “addressing systemicissues: Enhancing the coherence and consistency ofthe international monetary, financial, and trading sys-tems in support of development”, the main points Iwish to make here, are:

• First, the need to work with the existinginstitutions for promoting international developmentrather than to bring forth significant new proposals forinstitutional realignment.

• Second, there is a need to improve the col-lective role of developing countries in the process ofeconomic decision-making, to enhance their participa-tion in the formulation of financial standards andcodes, and to broaden implementation on a voluntarybasis, taking into account the varying conditions ofindividual countries.

• Third, there is a need to work further oninternational economic policy coordination. In thiscontext I would note that the major developed coun-tries have a special responsibility in adopting pro-growth policies that would revive the global economy.

It is worth noting here that oil-producingcountries have continued to demonstrate their con-structive role and cooperative spirit in meeting thechallenges confronting the international energy worldeconomy. It remains appropriate for the industrialcountries to review their policies of taxing oil and oil-based products on efficiency grounds and as part offinancing budgets. As a major oil-producer andexporter, Saudi Arabia believes that it is in the inter-ests of both producers and consumers to cooperate toreduce instability and volatility in the oil markets. OurCrown Prince’s proposal to establish a secretariat forthe International Energy Forum and offer to host thissecretariat in Riyadh, the Saudi Capital, is meant toserve this objective.

In conclusion, I would just like to underlinethe importance of all parties represented at theConference “staying engaged” as the consensus docu-ment rightly puts it. This will indeed be an ongoingand hopefully unremitting effort. This will ensure thatthe results of this Conference are carried forward on aregular basis. As an immediate next step, I endorsethe suggestion that the topic of DevelopmentCooperation in the 21st Century should become amain item for discussion at the Spring Meeting of theDevelopment Committee next month. Given that theInternational Development Association (IDA) has beenand remains the core instrument of development assistance to the poorer countries, we hope that the negotiations for the 13th Replenishment will soon beconcluded.

With a good spirit of cooperation and consensus, we can all indeed take the further stepsneeded to ensure that the 21st century becomes the Century of Development for All.


246

Sierra LeoneStatement byDr. Kadi SesayMinister of Development and Economic Planning,the Republic of Sierra Leone

Let me extend greetings and felicitations from thePresident of the Republic of Sierra Leone, HisExcellency Alhaji (Dr.) Ahmad Tejan Kabbah to all par-ticipants at this conference and also extend his apolo-gies for his unavoidable absence at this conference dueto urgent domestic issues. Let me also enjoin theother delegations to thank the President, Governmentand people of Mexico for the warm hospitality accord-ed the delegations since our arrival here in Monterrey.Also, I wish to express my gratitude to the organizersof the conference for such excellent conference facili-ties and arrangements.

Mr. Chairman, Sierra Leone views thisconference as important and timely as it touches onissues that are fundamental to the global developmentagenda in general and to our specific developmentalrequirements as a post conflict country. Following adecade long civil conflict, our economy is in tattersand human capacity severely eroded. The costs of thewar in terms of human lives, property and lost oppor-tunities are enormous. On the human side, millions ofour people remain either internally displaced orrefugees in neighbouring countries, while tens of thou-sands have perished. The war also severely damagedthe basic social and economic infrastructure. Theeconomy, though, has remained relatively stabledespite large fiscal and external account imbalances. Inthis respect, Sierra Leone, like other post-conflictcountries, must be treated as a special case.

Despite these difficulties, our Governmentworked hard to secure peace, disarm and demobilizeformer combatants and re-establish control throughoutthe country. Thanks mainly to our friends in the inter-national community, namely our friends in theEconomic Community of West African States (ECOW-AS), the United Nations, The United Kingdom, theUnited States of America and many other bilateral andmultilateral organizations, the civil war in Sierra Leoneis now over. I, therefore, wish to seize the opportunityprovided by this meeting to publicly extend to all ofyou the gratitude of the President and people of SierraLeone for your assistance and support in our time ofdire need.

On the specific issues of this conference,we believe that a broader and regional economic inte-gration and cooperation among nations is a betterframework for promoting economic stability and devel-opment especially in the African region. In WestAfrica, ECOWAS remains our key instrument for sub-regional cooperation in harnessing our resources, bothhuman and physical, to promote competitiveness. Atthe continental level, we support the New Partnershipfor Africa Development (NEPAD) that provides a long-term development vision for the continent. As youmay know, the initiative focuses on key priority areasincluding promotion of peace, security and good gov-ernance; consolidation of democracy; the promotionof the role of women in all aspects of development;sound economic management and reduction of pover-ty. It, therefore, provides an important framework,through partnership and a shared vision, for meetingour development challenges, based on the principle ofownership of the development process by the peopleof Africa. More importantly, NEPAD seeks to promoteshared objectives and mutual accountability towardsagreed outcomes between Africans and their develop-ment partners. In Sierra Leone, we are developing ourown long-term perspective vision that seeks to definedevelopment priorities from a careful analysis of thecountry’s historical experiences, its natural and humanresources and its cultural, regional and internationalcontext.

Financial Resource Mobilization

Mr. Chairman, as a country just emerging from war,we are aware that good governance and a strongeconomy are essential to support the process. We alsorecognize that mobilizing financial resources in a trans-parent manner is vital to the process of growth, devel-opment and poverty reduction. In this regard, maxi-mizing resources obtained from existing sources offinancing becomes critical. Hence, mobilizing domesticsavings, both public and private, are essential to sus-taining adequate levels of investment and increasinghuman capital. However, mobilizing such savingsrequires an environment that minimizes capital flightand increased productivity while creating an enablingenvironment to promote foreign investment. The low-income level in our countries is a deterrent to mobiliz-ing sufficient savings to finance development.

247


The huge gap between the requisite financ-ing necessary to foster development in line with theMillennium Development Goals and available domesticresources, brings to the fore the importance of exter-nal financing in the development process. For SierraLeone, our huge rehabilitation and reconstructionneeds and our weak financial systems would mean thatin the short to medium term, focus would increasinglyturn to external support to finance immediate develop-ment objectives. The negative effects of money laun-dering do not also help our development efforts. Inthis connection, I wish to express our government’sconcern about the grave dangers posed by moneylaundering and other financial crimes to the stability ofour subregion and the wider international community.In this respect, our government will intensify its coop-eration in international efforts to effectively combatmoney laundering and harmful tax practices.

Also, we are aware that foreign directinvestment, along with other private inflows, is anessential complement to domestic financial resourcesin support of our growth and development efforts forpoverty reduction. A favourable enabling economicand political environment is a key to attracting privateinflows. In this regard, our government is determinedto implement policies that would foster peace and eco-nomic growth while creating the enabling environmentfor private business to operate. Our completion of anInterim Poverty Reduction Strategy Paper and the rec-ommendation of our performance by the ExecutiveBoard of the IMF under the first review of the PovertyReduction and Growth Facility are evidence of thiscommitment.

Official Development Assistance (ODA)

With current levels of domestic savings and investmenttoo low to ensure broad-based, sustainable and equi-table growth to attain the targets of the internationaldevelopment goals for poverty reduction by the year2015, ODA flows to the African region remains ofgreat importance to fill this gap. Official DevelopmentAssistance is important in strengthening the ability ofgovernments to make long-term investments, vital forprivate-sector-led growth. It can also invariably serveas a complementary source of financing for countrieswith minimal potential to attract private investmentflows. Effective ODA can facilitate key public invest-ment programmes in infrastructure and humanresource development. In this connection, we believethat with effective and efficient aid coordination mech-anisms including the proper targeting of processes,

external development assistance could be very effec-tive in reducing poverty, promoting growth and attain-ing development goals while enhancing peace and rec-onciliation especially in post-conflict countries. Moreimportantly, donor countries need to revisit the oftenoverladen conditionalities tied to aid since these createburdensome and bureaucratic processes for recipients,especially for those of us with limited human capacityand skills.

During this conference, we are convincedthat the developed world would make a strong com-mitment to providing assistance in an efficient mannerwhile reducing transaction costs to countries in eco-nomic crises and those emerging from conflict. In thepast, donors have often blamed the lack of politicalwill and poor implementation on the part of recipi-ents, for aid ineffectiveness. However, on our part, wewould prefer to point the finger at the unrealisticadvice and conditionalities sometimes imposed, theslow and inadequate disbursement of funds, and theadverse international economic environment. Steps toimprove aid effectiveness will include emulating bestpractices and experiences of countries that have suc-ceeded in achieving credible results. At the same time,aid givers would need to harmonize operational proce-dures and improve access to aid in a timely manner.Such assistance is now even more meaningful withinthe context of homegrown and home-driven develop-ment strategies and policies as embedded in thePoverty Reduction Strategy Papers (PRSPs). It ishoped that all donor interventions in aid recipientcountries will use the instrument of the PRSP as a tool for providing aid.

External Debt

Mr. Chairman, the debt burden of developing coun-tries remains the key impediment to promoting sus-tainable growth and development for poverty reduc-tion. The social costs of servicing both domestic andexternal debts are also high. To make meaningfulprogress in attaining the international developmentgoals, creditor countries need to give serious consider-ation to addressing the debt overhang of poor coun-tries. We are all agreed that for the Enhanced HIPCInitiative to have any meaningful impact, it should pro-vide broader and faster relief to eligible countries withsubstantial amount of resources. Also, eligibility criteriashould be able to respond to and take into accountunforeseen problems like deterioration in terms oftrade and conflicts. In particular, to foster reconcilia-tion and sustain peace, Sierra Leone requires a sub-


248

stantial amount of debt reduction to facilitate theimplementation of programmes and deliver basicsocial services to our rural communities and poorurban areas. Hence, for countries like Sierra Leone,debt cancellation should be given serious considera-tion, which may be linked to mutually agreed perform-ance indicators including good governance and theimplementation of economic reforms.

International Trade

Mr. Chairman, we fully recognize the role of interna-tional trade as an engine for growth and development.The broad objectives of Africa’s participation in multi-lateral trade negotiations such as the World TradeOrganization (WTO) have been, inter alia, to enhancetrade benefits for Africa, secure a fair and balancedsystem of rights and obligations and support efforts forstrengthening supply of capacity to Africaneconomies. Another objective is to improve access tomarkets for products and services for African coun-tries. However, we are all aware that those benefitsfrom trade have not been fully realized by our coun-tries. The decline in Africa’s share of world trade forits main exports – primary products – and the declin-ing relative importance of these products in worldtrade have contributed to the decrease in the conti-nent’s share of world trade. Export earnings havebecome more volatile due to the volatility of the com-modity prices themselves.

Globalization will only be meaningful toAfrica when the developed world is willing to opentheir markets to us. Hence, our development partnersshould support our efforts to strengthen our produc-tive capacities in order to improve overall productivityand the competitiveness of our economies, diversifyour production and export base and address the nega-tive impact of declining terms of trade. In this regard,there is an obvious need for multilateral institutionssuch as the United Nations to continue to facilitateserious dialogue to improve policy coherence in theareas of trade and development financing. Otherwise,our countries risk further marginalization in the globaleconomy.

In concluding, let me express our strongbelief that this conference has provided an opportunityfor us developing countries to evolve new strategies ofdevelopment cooperation with our development part-ners. Sierra Leone supports the broad outlines of poli-cy contained in the Monterrey Consensus. We hopethat all partners will be committed to its objectives forour mutual benefit. We are convinced that follow upactions will be driven by the mutual desire of all parties

to search for a common ground to achieve the globalMillennium Development Goals to reduce poverty andmitigate the associated risks of the HIV/AIDS epidem-ic while improving the overall living conditions of ourcitizens. I recognize that, as usual, the United NationsSystem will continue to play a leading role in thisprocess. Let me therefore hasten to commend themfor their role in advocating strongly for a new develop-ment agenda especially for Africa. We will continue tocount on them to assist in building this consensus andfacilitating the achievement of global stability anddevelopment.

SingaporeStatement byHis Excellency Mr. Raymond LimMinister of State for Foreign Affairs, Trade andIndustry, Republic of Singapore

Globalization

The issue of development financing is not new. But ithas been given a sharper edge in recent years with theadvent of an increasingly integrated global economy.This is why this conference that we are having is time-ly. The integration of capital, technology and informa-tion across national boundaries is creating a new glob-al economy unlike anything previously encountered.Because globalization works through ruthless efficien-cy, with capital and talent gravitating towards whereprofits can be maximized at reasonable risk, this hasgenerated unprecedented prosperity, but at the sametime, has led to increased inequalities both betweennations, and within.

The issue is not whether we should haveglobalization or not. It is whether we manage global-ization well or badly, fairly or unfairly. In this newglobal economy, we are all – developed and develop-ing – inextricably bound to one another by commoninterests, shared needs and linked destinies. What hap-pens to the poorest citizen in the poorest country canhave repercussions on the richest citizen in the richestcountry. Managed badly, global integration risks mar-ginalizing whole economies and millions of people inthe developing world. Managed wisely, globalizationcan and will lift millions out of poverty, and becomethe high road to a just and inclusive global economy.

249


History has shown that since the end ofthe 2nd World War, no country has lifted itself out ofpoverty without participating in the global economy.Therefore, we can only best help the developing coun-tries by developing their capacity to participate mean-ingfully in such a global economy, strengthening ourcooperation, modernizing our international rules andreforming the institutions of economic cooperation tomeet the new challenges.

Stability, Investment and Trade

Stability, investment and trade are the main long-termdrivers of global prosperity. For the MonterreyConsensus to be a success, concrete actions on eachand every one of our parts are needed. The interna-tional community needs to put together its collectivewill and wisdom to seek genuine market access for thegoods and services of all.

Expanding trade could lift at least 300 mil-lion out of poverty by 2015 in addition to 600 millionescaping desperate poverty with normal growth. Evendiminishing by 50% protectionist tariffs in agricultureand in industrial goods and services would boost theworld’s yearly income by nearly $400 billion. Andsince three-quarters of the world’s poor live in ruralareas, opening up agricultural markets offers the bestand quickest route out of poverty. Subsidies to agricul-ture which run at one billion dollars a day – six timesdevelopment assistance – are in urgent need ofreform.

It is also clear that massive flows of capitalwill be required if we are to alter the huge disparitieswe witness across the globe. FDI flows can assistdevelopment. As a mutually beneficial phenomenon, itbrings in needed technology, creates employment, andgenerates tax revenues without which programmes tohelp the poor cannot be financed. But it is also truethat both the right domestic conditions and the rightexpertise are needed to attract FDI.

ASEAN as a region has generally sustainedan open orientation towards trade and investment.The ASEAN countries continue to view trade liberal-ization as an important vehicle for development.Therefore, instead of backtracking from its commit-ment to free trade, ASEAN brought forward the dateby which it will achieve 0-5 per cent tariffs under theASEAN Free Trade Area (AFTA) from 2003 to 2002.Besides trade, foreign direct investment will also con-tinue to play an important role in invigorating andenhancing the longer-term prospects of the ASEAN

economies that have been affected by the crisis.ASEAN has therefore put in place a series of regionalinitiatives, such as the ASEAN Investment Area, toassure potential investors of the continued viability andvibrancy of the region as an investment destination.

Recognizing that the future economy willbe more knowledge-based, ASEAN has also cometogether to give more attention to human resourcedevelopment and bridge the digital divide. Under anew e-ASEAN agreement, ASEAN leaders haveagreed to the establishment of a free trade area forgoods, services, and investments for the info-comindustries so that ASEAN will be able to competemore effectively in the knowledge-based economy.

Singapore Cooperation Programme (SCP)

Of course it would be simplistic to believe that tradeand investment alone are sufficient to lift countries outof poverty. Sustainable growth and developmentdepends on many factors. At the domestic level, itoften centres on the ability of the government to buildthe supporting legal, social and economic frameworks,nurture the necessary talents and effectively exploitavailable resources. There is a critical need for assistance to developing countries in such capacity-building.

Having benefited from the technical assis-tance provided by others during the early years of ourdevelopment, Singapore recognizes the importance ofsharing our developmental experiences with otherdeveloping countries. Through the SingaporeCooperation Programme and its bilateral and thirdcountry training programmes, Singapore has spon-sored training courses and study visits for over 15,000officials from 139 developing countries; providingtraining in a range of fields where we have relevantexperiences to share, including communications andtransport, economic development and trade promo-tion, management and productivity, finance and bank-ing, and information technology.

Singapore has collaborated with the WorldBank to provide technical assistance to developingcountries in fields such as environmental management,budgetary processes, bank management, public admin-istration, urban development and health sector admin-istration. We are also in partnership with ADB to con-duct joint regional capacity building courses for devel-oping countries ranging from tourism, water manage-ment to port and airport management. Since its inau-


250

guration in 1998, the IMF-Singapore RegionalTraining Institute has conducted over 50 trainingcourses for more than 2000 participants from devel-oping countries in the Asia Pacific Region. Throughthese efforts, we hope that despite our limitedresources, Singapore can make a modest contributionto the economic growth and progress of our fellowdeveloping countries.

Role of National Governments and the International Community

Developing countries on their part also need to musterthe political will to undertake the necessary structuralreforms, which are sometimes difficult and painful, inorder to plug into the world economy. While the cir-cumstances facing each country and society may bedifferent, we have found that crucial elements, such asdomestic stability, rule of law, transparency, accounta-bility and market oriented policies are needed to pro-vide the necessary climate and infrastructure for sus-tained economic and social development to take place.

While much of the responsibility for changeand adaptation lies at the national level, we also needto pull together and address our problems in a globalcontext. One thing that is needed to ensure this is forthe UN and international organizations such as theWorld Bank and IMF to renew themselves so as toadapt and better respond to the new environment andthe challenges that are presented. Today, there is animperative for them to get together and coordinatetheir efforts to assess what competencies the poorernations need to develop in this new era. They shouldthen put in place coordinated programmes to buildcapacity for globalization and the knowledge revolu-tion. Doha (WTO), Monterrey (FfD) and Johannesburg(WSSD), provide us the platforms from which weshould seek infrastructural development or risk institu-tional collapse.

We have negotiated long and hard to comeup with the Monterrey Consensus. While it is certainlyno mean feat that we have managed to accomplishthat task on time and by consensus, history will be thejudge of whether or not this was truly a success. Thechallenge we face is immense. But all can benefit ifeach meets agreed obligations for change.

SlovakiaStatement byHis Excellency Mr. Ivan Míklosv

Deputy Prime Minister of the Slovak Republic

It is a great honour for me to address on behalf of theSlovak Republic our Conference, a unique gathering inwhich for the first time in the history of the UnitedNations all aspects of financing for development areexplored in a coherent way. The presence of all stake-holders in the financing of development around theworld, including representatives of civil society and thebusiness sector, gives our assembly an utmost capacityand responsibility to handle eradication of poverty,nowadays recognized as a crucial part of our commonresponsibility for the destiny of the globe.

The international community has changedsince the UN Millennium Summit in September 2000set up the development goals to eradicate poverty,achieve sustained economic growth and promote sus-tainable development. In the climate of solidarity creat-ed after the tragic events of September 11, our clearsupport for strengthened cooperation, which is a pre-condition sine qua non of peaceful interrelations andmutual security, must lead our states to firm actionswhich requires implementation of the noble Agendafor development.

The world entered into the 21st centurykeenly aware of the pace of change. We should allchange our behaviour. Much has been shaped by glob-alization. However, the foundation of further globaleconomic and social progress must be primarily basedon continued efforts at national levels. Discussion hereproved that thanks to coherence in economic andsocial policies, a number of middle-income developingcountries apparently benefit from increased flows ofprivate capital, thereby compensating decline in officialaid recorded in the course of the last decade.

Our task is, therefore, the issue of extremepoverty actually increasing in nearly every part of theglobe. Moreover, 74 countries, i.e. more than one-third of the world’s population, are not on track tomeet the poverty reduction goals. In this context wewelcome the significant unilateral initiatives of theUnited States and the European Union and otherimportant donors which come as a result of awarenessof global interdependence, thereby emphasizingpeace, security and development concerns, includingenvironment, human rights and governance.

251


The Slovak Republic shares with interna-tional community the objectives of the MillenniumDevelopment Agenda. Although the status of the‘country with economy in transition’ still allows us tobenefit from the assistance, we have already started todefine our development policies to respond on objec-tives enshrined in the Millennium Development Goals.As an advanced candidate country for joining theTrans-Atlantic political, security and economic struc-tures, we are ready to assume more visible contribu-tion, though limited from the beginning, for mobilizingour own domestic financial resources in order to fulfilglobal development goals.

We declare our full support to the objec-tives of the Conference to give an impetus on furtherdevelopment assistance flows. In the aftermath of theConference, the Slovak Government will discuss thecommitment for Financing for Development which willreach from the current level 0.04% of GNP in 2002to the level of 0.125% of GNP around 2010.

Our transformation experience shows thataid without trade may not ensure the equitable devel-opment path. Multilateral rules-based trade system andreduction of trade barriers must serve as a naturalimpetus for development. Promising results of theWTO Ministerial Conference in Doha, which succeed-ed to tackle major concerns and expectations of thedeveloping countries committed to rules-based tradingprinciples, provided for tangible contribution to prepa-ration of the ‘Development round from Doha’,launched last month in Geneva.

To meet the Global Development goals viamobilizing and increased use of public and privatefinancial resources, a firm partnership between devel-oped and developing countries is inevitable. It shouldensure that sound policies, solid democratic structures,respect to rules of law and ‘good governance’ prac-tices at national levels are in place and properly imple-mented.

By compromising these elements, theprospects for sustained results and visible progress inthe development agenda might be delayed. Only afirm subscription to coherence in our deliberations andactions may indeed guarantee meeting reiterated com-mitments initially adopted at the UN MillenniumSummit in 2000.

We hope that the favourable climate, whichgoverns in the Conference, altogether with a hos-pitable reception offered by the host country, Mexico,will be also translated into a successful outcome of ourhistorical gathering.

SloveniaStatement byHis Excellency Mr. Anton RopMinister of Finance, Republic of Slovenia

The state of globalization and deep developmental dis-parities clearly show the unsustainability of an integrat-ed but divided world in which poverty is its most brutalmanifestation. But at the same time, it provides theopportunity to reach out and overcome the problemsof the most needed. That is why Slovenia attributesgreat importance to this conference for creating a newpartnership and for strengthening international coop-eration for development.

This conference is the opportunity toassess the implementation gap between our actionsand international commitments in order to enhanceconsistency and accountability for our own decisions.This is directed to donors of financial developmentcooperation as well as to recipients and to those of uswho are transiting in between the two. The outcomeof this conference must be a clear commitment in thespirit of new partnership towards mobilization ofresources and for providing a supportive national andinternational environment for development.

In the run up to this Conference we havewitnessed an exchange of views upon the effectivenessof development assistance. We know that there havebeen positive and negative experiences from which weshould learn to streamline our future cooperation.However, it is also true that development assistancehas a catalytic and supportive role for developmentefforts. Our experience as a recipient and our limitedhistory as an emerging donor reassure us of theimportant role of international cooperation for devel-opment. We believe that if we fully commit to imple-ment the Monterrey Consensus and strengthen themultilateral channel, the way in which internationalcooperation is provided, we will enhance the effective-ness of ODA. Falling short of Monterrey commitmentswill result in not meeting the agreed MillenniumDevelopment Goals.

Slovenia is an emerging donor country. Itbegan its graduation process at the World Bank as thefirst of the CEE countries, not so long ago in 1999.The evolving role of Slovenia from recipient to donorcountry has been constrained by the still limited butexpanding national capacity to provide financing andtechnical assistance. The focus of our contribution hasbeen primarily to support the development and peace


252

process in Southeast Europe. We are convinced, asthe progress of peace consolidation in the region hasstarted to render positive results, that peace and devel-opment are mutually supportive.

Slovenia is assuming an active role withinthe Stability Pact for SEE; we are engaged in variousprojects covering mainly capacity-building and buildinginstitutional infrastructure. In our development-financ-ing effort we have been aiming at involving the privatesector, which also responded favourably by triplingoutward Slovenian FDI in the region. The internationalcooperation effort to which we have contributed hasrestored growth, increased trade and stimulated for-eign direct investment flows in the region.

A supportive global environment is a criti-cal component for fostering a sustained developmenteffort; we have to ensure full implementation of thecommitments made in Doha. We believe that freetrade is critical to enhance developing countries’ abilityto finance their own development. Slovenia on its own also has free-trade agreements with countries inthe region, which have proven to be highly beneficialto all parties.

Even though Slovenia has focused its con-tribution for development within the region, we havealso committed our development assistance throughvarious international financial institutions and multilat-eral organizations. We have joined important interna-tional initiatives including the Global EnvironmentFacility where the Slovenian Government will contribute to its third replenishment; similarly we have contributed to the African Programme for riverblindness.

Throughout this week we have repeatedlyheard two words: ‘commitment’ and ‘implementation’.In order to truly link them we need to build further onthe momentum reached here in Monterrey. ThisConference has served to revive our commitments todevelopment cooperation. But we have to continue;for us in Slovenia it means to continue implementingsound economic policies, further mobilize our internalresources for development financing and, in the medi-um term, transcend the regional context.

Within donor countries, implementingMonterrey, besides creating an enabling internationalenvironment, should also imply commitment to buildawareness and national consensus on the importanceof development cooperation. A special emphasis mustbe placed on the fact that ODA is not charity butfunds committed for mutual benefit among equals topreserve the well-being and peaceful coexistence ofthe human race.

Sri LankaStatement byHis Excellency Dr. Warnasena RasaputramAmbassador of the Democratic Socialist Republic ofSri Lanka to the United States of America and to theUnited Mexican States

Sri Lanka welcomes the excellent report of the Panelof Experts and endorses the Monterrey Consensus.They give us hope and strength that the problemsfaced by developing countries in the path to the eradi-cation of poverty and rapid economic growth havebeen well studied to the point of evolving an ActionPlan to meet the challenges with a determined com-mitment. We have come here with a lot of hope.

The Monterrey Consensus sets the guide-lines but not the targets to be achieved in financingdevelopment and eradicating poverty. We have setthese guidelines before, but not achieved very muchand missed all the opportunities. The Hour has come.

Today, we have the opportunity to moveforward, to act with firm commitment on the basis ofshared responsibility to keep to the target of reducingpoverty by half in 2015 and finally eliminating poverty10 years later. At the Millennium Summit, the UnitedNations Secretary-General presented the 21st CenturyAction Plan. The UN has already set the deadline forpoverty eradication by half by 2015. What is requirednow is to strengthen the arm of the development par-adigm by a time-bound Action Plan for poverty eradi-cation. This has to be done almost immediately to takeadvantage of the current atmosphere regarding globalsecurity. The problem of poverty has come centrestage after the terrorist attacks on September 11th.The world security and future development and growthwill therefore depend on the eradication of poverty bythe same coalition of forces that joined together toattack terrorism. Though poverty is not the only causeof terrorism, an Action Plan will adopt a holisticapproach to prepare the environment for peace andharmony by removing corruption and inculcating thehuman values of love, respect for human rights, justicefor all, tolerance, and right understanding.

Tangible results obtained through educa-tion, health and nutrition programmes will generatethe necessary alliance with businesses, the governmentand non-government organizations. Cultural activitieswill naturally have place to broaden the economicdimension for the creation of more jobs with greateraccess to local finance. Therefore, an Action Plan

253


accepted by all countries of the UN, using the inputsfrom all countries, has to be implemented with thehighest degree of priority and urgency so that povertycan be eradicated by the year 2025. It must beremembered that this Action Plan is a contractbetween the developed and developing countries withthe UN to keep to the performance criteria agreed byall countries.

The United Nations may also evaluate andreview the progress of a global poverty programmeannually. The partnership with the UN will avoiddelays and enable deficiencies to be corrected on time. It is expected that partnerships will be broa-ened to include international organizations, and the private sector.

In the search for finance for developmentwe cannot be overoptimistic about foreign assistance.In fact such assistance can be temporary. It is believedthat removal of trade barriers can generate nearly$300 billion for the developing countries throughtrade. The need for direct foreign investment is welldocumented. Money flows when confidence is high.Therefore, confidence-building measures must be putin place particularly by the developing countries toremove the legacy of distrust about the utilization offunds. Economic reforms and policy initiatives to raiselocal savings to the highest possible level, soundmacroeconomic management and good governancemust necessarily prepare the ground for greater finan-cial assistance for the developing countries.

The speculative capital movements, whichbrought about the Asian financial crisis, are fresh inour minds. It is our hope that the IMF will develop analliance among all the players so that danger signalswill be attended to forthwith by developing a strategicpartnership with the capital providers and the securi-ties commission of the countries. It is necessary thatcountries start with a clean slate about the volume ofits debts. The poor countries that are unable to meetthe debt burden may have part of the debt written offand aid programmes include a large grant element

Finally, it is the shared responsibility of allto meet the democratic challenges by providing sup-port to all the developing countries to strengthen theirdemocracies by widening economic and social oppor-tunities. When society gets transformed it may beaided by consistency of policies, increasing public trustand confidence, including a broader vision for thefuture, and the building up of strong institutions thatcommand the highest respect by the people andorganization both within and outside.

SudanStatement byHis Excellency Mr. Mubarak Hussein RahmtallaAmbassador and Permanent Representative to theUnited Nations, Republic of the Sudan*

I have the honour of making this statement on behalfof the head of the Sudanese delegation, HisExcellency Mr. Karamadin Abdelmullah, who leftMonterrey three hours ago to go back home.

The Sudanese delegation expresses its grat-itude to the President of Mexico for presiding over thisimportant International Conference. We also expressour gratitude to the people and Government of friend-ly Mexico for its hospitality here in this beautiful cityand to the Committee and the Bureau elected to facili-tate this Conference. We also appreciate theSecretary-General’s efforts and support for thisConference.

At the outset, the Sudanese delegationwishes to pay tribute to the efforts of the ConferencePreparatory Committee, which have gone on for twoyears, and the positive spirit of negotiation at the finalsession. Last January, the Sudanese delegation wit-nessed the results achieved in the MonterreyConsensus.

The Sudan, located in the heart of theAfrican continent and a natural bridge of unity fortheir people, reiterates once again the determinationof African world leaders, when they began the NewPartnership for Africa’s Development (NEPAD) initia-tive, not to impose changes on their peoples, to deter-mine their own future and to call on the rest of theworld to support their efforts in this context. In theSudan we know what we must do in order to achievedevelopment in our countries. We must commit togood governance, improve the investment climate andprioritize human resource investment.

Before the Monterrey Conference, the firstinvestment forum ever held in the Sudan was con-vened in Khartoum and was hosted by the Sudan.More than 200 people from more than 15 countries,as well as 60 delegations representing regional andinternational organizations, including the InternationalMonetary Fund and the World Bank, participated inthat conference. One of the major outcomes of that



254

conference was the reaffirmation of the importance ofthe Sudan’s investment climate, thanks to the stabilityachieved by the Government, which has also achievedthe greatest level of development and a lower unem-ployment rate, as well as stability in the exchange rateand legislation beneficial to investors.

These are our commitments and efforts atthe national level. Success at that level depends on therole that must be undertaken by developed countries,our partners in development. In this context, we fullyagree with the statement of the President of the WorldBank, who called on these countries to help develop-ing countries increase their local capacities in the busi-ness and private sectors. They must listen to develop-ing countries in order to facilitate the establishment ofrealistic projects that will lead to real and desiredchange. Given our conviction that developing coun-tries will not be able to achieve development alone,regardless of their policies, if they do not have accessto markets, we feel that development partners,through their determination, must also enhance tradeliberalization.

Rich countries must take initiatives toreduce agricultural subsidies in their countries, whichreach $350 billion yearly, which is six times the devel-opment assistance provided by the rich countries toabout 5 billion inhabitants of poor countries. We sup-port Mr. Kofi Annan’s initiative for rich countries toincrease their official development assistance and toprovide from between $40 billion and $60 billionannually in order for us to be able to achieve the mil-lennium goals.

The tragic events of 11 September, whichthe Sudan has condemned as a criminal terrorist act,and economic recession might not be justification fordeveloping and developed countries not to implementthe commitments undertaken at the MillenniumSummit and in the Monterrey Consensus. Since the11 September attacks, people around the world havebecome convinced, as was stated by Mr. JamesWolfensohn, President of the World Bank Group, thatmilitary solutions for combating terrorism are notenough. We must provide people with the hope for abright tomorrow. We must build a global world com-munity in order for globalization to benefit all ofmankind, not only competitive commercial interests.

In conclusion, we hope that the MonterreyConsensus will be a first step in a world partnershipfor development. Billions of people, particularly thosewho suffer from disease and poverty, will seek follow-up mechanisms to measure the success of the commit-ments made at this Conference at all levels.

SurinameStatement byHis Excellency Mr. Kermechend RaghoebarsingMinister of Planning and Development Cooperation,Republic of Suriname*

Suriname thanks the Secretary-General, the MexicanGovernment and the City of Monterrey for organizingand hosting this important conference.

Suriname associates itself with the state-ment of the honourable President of the BolivarianRepublic of Venezuela, His Excellency Hugo Chávez,who spoke so eloquently on behalf of the Group of 77and China. My delegation is especially grateful for thestrong support in the Group of 77 statement regard-ing the necessity of real partnership in achieving theMillennium Development Goals and the implementa-tion of the Monterrey Consensus.

The human rights-based approach to devel-opment, including the notion that human-rights educa-tion is a key to development, should be embraced. Weshould acknowledge that the life and poverty of ourpeoples is a serious violation of their human rights.Every human being has the right to an adequate stan-dard of living in regard to health, medical care, well-being, education, food, housing and social services.

Suriname welcomes the draft Consensuson Financing for Development and applauds theprocess and efforts so far. The Monterrey Consensusprovides us with a good point of departure. The poorare in need of honest commitments and actions. Well-targeted investments in the poor rank among the high-est returns in social and economic development on thelevel of the individual as well as on the level of nationsand the entire world.

Therefore, first of all, it is safe to come upwith the strongest possible commitments and live upto them. It will create rewarding successes for all.Secondly, we need to move from good intentions toeffective actions. All too often, good intentions aretranslated into poor actions. Valuable time and moneyare being lost in an array of donor-driven, inefficient,and inharmonious changing procedures and conditions.


255


This successively burdens scare humanresources. A lot of money remains floating in donorbureaucracies and is being paid to expensive consult-ants. The poor do not have an idea of how muchmoney is being paid in their name. The good inten-tions and commitments of human beings in someparts of the world for the well-being of their fellowhuman beings in other parts of the world too oftenenters into bureaucratic quicksand and ill-targeteddelivery mechanisms of donor agencies.

To reach the Millennium Declaration Goalswe need more and faster interventions, less bureaucra-cy and improved targeting and delivery. We must seeto it that money really ends up in addressing theimmediate problems of the poor and that theMillennium Declaration Goals are being worked onfrom day one and for every penny. The greater theownership of the development process, the moresound and sustainable the results can be to ensureeconomic development and social equity. Ownershipincludes the business community and civil society.Donor support must be complementary to domesticprocesses and resources, not the other way around.

Thirdly, performance of all, including thatof the donors and international financial institutionsinvolved must be measured and monitored. Very oftenthe poor have suffered from experimental visions ofdonors and multilateral institutions. Up to now, thedeveloping countries and the poor are the only onesthat have absorbed the negative consequences, where-as more performance should be measured by an inde-pendent organization like the United Nations. For it isin the interest of the poor that the United Nations issupported to monitor and evaluate results and can sug-gest corrective actions. The United Nations representsthe people and has a single, clear agenda: the devel-opment of all and a clear voice for the poor. Wewould like to see the United Nations with a strongmandate to monitor and evaluate performance, includ-ing the commitments from donors and internationalfinancial institutions and their agencies in our countriesinstead of self-evaluation by them. In delivering theirsupport the United Nations will assist in improvingefficiency and effectiveness.

People should always be at the centre of alldevelopment goals, not only when it comes to humanrights, gender, education, health and democracy butalso when it concerns globalization, Information andCommunications Technologies (ICT), the economy,international trade, commerce and private-sectordevelopment. People should come first – all peopleand all the time.

This calls for a change in world organiza-tion, including the behaviour of transnationals and thestaff on the donor agencies and multilateral institutionsin our countries. Too often, the negative consequencesof the current order are explained as incidental andaddressed with poor solutions. Too seldom is itacknowledged that there are fundamental errors. Wecannot hide behind concepts like the system or themarket, because we create the system and we are themarket. So we can change them if we want to.

The poor are reliable and resourceful part-ners. They are extremely cost-effective in their solu-tion. Their progress will be beneficial to all. But weneed conceptual transformations in both the develop-ing as well as the developed countries. In this sense,we are discussing the development of all – poor andrich, women and men, the young and the elderly. Inrecent history, this argument was applauded. Recentdevelopments, however, suggest a renewed increase indefence expenditures. We must ensure that theMillennium Declaration Goals are not jeopardized bythis trend.

Monterrey will present a price tag, hopeful-ly sufficiently covered to realize all the good intentions.But Monterrey is not about money in the first place. Itis about the future. It is about old-fashioned conceptslike solidarity, humanity, peace and happiness, blend-ed with the new concepts of partnership and globalresponsibility. Monterrey provides a unique opportuni-ty to effectively address the serious problems in ourworld and to provide solutions in the best interest ofour peoples and countries.

SwazilandStatement byHis Excellency The Honourable Majozi SitholeMinister of Finance, Kingdom of Swaziland*

Allow me to first greet the participants and expressmy gratitude to the Government of Mexico for thewarm hospitality which has been extended to us. Ourthanks go also to the Secretary-General and his stafffor all the preparations that they have made for thisconference.



256

I am greatly honoured to address this gath-ering of the United Nations International Conferenceon Financing for Development on behalf of theGovernment of His Majesty King Mswati III. In sodoing, I also wish to associate myself with the state-ment of the Chairman of the Group of 77, HisExcellency Mr. Hugo Chávez, the President of theRepublic of Venezuela.

The Kingdom of Swaziland welcomes thedynamic developments in the world economy broughtabout by globalization and the strides that have beenmade towards ensuring sustainable development forall. While the overall picture may look positive, behindit is concealed a number of persistent imbalancesthreatening the stability of the present growth path.We have noted with great concern that developingcountries, including Swaziland, have continued to beconfronted with dwindling private financial flows andofficial development assistance, limited access to mar-kets for their goods, non-competitive prices for goodsin overseas markets, high levels of poverty, theHIV/AIDS scourge and the recurring budget deficits.

In addressing these issues, the Kingdom ofSwaziland has devised a national development strate-gy, which is the country’s vision to be at the top 10per cent of the median human development group ofcountries founded on sustainable economic develop-ment, sound justice and political stability by the year2022. This vision is consistent with the MillenniumDevelopment Goals.

However, the HIV/AIDS pandemic hascontinued to be a major threat and a setback to ourefforts. As a result, the Government has since adoptedan HIV/AIDS emergency response committee to coor-dinate the implementation of an HIV/AIDS strategyplan. An HIV/AIDS fund has been set up to enhanceand augment our efforts. We appeal to donors tomake contributions to finance our fight against thispandemic. Developing countries like my own are con-scious of the need to accelerate the pace of mobiliza-tion of domestic resources to promote high investmentin our countries and subsequently address the presentsocial and economic problems.

However, of critical importance is the pro-vision of additional finances from the developed worldto augment existing finances in developing countries.In this context, the Kingdom of Swaziland hasembarked on a major drive to mobilize resources tofinance national infrastructural projects. With the assis-tance of the United Nations Development Programmeand the World Bank, we are preparing for a donorround table to be held in June and July this year in

Geneva to solicit financial support from the interna-tional community. We will therefore be visiting yourcapitals and organizations in the next two months withthe appropriate documentation.

The importance of trade to sustainabledevelopment and poverty alleviation can never beoveremphasized. In this regard, we welcome theendeavour to open markets to the developing world,as it has become clear that trade barriers make it diffi-cult for the developing world to succeed in the tradearena.

The time has come for this change so thatbenefits from trade also accrue to those countrieswhich are currently lagging behind. To that end, wewelcome the initiatives taken by the United Statesthrough the Africa Growth and Opportunity Act, andwe would further urge other developed countries tohonour their obligations under the World TradeOrganization to improve accessibility to their marketsby the developing countries in order to stimulate eco-nomic growth.

We view with great concern the continueddecline of official development assistance to develop-ing countries, especially the least developed countries.With official development assistance, it is difficult forpoor countries to make any meaningful strides in theirendeavour to uplift the standard of living of their poormasses. We therefore urge the international communi-ty to redouble its effort towards accelerating develop-ing in Africa through increased official developmentassistance. We, as developing nations, are also fullycommitted to ensuring that these resources are locatedappropriately to ensure that poverty reduction goalsthat we have set for ourselves are achieved.

The debt burden faced by developing coun-tries continues to be a source of concern to all of us.We share the view that indeed countries that are heav-ily indebted require the assistance of creditor countriesto disentangle themselves. In this regard, we appeal tothe international community, particularly creditorcountries to convert the debt to grants or cancel thedebt altogether. That would assist in freeing muchneeded resources for spending in other pressingneeds.

Whilst we recognize the correct mix ofappropriate policy measures to assist the developingworld to realize freedom from debt, we wish to under-score the importance of close collaboration with inter-national financial institutions to implement solutionsthat are tailor-made to suit individual situations.

257


In conclusion, we view the MonterreyConsensus document as a good basis for addressingthe issues of Financing for Development. It is aroadmap that could be used to guide us towardsachieving the Millennium Declaration goals. Howeverits success will depend entirely on implementation,monitoring and continued review and evaluation. Tothat end, we would support regular dialogue betweenall stakeholders for the fulfillment of the objectives ofthe Consensus.

SwedenStatement byHis Excellency Mr. Bosse RingholmMinister of Finance, Kingdom of Sweden

It is a pleasure for me to address you here inMonterrey. This gathering is a unique opportunity totake steps toward the goal of reducing poverty by halfby the year 2015.

A raised living standard in developing coun-tries presupposes more equitable economic conditionsboth domestically and internationally. The mainresponsibility for the mobilization of resources fordevelopment rests with the developing countries them-selves.

The key to stability and growth, and toreduce poverty, is sound and predictable macroeco-nomic and structural policies. I am encouraged by thecommitment to domestic resource mobilization con-tained in the Monterrey Consensus. This commitmentmust be mirrored by a commitment from us in the richcountries.

The problem in the world today is not thatthere is too much economic integration. On the con-trary, many parts of the world participate too little ininternational trade and investments. The global econo-my still does not involve all. Globalization must bemore global and more pro-poor.

We need more trade and less subsidies andtariffs. A great contribution that we can make to theeconomic development of our partner countries is toeliminate tariffs on their exports. Also, we must abol-ish trade-distorting subsidies that disadvantage poorercountries. Further, trade liberalization is also neededbetween developing countries themselves. TheEuropean Union’s Common Agricultural Policy shouldbe reformed in ways that benefit developing countries.

We also need to strengthen internationalcooperation in areas of particular significance forresource mobilization. One important example isimproved coordination of our efforts to deal withharmful tax practices.

Rich countries should take their responsibil-ity and increase ODA. I urge all donors, individuallyand collectively, to set timetables for attaining an ODAvolume of 0.7 per cent of GNP well in advance of2015. An intermediate target for all countries shouldbe to reach at least the 0.33 level by 2006. Europeanleaders in Barcelona have already stood up to thischallenge. By 2006 EU’s joint ODA will reach 0.39%to GNP, delivering an additional US $7 billion a year.This will accumulate to US $20 billion over the nextcouple of years. Sweden has for a long period of timebeen a member of the far too exclusive 0.7 group.Still we have set an ambitious target for ourselves – toreach the 1% level. Furthermore, donors should, inorder to make ODA more effective, step up work onharmonization of procedures and further untying ofaid.

Developing countries must be empowered!By focusing more on supporting capacity building,developing countries will be able to effectively utilizeand mobilize resources. Furthermore, we must supportdeveloping countries to participate in and reap thebenefits of globalization in general. We must strength-en their voices at the negotiating tables.

Support for capacity building is needed inseveral areas. Let me mention four areas whereSweden is ready to support poor countries efforts tocreate an enabling environment for development:

• Firstly, Many developing countries, in par-ticular the poorest, need trade-related support forcapacity building in order to be able to take part inand influence the WTO to work to their benefit. Wealso need to support poor countries to develop theirproductive capacity, eliminate supply-side constraints,and build institutions that are necessary for a well-func-tioning trade.

• Secondly, capacity-building support in pub-lic finance management is crucial to our efforts toimplement the Monterrey Consensus. Strong publicexpenditure management is key to mobilizing andusing domestic resources efficiently. It is the basis forimplementing sound pro-poor macroeconomic poli-cies. It is also key to utilizing resources freed by debtcancellation under the HIPC Initiative. If donors are toshift to more general budget support we must be com-fortable with the quality and effectiveness of the public


258

expenditure system. I am happy to announce thatSweden and the World Bank this morning signed anagreement for a capacity-building programme forPublic Expenditure Management for the African coun-tries that participate in the HIPC initiative.

• Thirdly, building the capacity for macroeco-nomic management is a key component to reducepoverty. I strongly welcome the recent launching ofthe IMF Africa Capacity-Building Initiative.

• Fourthly, capacity building is also crucial indebt management. The Monterrey Document correctlyunderlines the importance for all heavily indebtedcountries of attaining a sustainable external debt. Wemust also focus on debt management. Sound manage-ment of debt service payments and new borrowingcan go a long way in securing resources for develop-ment.

We are prepared to go further in all theseareas. We urge others to make similar commitments.

I would like to point to another area inwhich I believe that we must make urgent progress.Important studies have recently been carried out onGlobal Public Goods such as the environment andcontrol of infectious diseases. A Global Public GoodsTask Force should be set up to provide suggestions ondefinitions and priorities, and provide recommenda-tions for action. Sweden and France are willing to leadthe work together with partners as an outcome of thisConference. With strong political leadership, I am con-vinced that we will be able to grasp the existingmomentum. The best way to start is to implementwhat we have agreed upon here in Monterrey andinvolve all stakeholders. Member countries must alsoensure that their policies in different fields are mutuallyreinforcing.

The goal of the Millennium Declaration, to reduce poverty by half by the year 2015, requiresimmediate action. Our task is truly challenging but not unrealistic. I am convinced that this conferencewill serve as a good starting point for our renewedefforts which are essential for a more equitable globaleconomy.

SwitzerlandStatement byHis Excellency Mr. Joseph DeissMinister for Foreign Affairs, the Swiss Confederation

On the 3rd of March this year, the people ofSwitzerland decided in a referendum to join the UnitedNations.

My country, which already participatesactively in a wide range of activities within the UN sys-tem, has thus made its commitment to the greatUnited Nations family full and complete. Monterrey isthe first official occasion for me to announce this his-toric decision to the international community. I consid-er it a happy coincidence that the meeting at which Imake this announcement is devoted to the subject offinancing and development. For, indeed, one ofSwitzerland’s reasons for becoming a full UN memberis to show solidarity, in particular with the least privi-leged countries of the world. This conference onfinancing is crucial for the success of internationalefforts to make development sustainable.

Monterrey is thus an unavoidable stagealong the road to Johannesburg.

I would first like to take this opportunity toexpress a heartfelt “thank you” to Mexico for thetremendous work it has undertaken in preparing thisconference, and for a warm and friendly welcome.This conference is a turning point because, for thefirst time, an attempt is being made to deal with theproblem of development financing in a multidimen-sional way, rather than purely from the point of viewof Official Development Assistance (ODA). To ensurethe success of this process, Monterrey must find waysto mobilize greater financial resources, both domesticand international.

The first step is to establish the guidingprinciples. This is the aim of the ‘MonterreyConsensus’, which Switzerland fully supports. Butwithout deeds the most solemn commitments are hol-low. This means coming to terms with the harsh reali-ty of economic constraints. The transition from com-mitment to action is, however, the essence of politics.The Swiss government is determined to make an evengreater commitment to improving the efficiency ofdevelopment efforts and their impact, including theirfinancing.

259


Through sustained effort and a specificprogramme, Switzerland will increase its ODA pro-gressively to 0.4 per cent of gross national product(GNP) by 2010. But quantity must go hand in handwith quality. At the same time as we increase the vol-ume, we also want to make our ODA more efficientand more effective, notably by:

• Giving more support to the strategy of ourpartners, and

• Ensuring suitable coordination with otherdonors.

With regard to financing, it is importantthat the terms and conditions for support be clear, andthat they are respected. In our view, the way in whichresponsibilities are currently assigned should be main-tained:

• The United Nations Funds and Program-mes should continue to allocate their resources in theform of donations

• The international financing institutions suchas the International Development Association and theregional development funds should provide loans, as atpresent.

Switzerland is satisfied with this way ofdoing things, because it offers the following twoadvantages:

• It takes into account the different natureand role of each institution, and

• Above all, it preserves the ability of theinternational financing institutions to ensure their ownfunding.

This debate should not however be allowedto delay the efforts of the international community toprovide debt relief to the poorest countries, both atthe bilateral level and within the framework of multilat-eral initiatives. Closely involved right from the start,Switzerland will continue to play an active role.

Trade is another source of financing.Switzerland remains committed to the implementationof fair international trade agreements. We muststrengthen the measures designed to accompany theprocess that leads to membership of the World TradeOrganization, and, in particular, support the efforts ofthe least developed countries (LDCs) to become fullmembers. In this context we are pleased to launch

negotiations here in Monterrey aimed at transformingthe Agency for International Trade Information andCooperation into an intergovernmental organization.

In the same spirit we wish to collaboratewith our partners to build up a healthy and efficientfinancial sector, in particular with a view to strengthen-ing the systems of regulation and supervision.Cooperation between state authorities and private-sec-tor operators is another avenue for us to explore.Switzerland can help to promote the necessary dia-logue with the assistance of some very valuable part-ners, such as the World Economic Forum. We are alsoaiming to use development aid to promote balancedand constructive partnerships between the public andprivate sectors.

Institutional dialogue, which has strength-ened during the Monterrey process, is an integral partof these efforts. We need to increase the number ofmeetings between the United Nations and the BrettonWoods institutions, as well as with other key playerssuch as the World Trade Organization.

The Swiss government is determined tocontribute and to make proposals to this end.

Syrian Arab RepublicStatement byHis Excellency Mr. Mikhail WehbeAmbassador and Permanent Representative to the United Nations of the Syrian Arab Republic*

I take pleasure in thanking the President of Mexicoand the friendly people and Government of Mexicofor their warm hospitality extended to us during ourattendance at this Conference in the city ofMonterrey, a city surrounded by beautiful mountains.

At the outset, I wish to express our supportfor the statement made by the President of Venezuelaon behalf of the Group of 77. This gathering of worldleaders today in Monterrey must lead to a clear andserious commitment that will make the twenty-firstcentury a century of real development by mobilizinginternational, regional and national financial resourcesand enacting necessary legislation. The developing anddeveloped countries must fulfil their commitments.

* The text of th is s tatement has been transcr ibed f romaudio recordings, as the or ig ina l was not submitted totheSecretar iat .


260

International technical and financial coop-eration is a must for development. That cooperationnevertheless currently faces difficult circumstances,since credit conditions and debt servicing constituteheavy burdens for developing countries. Preventingmany countries from accessing technology on variouspretexts does not contribute to development in thesecountries.

World leaders affirmed in the MillenniumDeclaration their determination to achieve durable andjust peace in all places of the world, in accordancewith the purposes and principles of the Charter. Theleaders reiterated in the Monterrey Consensus thatdevelopment and peace are interdependent.

However, the absence of peace in theMiddle East region, due to the continued Israeli occu-pation of Arab territories, is a major obstacle to sus-tainable development. It contributes to creating a cli-mate of instability and adversely influences efforts toestablish any strategy aimed at attracting external andinternal investments, not to mention the large alloca-tions made to defence expenditures. That increasesthe debt burden of the Arab countries, despite effortsbeing made by those countries to achieve develop-ment. Nevertheless, under current occupation, truesustainable development remains a distant goal.

Developing countries were clear in theirmessage to this Conference. As a developing country,Syria wishes to reiterate these important points:

• First, it is important to open the markets ofdeveloped countries fully and comprehensively to theproducts of developing countries and to lift tariff andother barriers to the entry of such products.

• Secondly, we must increase the currentmomentum and use all the mechanisms and proce-dures necessary to alleviate poverty, particularly sincethe number of poor in the world is over 1.2 billion, ofwhich 900 million face extreme rural poverty. We can-not forget the hundreds of millions of children who areAIDS victims and who face extreme poverty, militaryconflicts and occupation, as well as the scourge ofenvironmental pollution.

• Thirdly, there is diversification of theworld’s commercial, developmental, financial andmonetary institutions. To achieve the best results,these institutions must find the means to establish amechanism of cooperation in order to achieve thedesired objectives.

• Fourthly, with regard to the debt burden ofpoor countries, every one has confirmed the continua-tion of efforts aimed at alleviating the debt burden ofthe least developed countries, as well as of developingcountries, and at reviewing loan conditions to alleviatethe debt burden of developing countries and the leastdeveloped countries. Achieving a just solution to thedebt problem is a major element in combating pover-ty. We welcome the Heavily Indebted Poor Countriesinitiative for poor countries. Nevertheless, we call for amechanism to deal with the heavy debts faced bydeveloping countries outside the framework of theHeavily Indebted Poor Countries initiative.

• Fifthly, all initiatives and statements madeyesterday and today point out that donor countrieshave not adhered to their commitments to achieve theofficial development assistance objective, which wasagreed within the framework of the United Nations, toachieve 0.7 per cent of the gross national product.Official development assistance is still playing a role inproviding financing for developing countries and theleast developed countries. Therefore, given widespreadglobalization and its challenges, those countries mustrespond to the call of Monterrey and make their besteffort in a spirit of good will not only to achieve the0.7 per cent target, but also to increase that percent-age under objective developments.

• Sixthly, real development requires genuinepolitical will in order to achieve comprehensive andjust solutions to end regional and international con-flicts, as well as to enable international financing andexternal and internal investment to be channelled intothe melting pot of sustainable development.

Failure to implement the blueprint of theMillennium Summit in achieving development and itsfinancing will adversely reflects on the credibility of thedecisions taken by the Millennium Summit. That moti-vates us, at Monterrey and elsewhere, to intensifyefforts aimed at achieving the Millennium goals andimplementing the Monterrey Consensus, which wouldpave the way for the success of the comingConference in Johannesburg.

This simple gathering, in this beautiful city,of world leaders at this Conference, which has longbeen called for, demonstrates the importance of dia-logue and of listening to mankind’s suffering. It is agood beginning towards understanding the problemsof the South. Monterrey is one step on a long roadwith many obstacles. We must all cooperate in orderto save our peoples from poverty, hunger and depriva-tion and the tragedies of occupation and armed con-flict and to help them achieve sustainable developmentin order to attain a dignified life for all mankind.

261


TanzaniaStatement byHis Excellency Hon. Jakaya M. KikweteMinister for Foreign Affairs and InternationalCooperation, Republic of Tanzania

Mr. President, it is an honour and privilege for me totake this opportunity to add Tanzania’s voice in con-gratulating you and other members of the Bureauupon your election to preside over this importantConference. I am confident that you will guide ourwork to fruitful conclusion. In the same vein, allow meto express my sincere appreciation for the good workdone by the two Co-chairmen and the Bureau of thePreparatory Committee. Their tireless efforts havemade this Conference possible. I am optimistic thatthe outcome of this Conference will commensuratelyreward their hard work and dedication. I would alsolike to express my appreciation to the Governmentand the people of Mexico for hosting this Conferenceand for putting at our disposal such excellent facilities.This affords us a serene atmosphere for successfuldeliberations. My delegation and I are deeply touchedby warm hospitality being accorded to us since we setfoot onto this great country.

My President H.E. Benjamin Mkapa verymuch regrets that he could not attend this importantConference because of unavoidable reasons but sendshis best wishes. He trusts that his colleagues andmembers of the United Nations, family gathered herewill live up to the expectations of millions of peoplewho remain victims of poverty and deprivation.

We have come to Monterrey with hopesand expectations that this Conference will provide anopportunity to further the cause of getting comprehen-sive resolutions to the complex development questionsfacing mankind today. In particular this Conference isexpected to give practical answers to issues related tothe eradication of poverty. It is quite opportuneindeed, that this Conference demanded by the Groupof 77 two decades ago, is being held two years afterthe Millennium Summit of 2000 at which world lead-ers agreed on the Millennium Declaration that madepoverty eradication the central focus for our develop-ment efforts in the new century. The MillenniumDeclaration spelt out clearly in the MillenniumDevelopment Goals (MDGs) that abject poverty wouldhave been eradicated by 50% by 2015. This generat-ed hopes to those countries and peoples who are vic-

tims of poverty. This meeting, dedicated to finding themeans to implement the MDGs raises our expecta-tions to even greater heights. We sincerely hope thatwe will not be let down either by the conclusions orlater by the conclusions not being implemented.

The implementation of MDGs will requiresubstantial new and additional resources from bothdomestic and external sources. The World Bank esti-mates that US $30 billion will be required annually fora period of thirty years to meet this goal. The UnitedNations estimates that some $50 billion will berequired annually up to 2015, of which $10 billion willbe spent on stemming and reversing the surge ofHIV/AIDS.

This may appear not to be a small task butI believe it not an impossible one. Fortunately thisworld has tremendous wealth, especially in the devel-oped countries of the North. What is $50 billion tothe European Union countries which spend $1 billiona day on agricultural subsidies which they can do with-out? That money alone is equivalent to seven years’budget of financing the Millennium DevelopmentGoals. If one were to combine that with the huge sur-pluses in the US, Japan and other non-EU developedcountries the resource requirement to implement theMDGs should not be a headache. Perhaps what isrequired now is greater political will and commitment.Recent decisions taken by the European Union andH.E. President George W. Bush of the United Statesare steps in the right direction and are welcomeindeed.

My delegation came to Monterrey withhigh expectations that this Conference come will upwith a clear message of hope that the implementationof the Millennium Goals is doable. Also that there areconcrete plans of action and proper follow-up mecha-nism is put in place.

Sustainable debt financing on the part ofthe developing countries is an important element formobilizing resources for public and private investment.We greatly appreciate the steps taken by the interna-tional community to resolve the problem of unsustain-able debt of the highly indebted poor countries in theframework of enhanced HIPC Initiative. This initiativeis expected to provide broader, faster and deeper debtrelief and is premised on the assumption that once aHIPC country reaches completion point, its debtbecomes sustainable.

This assumption, however, raises a numberof issues which need to be considered. At completionpoint, the debt relief delivered is only that of theMultilateral Financial Institutions and the Paris Clubcreditors. Non-Paris Club creditors, including commer-


262

cial creditors are not providing relief as assumed in thedebt sustainability analysis. Exclusion of domestic debt and contingent liabilities in the debt sustainabilityanalysis is a concern of the HIPCs, because of itsimplications for fiscal resources available for financingpoverty reduction. We encourage donors to providefinancial assistance, to the extent possible throughgrants. In this connection we have taken keen interestin the United States’ proposal to ‘stop-the-debt’ forthe poorest countries. We eagerly look forward togaining more understanding of the proposal.

Tanzania like many other countries doesrecognize the role and importance of trade in promot-ing faster economic growth and development ofnations. However, in the case of Least DevelopedCountries, the key issue in trade development is theneed to address supply side constraints. The marketaccess opportunities for LDCs can only be effective ifLDCs are assisted to build their capacities to producetradable goods of higher value and acceptable qualityat competitive cost. Certainly I do not foresee a pros-perous, modern, poverty-free and debt-sustaining Sub-Saharan Africa surviving on exports of raw cashewnuts, coffee, tea, cotton, cocoa, while importing every-thing else in the form of industrial goods from abroad,using the foreign exchange earned from primaryexports.

Assisting LDCs in this regard is in line withthe Programme of Action adopted in Brussels and asreiterated at the WTO Ministerial Meeting in Doha inNovember 2001. It is therefore in order that theMonterrey Conference adds its voice on the need toassist LDCs to build their capacities to fully utilize theirpotential. In this respect Tanzania welcomes assistancefrom our cooperating partners in the development ofphysical infrastructure to open up the potential in theagricultural sector; to assist in value addition especiallyin agro-processing and manufacturing in general andto provide technical assistance and training throughthe Integrated Framework for Trade Development.Such assistance is crucial if we are to be fully integrat-ed in the Multilateral Trading System.

Despite measures to grant tax and quota-free access to European and American marketsexports from developing countries face trade barriersbecause of subsidies exercised by developed countriesand other non-tariff barriers such as use of environ-mental issues by the same. Subsidies for agriculturalproducts pose an impossible challenge in, ourattempts to export farm produce to European mar-

kets. And, yet it is in this area where we have compar-ative advantages if given an opportunity for fair com-petition. We look forward to the day when this hurdlewill be removed.

Globalization can only be an opportunity toall nations of the world if developing countries aregiven a fair chance, within the rules based on multilat-eral trading system, to enhance their productioncapacities and to have predictable access for theirproducts and services. A scenario which developingcountries are required to open up their markets with-out meaningful access opportunities into the marketsof developed countries, inevitably leads to de-industri-alization in developing countries. This has debilitatingconsequences in terms of growth, employment andthe whole fight against poverty.

The role of Foreign Direct Investment asan important instrument for implementing the MDGscannot be over emphasized. Low levels of FDI flows tothe developing countries are not justifiable and, if leftto continue, the poverty situation in our countries willnot change. We expect this Conference to play a cat-alytic role in encouraging increased flows. The majori-ty of countries have carried out political, social andeconomic reforms. A climate for investment is con-ducive and returns are good. We appeal toGovernments of developed countries to take a moreproactive role in encouraging their private sector todirect more investments to developing countries.

The media also has an important role toplay in this regard. The Western media for examplecould give a place to the numerous positive thingshappening in Africa instead of always portraying it asa continent of conflicts and diseases. I believe thiscould pay dividends in terms of increased investments,trade and tourism.

In conclusion, my delegation considers theMonterrey Conference as so critical to our commonfuture that we cannot afford to fail. This Conferencerepresents a new dawn in the new millennium. My del-egation expects to see demonstrable commitment onthe part of developed countries to increase resourcesfor the fight against poverty. We also expect thatthose of us from developing countries will make strongcommitments to do our best to increase domesticresource mobilization, uphold the principle of rule oflaw and good governance, intensify the fight againstcorruption and put in place conducive environment toimprove effectiveness of aid and attract investments.

I believe we will succeed. “It can be done;play your part.”

263


Trinidad and TobagoStatement byMrs. Sheelagh de OsunaChairperson of the delegation of the Republic ofTrinidad and Tobago

On behalf of the Government of the Republic ofTrinidad and Tobago, I wish to thank the Governmentof Mexico for hosting this Conference and to expressour appreciation for the kind hospitality offered in thisbeautiful city of Monterrey.

The realization of this Conference marks,we hope, a concrete step towards the fulfillment of theMillennium Development goals to which we were allcommitted. It is also fundamental to the implementa-tion of the Plans of Actions adopted at the various UNConferences to achieve sustainable development. Asmany others have stressed, Monterrey is not an end initself but just a beginning. Much remains to be done.Trinidad and Tobago fully supports the Consensus.

Resource mobilization

Resource mobilization at the national, regional andinternational levels are central to the development ofsmall island developing states. Trinidad and Tobagohas consequently given priority to the mobilization ofdomestic and international resources within an overallmacroeconomic policy which encourages the creationof a competitive business environment. For more than15 years the Government has maintained those poli-cies that were conducive to the generation of savingsand the attraction of local and foreign investments.Our focus has been on the creation of an institutional,legislative and administrative framework that is invest-ment friendly.

Success in domestic resource mobilizationis however heavily dependent on the external environ-ment and linked to success in accessing the markets ofdeveloped countries. Many of the factors, which pre-clude foreign investment flows, lie outside of our con-trol. Trinidad and Tobago faces the particular problemof attracting foreign investment in the non-oil sectorwhich affects the overall development of social infra-structure. FDI tends to flow where profits are highestand not in all instances where a sound policy for thecreation of a hospitable local environment exists. Thechallenge for the international community, including

the multilateral financial institutions, is to facilitatestronger public-private sector partnerships so that for-eign investment is made more supportive of nationaldevelopment goals.

Debt

Trinidad and Tobago applauds the recognition given tothe importance of sustainable debt financing. Wetherefore support the call for further initiatives toreduce outstanding indebtedness by major stakehold-ers. However, as a small island developing country,which, paradoxically, is also a significant creditor, inrelative terms, we implore the multilateral communityto ensure that in the implementation of any furtherdebt relief no additional burden is placed on countriessuch as ours. The cost of existing international debtrelief efforts has been far too burdensome on Trinidadand Tobago, when these obligations are viewed inrelation to relevant macroeconomic indicators.

We also support calls for debt relief to beextended to middle-income countries, thus freeing upresources to finance critical areas such as health andeducation. Countries in our region utilize a significantportion of their GDP to meet debt servicing require-ments while being confronted with major developmentchallenges, such as the fight against the HIV/AIDSpandemic, drug-related crime and youth underemploy-ment.

Trade

Trade remains an essential element for generatingincome to meet development goals. While safety andsecurity concerns have become a high priority of theinternational community, the fact remains that therecan be no peace without development. The interna-tional community must guarantee the strength and sta-bility of commodity prices and improve trade accessfor small economies. It must also remove barriers toexports and eliminate trade-distorting policies, particu-larly agricultural subsidies.

Trinidad and Tobago is therefore encour-aged by the spirit of the Doha Declaration whichpoints to improved market access for agriculturalgoods, industrial products and services to benefit allmembers of the WTO. We also look forward to defin-ing the modalities of a work programme for smalleconomies.


264

I turn now to the special situation of SmallIsland Developing States (SIDS). Heads of State andGovernment resolved at the Millennium Summit toimplement “rapidly and in full” the 1994 BarbadosProgramme of Action and the 1999 outcome of theTwenty-second special session of the GeneralAssembly on SIDS. It is now universally acknowledgedthat small states are particularly vulnerable to interna-tional developments and natural disasters. They needinternational support to meet goals of sustainabledevelopment.

Of highest priority to us is the finalizationof a vulnerability index which has been called for bythe UN General Assembly, the SIDS special session,the South Summit, and more recently, the 2000Millennium Summit. This index will assist multilateralfinancial institutions to assess more effectively theneeds of SIDS and to accelerate the provision of tech-nical and financial assistance, the grant of trade prefer-ences and development assistance which guaranteeour economic sustainability.

Governance

Trinidad and Tobago is committed to good governancethat is based on participation and the rule of law, witha strong focus on combating corruption. TheGovernment is also committed to an improved andeffective partnership with all stakeholders in the socie-ty to secure a stable environment for growth anddevelopment.

However, while we are committed to theprinciple of globalization and economic liberalizationto make Trinidad and Tobago a highly developed smalleconomy, we cannot ignore the harmful social andpolitical impact that is associated with these phenome-na. There is an urgent need to reshape the financialand trade institutions which guide the process of globalization. We must develop capacity and improve governance at both national and international levels to deal with these phenomena. There must begreater coherence in international policy-making given the interrelatedness of trade, monetary andfinancial policies with social and environmental issues.Indeed, “Coherence is the byword and goal of thisconference”.

Trinidad and Tobago will do its part tomeet our commitments in the Monterrey Consensus.Its success will ultimately depend on the ownership ofit by Member States and the institutions we have cre-ated to deal with issues of development.

TurkeyStatement byHis Excellency Mr. Kemal DervisMinister of State, Republic of Turkey

We think it is highly important that we hereby declarethat development guided by specific policies continueto dominate the world’s agenda. The pronouncementas well that industrialization for all countries, be it indifferent levels, is an important means for develop-ment efforts. Adopting foreign trade as the maininstrument of development and industrialization willfocus all nations towards a healthy globalization. For atransition to a market economy, it is necessary to con-centrate on enhancing markets in developing countriesas well as amending the malfunctioning aspects of themarkets in a more orderly fashion.

Planning for a transition to a market econ-omy has been on the world’s agenda since 1945 andmany a beneficent implementation of it has beendeveloped by the World Bank. We have sufficient needand grounds even today in building up supportiveplanning approaches for new sustainable developmentmodels serving free trade. Development plans are nec-essary for developing countries in their advancementtargets and restructuring, that is above and beyond thegrowth rate and structure they themselves can afford.In fact, one of the most important vehicles of rapidchange can indeed be a planned change.

Our proposals for achieving implementa-tion effectivity are:

• That governments should stay clear of dailymarket functions except for the micro-guidance of the economy,

• That priority be given to arrangements for better governance at national levels,

• That special policies and models belaunched to open real commerce markets (permanent,simulative and with high added value) to developingcountries.

A dimension we would have liked to beincluded in the Monterey Consensus is that the groupof G-20 be a part of the ‘Consensus’ as the bodywhich, through regular meetings with specific agendas,designs proposals for all countries on development,management and financing.

265


TuvaluStatement byHis Excellency the Honourable Saufatu SopoangMinister of Finance, Economic Planning andIndustries, Tuvalu

Tuvalu shares the words of appreciation expressed toyou, Your Excellency Mr. President, your Governmentand the people of Mexico, for your kind hospitality inhosting this Conference.

Like the currents of the vast Pacific Oceanexpectantly reaching this great land, Tuvalu has cometo Monterrey with great hope: That out of this greatcity there will emerge strong political will to addresswealth, disparity and poverty, and create opportunitiesequitable to all.

A mere six months ago, the world, includ-ing we in the Pacific, were to be proven unfortunatelythrough terror, that we cannot continue to see as nor-mal a world where, according to the World Bank, lessthan 20 per cent of the population dominates 80 percent of its wealth and dollar-income. Such a world hasled to utter poverty and lack of opportunities amongstthe disadvantaged; it has also allowed for human rightsabuse and brewing of terror and insecurity worldwide.This situation is simply unacceptable, and we appealfor efforts to address it.

The principles and directions proposed inthe outcome document for our consideration are wellformulated. In our view, however, our mission hereand the actions thereafter must remain focused on theultimate goal of this Conference, and that is financingfor development. Our success will be judged not onthe rhetoric here, but on the partnerships and actionsthat will ensue post-Monterrey.

Partnerships on Financing forDevelopment, in our opinion, can only be real andmeaningful if properly contextualized to the peculiarsituations of development partners based on mutualtrust, understanding and respect of each other’s rolesand responsibilities. In our own small way, Tuvalu iscommitted to the principles of good governance,democracy and the rule of law and fully respects therights of individuals, women and children, businessesand non-governmental bodies to participate in, andhave access to, development.

Like the many extremes of the Small IslandDeveloping States in the Pacific and in other regionsof the world, however, the nature of poverty in Tuvaluis defined by its unique smallness, islandness, and iso-lation, which all translate into a series of vulnerabili-

ties. There is a wealth of spirit, and there are alsopotentials especially in our vast ocean resources. Whatchallenges us most is the lack of opportunities todevelop our people’s ability in development let aloneto integrate into the world economy.

Our capacity to develop solutions to thechronic problems of basic infrastructures particularlyfor transportation, affordable energy, freshwater sup-ply, health services, quality education as well as toimprove institutional regulatory, financial and manage-ment frameworks, moreover, is highly limited due tothe lack of financial and technical resources. Thesebasic handicaps are made even worse by environmen-tal risks of global warming and sea-level rise for whichthe vulnerability of Tuvalu is well known. They havemade our islands highly unattractive to any foreigndirect investment. In these regards, every measure toreduce costs and mitigate risks through innovativepartnerships for economic growth, and particularly forthe long-term security and survival of SIDS will begreatly useful and appreciated.

Clearly, overseas development aid is indis-pensable to the development of Small Island develop-ing States like Tuvalu. For us ODA has been, and isthe development budget. The sustenance of vital serv-ices to our people through innovative partnershipssuch as the Tuvalu Trust Fund would not have beenpossible without ODA, and I would like at this junctureto acknowledge with sincerity Tuvalu’s appreciation toall its development partners, particularly Australia,New Zealand, United Kingdom, Japan, the EuropeanUnion and the Republic of China on Taiwan.**

We are, however, extremely worried by theoverall continuing decline in ODA. We are thereforeheartened by the US initiative of substantial aid todeveloping countries, and hope that some of it wouldtrickle across to the Pacific islands. On the latter, andparticularly in the advent of continuing reduction inthe global volume of ODA, every legitimate sourceand proven commitment to international effortsagainst poverty and insecurity must be welcome. Thesubstantial contribution that the Republic of China onTaiwan has made to international development inpractically all regions of the world, in our view, shouldbe recognized. The United Nations and its specializedagencies can no longer ignore the reality of the factthat the ROC has been and will continue to be a



266

responsible player in international affairs. We stronglyfeel it is time that proper representation of the ROCin these bodies is allowed to be seriously considered.

On the effectiveness of aid, there is a greatneed to improve procedures both for the formulation,procurement and implementation of projects and pro-grammes to ensure that they are locally owned andnot donor-driven. Experience has shown that projectswith direct ownership by the local people and commu-nities have higher chances of success than those for-mulated without proper dialogues and consultations.

Moreover, our experience in the Pacific hasalso shown that the role that regional cooperationplays in development is extremely important.Partnerships with the collaboration of regional bodiesto compliment national efforts, and through the cre-ation of regional development financing facilities toaddress poverty of access to international financingare practical measures for us, and need to be seriouslyconsidered.

Finally, the role of overseas employmentand remittances in small and vulnerable economies likeTuvalu is also vitally important. We therefore appealthat ODA be also complimented through innovativeschemes of overseas employment and reduction incosts of transfer of remittances from migrant workers.Partnerships to address this will be useful particularlyto SIDS.

Whilst appreciative that each country hasthe primary responsibility for its own development, itcannot be overstated that for SIDS like Tuvalu, sus-tained economic growth and development arerestrained by the realities of life endowed on us. Lefton our own, our long-term survival cannot be assured.The proposed ‘Monterrey Consensus’ must translateinto fulfilling our hope for a more prosperous andsecure world for our children. We fully support itsadoption.

UkraineStatement byMr. Volodymyr PershynState Secretary, Ministry of Economy and forEuropean Integration, Ukraine*

First of all, I would like to say how grateful we are tothe Government of Mexico for giving me a chance tospeak at this conference.

I would like to say that the processes ofever-increasing globalization require that the entireworld pool its efforts so that we ensure a more justdistribution of the results of our work and we over-come the gap that exists between the more developedand less developed countries in the world. The factthat we share responsibility to create the conditionsfor sustainable development that we have seen inMonterrey and has been expressed by the Heads of State and Government, leaders of international organizations and representatives of business and civil society.

The implications of the terrorist acts of 11September have shown how the political and econom-ic processes are interrelated. These events haveslowed down the economy and led to the reduction inexports and a lowering of prices for raw materials aswell as flows of private investment, which have beennegatively affected. This has had a terrible impact onthe poorest countries and has required that we takemeasures to consolidate efforts to overcome the nega-tive impacts on an economic level.

Now we have an opportunity to take onthese responsibilities, to implement what the Heads ofState have said, in particular to defend the principlesof equality, solidarity and social justice and to achievethe important goal of reducing by 50 per cent,between now and 2015, the number of poor people.

Ukraine welcomes the contribution madeby the United Nations in this conference and the keyrole it has played in bringing together all the partici-pants for financing for development, including donorsand recipients and civil society and the private sector.


267


The draft of the Monterrey Consensus wasthe result of the worthwhile work and cooperation ofall participants of the preparatory conference – thefact that we agreed to provisions that will enshrine theinterests of all countries, which will enable us to takean optimistic look at the future and will serve as aguiding map for the future work. We welcome theprinciples in the document, which will help us mobilizeand make better use of money for developmental pur-poses inside countries and in the international capitalsector and will help us fine-tune our Governments andimprove the situation. It is also very important to seethat we share our experience so that we can fight cor-ruption at all levels, which is a major obstacle to thedistribution of resources.

Ukraine wants to step up United Nationsactivity and that of international financial institutionssuch as the World Bank, the International MonetaryFund, regional banks, the European Bank forReconstruction and Development, and the EasternEuropean and Ukrainian banks in order to make betteruse of the potential of these institutions in order toimplement market-oriented reforms, resolve social andeconomic issues and the problems of developing coun-tries and the transitional economies.

One of the major obstacles for Ukraine isthe complex of problems having to do with structuraleconomic reforms and the long-term impact of theChernobyl catastrophe. It is no exaggeration to saythat it had a worldwide impact. I would like to thankthe international organizations and governments thathave stated their willingness to help us with this catas-trophe, and I hope that they will be living up to theirobligations.

An important role in this developmentalprocess would be a non-discriminatory system fortrade. Eliminating protectionist barriers for transitioneconomies for their exports, the exports of their goodsand services as well as a significant liberalization oftrade will have a positive impact on promoting theprocess of development in these countries.

We hope that the Monterrey conferencewill build on the success of the meeting in Doha,which decided on having a new round of trade negoti-ations devoted to development. The MonterreyConsensus is an expression of the willingness of all thestakeholders to engage in a process of improving theworld, and for Ukraine this is one of the priorities ofour foreign economic policy. It would also be a posi-tive thing to create conditions whereby we could alllive up to our obligations.

The future of humanity, where we will tryto ensure the right to dignity, requires that we act in avigorous way, consistently, and develop the prospectsin a realistic way, based on the Monterrey Consensus.It depends on our willingness and ability to pool ourefforts aimed at strengthening our worldwide allianceon the different global and regional levels. I hope thatthe Monterrey Conference will be successful and helpus improve on the situation for development.

United Arab EmiratesStatement byHis Excellency Mr. Abdulaziz Nasser R. Al-ShamiAmbassador and Permanent Representative to theUnited Nations of the United Arab Emirates

I have the pleasure to convey to the Government andPeople of the Republic of Mexico, on behalf of theUnited Arab Emirates, our sincere thanks for its gra-cious hosting of this historical conference. I shouldalso like to express our deep appreciation to the mem-bers of the preparatory committee for the effectiveefforts they have exerted, efforts which have con-tributed to the success of this conference. I should alsolike to take this opportunity to express our apprecia-tion to Secretary-General Kofi Annan for his series ofreports on development which contain valuable anduseful information. I would also like to express oursupport for the statement made by Venezuela onbehalf of the Group of the 77 and China.

Despite the relative improvement whichhas occurred during the Nineties on the economic andfinancial conditions in many areas of the world, affect-ed by the repercussions of globalization, open mar-kets, the development of modern technological infor-mation and communication instruments, these positiveresults have not affected the peoples of the third worldcountries who continue to face the results of the grow-ing decline in the growth rates, the increase in theproblems related to the spread of poverty, hunger,unemployment, infectious diseases and other chal-lenges of the burden of debt and the continueddecrease of the National Income. This matter con-tributed to the marginalization of these countries andwidening the gap between them and the countries ofthe North, and also providing a state of inequality andunevenness in opportunities and prosperity betweenthe two groups of peoples.


268

The latest international statistics haveproved that the initiatives and efforts exerted to datesince the adoption of the twenty first century agendain the fields of energizing sustainable developmenthave all proceeded in an extremely slow pace. In addi-tion to that, their results have not been up to the nec-essary expected standards due to their lack of system-atic planning, necessary financial resources and theirclashing with bureaucratic conditions and regulationsthat many countries and granting international finan-cial institutions continue to practice towards develop-ing countries, in particular those that suffer from theaccumulation of foreign debt and the decrease offinancial resources for basic service programmes fortheir peoples. We, therefore, reaffirm the need for theinternational community to find the necessary politicalwill to commit to a clear comprehensive strategy tofinance development in developing countries. Thisstrategy should be in accordance with the principles oftransparency, equality, the exchange of interestsamong countries, and the acknowledgement of theright of developing and small countries to effectivelyparticipate in international economic decision-makingwhile taking into consideration the need to respect thecharacteristics that separately distinguish each countryand geographical area.

In this context, we also believe in thenecessity to promote the aspects of economic andtechnical cooperation among the South-South coun-tries and that the governments of these countriesundertake their principle roles in the field of develop-ing local resource mobilization programmes andpreparing the appropriate conditions to encourage theinflux of financing for their national development pro-grammes. At the same time, we demand that thedeveloped countries and donating international institu-tions bear their responsibilities within the frameworkof three principle elements, which are:

• Firstly, the implementation of the commit-ment to earmark 0.7 per cent of their Gross NationalProduct as official developmental assistance for devel-oping countries, and also to earmark 0.15-0.20 percent to the less developed countries during thisdecade, in addition to increasing other kinds of unoffi-cial assistance and improving the means of deliveringit to the benefiting countries.

• Secondly, the application of innovativemechanisms to deal with the problem of foreign loans,particularly for the less developed countries either bythe reduction, cancellation, mobilization or change ofthese loans as resources to finance the branches ofdevelopment in these countries.

• Thirdly, the establishment of a multilateralcomprehensive commercial system in accordance withthe principles of non-discrimination and fairnessamong countries which ensures the delivery of devel-oping country exports to international markets, theattraction of capital influx, foreign investments andmodern technologies used for peaceful purposes.

We consider that the occurrence of strug-gles and continued practices of occupation and terror-ism are the most important obstacles that hinder theimplementation and financing of development. We,therefore, demand the international community totake the necessary procedures to urge the Israeli gov-ernment to immediately and urgently halt all outra-geous occupation and settlement practices and attacksinside the Palestinian territories including the Arabiccity of Al-Quds. We also demand the Israeli govern-ment halt its barbaric, unethical and irresponsibledestruction of the Palestinian national developmentinstitutions which have all been built with financingfrom grants and financial assistance from donatingcountries and international institutions, the Emiratesbeing one of them.

The United Arab Emirates has adhered, inaccordance with the sublime directives of His HighnessSheikh Zayed Bin Sultan Al Nahyan, President of theUAE, to the establishment of legal and financial rulesand regulations which govern national policies inregards to macroeconomics and the participation inone way or another in mobilizing and developing localfinancial resources. In addition to developing the pro-ductive capabilities and skills of the citizen of theEmirates, increasing work opportunities, encouragingdifferent investments and markets, increasing the par-ticipation of the private sector and other aspects toenhance social, economic, cultural and environmentalsustainable development. The United Arab Emirateshas adhered, in accordance with its faith in the spiritof regional and international participation to offeringvarious kinds of financial and technical assistance,grants and loans to many developing and poor coun-tries to assist them in enhancing their developmentprogrammes. The Emirates has also participated inoffering humanitarian and relief assistance includingthose allotted to re-building and clearing mines ineffected areas.

In conclusion, we voice our support to therecommendations which call for developing the mech-anisms of coordination between the United Nationsand other multilateral financial and economic institu-tions such as the World Bank, the InternationalMonetary Fund, the World Trade Organization and

269


others in order to enhance their roles in the fields ofreforming and developing the international financialsystem and mobilizing necessary financial resources toimplement the mechanisms and programmes to elimi-nate poverty and hunger in addition to meeting theneeds of social and economic growth and protectingthe environment as principle factors to achieve sus-tainable development.

United Kingdomof Great Britain andNorthern IrelandStatement byMr. Barrie IretonChairman of the Delegation, the United Kingdom ofGreat Britain and Northern Ireland*

I will indeed be extremely brief. I would just like onbehalf of the United Kingdom to make very few pointsas Monterrey draws to a close. Firstly, perhaps I couldsay there have been a number of excellent nationalinterventions, and I am sure that if my own Minister,Clare Short, were here, or indeed Gordon Brown, ourChancellor, they would have been the first to haveapplauded the enthusiastic way in which our Dutchcolleague encourages all – rich and poor – to live upto Monterrey.

We believe the Monterrey Consensus is agood one. We endorse it. We think it is a good basisfor mobilizing resources, domestic and external, toachieve the Millennium Development Goals (MDGs).We must get on with implementation. We need effec-tive monitoring processes, preferably based on theUnited Nations process of annual reporting onprogress towards the MDGs.

We are determined to press for an earlyadoption of improved trade regimes based on Doha toallow developing countries to participate in the worldeconomy on fair terms. We think that it is importantto find concrete ways of implementing commitmentsmade here and also in the European Union Barcelonaconclusions to strengthen the voice of developingcountries in the international financial architecture.


We will also continue to call for an agreement torelease the Fourth Amendment Special DrawingRights (SDR) allocation, which would generate addi-tional significant resources for development.

Like others, I would just like to say that wefirmly believe that no country seriously committed topoverty reduction and the Millennium DevelopmentGoals, based on sound poverty-reduction strategiesand good governance, should be denied the chance ofachieving those goals through lack of resources. Thiswas said at Dakar in regard to universal primary edu-cation. This commitment goes much further and, Ithink, reflects the sound nature of the partnership we have forged at Monterrey. It is a challenge for all of us.

We therefore welcome the commitmentsmade on aid volume from the European Union andalso the United States. The United Kingdom itself iscommitted to substantial increases in aid volume andin its ration of official development assistance to grossnational product year to year. We will play our full partin delivering the European Union commitment to pro-duce an additional $7 billion per annum by 2006. Weregard this as a very important step towards the 0.7per cent target.

Finally, may I just say that we need then touse the World Summit on Sustainable Development inJohannesburg to build on what we have achieved hereand, at that point, renew our determination to eradi-cate poverty on a sustainable basis.

Viet NamStatement byMr. Tran Xuan GiaMinister of Planning and Investment of the Socialist Republic of Viet Nam

In recent years, Viet Nam is known to the world as acountry of reform and integration with significant ini-tial successes in socio-economic development, hungereradication and poverty reduction. The number peopleliving in poverty reduced by more than a half in 10years from 1990 to 2000 is a significant achievementof the reform process, including reform in develop-ment cooperation, a result of the joint efforts by thegovernment, the authorities at different administrativelevels, the domestic population at large and the inter-national community, especially the donors’ communi-ty. The Vietnamese delegation therefore highly appre-


270

ciates that this conference has put emphasis on pro-motion and improvement on effectiveness of develop-ment aid to take the world through challenges and tosuccessfully implement the development goals set forthat the Millennium Summit.

During the 1990s, Viet Nam successfullyimplemented the ‘1991-2000 socio-economic stabi-lization and development strategy’. At present, VietNam is proceeding with implementation of the 10-year socio-economic development strategy 2001-2010and the 5-year socio-economic development plan2001-2005. During development and implementationof these socio-economic development strategies andplans, hunger eradication and poverty reduction hasalways been linked closely with development andgrowth and vice-versa.

The fast economic growth with an averageGDP growth of 7% per annum in the 10 years 1990-2000, together with the appropriate policy of distribu-tion of income, have constituted a decisive element forthe success of hunger eradication and poverty reduc-tion processes in Viet Nam. The high economicgrowth itself has created more jobs and generatedhigher incomes for the poor. The successes in devel-opment and the fight against poverty is the result ofViet Nam’s determination to reform and the pro-activeapproach to economic integration, promotion to builda market economy with an economic structure thatenables each sector, each region and each economicparticipant to take full advantage of their own compar-ative advantage to develop effectively; promote, thusallowing mobilization of national resources, domesticand external for development investments.

During development and the process ofpoverty reduction, Viet Nam has received significantand effective development aid from the internationalcommunity. We highly appreciate and would like toexpress our sincere thanks to such valuable assistanceand cooperation. Thanks to the close coordinationbetween the Vietnamese Government and its localauthorities with overseas governments and internation-al organizations, the development resources have beeneffectively utilized, focusing on priority areas of socio-economic development in Viet Nam.

However, Viet Nam is still facing manychallenges in hunger eradication and poverty reductionefforts given that GDP per capita is a mere US $450per annum and there are yet a large number of peoplewith income of just US $1 a day. To overcome suchchallenges, Viet Nam adopts a policy to, on the onehand, mobilize internal resources, taken as the decisiveresource and, on the other hand, expand and improve

the effectiveness of international cooperation, includ-ing foreign direct investment (FDI), official develop-ment assistance as well as international trade.

Internal resources mobilized include notonly government finance, but also, and more impor-tantly, private finance as well as contributions from thelocal community benefiting from development assis-tance.

To attract foreign direct investments, VietNam continues to improve the investment climate tobe more open, more attractive and more competitive.To expand international trade, Viet Nam is activelynegotiating for accession to WTO and hence requeststhe support from countries around the world asexpressed in the Monterrey Consensus.

We would like to call for more officialdevelopment assistance (ODA) from internationaldonors community. The 10 years of developmentcooperation (ODA) have left us with many valuableexperiences, i.e. the Government, together with thedonors, must correctly identify the objective and policyfor ODA which must be kept in line with the objec-tives of the socio-economic development strategy ofViet Nam; a sound legal framework for effective man-agement and use of ODA must be completed, thusharmonizing the procedures of Viet Nam and thedonors.

The actual development assistance andpoverty reduction in Viet Nam have reflected that theobservation and recommendations at this MonterreyConference are essentially appropriate. TheVietnamese delegation welcomes and highly appreci-ates the consensus reached at the Conference.

We agree and share the views with manydelegates at the Conference on the need to have moreconcrete commitment for rapid increase in financialresources to meet the demand for reaching theMillennium Goals.

We also agree with the proposals for theimprovement and effective use of development aidbased on adjustment of fund allocation to the right tar-get group, keeping in line with the needs and thedevelopment strategy of recipient countries, avoidingimposition and honouring the respect for ownership ofrecipient countries, since we believe that as assistancefrom developed countries to developing countries isfor a better world and for themselves.

271


YemenStatement byHis Excellency Mr. Ahmed Mohamed SofanMinister of Planning and Development, Republic ofYemen*

The delegation of the Republic of Yemen agrees ingeneral with the principles, ideas and measures con-tained in the Monterrey Consensus document, includ-ing those related to justice, solidarity and sharedresponsibility, as well as the recognition of diversenational cultural circumstances and the independenceof economic policies and national development strate-gies.

We also agree that we must pool ourresources and release our political will by committingourselves to achieving the objectives of internationaldevelopment, on the basis of a new partnershipbetween developed and developing countries. Ourcountries must adopt the right policies by poolingdomestic resources and attracting international flowsthat encourage international trade as an engine fordevelopment. We must also increase internationalcooperation, financing and technical cooperation fordevelopment, cancelling foreign debt and improvingthe international fiscal, financial and trade systems.

We affirm our recognition of the mainresponsibility of social, economic and national devel-opment and the priority roles of national policies anddevelopment strategies. But at the same time, we mustrecognize interdependence between domesticeconomies and the international economy in a waythat reinforces the determination of partners for devel-opment to provide a propitious economic environmentand development frameworks at the regional level.

The set of challenges engendered by glob-alization is so complicated that we can take measuresonly at the national level. It has also become clear thatour national efforts require a complimentary interna-tional economic environment. As I said, that demon-strates the interdependence between the national andinternational economies. A comprehensive approachis required to face these interdependent challenges,particularly in financing for development.

As participants know, Yemen is one of theleast developed countries. Therefore, it is pursuing aprocess of comprehensive development under very


difficult circumstances because of the scarcity ofresources that are necessary to finance development.It is doing this with a view to allocating developmentfinancing for investment to support an infrastructurefor expenditure in the service sector, where greaterexpenditure was required after the Yemeni union in1990.

The Government is pursuing a comprehen-sive policy for development in all economic, social andpolitical spheres. Our national economic reform pro-gramme in the areas of finance and cooperation withinternational institutions is six years old. Reform meas-ures for restructuring and financial stability are aimedat reducing the budget deficit by providing the neces-sary currencies and moving investments. In thisregard, we have adopted legislation on investment andregulations that ensure a smooth process for investors.Much commercial legislation has already entered intoforce.

Yemen awaits full membership in the WorldTrade Organization, having satisfied all the necessaryconditions for it. We are now pooling our resourcesfor development domestically and in cooperation withour partners at the bilateral and multilateral levels. It isalso worth noting that among the more importantdevelopment objectives for our Government are thoserelated to combating poverty, in keeping with theobjectives of the Millennium Declaration. Yemen willbecome the first country in the Middle East and Africato issue, at the end of March 2002, the first povertyreduction strategy, which will improve the living stan-dards of the entire population, as well as humanresource and development programmes.

Yemen has adopted a governance-approach based on democracy and respect for humanrights. Our system is based on political pluralism anddevelopment of greater political participation in deci-sion-making. Parliamentary elections are held at thegovernorate and provincial levels, and we have adopt-ed decentralization measures. The first elections inthat regard have been held.

In accordance with our President’s instruc-tions, I wish to highlight here a new policy adopted bythe Government of Yemen, on two of the most impor-tant issues of this Conference: corruption and goodgovernance.

In conclusion, holding this Conference fol-lowing major preparatory efforts and the importantpolitical document representing the universal responseto challenges of financing for development is only aninitial step on the road to strengthening internationalcooperation for development and the mobilization ofresources needed by developing countries to join theglobalized international economy.


272

Achieving the objectives of the MonterreyConsensus will be possible only through exercisingdetermination and political will. This will provide impe-tus to multilateral and international cooperation fordevelopment, lead to the stability and prosperity ofpeoples and ensure international peace and security. Iwish the Conference every success.

YugoslaviaStatement byHer Excellency Mrs. Jelica MinicAssistant Minister For Foreign Affairs, the FederalRepublic of Yugoslavia

I would like to join the previous speakers in congratu-lating the Government of Mexico on the excellentorganization of this important meeting, held under theauspices of the United Nations.

The final document, entitled the MonterreyConsensus, which is before us, is of extreme impor-tance as it will contribute to mobilize funds for devel-opment and reach a firm consensus of all participantson a large number of issues.

No doubt, financing for development hasto be carried out primarily from domestic resources.Although foreign financial support should not replaceefforts to ensure domestic resources, it has to be a cat-alyst in the development of developing countries andcountries with economies in transition. Without for-eign capital inflow it is not possible to carry out thenecessary economic and political reforms. However,the terms for foreign financial support and assistancehave to be adjusted to the local situation in order to beeffective.

Allow me to touch upon the importance ofdevelopment financing for the Federal Republic (FR) ofYugoslavia. After more than a decade of seriousregional instability, wars, economic sanctions, misman-agement and corruption, which drastically crippled itseconomy, the FR of Yugoslavia has embarked uponradical economic and political reforms which will sure-ly contribute to economic and political stability of ourregion and Europe at large.

The Yugoslav Government has adoptedand started to implement a programme of economicreform whose goal is the achievement of macroeco-nomic stability and structural reforms needed for thesuccessful market economy. Direct foreign investment

and trade are necessary to make this programmework. The FR of Yugoslavia needs assistance.However, we stand ready to implement all necessarymeasures at the domestic level to replace this assis-tance as soon as possible with trade and direct foreigninvestment.

For the new democratic authorities in theFR of Yugoslavia it is an imperative to deal with theenormous burden of the Yugoslav foreign debt. Thenew authorities were therefore compelled to seek areduction of foreign debt on terms enabling Yugoslaveconomy to achieve a sustainable development in linewith the programme of structural adjustment support-ed by the IMF. In this transitional phase, which weconsider temporary, when many problems inheritedfrom the past have to be resolved, we need the sup-port and assistance of the international community.

We fully support the reform of the interna-tional financial architecture, which should contribute tosustainable development in a more concrete way. Wejoin the efforts aimed at finding a pragmatic and inno-vative way to promote further efficient participation ofdeveloping countries and countries with economies intransition in international dialogues and decision-mak-ing processes. It is the only way to make globalizationbeneficial to all.

The FR of Yugoslavia is committed to thestrengthening of the role of the United Nations ininternational relations. The UN has a crucial impor-tance in the promotion of international cooperationfor development. We support and encourage closecooperation among the United Nations, World Bank,International Monetary Fund and the World TradeOrganization.

Finally, allow me to emphasize the impor-tance of a follow-up conference and the need to usefinancial resources as efficiently as possible in order toachieve the goals listed in the Millennium Declaration;elimination of poverty, improvement of social condi-tions, raising living standards and protection of theenvironment.

273


ZambiaStatement byHis Excellency Mr. Patrick Kalifungwa, M.P.Deputy Minister of Finance and National Planning,Republic of Zambia

Allow me to begin by joining other delegates in con-gratulating you, Mr. President, for convening this veryimportant global Conference on Financing forDevelopment. I would also like to commend and thankthe Secretary-General of the United Nations, Mr. KofiAnnan for his personal commitment and unprecedent-ed leadership to the global problem of financing devel-opment. Your leadership inspires us. Permit me, too,to record my thanks and gratitude to the MexicanGovernment for according my delegation and me awarm welcome and providing us with comfortableaccommodation in this beautiful city of their greatcountry.

The holding of this conference is longoverdue. There are at least three reasons why I holdthis view. Firstly, in the last half century, the world has witnessed extraordinary economic and social gains in many countries. The economic well-being of many of the world’s population measured by per capita incomes and life expectancy has improved significantly.

The gains witnessed at the global levelhave however been marked by regional disparities.While the developed countries and some developingcountries have made phenomenal gains, both econom-ically and socially, the situation in much of the devel-oping world does not match what has been achievedat the global level.

Several of the developing countries areexperiencing a regression in their economic and socialwell-being, while others have only witnessed slowprogress. Today, about one-fifth of the world’s popula-tion survives on less than a dollar per day. In fact, inmany of the Sub-Saharan African countries, the gainsmade in economic progress in the sixties have actuallybeen reversed. This conference is faced with the chal-lenge of mapping out strategies for putting thesecountries back on the path of growth and develop-ment, including the financing of this growth and devel-opment in order to make it a reality.

Secondly, the paradigm of external aid asan engine for development seems to have brokendown over the last forty years for a number of coun-tries, especially for the majority of countries in Sub-Saharan Africa. By some estimates, less than 35 percent of overseas development assistance (ODA) goesto developing countries’ financing of investment.

The larger share goes towards the adminis-tration of aid, both in the recipient and the donorcountry. For most developing countries, it seems thatit is what donors think that determines aid policy (andoutcomes). Official development goods may not costmoney, but often, under the current arrangements,they entail some loss of sovereignty on the part of therecipient country.

This loss in sovereignty explains, in part,the ineffectiveness of aid experienced in a number ofSub-Saharan African countries. These arrangementsare in need of an overhaul. And this conference pres-ents a great opportunity for achieving a consensus onhow these arrangements should be structured to betterserve mankind, through accelerating the economic andsocial progress of poor countries. Today there is anunprecedented frankness in examining the record,identifying best practices, and forging new modalitiesfor cooperation.

Thirdly, globalization – that new phenome-non of economic and social progress – is furtherthreatening to put the countries of Sub-Saharan Africaat the periphery of world economic activity. Theirshare of world trade has dropped from about 3.2 percent in 1981 to less than 1 per cent by 2000. Thisconference offers the world at large a timely andunique occasion to examine how globalization can bemade to work for the good of all mankind and howthe Millennium Development Goals might be realisti-cally reached.

Having said this, I would like to make thefollowing six points that relate and correspond to thethemes of this conference:

• My first point relates to domestic resourcemobilization. The question that comes to my mind ishow should domestic resources be mobilized so as toengineer long-term sustainable growth and povertyreduction? It is almost a truism that developing coun-tries need to increase gross domestic savings to atleast 30 per cent of GDP and gross domestic invest-ment levels to 30-33 per cent of GDP in order toachieve growth rates of 7-8 per cent annually so as tohave any prospect of reversing divergence betweentheir per capita incomes and those of the developed


274

countries. There are no other short cuts. In Zambia,we are now convinced that for a mobilization of suchproportions to be successful, it needs to go hand inhand with a renewed emphasis on modern agricultureas a basis for industrialization and poverty reduction.Agriculture must get new attention, both in develop-ment cooperation and in domestic resource allocation.

• My next point almost follows from the first.In the wake of the new trade round that was launchedat Doha, the commitments by developed countries toopen their agricultural and textile markets to develop-ing countries need to be correspondingly implement-ed. Developed countries ought to reduce agriculturalsubsidies that artificially depress the prices for Africa’sagricultural produce. To do anything other than thiswill further marginalize the countries of Sub-SaharanAfrica, and consign them to the spectre of an ever-declining share of world trade and economic activity.Further, low-income developing countries and smallisland states need to be assisted with the significantincremental administrative costs they have had to incurin coping with the implementation of the UruguayRound agreements. These countries simply cannotcope by themselves.

It is through increased international tradethat Africa will develop. Export is the means forobtaining long-term investment and finance. It is thenecessary engine for growth. However for this tocome about, African products need much-improvedaccess to international markets. Africa faces too manybarriers to the sale of its products internationally,especially for processed primary products where Africamay have a competitive edge. Quite clearly, a range ofmeasures within the WTO framework and bilaterallywith trading partners are required to level the playingfield in some areas, and to provide for preferentialtreatment in others.

• The third point I am making is that, privatecapital flows are crucially important if growth of 7-8per cent per annum in developing countries is goingto be financed. The bulk of that growth can only befinanced by private capital flows, which can providethe long-term finance required for economic growthand poverty reduction is the private sector, bothnational and international.

If we hold the view that private capitalflows can be harmful, then let us research into ways inwhich we can minimize on the downside risks associat-ed with private capital flows and maximize on the pos-sible benefits. In fact, over the last ten years, privatecapital flows have grown considerably to rival ODAflows for some developing countries. It is now beyonddispute that business and markets are the cornerstone

of development. They are also the essential means ofachieving a transition from ODA dependence to sustainable internally generated growth based on avibrant and competitive private sector that plays a key role in lifting people out of poverty.

• The fourth point is that overseas develop-ment assistance (ODA) has perverse incentives for therecipient country, if that country is not conscious ofwhat role ODA should play in the economy. If a devel-oping country gives up its vision or does not have one,someone else will supply that vision. When this hap-pens, this is usually with disastrous consequences forthe developing country. This calls for ownership andleadership of visions of development by the recipientcountries of ODA. Elements of Zambia’s vision onODA include the belief that this should be targeted toreduce poverty and that all aid resources should bechannelled through the national budget system. Aidresources that are channelled outside the nationalbudget system tend to undermine it.

It is also a truism that Africa needs not onlyincreased resource flows but also more effective utiliza-tion of those resources. More ODA is needed to helpAfrica fill its existing financing gap of approximatelyUS $10 billion per annum if it is to meet theMillennium Development Goals of halving poverty by2015. (This figure excludes the estimated financingrequirements to address the HIV/AIDS pandemic).Increased assistance should be targeted on countriesthat have a demonstrated capacity to use aid well, andshould focus on priority areas.

• The next requirement is stable long-termresource flows to Africa and the predictability of donorsupport; these are key to the success of aid and eco-nomic management. Several leading donors are mov-ing in this direction, simplifying and harmonizing theirconditionalities and increasing the commitment hori-zons of their assistance. We applaud their efforts asthey move in this direction, which is in line with theprinciples of the New Economic Partnership forAfrican Development (NEPAD).

• A fifth point I would like to make is that forall the so-called Heavily Indebted Poor Countries(HIPCs), a rapid and sustainable exit from the debt cri-sis is essential. Current debt reduction initiatives needto be enhanced and speeded up, and financial assis-tance options need to be less reliant on loans, whichhave a risk of relapse into indebtedness. As theystand, current methods do not offer a permanent solu-tion to a lasting exit from debt. The bottom line is that under the current arrangements, resources are not

275


being used to create productive capacity or createemployment. This conference should look at thepotential for new initiatives out of this quagmire ofunsustainable debt.

This does not mean however that weshould forget how the debt build-up came into being inthe first place. Both lenders and borrowers engagedthemselves in unproductive activities. There shouldhowever be an exit strategy out of debt so that this isnot a permanent feature. There should be recognitionthat past regimes on both the lender and borrowercountries did not use funds efficiently. This is what ledto the debt build-up in the first instance. A moveneeds to be made towards higher levels of debt reliefin order to dismantle Africa’s debt, which is very smallin absolute terms but very huge in relative terms.

• Finally, even as this conference looks atnew measures to generate resources to finance devel-opment, it should also explore modalities of howdeveloping countries can participate more effectivelyand meaningfully in the development process. Thiscalls for global good governance to be put on theagenda. Zambia therefore supports present proposalsto, “invigorate the UN system as a fundamental pillarfor the promotion of international cooperation tomake the global economic system work for all.”

In this regard, there is need for the IMFand the World Bank – two of the most important pil-lars of the international monetary and financial archi-tecture – to democratize their decision-makingprocesses so that developing countries can fully partic-ipate in accordance with the emerging principles ofgood governance.

Let me close by urging the conference par-ticipants not to allow the forces unleashed by this con-ference to die here. We believe that this conferencesignifies the dawn of a new era where the inhabitantsof the globe did not shy away from looking at thethorny issue of how the world can be made better forall. Let there be another follow-up to this conferenceto be held in the not so distant future – with at leastthe specific aim of measuring how far we would havegone on the path of equitable and all-encompassingdevelopment.


276 Build

ing

onM

onte

rrey

Chapter 5RoundTable Discussions

Ministerial-level and Summit-level Round Tables19-21 March 2002

RoundTable

Discussions

Round table discussions during the International Conference

on Financing for Development at Monterrey, Mexico,

19-21 March 2002.


278

Ministerial-level and Summit-level Round TablesSummaries of Discussions19-21 March 2002

IntroductionIn accordance with General Assembly decision 56/445, round table sessionswere held alongside the Ministerial-level and Summit-level segments of theInternational Conference on Financing for Development. The round tables were intended to encourage the free flow of ideas to take the discussion on key issues related to financing for development beyond the scope of countrystatements made at the plenary sessions. For this reason, too, the meetingswere closed to the press.

Each day from Tuesday, 19 March 2002 to Thursday, 21 March2002, the round tables considered different themes. On Tuesday, theMinisterial-level Round Tables discussed ‘Partnerships in Financing for Develop-ment’; on Wednesday, the topic was ‘Coherence for Development’; while onThursday, the Summit-level Round Tables were invited to ‘Look Ahead’ andbeyond the outcome of the Conference.

In keeping with the inclusive nature of the FfD process, all the stake-holders were represented at the round tables. From a maximum of seventy participants, forty-eight were government delegates, seven civil society repre-sentatives, seven business representatives, and eight representatives from international financial and economic institutions and other intergovernmentalorganizations.

In keeping with the tradition of the preparatory process of the conference, each round table was co-chaired to ensure balanced representation.In the case of the Ministerial Round Tables, the sessions were co-chaired by aMinister, selected by regional groups, and the head of a regional development

279

Chapter 5 Round Table Discuss ions

bank or regional commission, the head of UNCTAD, or the head of UNDP. At the Summit level, the round tables were co-chaired by Heads of State orGovernment representing different regions along with the heads of the WorldBank, IMF, and WTO. Summit-level Round Table C4 was co-chaired by twoHeads of State and Government.

The Co-Chairs opened the round tables with introductory statements.During the exchange of views, they sought to balance the interventions from each category of stakeholder. At the end of the three-hour session, theCo-Chairs orally presented their own initial summaries of the issues raised inthe discussion. The following twelve summaries – eight from the MinisterialRound Tables and four from the Summit Round Tables – reflect the refinements introduced by the Co-Chairs as they developed a common view of the exchange of ideas during the round table discussions.


280

Ministerial Round Table A.1Partnerships in Financingfor DevelopmentTuesday, 19 March 2002

Summary by the Co-Chairs

His Excellency Mr. Paa Kwesi NduomMinister for Economic Planning and Regional Cooperation, Ghana

His Excellency Mr. Charles JosselinMinister for Cooperation and Francophonie, France

Her Excellency Ms. Heidemarie Wieczorek-ZeulFederal Minister of Economic Cooperation and Development, Germany

1. We began with a fundamental agreement:attaining the Millennium Development Goals is a mosturgent priority and partnership is at the root of thesystem of international cooperation that can turnthose goals into reality. Ministers and senior officials ofGovernments, senior representatives of internationalorganizations, business leaders and representatives ofnon-governmental organizations were thus able tohold a rich and focused round table discussion on howto maximize the effectiveness of the contributions tofinancing for development of a wide variety of tradi-tional and innovative partnerships between officialentities, and between official entities and private enter-prises and civil society.

Public-public partnerships

2. The vast majority of speakers expressedtheir concern about the inadequacy of official develop-ment assistance (ODA) to developing countries in theface of the urgent need to meet the targets agreed bythe international community at the Millennium Summitof the United Nations General Assembly. It was recog-nized that despite their efforts, some developing coun-

tries will not be able to attract enough private capitalflows or to amass sufficient domestic resources tofinance their developmental needs. For those coun-tries, ODA will continue to be an important source ofresources. While welcoming recently announced ODAinitiatives, speakers urged donor countries to increaseboth the level and the efficiency of ODA for the mutu-al benefit of both donor and recipient countries.

3. It was recognized that ODA resources havenot always been targeted at the poorer countries buthave often been driven by geopolitical considerations.In that respect, it was suggested that donor ODA prac-tices and policies need to be changed. The need wasunderlined for increased coordination among donorcountries to support the priorities and programmes ofrecipient countries and efficient public partnerships. Along-term planning framework, such as the povertyreduction strategy paper, should originate in the recipi-ent country and be the basis for increased dialogueand consultation between the recipient country and itsdonors. Transparency and accountability are essentialfor the success of that process.

4. Participants stressed the need to improvethe policy coherence and consistency of donor coun-tries as a means to improve ODA efficiency. Whilewelcoming recent initiatives in that area, such as theCotonou Agreement of the European Union and theAfrican, Caribbean and Pacific Group of developingcountries and the African Growth and OpportunityAct of the United States, several speakers voiced theirconcern about ongoing protectionist practices indonor countries, which mitigate the potential positiveimpact that ODA can have on developing countriesand reduce opportunities for faster economic growththrough increased trade. In addition, the view wasexpressed that such practices indicate a lack of com-mitment to trade liberalization, a condition oftenimposed on developing countries in their negotiationswith international financial organizations, and couldrepresent a serious impediment to the new develop-ment agenda for trade negotiations launched in Dohain November 2001.

281


5. Lack of market access by developing coun-tries to the markets of developed countries is consid-ered a great obstacle to development. At the sametime, additional efforts are necessary to overcome sup-ply-side constraints in developing countries andenhance their productive capacities.

6. The importance of regional integration wasalso highlighted, as well as the possibility that public-public partnerships could be explored to provide solu-tions to common problems not only in the economicdomain but also in the areas of health and education,among others. Several speakers placed great hopes onthe New Partnership for Africa’s Development as ananswer to the continent’s developmental quest. Whilethe Partnership is a home-grown initiative, there isrecognition that African countries will need assistancein the implementation process. Accordingly, thePartnership could be considered as a model for a newframework of cooperation among major developmentpartners.

7. Several participants expressed support forthe proposal that ODA be used to promote foreigndirect investment and facilitate the integration of devel-oping countries in international trade. Such measureswould maximize potential synergies in the generationof additional resources for development. In that sense,capacity-building is considered essential.

8. Speakers also expressed their concern thatthe conditionality for official flows to developing coun-tries is not uniformly applied, and they urged greaterconsistency of such requirements. In addition, it wasfelt that conditionality should not go beyond what hasbeen agreed in international forums.

9. The debt overhang continues to representa serious impediment to growth in developing coun-tries because it discourages private flows and repre-sents a significant drain on scarce local resources. Inthe past few years, the international community haswitnessed a series of significant initiatives to relieve theexternal debt burden, particularly of the highly indebt-ed poor countries. However, participants suggestedthat more needs to be done and greater flexibility mustbe exerted in establishing debt sustainability becausecountries are continuously subjected to externalshocks, such as the recent global slowdown and sharpfall in commodity prices.

Public-private partnerships

10. It was stressed that the effectiveness ofpublic-private partnerships depends crucially on a sup-portive institutional environment, including a modernjudicial system. A modern legal system is seen as oneof the most important structural changes because itenhances governance by providing increased trans-parency and accountability, which would help curtailcorruption where it is a problem. Accordingly, thedevelopment of a strong justice system should be sup-ported by technical assistance.

11. It was emphasized that to increase privateinvestment, including foreign direct investment, moregovernment or public-private investment in infrastruc-ture is needed. There were also suggestions toincrease the role of regional development banks intrade financing and project financing, together withthe private sector. Several examples of successful col-laboration between public and private sectors weregiven, including infrastructure development (water supply, telecommunications), education, research and development, and foreign equity investment insmall and medium-sized enterprises.

Overall considerations

12. Several speakers emphasized that broaderinstitutional considerations need to be in place for theabove partnerships to be effective. They should makeit possible to realize the right to development in a justsociety, with gender equality. By emphasizing thesocial dimensions of sustainable development andmobilizing public support in developing and developedcountries, civil society is making an important contri-bution to that process.

13. Problems of global economic governancewere also discussed, including the increased participa-tion of developing countries. The participants pointedto the need for more cooperation, coherence and con-sistency among different international economicorganizations. In addition, some speakers argued thatthere is a gap in global economic governance becausea global economic forum is lacking. Accordingly, itwas suggested that treaties, such as those on globalenvironmental issues, could serve as a model for moreformal partnerships. In addition, some speakers sug-gested that partnerships in economic governancecould be solidified through the establishment of anEconomic Security Council.


282



His Excellency Mr. Didier Opertti-BadanMinister of Foreign Affairs, Uruguay

Mr Myoung-Ho ShinVice President, Asian Development Bank

1. The round table held a very rich debate onthe main issues before the International Conferenceon Financing for Development and on the theme“Partnerships in financing for development”. A sum-mary of the discussion is set out below.

General considerations

2. The general considerations of the roundtable were as follows:

• Ministers expressed strong support of thedraft Monterrey Consensus, in particular of the domes-tic and international reforms that it advocates. Thedraft Consensus has put financing at the top of theinternational agenda;

• Ministers focused on the implementation ofthe draft Monterrey Consensus. They were of the view that an effective and rapid implementation of the draft Monterrey Consensus is critical to spur economicgrowth worldwide and eradicate poverty;

• It was noted that implementation willrequire major national and international efforts, andthat substantial technical efforts should be accompa-nied by a strong and persistent political will. The par-ticipation of Heads of State and Government in theConference augur well for such political will;

• Partnership was seen as critical. However,partnerships must go hand in hand with country own-ership. No single partner – whether a country or aninstitution – can do enough. Several dimensions ofpartnership are considered to be key to development.Public-private partnership is at the core of rapid eco-nomic growth. Partnership between countries and

development organizations, as well as among the lat-ter, are also crucial for sustainable development.Partnership between aid agencies and NGOs alsomake a major contribution to development efforts;

• Participants stressed that the MillenniumDevelopment Goals are the driving force of the newunprecedented international effort for mobilizingfinancing for development. Considerable progress hasbeen made in the last 30 years in the areas of health,education and other basic social services. Yet the num-bers of the poor and the illiterate remain far too high,and international goals in the areas of health and basicsocial services are far from being achieved. The situa-tion in least developed countries and landlocked devel-oping countries calls for particular attention.Commitments to help those countries, other develop-ing countries and countries with economies in transi-tion to develop and integrate with the world economymust be implemented;

• Some ministers were of the view that thedraft Monterrey Consensus should have been moreexplicit in addressing the social agenda and the financ-ing of programmes in social sectors. They also pointedto the need to address unemployment, pay greaterattention to the informal sector of the economy andsupport small entrepreneurs. In that regard, particularattention must be paid to rural areas, where the major-ity of the poor live;

• Many ministers stressed the importance ofeducation for all, particularly girls and women. Positivechange requires education at all levels, particularly uni-versal primary education for boys and girls, as calledfor in the United Nations Millennium Declaration. Theimplementation of the Conference outcome must bepursued in a human rights framework.

Main issues discussed

3. Alongside support of the draft MonterreyConsensus by all ministers, discussion focused on anumber of key issues. There was agreement that goodgovernance forms the basis for mobilizing both domes-tic and international resources for developing coun-tries. It was pointed out that effective efforts to eradi-cate corruption are essential for good governance inall countries, and that those efforts are the jointresponsibilities of developing and developed countries.Allocation of government resources to military usesdiverts funds from development expenditures. Withregard to international private resources, foreign directinvestment was seen as preferable to short-term capi-tal and more volatile credit. Many participants pointedout that the improvement of market access for agricul-tural products represents an important contribution tofinancing for development. There was general agree-

283


ment that effective progress in implementing the DohaMinisterial Declaration, particularly the liberalization oftrade in agriculture, is crucial. In that regard, it wasstressed that mechanisms should be developed to sup-port the effective functioning of small entrepreneurs ina globalized economy, and that care must be taken toensure that entrepreneurs benefit from internationalassistance. Many urged the rapid implementation ofthe enhanced heavily indebted poor countries (HIPC)initiative and efforts by donor countries to increaseofficial development assistance (ODA) to reach 0.7 percent of gross national product. At the same time, min-isters emphasized that the quality of ODA needs to beenhanced through improved coordination of donorefforts and conditions, the untying of aid andimproved capacity of recipient countries to use aideffectively. A major international effort to assist devel-oping countries in capacity-building in all areas wasidentified as an integral part of development assis-tance. Ministers underscored the importance of achiev-ing consistency and coherence of the internationalmonetary, trading and financial systems, as well as inthe policies of developed countries, which can affectthe international economic conditions that impact theeconomies of developing countries. They also empha-sized the importance of reform of the Bretton Woodsinstitutions and increased participation of developingcountries in economic decision-making.

Proposals additional to those contained in thedraft Monterrey Consensus

4. The following represent proposals made byvarious participants:

• Extended use of regional swap network for central banks;

• Regional banks to create new credit lines for emergency loans and to increase loans to the social sector;

• Debt cancellation for IDA-non-HIPCs;• More extensive use of debt swaps;• International Monetary Fund/World

Bank/Organization for Economic Cooperation and Development international dialogue on taxation;

• Industrialized countries should open labour markets to workers from developing countries;

• Establish international standards ofpartnership;

• Strengthen various global information clearinghouses for use by domestic and international investors;

• Improvement of private credit rating methodology.

Ministerial Round Table A.3Partnerships in Financing for DevelopmentTuesday, 19 March 2002


His Excellency Mr. Shaukat AzizMinister of Finance, Pakistan

Mr. Mark Malloch BrownAdministrator of the United Nations DevelopmentProgramme

1. Ministers regarded the draft MonterreyConsensus as the embodiment of a new partnershipfor development, although a number of participantsfelt that it is not sufficiently far-reaching. There wasbroad agreement that its adoption must be followed bya strong focus on implementation and translation fromwords into action if it is to become a meaningful glob-al initiative. Political will and leadership – in both thedeveloped and the developing countries – will be keyfactors determining its ultimate success.

2. The need to ensure national ownership ofdevelopment was underlined. The developmentprocess must be fully inclusive and the concerns of allmust be taken into account in the formulation andimplementation of strategies, programmes and proj-ects. External assistance should be regarded as eco-nomic cooperation rather than ‘aid’, not as a perma-nent crutch but as a means of helping developingcountries to help themselves. It is of the utmost impor-tance that recipient countries themselves design pro-grammes of reform and poverty eradication and fullyown them. Donor countries should support implemen-tation of such programmes instead of requiring recipi-ent countries to follow any donor-designed reforms.The experience of Ireland with the aid received fromits European partners was hailed as a good example ofownership, in which the recipient was encouraged toset its own developmental priorities, which were thensupported by its partners. The New Partnership forAfrica’s Development was recognized as an importantrecent initiative fully owned by the developing coun-tries involved.

3. Within the framework of ownership, part-nerships entail a clear understanding of the reciprocalcommitments and mutual obligations of all partiesinvolved in development. Ministers endorsed the con-


284

cept of partnership as a central principle of interna-tional development cooperation, but felt that furtherwork will be required to refine the new commitment topartnership into concrete results.

4. Different aspects of the concept of partner-ship were stressed, including partnerships betweendeveloping countries, among developing countries andbetween the public and the private business sectors, aswell as those involving various branches of civil socie-ty, including NGOs and trade unions. One of the keyaspects of the concept of partnership is the need tofully recognize the role and contribution of those civilsociety partners. Participants also emphasized theneed to incorporate the gender perspective into alldevelopment programmes and projects.

5. Several examples were provided of theneed for and benefits of partnerships within countries.It was recognized that the State’s responsibility fordevelopment must be shared with a range of otherstakeholders within and outside the countries. The private sector has a comparative advantage in someareas, although there are a number of risks and activi-ties that are best left in the realm of the State. In somecases, public-private partnerships provide a means oftaking advantage of the strengths of both parties.Several participants provided examples of such public-private collaboration.

6. Official development assistance (ODA) wasuniversally recognized as indispensable to meeting theMillennium Development Goals, particularly in thepoorest countries. Attention should be focused on sup-porting national efforts to improve education andhealth, including AIDS, but there is also a manifestneed for capacity-building, including in the manage-ment of ODA; some participants felt that infrastruc-ture development no longer receives adequate atten-tion in aid programmes.

7. The accountability of both donors andrecipients of aid was widely stressed. Recipients of aidshould be accountable to both their citizens anddonors in terms of commitment to sound governanceand policies, but donors are also accountable to recipi-ents in many ways, including in such respects as thevolume, quality and effectiveness of their aid.Developed countries should make their own accounta-bility a priority rather than leaving it to NGOs.

8. The need to enhance coherence and coor-dination in international development assistance wasemphasized. Developing countries are often requiredto comply with varying conditions in order to receiveaid because donors’ priorities and procedures differ.Improved coordination among donors could reducethe burden on recipient countries, particularly smallStates.

9. Many ministers emphasized that publicawareness about the importance of closing the povertygap needs to be raised in the developed countries.There is a need to increase recognition of the need forand effectiveness of ODA in order to increase publicsupport for additional flows. The Conference hasalready had a positive impact in that respect; themedia could be an important partner in continuingthat effort. Appreciation was expressed for the pro-posed increases in flows that have been announced bysome major donors in the days prior to theConference, but there is concern that ODA will stillfall far short of both the estimates of the flowsrequired to ensure that the Millennium DevelopmentGoals are met and the target of 0.7 per cent of grossnational product.

10. There was an emphasis on the need forcoherence among the trade, finance and developmentpolicies of developed countries. Several participantshighlighted the impediments to development in devel-oping countries created by protectionism and domesticsubsidies in the developed countries.

Proposals going beyond the draft MonterreyConsensus

11. The following represent proposals made byvarious participants:

• One delegation clarified an earlier announcement regarding an increase in its country’s future aid flows;

• One delegation announced that its country would be proposing a global lottery;

• A number of recipient countries recom-mended that donors delegate full responsibility for the management of their external assistance programmes to their offices in recipient countries;

• It was also proposed that donors pool their resources into a single fund at the country level;

• There was a suggestion that the interna-tional financial institutions report on donor countries’ performance in terms of volume and quality of aid given, as well as on otherdevelopment-related policies towards devel-oping countries, such as trade;

• Two private-sector enterprises made pro-posals concerning learning frameworks andlearning networks to build capacity for entrepreneurship and organizational skills in developing countries;

• It was suggested that the United Nations is in an advantageous position to raise public awareness of the need for additional aid flows.

285




Mr. Mugur IsarescuGovernor of the National Bank of Romania

Mr. K.Y. AmoakoExecutive Secretary of the Economic Commissionfor Africa

1. The draft Monterrey Consensus was wel-comed as a historical instrument and a turning point inthe global partnership for development.

2. Participants emphasized that partnership isa critical element for poverty eradication and theachievement of the Millennium Development Goals.Several dimensions of partnerships are considered keyto people-centred sustainable development. At thenational level, partnerships should be based on sharedresponsibilities and complementarity of efforts androles of the State, the private sector and civil society.At the global level, developed and developing coun-tries should pursue development as a joined responsi-bility. Partnerships among countries, developmentorganizations, civil society and business are consideredto be essential for achieving greater coherence andaccelerating development. Delegates also stronglyencouraged public/private partnerships as effectiveways to create a favourable climate for socially respon-sible investment. A number of speakers stressed theimportant role of the private sector in wealth creation,and called for stronger partnerships between transna-tional corporations and national entrepreneurs to pro-mote investment and growth.

3. There was strong support for the domesticand international reforms advocated in the draftMonterrey Consensus, including, at the domestic level,solid democratic institutions, respect for human rights,gender equality, good governance, sound macroeco-nomic policies and an enabling environment for pri-vate investment (both domestic and foreign). At theinternational level, effective progress on trade liberal-ization along the lines of the Doha Ministerial

Declaration, especially enhanced market access fordeveloping countries, substantially increased quantityand quality of official development assistance (ODA),external debt relief, efforts to stabilize internationalfinancial markets and enhanced capacity-building indeveloping countries, were seen as crucial.

4. With regard to ODA, the recent initiativesannounced by some developed countries to increasetheir development assistance were welcomed as prom-ising steps in the right direction. At the same time,several participants emphasized the need to increasethe effectiveness of ODA through such measures asthe untying of aid, improved coordination of donorefforts, increased country ownership and enhancedabsorptive capacity of the recipient countries.

5. Rapid and effective implementation of thedraft Monterrey Consensus was the focus of manyinterventions. Building partnerships should be part ofthe process of staying engaged as a long-term commit-ment.

6. The special needs of Africa, the least devel-oped countries and the small island developing Stateswere emphasized. Investment in those countries needsto be encouraged, including through the catalyzingeffect of ODA flows. The importance of the NewPartnership for Africa’s Development was stressed asa key partnership that should be supported by theinternational community.

Proposals additional to those contained in the draft Monterrey Consensus

7. Alongside the support for the draftMonterrey Consensus in general terms, the followingconcrete proposals were put forward:

• Creation of a forum for business entities from North and South under the auspices of the World Bank and the regional development banks;

• Doubling ODA as a first step towards meeting the 0.7 per cent target to achieve the Millennium Development Goals;

• Capacity-building reforms, with a special focus on post-conflict countries;

• Creation of an international task force focusing on global public goods;

• Creation of a permanent consultative forum among developing and developed countries on financial and debt issues;

• Ensuring greater participation of developing countries in decision-making on international economic and financial issues;


286

• Reducing expenditure on defence and increasing public spending on social sectors, in particular for human resource development;

• Enhanced International Monetary Fund and World Bank support for regional and subregional reserve funds and develop-ment banks;

• Additional efforts to move towards sustain-able debt levels of developing countries;

• Strengthening the resources of the interna-tional financial institutions and the United Nations system and increasing coordinationand coherence of actions among them;

• Further consideration of private sector proposals made at the Conference;

• A reassessment of conditionalities;• Addressing the issue of subsidies,

particularly in agriculture;• New and innovative sources of financing,

including a currency transaction tax and tax incentives for private flows;

• Gender mainstreaming at all levels and in all policies;

• Establishment of an entity to issue guarantees for capital markets risk cover-age in sub-Saharan Africa;

• Establishment of a global forum on taxa-tion;

• Development of mechanisms for debt arbitration among creditor and debtor countries.

Ministerial Round Table B.1Coherence for DevelopmentWednesday, 20 March 2002


His Excellency Mr. Jan KavanDeputy Prime Minister and Minister of Foreign Affairs of the Czech Republic

Mr. Rubens RicuperoSecretary-General of the United NationsConference on Trade and Development

1. The round table began with the recognitionthat the International Conference on Financing forDevelopment needs to successfully address the matterof coherence. Policy-making in both individualGovernments and intergovernmental settings hasbecome specialized into more or less related entitiesthat cooperate imperfectly. In many cases, the difficul-ty is not lack of information but unresolved differencesin policy preferences that lead Governments or inter-national organizations into inconsistent actions. Ourdiscussion focused on coherence difficulties both innational Governments and internationally. Certain par-ticipants in our round table also announced a signifi-cant initiative.

Domestic Coherence

2. Participants noted that the search forcoherence is not a new phenomenon and that addi-tional efforts are required. However, in approachingthe issue, all dimensions of development and all stake-holders and partners should be considered in a com-prehensive and holistic approach, in which all playersshould reinforce each other. For instance, lack ofcohesion in the international sphere can undermineefforts to enhance cohesion at the domestic level.

3. Some participants considered that despiteits importance, enhancing coherence should not bepursued at the expense of addressing specific prob-lems. Sometimes painful policy reforms are necessaryand they should not be dismissed under the false pre-tence that they undermine consistency. On the otherhand, it was widely recognized that developing coun-tries are overburdened by a vast array of donor andcreditor requirements. Seeking to implement themdrains scarce resources and they thus need to be sim-plified.

287


4. Considerable attention was devoted to theneed to promote and enhance cohesion at the nation-al level, both in developed and developing countries.Some speakers noted that achieving that goal wouldbe a major challenge. The process involves numerousactors who may have conflicting interests and objec-tives – the national, regional and local levels of gov-ernment and public institutions, the private sector andcivil society.

5. Participants considered that a clear visionor development strategy, formulated at the countrylevel, that brings all stakeholders together in a spirit oftrue partnership and cooperation, could have animportant bearing on improving coherence. In addi-tion, it was stressed that such a vision should be basedon respect for and support of human rights, promo-tion of gender equality and protection of the environ-ment. The global compact launched by the Secretary-General of the United Nations and the increased atten-tion by large institutional investors, such as pensionfunds to good corporate citizenship by the firms inwhich they invest, were cited as examples of relevantactions by different stakeholders.

6. Some speakers highlighted the importanceof public sector reform as a means to improve coher-ence at the national level. As the role of governmenthas evolved in a number of countries, the State hasbecome less a direct producer and more an enabler ofeconomic activity. This requires that government havea strong institutional, supervisory and regulatorycapacity, for example for the development of an effec-tive financial sector, which is central to successfuldomestic resource mobilization. Adequate financial andtechnical support from the international community isalso considered necessary to enable such reforms.

7. Some speakers noted that although foreigndirect investment (FDI) is important for development,simply attracting FDI does not automatically implyfaster growth. There is a need for complementarydomestic policies to link the operations of foreignfirms to the domestic economy and thereby increaseits benefits for the country concerned.

8. One means of reducing inconsistencies isto increase the transparency of business and govern-ment practices and share information fully.Accordingly, representatives of the business sector putforward a series of proposals, including the establish-ment of a global information clearing house, the pro-motion of investment guidelines in least developedcountries, enhancing developing countries’ access to

equity and debt financing, new mechanisms for infra-structure financing, and strengthening small and medi-um-sized enterprises in developing countries.7

International coherence

9. Participants stressed the importance of bet-ter coherence between national development effortsand international cooperation. It was argued that themajor industrial countries should pay more attention tothe consequences of their macroeconomic policies forthe rest of the world. It was also observed that com-bating corruption requires cooperation between devel-oping and developed countries, especially if developingcountries are to recover illicitly removed funds.

10. A large majority of speakers expressedconcern about incoherence between trade and devel-opment policies. It was emphasized that structuralreforms in developing countries, including foreigntrade liberalization, have not been accompanied byadequate measures in industrial countries to open uptheir economies. Moreover, developed countries stillheavily subsidize the export of many products, anddeveloping countries that are efficient producers ofthose products have had to compete in third countriesagainst those subsidized exports. Hence, the efforts ofmany developing countries to modernize theireconomies are held back by the lost opportunity toearn sufficient financial resources from exports. Inaddition, many developing countries do not have thecapacity to adequately participate in negotiations tofurther liberalize trade in a balanced way, as in thecase of agriculture in the World Trade Organization(WTO). It is recognized that technical cooperation toassist those countries in trade negotiations should be apriority.

11. Problems of cohesion in official develop-ment assistance (ODA) were also highlighted. The par-ticipants argued that although in the 1990s the devel-oped countries experienced strong growth, in thatperiod the volume of ODA declined, which, accordingto one speaker, represented a fundamental incoher-ence. It was also stressed that unlike the time-boundcommitments contained in the adjustment pro-grammes that developing countries arrange with multi-lateral creditors, most donors have not set a timetablefor increasing ODA. Moreover, it was stressed thatdonors should streamline and harmonize proceduresand not lightly or frequently change priorities of assis-tance, which sends conflicting and confusing messagesto the recipients.

7 See paper ent i t led “Strengthening f inanc ing for develop-ment : Proposa ls f rom the pr ivate sector” , compi led by the United Nat ions-sanct ioned bus iness inter locutors to theInternat ional Conference on F inanc ing for Development,March 2002.


288

12. The participants tried to find ways to betterlink national and international development efforts. Itwas agreed that that could be achieved if respectivegoals were clear and shared. Developing countriesshould be assisted to build the capacity to determinetheir own viable development programmes, whichshould be supported by the international community.Poverty reduction strategy papers are considered to bea move in the right direction.

13. The need to improve coherence among theinternational agencies was also emphasized as one ofthe most critical issues. It was stressed that membercountries often speak in different voices in differentorganizations and that those organizations can speakin different voices to individual countries. In addition,the economic programmes for developing countries donot always take due account of domestic conditions. Astandardized approach should be avoided.

14. There should also be more coherenceamong donors at the operational level, for example tosimplify procedures and cut costs of implementation.Furthermore, policies of international developmentinstitutions have not always produced expected out-comes. For instance, the retreat of public financingfrom infrastructure projects has led to substantialreductions in that important component of investment.It was argued that the regional development banksshould increase their activities in that sphere and thatconsideration should be given to strengthening region-al financial cooperation for development.

15. At the same time, speakers stressed thatthere have been positive developments in the closercooperation of international organizations, includingBretton Woods institutions, WTO and the UnitedNations and its agencies and programmes. It was sug-gested that the United Nations play a central role inmonitoring, assessing and coordinating internationaldevelopment cooperation, and that the relationshipbetween WTO and the United Nations be put on thesame basis as that between the United Nations andthe Bretton Woods institutions.

A specific proposal

16. China and the United States of Americaannounced a notable initiative during the round tableas a follow-up to the Conference. They intend to bringtogether Governments and enterprises in Shanghai,China, in November 2002 in order to help better realize the potential contribution of foreign directinvestment to economic growth and development.



His Excellency Mr. Trevor ManuelMinister of Finance, South Africa

Her Excellency Ms. Eveline HerfkensMinister for Development Cooperation,Netherlands

1. The round table had a highly interactiveand lively discussion on enhancing coherence fordevelopment. Many dimensions of coherence wereaddressed, both national and international, in particu-lar coherence among international institutions andamong international institutions and developing coun-tries.


2. A key thrust of the debate was that theMillennium Development Goals, the draft MonterreyConsensus and the sustainable development agendahave provided major impetus to achieving greatercoherence in the development policies and actions ofall partners. There is now broad consensus that morecoherence is needed. But that has to be translated intoconcrete implementation and actions.

3. Ministers and stakeholders noted that thecurrent approach adopted by many countries of givinguncoordinated directives from individual ministries tothe various international institutions creates problemsfor good global governance. Coherence must start athome. Otherwise, such lack of coherence is exportedto the international systems and hinders the efforts toguide globalization so that it supports the MillenniumDevelopment Goals. In the end however, coherencemust be established worldwide.

4. A major challenge today is how to intro-duce a pro-poor focus in trade policies and the inter-national trading system and ensure that they bettersupport development goals. The agricultural and ener-gy policies of developed countries must be submittedto the same scrutiny on policy coherence. The mostrestrictive trade barriers are a burden on the productsof the poor. In particular, agricultural subsidies couldbe better spent on investing in MillenniumDevelopment Goals.

289


5. Coherence in cooperation policies shouldaccompany country ownership of national povertyreduction strategies. Some progress has been made,but we need increased efforts in that area. Often, lackof coherence in national policies reflects the insuffi-cient administrative capacity of a country to make poli-cies in today’s complex conditions. Once nationalpoverty-focused strategies are formulated, with ade-quate participation by all stakeholders, donors shouldbe more flexible and finance strategies with a pre-dictable, multi-year commitment, preferably in com-mon pool mechanisms.

6. Countries’ poverty reduction strategies –notably the poverty reduction strategy papers (PRSPs)– are excellent tools for countries to foster policycoherence and make education, health and defencebudgets add up to one integrated budget with a pover-ty focus. Coherence between macroeconomic policiesand microeconomic policies is crucial for sustainabledevelopment. Yet a proper analysis of what pro-poorpolicy contains is country specific. Countries otherthan the highly indebted poor countries should alsoconsider formulating PRSPs in order to reduce povertyin a comprehensive manner.

7. At the national level, transparency andcommunication, as well as consultation with all part-ners at local and other levels, are critical to improvedcoherence. Thus, transparent and sound governanceat the national level goes a long way towards ensuringpolicy coherence.

Main issues

8. The lack of policy coherence at the nation-al level in developing countries reflects both a lack ofcapacity and, in many cases, incoherence amongdonors. Increased coherence in developing countriesrequires a major cooperation effort for capacity-build-ing. A coherent approach by developed countries tosupport development requires removing obstacles tothe exports of developing countries and providingmarket access, particularly in the areas of agriculture,manufacturing and services. Often, inconsistency aris-es from conditionalities imposed by donor countriesand institutions. One country reported that it had tocomply with some 160 conditions for obtaining sup-port to its poverty reduction strategy. It was consid-ered important for donors to show flexibility and helpcountries to respond to new situations or needs of anurgent nature. Double standards should be avoided,and all countries should impose on their own actionsthe same scrutiny and goals that they impose on oth-ers.

9. When international financial volatility origi-nates in developed countries, the demand for liberal-ization of the capital account worsens rather thanimproves financial conditions and stability in develop-ing countries. It was stressed that the InternationalMonetary Fund (IMF) does not currently call for indis-criminate liberalization of the capital account in devel-oping countries but rather for the appropriatesequencing of strengthening of the financial sector andcapital account liberalization.

10. Coherence between macroeconomic andmicroeconomic policies in developing countries is cru-cial for achieving development. That includes support-ing poverty reduction priorities with budget levels thataccommodate pro-poor spending and establishingcoherence between social and economic developmentpolicies and between public investment and privateinvestment policies. Linkage between trade and devel-opment policies must also be made in developmentstrategies, and the link between trade and povertyneeds to be assessed.

11. Coherence must be ensured between busi-ness actions and national plans. New initiatives, suchas the New Partnership for Africa’s Development,could be a driving force for mobilizing the contributionof the private sector to development.

12. Gender blindness is an obvious example oflack of coherence. Trade liberalization may have nega-tive consequences for women. Improved participationof women in economic policy-making must beensured. Girls’ education is one of the most effectivemeans to reduce poverty.

13. Reference was also made to the issue ofincoherence in the policy advice provided by IMF, i.e.,its Article One on full employment.

14. There is a need to formulate a single set ofissues for the Bretton Woods institutions, the WorldTrade Organization (WTO) and the United Nations.WTO members should invite their representatives tosubscribe to the Millennium Development Goals as acharter since the Marrakech Agreement EstablishingWTO describes trade as a means to development.

15. The multilateral organizations and bilateraldonors still have fragmented priorities and strategiesthat undermine coherence. Ad hoc contributions tosubprogrammes of the specialized agencies createeven more fragmentation rather than a coherentUnited Nations strategy.


290

16. In the United Nations, ongoing reformefforts aim to reduce the fragmentation of its opera-tions and improve coherence in its day-to-day work,but more remains to be done. The United Nationsneeds help from donor countries in that respectthrough an increase in their core contributions. Oneparticipant suggested that at the next GeneralAssembly, a request be made that the Secretary-General explore the idea of establishing an economicand social security council, with comparable functionsto those of the Security Council. At the same time,there is a need to ensure that the Economic andSocial Council is focused on the key issues of develop-ment.

17. Coherence at the multilateral level requiresthe full participation of developing countries. In WTO,there has been progressive transparency in its opera-tions, and there is now a requirement that all membersparticipate better in decision-making. The more mem-bers understand trade issues and how they impacttheir development, the better their participation andcoherence of decisions. The draft MonterreyConsensus and the International Conference onFinancing for Development are definite steps forwardin the participation of all stakeholders and in improv-ing coherence.

Looking ahead

18. The following issues were revised:

• What do we focus on now in terms of howwe want international institutions to be? Who shouldbe doing the thinking now since the existing institu-tions are not the places that should be doing it? Whowill provide the political leadership for listening to newideas and changing institutions?

• Is there a true sense of multilateralism?Can large countries choose to opt out or are there thesame rules and standards for all countries?

• The issues discussed need a lot of creativethinking. The focus on the Millennium DevelopmentGoals and the road map for their implementation canprovide us with strong guidance for coherence.Upcoming events – the World Summit on SustainableDevelopment to be held in Johannesburg, theDevelopment Committee meeting to be held at theWorld Bank-IMF meetings and the Economic andSocial Council-Bretton Woods institutions high-level

dialogue – will provide opportunities for bringing thoseissues forward after some further thinking and continu-ing the momentum that was generated at this roundtable. Accordingly, we will submit the main findings ofthe round table to the high-level dialogue.

Recommendations

19. The following recommendations weremade:

• There is a need to establish, at the devel-oping country level, one coordination (or central con-tact) point for economic cooperation to give a senseof direction and ensure coherence between donorsand domestic policy. Periodic briefing of donors anddiscussion with domestic stakeholders should be partof such a mechanism;

• There is a need to develop a single matrixfor development, including national authorities, officialdevelopment assistance, technical assistance and for-eign direct investment, partly to avoid donors operat-ing in the jurisdictions of ministries, and to reconcilenational and international agendas;

• When countries come up with crediblePRSPs, based on broad consultation with stakeholders,donors should be ready to provide more flexiblefinancing;

• In developed countries, to confront theconflicts between national issues (interests) and therequirements to assist development (global issue) it isnecessary to give a new public dimension to the globalfight against poverty;

• The Organization for EconomicCooperation and Development ministerial meetingheld in June 2000 subscribed to policy coherence,which should now be followed up by an implementa-tion plan;

• The European Union, already committedto enhance coherence in Maastricht in 1992, shouldpursue that commitment more vigorously;

• It is crucial to review progress in nationaland international efforts in order to achieve theMillennium Development Goals and reduce inequity;

• The Bretton Woods institutions and WTOmust help to build partnerships for enhancing coun-tries capacities in the area of sustainable development;

• WTO should ensure that its work moreclearly supports the pursuit of the MillenniumDevelopment Goals and poverty eradication;

291


• The Philadelphia coordinating mechanism,which brings together Bretton Woods institutions exec-utive directors and delegates to the United Nations,should be expanded to Geneva-based institutions andcould be broadened to include other developed coun-tries;

• The Economic and Social Council mustfocus on key topical issues of the day. It has an impor-tant role to play in the follow-up to the MonterreyConference and in helping to keep the focus oncoherence and coordination in pursuit of theMillennium Development Goals.



His Excellency Mr. Ram Sharan MahatMinister of Finance, Nepal

Mr. Enrique IglesiasPresident of the Inter-American Development Bank

1. Various dimensions of coherence wereaddressed – national, regional and international –among international institutions, among internationalinstitutions and developing countries, and amongobjectives and instruments. Coherence among the eco-nomic, human, gender, social and environmentaldimensions is seen as essential. Striking the balanceamong those different agendas will be a key challengefor the World Summit on Sustainable Development. Inthat sense, the success of the International Conferenceon Financing for Development and the Summit areclosely related.

2. The Millennium Development Goals pro-vide a broad framework for coherence not only amongpolicies and programmes of countries but also amongmultilateral institutions. The commitment to the sub-stance and the spirit of the draft Monterrey Consensusand its follow-up should give new impetus to the mobi-lization of resources for their effective implementation.

Since broad consensus has emerged on the need forcoherence, attention should now focus on practicaland effective measures for its promotion. In the end,coherence will be measured by its ability to reduce thenumber of people living in poverty.

3. Several speakers stressed that coherencemust start at home, especially among different min-istries and other stakeholders, if directives to interna-tional institutions are to be equally coherent. No singleactor or policy can succeed on its own but only in aneffective combination of efforts. In that regard, bettergovernance and coordination are essential to improvecoherence within and among countries and institutionsin the delivery and effective use of development assis-tance. The role of nationally owned policies as aframework for coherence, including in relation topoverty reduction strategy papers, was also empha-sized. The need for coherence between national poli-cies and multilaterally agreed commitments was furtherstressed. Cooperation among countries on issues thatneed to be addressed at the regional level can alsoenhance coherence of policies and actions.

4. At the global level, increased participationof developing countries in international decision-mak-ing was seen as critical for coherence. Moreover, aneffective strategy for development should seek toreduce existing asymmetries in access to capital andtechnology as well as between mobility of capital andrestrictions to labour movements. The vulnerability ofdeveloping countries to external shocks and the fre-quency and more pronounced nature of economiccycles in those countries should also be addressedthrough a more coherent response that encompassesmacroeconomic, financial, trade and social measures.Similarly, increased official development assistance(ODA) for low-income countries should not come atthe expense of flows directed to middle-income coun-tries, otherwise poverty levels in the latter wouldinevitably rise. External debt burdens should be sus-tainable and consistent with poverty reduction goals.

5. Speakers pointed out the importance ofstrengthening coherence between the United Nations,the Bretton Woods institutions and the World TradeOrganization, as well as regional financial institutions.Development should be placed at the centre of theglobal political agenda. The dialogue on developmentamong all stakeholders, including decision makers, inthe political, development, finance and trade areasspurred by the Monterrey process was welcomed, andthe importance of continuing it as a major new trendwas stressed.


292

6. It was considered that coherence in theinternational trading system requires the removal ofobstacles to developing countries’ exports, especiallyin agriculture and textiles. The Doha MinisterialDeclaration and upcoming trade negotiations wereseen as an opportunity to make the international trad-ing system more responsive to the development needsof developing countries and more sensitive to thesocial and environmental dimensions.

7. The need for greater investment to preventthe conflict situation that has affected many develop-ing countries was also stressed. The conflict situationhas deepened and expanded poverty, enriching onlythose who benefit from the arms trade.

8. A better understanding of the relationshipand exploitation of the synergies between theMillennium Development Goals and other relevantpolicies will require further analytical work.

Proposals and recommendations

9. The following proposals and recommenda-tions were made:

• Establish a “global compact for coherence”of commitments by developed and developing countries;

• Address consistency in donor countriesbetween national interests and constraints, on the one hand, and development assistance goals on the other;

• Harmonize policies, actions and proce-dures of various institutions to align them with theMillennium Development Goals and their implementa-tion, as well as for monitoring and assessing results;

• As the most inclusive and participatoryforum, the United Nations should remain at the centre of discussion on the promotion of coherenceamong development cooperation, macroeconomic and social policies;

• Fully utilize the potential of the Economicand Social Council to promote meaningful dialogue for policy coherence;

• Further strengthen the United NationsDevelopment Assistance Framework and UnitedNations Development Group mechanisms;

• Establish a clearing house at the nationallevel to share information, enhance coordinationamong different ministries and other actors and build on the outcomes of various United Nations conferences;

• Ensure that development cooperation poli-cies do not directly or indirectly support arms purchas-es that lead to conflicts. Exploitation of conflicts forfinancial gains should be prevented through the devel-opment of global ethics;

• Promote the democratization of globalgovernance;

• Ensure balance between macroeconomicreform programmes and the social agenda;

• ODA should be supportive of recipientcountries’ national strategies and should be united.

Ministerial Round Table B.4Coherencefor DevelopmentWednesday, 20 March 2002


His Excellency Mr. Owen ArthurPrime Minister and Minister for Finance and Economic Affairs, Barbados

Mr. Jean LemierrePresident of the European Bank for Reconstructionand Development

1. The round table produced a rich debate onmany aspects and dimensions of coherence and its rel-evance to development. There was a widespread viewthat the draft Monterrey Consensus provides a soundframework for a coherent approach to developmentand the achievement of the Millennium DevelopmentGoals.

General aspects

2. Participants welcomed the impetus provid-ed by the draft Monterrey Consensus and emphasizedthat more coherent policies and efforts are needed atall levels. Coherence requires a long-term approachand must be built on a set of sound domestic policies,democracy, the rule of law, the enforceability of con-tracts and anti-corruption measures. A supportiveinternational environment is seen as crucial. Multipleconditionalities, protectionism, domestic subsidies andinadequate coordination in the development policies ofinternational institutions are hindering efforts to createa global economic system that supports the achieve-ment of the internationally agreed development goals.

293


3. Ministers and other stakeholders stressedthat coherence implies partnership at all levels. Thecoordination of efforts to rapidly implement the goalsset out in the draft Monterrey Consensus is the duty ofeach and every party. There is a need for clarity in theresponsibilities of all stakeholders to coordinate effortsand to improve broad-based policy dialogue.Transparency and accountability must be the underly-ing principles in that endeavour.

4. Coherence must be people-centred andaim at a higher quality of sustainable livelihoods. It wasstressed that true coherence relies on the citizen, whomust be integrated through an appropriate institutionalframework. Everyone must be able to participate inorder to support a well-functioning political process.Coherence is a coming together of all parties and inall sectors – in an early and broad manner.

5. Coherence and diversity work together.Participants stressed that development strategies mustrecognize different policy environments. Pluralism andheterodox approaches should be encouraged, but allforces must be brought together, which requires anenvironment that is conducive to better and moretransparent coordination of efforts.

6. Resources are an important aspect ofcoherence. The recent European Union and UnitedStates initiatives to increase spending on official devel-opment assistance (ODA) are welcome as first promis-ing steps in the right direction. The effectiveness ofaid has increased in the past few years, but moreremains to be done to enhance the absorptive capacityof developing countries, including throughprivate/public partnerships. Every country is responsi-ble for its own development, and it is crucial for devel-opment strategies to be owned by individual develop-ing countries. However, development requires muchmore than aid. Coherence implies joint efforts toaddress domestic resource mobilization, trade issues,debt problems and the reform of the internationalfinancial architecture.


7. Many participants stressed the need toaddress the inconsistencies in the overall approach todevelopment. A coherent approach would imply theuse of a variety of instruments and policies that do notconflict with each other. A fundamental problem inthat respect lies in the incoherence between the devel-opment assistance and trade policies of developedcountries. Protectionism, especially in the agriculturaland agro-industrial sectors, creates distortions in inter-national trade, and by penalizing competitive produc-ers in developing countries that have comparative

advantages in those sectors represents an obstacle togrowth. The agreements reached at Doha, if fullyimplemented, represented an opportunity to advancetowards a more development-oriented series of tradenegotiations. However, as one minister noted, capacityconstraints could be an obstacle preventing manydeveloping countries from reaping the benefits thatmore accessible markets make possible through opti-mizing the scale of production.

8. The combination of liberalized and increas-ingly volatile capital flows, particularly short-termflows, with an international financial system that isdesigned for a world with capital controls and far lessintegrated financial markets, is another source of inco-herence that needs to be addressed. One reflection ofthat problem is the repeated occurrence of interna-tional financial crises, which are often preceded bylarge capital inflows and revel underlying vulnerabilitiesand shortcomings at both the national and internation-al levels. Coherence in the financial sense requiresmeasures in developing and developed countries, aswell as at the international level. Such measuresshould include international financial regulations forinstitutional investors, highly leveraged financial institu-tions and off-shore financial centres.

9. Several ministers referred to the crisis inArgentina as a dramatic example of the urgent needto address incoherence at the international level.Some ministers expressed their solidarity with theArgentine people and its Government, and empha-sized the need to support the Government in its pur-suance of economic reforms amid extremely difficultcircumstances.

10. Conditionality attached to development aidcould be a source of incoherence and needs to beaddressed, according to several participants. In manycases, multiple and conflicting conditionalities canimpose a heavy burden on recipient countries, andtheir absorptive capacity needs to be taken intoaccount in that respect. Improved coordination amongdonors is essential. It was also stressed that condition-ality needs to be applied in such a way that the peopleof developing countries are not penalized for the fail-ure of their leaders to meet basic performance criteriafor aid. It was also felt that effective developmentassistance requires donors and recipients to share thesame goals, as well as a full commitment byGovernments of recipient countries to those goals,particularly to poverty eradication. Ministers alsoaddressed the need to avoid confusion between thegoals of ODA and those of private economic activity,for example by avoiding the use of ODA to subsidizeprivate business and to mitigate its inherent risk.


294

11. Ministers had a broad discussion on thecoherence of policies at different levels and with differ-ent approaches. One key issue was the coherence andcoordination of the macroeconomic policies of themain advanced countries, which was seen as an essen-tial ingredient of global macroeconomic stability andsustained, effective development policies, which wouldbenefit all, particularly the developing countries. It wasalso viewed as a key aspect of the establishment of anenabling international environment, without which thedevelopment efforts of developing countries cannotsucceed.

12. Another aspect of policy coherence con-cerns development policies in the developing coun-tries, particularly between macroeconomic and sectoralpolicies. For example, the subsidization of certain sec-tors can exacerbate fiscal burdens and lead to distor-tions in economic activity. One key aspect of policycoherence raised by one minister was the importanceof public awareness of and support for economic poli-cy and reform options. Even if policies are technicallysound, they cannot succeed without the support of thepeople.

Proposals

13. The following proposals were made:

• An international taxation organizationshould be created to tackle issues of international coor-dination of tax policies, with a possible extension toissues concerning foreign direct investment (FDI);

• A committee should be established to har-monize the evaluation of procedures by the interna-tional financial institutions;

• The United Nations should study the posi-tive and negative aspects of FDI and how to maximizeits benefits for developing countries while limiting itsnegative impacts;

• Enhancing the civil service’s effectivenessshould become one of the priorities of official develop-ment assistance, inter alia, because it is needed for thedevelopment of the private sector;

• An index of sustainability of enterprises ofdeveloping countries, along the lines of the one that isalready in place for developed countries, should bedeveloped. That initiative would help to improve thetriple social-environmental-economic bottom line at thenational level;

• The international high-level economic dia-logue now carried out under the Group of Eight MajorIndustrialized Countries grouping should be opened to include other groupings and the widening of theagenda.

Summit Round Table C.1Looking AheadThursday, 21 March 2002


His Excellency Mr. Guy VerhofstadtPrime Minister of Belgium

His Excellency Mr. José María Aznar LópezPresident of the Government of Spain

Mr. James WolfensohnPresident of the World Bank

1. Our perception is that in building up to the International Conference on Financing for Devel-opment, the international community has created thepolitical space for unprecedented dialogue among allrelevant stakeholders on financing for development.Certainly, the dialogue has not yet solved the key con-cerns of policy makers or policy advocates. However,we have seen actions on some issues that go beyondwhat only recently were called “the narrow limits ofthe possible”. The Monterrey Conference has been aprocess of convergence, albeit far from complete.

2. Today, multiple stakeholders have managedto hold a rich discussion of their respective priorities,prescriptions and concerns. Heads of State and othersenior policy makers, along with stakeholders fromintergovernmental organizations, the private sectorand civil society organizations, have been able to focuson priorities for advancing private and official financ-ing for development and on conditions for effectively“staying engaged”.

Private resources and investment

3. For private investment to play its role indevelopment, an enabling environment is essential.Well-established property rights are seen as indispen-sable for productive private investment and fully mobi-lizing domestic resources. However, the practical insti-tution of effective property rights for all people, espe-cially the poor, could be a long and complex process.

4. Some speakers noted that investmentincentives need to be carefully designed. They mayreduce risk for certain undertakings but should notcompletely insulate private investors from risk. It wassuggested that sovereign guarantees of foreign invest-ment be the exception and not the rule. Otherwise,

295


they could lead to irresponsible investor behaviour andbudgetary losses. Increasing information flows toinvestors, such as through an Internet-based clearinghouse, is a promising avenue of support of privateinvestment.

5. Several speakers considered that neitherprivate nor official investors will undertake some typesof essential investments, such as large infrastructureprojects, on their own. They suggested that officialdevelopment assistance (ODA) continue to financeinfrastructure investments, including co-financing withprivate investment, such as for water supply projectsfor the benefit of the poor. Important benefits are seenin the participation of users in the operation andmaintenance of infrastructure facilities after they arebuilt. It was also stressed that collaboration betweenthe public and private sectors should be performance-oriented and accompanied by mutual accountabilityand transparency.

6. It was further stressed that other types ofalliances between the public and private sectors couldwork successfully. Examples were given of successfullyapplying advanced information technology to assistdeveloping countries in increasing education in LatinAmerica. Public-private alliances are also helping poorcommunities to improve health care.

7. Participants noted a growing tendency ofmultinational corporations to make their operations inemerging markets more transparent and sociallyresponsible, reflecting the changing demands of insti-tutional shareholders, such as pension funds, as well asawareness by many corporations themselves of theneed to change the ways they do business. In addition,government policies in developed countries towardsthe foreign behaviour of their multinational enterpriseshave been changing, albeit with a lag, and somespeakers sought further progress in that area.

Public resources and investment

8. Several speakers noted that the commit-ment to the Millennium Development Goals haveimposed fundamental responsibilities on Governments.Investing in people – including in education, health,basic social infrastructure and social security pro-grammes – is vital for overcoming poverty. It is also avery productive investment for economic growth.However, sustained government stewardship overthose investments is required for efforts in those areasto be effective.

9. Several participants pointed out that thecurrent substantial gap between external financing lev-els and needs puts at risk the success of the NewPartnership for Africa’s Development. A number ofspeakers stressed that adequate international attentionis also required to combat poverty in the developingcountries of Asia, Latin America and the Pacific.

10. ODA is recognized as an essential comple-ment to domestic resources in the effort to reach theMillennium Development Goals. ODA, when properlyand effectively used and guided primarily by the needsof developing countries, can have a major impact, asillustrated by some speakers, who gave examples ofcountries moving from recipient to donor status. Boththe quantity and quality of ODA are critical. TheMonterrey Conference has clearly focused on both,and has already produced some concrete results.Recent donor initiatives to significantly increase ODAlevels, while steps in the right direction, are felt to beinsufficient and calls were made for additional support.Several speakers also stressed the need to enhanceODA effectiveness through the efforts of donors andrecipients and such measures as untying of aid,improved donor coordination and increased countryownership. Several speakers emphasized that capacity-building is essential for long-term sustainability. Someof the expenditure on armaments could be usefully uti-lized for development purposes.

11. Debt relief is also seen as holding thepotential to release essential resources for povertyeradication and sustainable human development. Theenhanced initiative for the heavily indebted poor coun-tries has provided some progress, but there were alsocalls for further efforts to relieve developing countriesof their unsustainable debt burden, including streamlin-ing debt-relief mechanisms and strengthening the rela-tionship between debt relief and development pro-grammes. The United Nations and the Bretton Woodsinstitutions were called upon to explore newapproaches, such as collective debt cancellation bygroups of countries and revised criteria for debt sus-tainability. There is also interest in developing the pro-posals for a new sovereign debt restructuring mecha-nism.

12. It was also suggested that innovativesources of financing, such as environmental taxes andtaxes on currency transactions, be seriously consid-ered, particularly in support of global public goods. Inaddition, it was suggested that the 1997 InternationalMonetary Fund agreement for a special equity alloca-tion of special drawing rights be implemented now.Moreover, significant efforts should be made to track


296

down illicitly transferred public funds and repatriatethem, within the context of a coordinated effort tocombat corruption, including through an internationalconvention on corruption.

Staying engaged

13. Many speakers wanted to capitalize on thepositive spirit of the Monterrey Conference. Key con-cepts in the new dynamic between North and Southare partnership, solidarity and good governance.Democracy, the rule of law, accountability, transparen-cy and the fight against corruption are consideredessential prerequisites for financing for development.

14. Ways were suggested to nurture and main-tain the spirit of the Monterrey Conference for aneffective follow-up to the Conference. A commoninterest in that regard is to turn the concept of mutualaccountability into concrete practice at the internation-al as well as at the national level.

15. According to several speakers, a first stepat the international level is to institute frank and timelymonitoring of the implementation of commitmentsand further requirements of the key partners in devel-opment, including developing countries, donorGovernments and multilateral institutions, along withother stakeholders. Such monitoring, it was suggested,should be comprehensive and take a coherentapproach to the financing of development. The moni-toring of the Millennium Development Goals couldalso make an important contribution in that regard.

16. The efforts of the United Nations to drawall relevant stakeholders together during the preparato-ry process to the Monterrey Conference has shownthe potential results of close collaboration that shouldbe enhanced in the follow-up to the Conference. Itwas also suggested that the democratization of globalgovernance could be strengthened by making greateruse of regional groupings of countries as intermediateforums to develop proposals and build consensusamong Governments on the great challenges oftomorrow.

17. There is a distinct sense that the worldmust make the effort now, not later, to make the com-mitments made at Monterrey real in order to strength-en development and finally begin to conquer globalpoverty. The terrorist attacks of 11 September 2001have had a profound impact on the world. There is noplace to hide. There is no time to lose. We need toinstil a sense of urgency in the public on the issue ofpoverty reduction. In conclusion, it was noted thatalthough all of the stakeholders may not agree oneverything there is a strong sense that the overridingobjective of poverty reduction is shared by all.



His Excellency Mr. Thabo MbekiPresident of South Africa

Mr. Horst KöhlerManaging Director of the International Monetary Fund

1. There was broad agreement among speak-ers that the draft Monterrey Consensus marks animportant and substantial step towards achieving theMillennium Development Goals. Looking ahead, thechallenge is to maintain the momentum and translatethose goals and the draft Monterrey Consensus intoconcrete actions to provide the resources that will pro-duce meaningful results for the world’s poor. Even ifthe resources were to become available, the requiredresults would not necessarily be forthcoming. All stake-holders must assume their share of the responsibilityfor translating principles and commitment into action,and should do so without delay. It is necessary to solid-ify progress in the months ahead so that further con-crete implementation measures can be agreed upon atthe World Summit for Sustainable Development, to beheld in Johannesburg in August 2002.

2. One of the underlying principles behind thevision of the draft Monterrey Consensus is that ofshared responsibilities and mutual commitment. Thedeveloping countries are committing themselves totaking full responsibility for their own development byundertaking structural reforms, with sound policies,good governance, gender mainstreaming, respect forhuman rights and the protection of the environmentas indispensable underpinnings. The internationalcommunity is committing itself to supporting develop-ing countries’ efforts through enhanced resource flowsand a more development-friendly international envi-ronment. Such a “two-pillar” approach also underpinsthe New Partnership for Africa’s Development.

297


3. Having developed international consensuson principles, Governments must build within theircountries – both developed and developing – the pub-lic support necessary to translate their collective visioninto action. That would require political leadership – inthe developing countries to overcome the many diffi-culties in undertaking institutional and policy reform,and in the developed countries to develop engagementand solidarity with the developing countries in theirefforts to reduce poverty. It would also require a coor-dinated effort on the part of all stakeholders and allsegments of society to support the formulation, imple-mentation and monitoring of development pro-grammes and activities.

4. In the developed countries, the citizenry atlarge will have to be convinced that development andthe reduction of poverty must be matters of concern innational policy, and that addressing those concernswill require resources and structural change. Someparticipants pointed to the wide support for develop-ment in some developed countries in terms of bothcommitment of resources and willingness to undertakenecessary reforms. However, in most cases, particular-ly in the area of trade liberalization, considerable addi-tional efforts are required for the population tobecome as aware of the need for change as they arein developing countries.

5. There was general appreciation for theincreases in official development assistance (ODA)announced in preceding days, but also concern thattotal ODA will still fall far below both what is requiredto ensure that the Millennium Development Goals aremet, as well as the longstanding target of devoting 0.7per cent of the gross national product of developedcountries to ODA. Most participants underlined theneed to achieve that target; one Minister called foreach country to establish a timetable for doing so. Itwas suggested that such expenditures be regarded asan investment in the future rather than a current cost.The challenges of fully financing the heavily indebtedpoor countries initiative and the United Nations initia-tive on AIDS, malaria and tuberculosis were highlight-ed by some participants. A few were disappointed thatthe draft Monterrey Consensus does not propose theuse of other innovative sources of developmentfinance, such as issues of special drawing rights andvarious forms of international taxation. A few otherparticipants regretted that the draft Consensus did notaddress global public goods and indicated that theywould be pursuing the matter in other forums.

6. It was emphasized that ODA is only onecomponent of the developed countries’ contribution todevelopment, and that other elements should be notonly consistent but complementary and reinforcing.Particular attention was focused on the impedimentsto growth and poverty reduction created by the tradebarriers and subsidies of developed countries. It waspointed out that, if such measures were abolished,developing countries could realize far greater revenuethan they would receive in ODA. It was incumbent ondeveloped countries to remove such impediments togrowth, particularly for the poorest countries.

7. External debt was viewed as another majorconstraint to achieving the Millennium DevelopmentGoals in many countries, particularly the least devel-oped countries. Some participants emphasized theneed for additional measures to deal with the externaldebt problem. Reduced debt service obligations areconsidered to be crucial for being able to allocate addi-tional domestic resources to anti-poverty purposes,such as health and education. Speakers called for along-term effort to vigorously pursue debt relief forcountries facing unsustainable debt burdens, with afew advocating full debt cancellation.

8. Several participants elaborated on thepotential contribution of the private sector to develop-ment and poverty eradication. Developing countriesneed to create conditions to support entrepreneurship,particularly in small and medium-sized enterprises,including farms, and to encourage private investment,including foreign direct investment (FDI). Concern wasexpressed about the low levels of FDI in countrieswhere it is needed most, particularly in Africa. In someinstances, countries have made considerable efforts tofulfil the conditions for attracting FDI but have madelittle impact on flows or the perceptions of risk ofinvestors. A number of participants, however, ques-tioned the value of FDI, saying that it does not alwaysnecessarily contribute to development and povertyreduction.

9. The need to develop adequate institutionalcapacity was noted and the complexities of achievingthat objective were highlighted. One speaker pointedout that the institutions that are currently consideredto be prerequisites for development arose in industrial-ized countries as a result and not as a precondition ofdevelopment. In addition, the level of economic devel-opment itself sets the limits to what can be achievedand replicated at the level of institutional development,and the same arrangements are not necessarily opti-mal for all countries.


298

10. Some participants also addressed the needto re-examine the representation of developing coun-tries in the international financial institutions and theneed for better gender balance.

11. The process leading to the MonterreyConference was based on a new partnership, involvingdialogue and consultations, and enhanced transparen-cy and sharing of information among the variousdevelopment partners and stakeholders, all of whichcontributed to trust and consensus building.Participants welcomed the improved cooperationamong the various multilateral organizations that hadresulted from the financing for development process. Itis imperative to stay engaged and further improveglobal policy coherence. The preparations for theupcoming Summit in Johannesburg will be part of thatprocess, but the dialogue will also have to be sustainedand enriched over the longer term. Some participantsfelt that, in order to enhance policy coherence at theglobal level, the international community should con-tinue its efforts to improve global governance.Regional consultative mechanisms could contribute tothis process.

12. It was recognized that the draft MonterreyConsensus will require an effective monitoring systemto follow up on the commitments by countries, inter-national institutions, the business sector and civil socie-ty to ensure that the Millennium Development Goalsare achieved by 2015. There was support for theestablishment of a formal mechanism for that pur-pose, and it was suggested that that could be aresponsibility of the United Nations, in full and activecooperation with the International Monetary Fund, theWorld Bank, the World Trade Organization and otherstakeholders. It was stressed, however, that such anexercise should not be accusatory but rather a meansfor all stakeholders to monitor and evaluate their owncontributions and exchange views.



His Excellency Mr. Miguel Ángel Rodríguez EcheverríaPresident of the Republic of Costa Rica

His Excellency Mr. Alejandro Toledo ManriquePresident of the Republic of Peru

Mr. Mike MooreDirector-General of the World Trade Organization

1. After participating in the opening of thedebate, Mr. Alejandro Toledo Manrique, President of Peru and Co-Chair of the round table, had to leavethe session prematurely due to the events that hadtaken place in his country. Participants expressed theirsolidarity with the President and people of Peru.

2. The round table generated a rich exchangeon the salient issues in terms of “looking ahead”beyond the International Conference on Financing forDevelopment. The main thrust of the discussion issummarized below


3. Participants agreed that the commitmentscontained in the draft Monterrey Consensus are clearand that their implementation is the responsibility ofall. To translate the draft Consensus into action willinvolve a process of arriving at politically acceptabledecisions at the national and international levels.There is a need for strong political will. Some partici-pants noted that there is room for optimism in thatregard because there has been a growing commonintellectual base for moving forward on the draftConsensus.

4. Many participants affirmed their commit-ment to eradicating terrorism, within the bounds ofthe law, wherever it arises. Global security and thehealth of the world economy are closely linked sinceinsecurity discourages private national and internation-al investment.

299


5. The discussion reiterated the importance ofcoherence, partnership, ownership and participationin effective implementation of the draft MonterreyConsensus and working towards achieving theMillennium Development Goals. There is a need forcoordinated efforts to strengthen governance and par-ticipation in decision-making at the national and inter-national levels while pursuing coherent development,trade and economic cooperation policies.

6. Several participants underscored the majorpotential contribution of trade to development andpoverty reduction in developing countries and thehuge cost that subsidies and trade barriers in devel-oped countries have imposed on developing countries.

7. Participants welcomed the new aid commit-ments resulting from the Monterrey Conference, whilenoting that they represent only a first step in efforts toincrease aid to achieve the Millennium DevelopmentGoals. There was general agreement that improvingthe effectiveness of aid is the responsibility of donorand recipient countries, and involves improved coordi-nation and capacity as well as national ownership ofprogrammes.

8. It was noted by some participants that thetime frame for implementation of the draft MonterreyConsensus is not sufficiently explicit. Some partici-pants felt strongly that there is insufficient considera-tion of human rights, labour rights, working condi-tions, fair pay and social protection in the draftMonterrey Consensus. Some also emphasized theneed for greater consideration of women’s participa-tion in decision-making at all levels and the impor-tance of assessing the gender impact of economic andsocial policies. It was emphasized that poverty reduc-tion and the provision of health services, education,employment opportunities and justice for all are neces-sary for strengthening democracy.

9. Participants underscored the importance ofthe follow-up to the Monterrey Conference as well asmore specific modalities of implementation.


10. Delegates agreed that the MonterreyConference represents a key turning point in buildingthe momentum for change in development assistance.The recent initiatives announced by developed coun-tries could be signalling a reversal of the long trend ofdeclining official development assistance (ODA). Thegroundwork has now been laid for that reversal to besustained over the long term: developing countries are

more explicit about their responsibilities and the needfor sound policies and good governance, and devel-oped countries needed to prove the sincerity of theircommitments, not just in the field of ODA. In largepart, that mutual understanding is the result of com-mon learning in the course of finding a new relation-ship between developed and developing countriesthroughout the last half century.

11. Specific challenges of great importanceremain ahead for ODA: it should be effective andshould also be delivered efficiently. It should prioritizecapacity-building, whether for people – such as in theaccess to technologies – or at the governmental level –e.g., developing countries’ capacity to take part inincreasingly complex trade negotiations. It should alsotake into account the need to enhance productivityand diversification in the agricultural sector.

12. Delegates noted that an essential aspect ofcoherence consists in a more effective division oflabour and development of partnerships between inter-national organizations, in which the respective com-parative advantages would be taken into account inthe implementation of development strategies. In thatlight, the World Trade Organization (WTO) highlightedits commitment to tap into the expertise of otherinternational organizations, such as the United NationsIndustrial Development Organization, the UnitedNations Conference on Trade and Development andthe United Nations Development Programme.

13. To many delegates, the MonterreyConference embodies a crucial first stepping stone inthe road to a new international financial architecture.In order to be truly instrumental in the process offinancing development, the new architecture will haveto be more participatory and embody two key princi-ples: prevention and stability. Stable and transparentfinancial flows and capital markets, at both the domes-tic and the international levels, are widely seen as aprerequisite for a sustained implementation of devel-opment strategies, since episodes of financial turbu-lence have too often interrupted social progress. Also,the institutionalization of good governance practicesby developing countries at the domestic level requiresa long-term approach that is incompatible with exces-sive volatility of financial flows, particularly short-termflows. In that light, the building of institutional capaci-ties for prevention of financial crises at the interna-tional level is seen as essential. Accordingly, a mecha-nism to deal in a fair and transparent way with theproblem of external over-indebtedness of developingcountries was considered by delegates to be a keyaspect of the latter.


300

14. Participants considered that the excessivevolume of external debt of the developing countriesmust be tackled in a coherent way. External debtshould not constitute a permanent and increasingdrain on financial resources that would otherwise beavailable for development purposes. Some participantscalled for the cancellation of the external debt of thepoorest countries. The heavily indebted poor countriesinitiative was commended by participants as a firststep in advancing towards a solution; however, inorder to enhance its coherence with other aspects ofthe international development strategies, progress stillneeds to be made by broadening the criteria for eligi-bility of countries and enhancing the volume of debtrelief that it provides. True ownership of debt reduc-tion strategies and their connected poverty eradicationprogrammes by the recipient countries was also con-sidered a key element of success. Special considera-tion should be given to avoid placing undue burdenson creditor developing countries. The final aim is toensure that a country’s level of external debt can besustainable in the long run without compromising eco-nomic and social objectives.

15. Many participants drew attention to theenormous costs that are caused by protectionism fordeveloped and developing countries alike, particularlyin the area of agricultural products, textiles and otherlabour-intensive goods. The agreements reached atDoha represent a historical opportunity to start build-ing developmental concerns into the trade liberaliza-tion agenda, and developed countries now have agolden opportunity to live up to their commitments.But developing countries also have their part to play inthe trade agenda, notably in the field of integration, ina manner that is compatible with WTO rules. Thatwould make their markets large enough to achieve thescale economies necessary, and it is also linked withthe need to attract foreign direct investment (FDI)inflows: one of the reasons that FDI has shied awayfrom Africa, for example, is the pervasive high degreeof trade protectionism among Africans themselves,which in too many cases represents an obstacle to anefficient scale of production. Another factor that rep-resents a key obstacle to FDI is the lack of certaintyand predictability of the legal and institutional frame-work, underlining the key importance of good gover-nance policies at the domestic level.

Proposals

16. The following proposals were put forward:

• Establish a strong and effective mechanism for monitoring the implementation of the draft Monterrey Consensus;

• The United Nations should play the lead role in the follow-up to the Monterrey Conference;

• Establish a permanent consultation and discussion forum between developed and developing countries on monetary and financial issues;

• Establish an annual forum for the follow-upto the Monterrey Conference;

• Pursue an arrangement between the United Nations and WTO to bring WTO into the United Nations system to improve coherence;

• Set up an international task force to advance thinking on global public goods and their financing;

• Establish an international humanitarian fund financed from traditional and non-traditional sources, including taxes on speculative capital flows and confiscation of the proceeds of drug trafficking;

• Establish an international economic/finan-cial crisis prevention mechanism compara-ble to the Secretary-General’s proposed early warning mechanism for conflicts in the Security Council.

301




His Excellency Mr. Ion IliescuPresident of Romania

His Excellency Mr. Thaksin ShinawatraPrime Minister of Thailand

1. The round table had a very rich and sub-stantive debate, a further testimony of the commit-ments of leaders of government and civil society atlarge to financing for development.

2. A key message of the debate was strongsupport for the draft Monterrey Consensus. TheInternational Conference on Financing forDevelopment has managed to involve the internationalcommunity and a range of partners in the first everdebate on how to finance development. It will giveimpetus to the implementation of the MillenniumDevelopment Goals.

3. Globalization unites us in one world.Poverty in one place is poverty everywhere.Globalization should be made truly inclusive, andshould benefit all nations and partners more equitablyto reduce poverty.

4. The Conference has started forging crucialalliances between developing and developed countriesand all partners. Those alliances aim to achieve thegoals of halving poverty, reducing the gap betweenpoor and rich countries, building social justice andgearing the international financial, trade and economicsystems towards the achievement of the goals set atthe Millennium Summit of the United Nations GeneralAssembly.

5. The new global partnership for develop-ment now has to be translated into concrete actions.We must now not only look ahead but move ahead.

6. That will entail carrying forward the set ofreforms and policies agreed to in Monterrey. There isgrowing consensus that reforms are necessary at boththe national and international levels to ensure a stableand conducive environment for development.

7. At the domestic level, countries have anobligation to work to eradicate poverty. Policies haveto reconcile the concern for longer-term developmentgoals and structural reform with the need to respondto the urgent needs of the poor. The benefits of devel-opment should target those most in need, particularlypeople at the grassroots level, who should be providedwith greater access to capital and information tech-nologies. Good governance, sound policies andstrengthening of the financial sector are crucial fordevelopment and for attracting investments. Gendershould be mainstreamed in all policies. It is importantto ensure broad participation and transparency indevising policies and initiatives at both the nationaland international levels.

8. A major international effort is called for togive countries the tools to move forward in develop-ment and poverty eradication. Official developmentassistance (ODA), trade and foreign direct investment(FDI) are three essential tools for development financ-ing.

9. The promises of the Doha MinisterialDeclaration for a meaningful trade liberalization, sup-portive of development, must be fulfilled. A majoreffort is required by developed countries for liberalizingtrade in agriculture and reducing subsidies. Somespeakers stressed the importance of labour standardsand the role of the International Labour Organizationin that regard. Others advised against linking trade dis-cussions with those on environmental and labour stan-dards.

10. Greater coherence and coordination at alllevels is essential. Efforts to build a more stable andparticipatory international system must be pursued.Reform of the international financial architecture iscrucial and must be pursued to foster internationalfinancial stability and help to build an internationalfinancial environment supportive of development.Standards and codes are essential for the conduct ofinternational financial relations, but they also need totake into account the readiness of the domestic institu-tions in each country.

11. The commitment expressed by some coun-tries to increase ODA are welcomed. It is essential thatall donors renew their commitments to increase ODAand reach agreed targets. Further progress is neededto solve the problems of poor countries’ external debt.

12. International efforts to build the capacity ofdeveloping countries are essential. Development coop-eration must be conducted in the context of country-owned frameworks.


302

13. The international community should sup-port the New Partnership for Africa’s Development asthe new strategy for reviving development in the conti-nent.

14. The key role and responsibilities of thebusiness sector in development were underscored.Small and medium-sized enterprises are especiallyimportant for creating employment, helping to reducepoverty and supporting growth.

15. We need to set up some concrete mecha-nisms for the follow-up to the Monterrey Conference.

16. The United Nations, the Bretton Woodsinstitutions, the World Trade Organization (WTO) andother international institutions have an important rolein the implementation and follow-up to theConference. The structures and functions of thoseinstitutions, notably the Bretton Woods institutions andWTO, may need to evolve to respond to a rapidlychanging environment so as to best carry forward thegoals of the Conference.

17. Developing countries need to be given agreater voice in international financial institutions.Reform in that regard must be pursued. It is hopedthat the Monterrey Conference will lead to developinga new, more equitable system of international gover-nance.

18. The presence of so many heads of stateand government as well as leaders of business and civilsociety in Monterrey augurs well for the future imple-mentation of the Conference and for the upcomingWorld Summit on Sustainable Development.

Proposals

19. A number of proposals and ideas were putforward in the course of the discussions of the roundtable to reinforce or carry forward the commitments ofthe draft Monterrey Consensus, including the follow-ing:

• An action plan and a follow-up mechanismshould be developed for implementing the Conference;

• Compacts should be established between recipients and donors to monitor policies;

• An external gender monitoring group could be set up to monitor the integration of gender perspectives in efforts to promote coherence and coordination in the achievement of the Millennium Development Goals;

• An international debt workout system was called for;

• Proposals made by the business sector, such as the creation of a global informationclearing house or venture capital funds to help support enterprise creation, should be considered in the follow-up to the Monterrey Conference;

• The United Nations should help to coordi-nate and disseminate private-sector development initiatives, such as in the education or distant-learning fields;

• A global development corporation could beset up by the United Nations, with private sector participation, to support the creationof small and medium-sized enterprises in developing countries;

• Mechanisms for mobilizing resources to achieve the Millennium Development Goals, such as taxation on speculative capital and on carbon emissions and a newallocation of special drawing rights should be studied and followed up;

• Efforts to combat corruption and illicit drugs should be actively pursued;

• Human rights commitments should guide the implementation of the draft Monterrey Consensus;

• The United Nations, in particular the Economic and Social Council should be at the centre of the follow-up process, which should be accountable and should empowerthe international community to oversee globalization.

303



304

The NGO Global Forum on Financing the Right to Sustainable

and Equitable Development convenes at the Fundidora Complex

in Monterrey, Mexico.

GlobalForum

DiscussionsResolutions

Chapter 6NGO Global Forum14-16March2002

Financing the Right to Sustainable and Equitable Development


306

Civil SocietyEngagement in the InternationalConference on Financing for DevelopmentMonterrey, Mexico

In pursuit of the objective of encouraging multi-stakeholder participation andownership of the financing for development process, civil society organizationswere involved from the outset in providing inputs, expertise and proposals toFinancing for Development.

In May 2001, civil society representatives attending the thirdPreparatory Committee meeting in New York, decided to hold an NGO Foruma few days prior to the Monterrey conference and use it as an opportunity tofurther the discussion on the proposals presented by civil society throughout thepreparatory process. In particular, many NGOs wanted a forum to focus atten-tion on issues such as innovative sources of finance and global public goods,economic, social, cultural and other human rights issues as well as the environ-ment, gender, labour, and global economic governance.

The Global NGO Forum: Financing the Right to Sustainable andEquitable Development, held in Monterrey, 14-16 March 2002, adopted a finaldocument that was presented at the Ministerial segment of the InternationalConference on Financing for Development on 18 March 2002 and is repro-duced here.

The NGO Forum document also emphasizes that Civil Society organi-zations, with their diverse voices and priorities, should and will continue to beinstrumental in the follow-up to the Monterrey Consensus, both in pressuringpolicy makers for better coherence at the institutional level and as partners inthe attainment of the Millennium Development Goals. Member states have alsoagreed in the Monterrey Consensus to continue the engagement with civil society (paragraph 69 b).

Members of civil society and NGOs attended plenary sessions of theInternational Conference on Financing for Development and participated in theMinisterial and Summit-level round table discussions. On 22 March 2002, rep-resentatives of the NGO Global Forum delivered the civil society statement tothe Final Summit Plenary session of the conference.

307

Chapter 6 NGO Global Forum

Ms. Laura Frade presents the Final Resolution of the NGO Global

Forum to the International Conference on Financing for Development

on 18 March 2002.

Final Resolution of the Global Forum:Financing the Right to Sustainable and Equitable Development16 March 2002

The Monterrey Consensus offers no mechanisms tomobilize new financial resources to achieve theMillennium Development Goals.

For this reason, the organizations partici-pating in the Global Forum on Financing the Right toEquitable and Sustainable Development are NOT partof the Monterrey Consensus. The participating organi-zations of the Global Forum would like to share thedeclaration which resulted from three days of intensework and participation by 2600 persons, 700 organi-zations and 80 countries from all the regions of theworld.

Our Monterrey Declaration is a review ofthe negative economic, social, environmental genderand cultural impacts of the current neo-liberal policies.These policies are repeated again in the Monterrey‘consensus’. Our Monterrey Declaration is a statementof the visions and proposals for policies, which wouldserve humanity and the environment in which we live.

The City of Monterrey has been presentedas a success story of globalization, but it is an exampleof the negative impacts of globalization on people,particularly the high social costs of production of thelarge-scale enterprises. These past days we heard testi-monies of children dying of leukemia because of toxicwaste in the environment, of sexual exploitation, ofprofit put ahead of humane working conditions, partic-ularly those workers which served in the Fundidora ofMonterrey. This is why we renamed the Coca-ColaAuditorium the Acero Fundidora (Steel Foundry), amonument to the surviving and the deceased workersof Monterrey, to the unemployed workers ofMonterrey, to the displaced women workers.

The testimonies heard these past daysdemonstrate the vital need for a profound change ineconomic policies. An economy governed by humanrights and environmental protections is an urgentnecessity. The economy must serve society and fulfiland support human potential.

We do not approve of the prevailing eco-nomic model as prescribed by the World Bank, theIMF and WTO, and this message was communicateddirectly to the IMF and the World Bank during the Forum. The current model is not working for sustainable and equitable development. There is little evidence in the Monterrey Consensus of a will tochange.

We emerged from the Global Forum with aset of common proposals for an alternative economicmodel that puts people in the centre of development.These are our common critiques, demands and pro-posals:

• The full enjoyment of human rights shouldbe the objective of a new economic model for sustain-able development with equity, equality and justice.

• Human rights, as they are included in theHuman Rights Instruments of the United Nations andthe ILO, should be the overarching framework and theobjective to which these institutions, the World Bank,the IMF, the WTO should be accountable to the UNCommission of Human Rights.

• Currency transaction taxes must be collect-ed as a means of financing development and as ameans of stabilizing the international financial system.

• The framework of any financial supportshould include the principles of accountability, trans-parency, good governance and democratic civil societyparticipation.

• No conditionality in ODA, debt and nation-al development plans.

• Genuine and balanced partnerships in rela-tions between governments in the context of bilateraland multilateral agreements are essential.

• The principles of transparency andaccountability must apply in the process of economicdecision-making at the local, national, regional andglobal levels.


308

Furthermore,Mobilization of domestic resources and structural adjustment

We demand that states maintain autonomy as a pre-condition for the attainment of their development.Moreover economic decision-making should bedemocratized within countries in such a way that par-liaments approve the decision which are currentlytaken behind closed doors between ministries of eco-nomics and trade, and multilateral financial institu-tions. The active participation of civil society in theseprocesses must be guaranteed.

The mobilization of domestic resourcescannot be separated from any other themes of theFinancing for Development Conference, especiallythat of debt. The mobilization of financial resourcesmust be carried out in a democratic and participatorymanner at local, national, and international levels.

Debt and structural adjustment

Given that the responsibility for debt lies with the cred-itors, we call for the cancellation of external debt ofthe countries of the South, through a fair and trans-parent process of arbitration which protects humanrights and the environment.

We call for a tax on currency transactionsin that financing gender-sensitive sustainable develop-ment for the benefit, particularly of indigenous peo-ples, blacks, women and children, and which also con-tributes to financing of global public goods. Wedemand the immediate fulfillment of the commitmentof 0.7% of GDP on the part of industrialized countriesfor ODA in order to obtain the MillenniumDevelopment Goals. All forms of conditionality shouldbe eliminated, such as tied aid, and food aid, whichundermines the productive capacity, and food securityof countries. We call for the effective participation ofcivil society in the formulation and implementation ofODA projects.

Investment and trade

Foreign investment has not been and will not be apanacea unless investment helps development ratherthan destroys it. We demand the elimination of specu-lative activities which enrich a small minority while cre-ating crises for humanity, such as that which the peo-ple of Argentina are suffering today. We demand thatour countries maintain their own regulatory investmentregime, accepting only those investments which con-tribute to the development of their peoples and thecreation of decent work. Foreign investment must not

309


denationalize our economies or destroy the nationalheritage, and it must operate according to perform-ance requirements. Free trade agreements must makethe rights of enterprises accountable to national laws,respecting the free movement of people and not onlyof capital and markets. We demand a universal mini-mum wage and the respect of universal conventions ofthe ILO. The investment of public funds should get tosocial benefit and not to volatile activities like theexport zones which harm people and their environ-ment. It should go to investments in small-scale proj-ects, especially for women and indigenous peoples.

We call for the conservation of biologicaland genetic resources. We firmly reject the introduc-tion of genetically-modified seeds because thesedestroy life. It is necessary to re-value the prices of pri-mary products and promote the food security of peo-ples. We urge comprehensive agrarian reforms withaccess to land and investment in traditional agriculture.

We demand the protection of internal mar-kets and national enterprises development strategies.We reject the imposition of products and prices by themultinationals. We demand immediate lifting of tradeand tariff barriers and an end to the dumping of agri-cultural products on poor countries. We demand thefinancing of trade-related capacity-building, and morefair and equitable trade rules.

Systemic Issues

With respect to systemic issues, we affirm that theprevailing neo-liberal framework undermines sustain-able development, and fails to address the neededreform of the system of global economic governance.Developing countries must have equal voice and votein standard-setting and economic decision-makingprocesses. These processes should ensure the effectiveparticipation of civil society organizations representingdiverse sectors and interests, including workers’,women’s and indigenous peoples’ organizations.Efforts to address recurrent financial crises have beeninadequate and ineffective. We call for a new and sta-ble global economic and social system. All stakehold-ers must commit to put in place debt workout mecha-nisms that uphold the following principles: neutraldecision-making, protection of debtors’ basic needs,co-responsibility of debtors and creditors, transparencyand civil society participation.

Developing countries must have the rightto choose their own capital accounts and exchangerate regimes. Those countries under crisis must regaintheir autonomy to implement macroeconomic policiesappropriate for recovery. Furthermore, all countriesshould have the right to implement policies which de-emphasize export-led development in favour of domes-tic demand-driven growth, regional integration andcooperation. We support the call for the adoption andimplementation of a UN Convention on Corruptionand the transfer of illegally acquired wealth to thecountries of origin. Stakeholders must commit to theimplementation of progressive taxation systems.

For us to be convinced that the financialinstitutions are ready to change, they must demon-strate this with concrete actions. Without imposingany conditionalities, they must help the people ofArgentina overcome the crisis which their policieshave produced.


310

Ms. Monica Vincent and Mr. Arjun Karki deliver the civil society state-

ment to the Summit plenary of the International Conference on

Financing for Development on 22 March 2002.

311


Civil Society Statement tothe 5th Plenary Meeting22 March 2002

The NGO Caucus would like to begin by expressingour appreciation to the Mexican government for itscompliance with UN guidelines in providing facilitiesfor civil society work. It sets a precedent that all gov-ernments should seek to follow in the future.

But the NGO Caucus states that we are notpart of the Monterrey Consensus. We do not considerit a sufficient basis for combating poverty or foradvancing economic, social and cultural rights.

We note that in the Round Tables manygovernments themselves agree with us. So, why hasthis document been adopted? The governments havetalked about reforming the World Bank, IMF andWTO, but this is not reflected in the Consensus. Whynot?

In terms of the process, we hope that youhave noticed that the adoption of a declaration inadvance is undermining the credibility of the processitself: Why are we here if not to negotiate the docu-ment?

We appreciate the establishment of theRound Tables as a first step, although we disagree withefforts to use the process to legitimize the MonterreyConsensus. Obviously there will need to be a greatdeal of fine-tuning to improve dialogue and increaseinclusiveness. And if this process is to have any mean-ing in the future, we will have to see some follow-upactions based on the discourse.

The NGO Forum Declaration was present-ed to this same plenary last Monday. All our demandsare included there and were repeated continuously atthe Round Tables. We have advocated these positionsthroughout the Financing for Development processand for decades before in previous UN internationalconferences, so we do not have to mention them here.

To those of you who say we have not been efficient in putting forward our demands, we sayif you have not heard us it is because you have refusedto listen.

We have advocated tirelessly for a concreteplan of action towards building a human rights fram-work – a different view of the world that is based oneconomic, social and cultural concerns that puts peo-ple before profits.

We intend to stay engaged in all efforts toachieve the Millennium Goals – But we must allacknowledge that, even if met, we will still have morethan half a billion people living in abject poverty.

The Special Session on Children, TheWorld Food Summit, The World Summit onSustainable Development will be opportunities for youto show us that we are wrong in our assessment ofyour will to deliver.

We hope you will be spurred by the realityof the thousands of women, men and children whowill die from preventable causes and in endless warsand conflicts before we get to Johannesburg inAugust.

We will be watching, and we will continueto mobilize our constituencies for implementation ofthe commitments you have made over the last decade.


312

“Let’s move from words to action...to facilitate the flow of capital to

developing countries”, business leaders declared at the International

Business Forum on Monday, 18 March, in Monterrey, Mexico.

Chapter 7Business Forum18March2002

Follow-up Dialogues19-22 March 2002

BusinessForum

Financing forDevelopment

Business SectorEngagement in the InternationalConference on Financing for DevelopmentMonterrey, Mexico

One of the unique aspects of the financing for development process has beenthe deep-set and structured engagement between governments/UN delegationsand the business sector. This had its origins in the Global Business Hearings thatwere organized by the Secretariat in December 2000. The rationale and struc-ture of engagement crystallized a few months later when the Bureau, with theassistance of the Secretariat, identified key business interlocutors, and a SteeringCommittee was subsequently set up. The Committee, which was advised andassisted by the Secretariat, operated in accordance with a road-map that out-lined a framework through which the various substantive discussion forumsorganized by the business interlocutors would feed into the intergovernmentalprocess.

Business representation during the preparatory process and in theInternational Conference on Financing for Development has focused on bring-ing out actionable policy proposals to be discussed with governments and inter-national organizations. Some of the key proposals are summarized in the busi-ness communiqué that is contained in the following pages. The vehicles throughwhich these ideas were disseminated and discussed were through the distributionof a report, ‘Strengthening Financing for Development: Proposals from thePrivate Sector’, the organization of an International Business Forum, and sever-al follow-up dialogues in Monterrey where business leaders interacted with rep-resentatives from governments and international organizations. Moreover, sen-ior business personnel from all over the world also participated and freely airedtheir ideas in the ministerial and summit round tables in Monterrey, as did thecivil society representatives.

Building on the feedback that they received during the Conference,the sponsors of various business proposals are continuing to engage with rele-vant actors in the private sector, governments and international organizations inan attempt to implement their ideas.


314

International Chamber of Commerce

Statement by

Ms. Maria Livanos CattauiSecretary-General*18 March 2002

On behalf of the coordinating group for the businesssector may I thank the United Nations and YourExcellencies for inviting the business sector to takepart in your proceedings. I will report on ours, and Iwill be considerably shorter than the five minutesrequested.

The business sector just held our interna-tional forum next door, and our approach can besummed up in one phrase: let’s move from words toaction. To do so, we put together a whole spectrum ofconcrete, doable and practical proposals and projectsto facilitate the flow of capital to developing countries.Each one of our proposals and projects requires part-nerships with Governments and international organi-zations. Each one has been put forward in this forum,and will be discussed in the next days in informal fol-low-up dialogues held in this building in the businessarea.

To give you a quick flavour of these pro-posals I will cite my three co-organizers of the forum.Firstly, Barbara Samuels called for a global informa-tion clearing house, which has had initial support fromthe Norwegian Government and the Ford Foundation.It is aimed at strengthening information and analysis inthe global financial system. As an independent expertinformation initiative, the focus is on bridging costlygaps between investors and Governments. There arefour related functions: the establishment of a globalinformation clearing portal; development of countryinvestor networks; the creation of independent expertgroups; and the facilitation of independent audits andperformance benchmarks.

The second citation is from Crocker Snowof the Money Matters Institute. Indigenous domesticcapital formation is key to creating and attracting foreign capital. Microcredit can serve a key role for small start-ups in poor countries. At the next


315

Chapter 7 Business Forum

Ms. Maria Livanos Cattaui, Secretary-General of the International

Chamber of Commerce, addresses the Business Advisory Council in

Monterrey, Mexico.

stage, venture capital financing, particularly in basicinformation-technologies-related companies and servic-es, have the greatest prospect for leapfrogging devel-opment. A proposal was made for an omnibus venturecapital fund, partly helped by Governments.

The third one is from Paul Underwood,director of the Business Council for the UnitedNations. Economic development requires ongoingaccess to private-sector capital in both equity and debtfinance. In our panel on closing the gap in liquidity,the Business Council invited leading professionals ininvestment finance to present a variety of mecha-nisms, strategies and public-private partnerships.These proposals included innovative methods offinancing power, water and other infrastructure proj-ects to strengthen the ability of small- and medium-sizecompanies to attract investment, to create world devel-opment cooperation to enhance funding, manage-ment, technology and market access and to create anindependent expert advisory group to enhance accessto debt markets, better allocate risk between publicand private sectors and lower the cost of capital fordeveloping countries.

Finally, from my own organization, theInternational Chamber of Commerce, our proposalconcerns a joint project with the United NationsConference on Trade and Development for stimulatinginvestment in the very least developed countries. Thisproject is already under way. It brings together individ-ual Government leaders with local and internationalbusiness to survey, benchmark and progress on theobstacles to any investment, local or international, andto make clear, unbiased, credible and truthful guidesfor companies of all sizes concerning what they caneffectively do in the least developed countries.

The private sector is committed to followthrough on its many proposals tabled at this confer-ence and to lend our support to your efforts in fulfill-ing the objectives of this conference.


316

Mr. Richard M. McCormick, President of the International Chamber

of Commerce, presents the Business Forum Communiqué to the

Summit plenary session of the International Conference on Financing

for Development at Monterrey, Mexico.

Business Interlocutorsto the InternationalConference on Financingfor Development

Final Plenary Communiquédelivered by

Mr. Richard D. McCormickPresident, International Chamber of CommerceMarch 22, 2002

The private sector organizations and their businessleaders thank you for inviting us to work with you. Weare grateful to the Financing for DevelopmentSecretariat for this opportunity and for their support.

We have taken up the challenge to beactive partners both in the preparation of this confer-ence and here in Monterrey. Business recognizes thatthe development of investment opportunities coincidesdirectly with the objectives of this conference – to pro-vide financing for development.

We know that ODA plays a critical role,but it will never be sufficient to meet the needs of theworld’s least developed countries. The only long-termand sustainable source of development finance is pri-vate sector investment – both domestic and interna-tional.

At this conference, business has delivered arange of innovative financing mechanisms and practi-cal models for partnerships with governments andinternational institutions – to actually mobilize this cap-ital. More than thirty concrete proposals werelaunched at the Business Forum on day one. Each onewas followed up in the next days during dialogues withpartners from governments and international organiza-tions.

These proposals included:

• The financing of power, water and infra-structure projects – by Vistech, Suez, Electricite deFrance, Standard & Poors and the Business Councilfor the UN;

• The strengthening of small and medium-size enterprises through private sector equity funds –by State Street Global Advisors;

• Incubating local sources of venture capital –by Potomac Associates;

• Enhancing debt and equity financing – byAMBAC, the Zurich Group and Spring Investment;

• Linking microcredit with connectivity toredevelop Afghanistan – by Grameen Phone;

• Establishing a Global InformationClearinghouse to strengthen information, analytics andrisk management for countries and investors – bySamuels Associates;

• Enabling international debt work-outs andinternational bankruptcy mechanisms – by theSecurities Industry Association; and

• Producing Investment Guides to help thepoorest countries attract new investment – by theInternational Chamber of Commerce.

At our Follow-up Dialogues, we were heart-ened by the active interest taken by:

• The World Bank • The International Monetary Fund (IMF)

• The International Finance Corporation (IFC)

• The Inter-American DevelopmentBank(IDB)

• Multilateral Investment Guarantee Agency (MIGA)

• The US Agency for International Development (US A.I.D)

• UNCTAD, and• The UN’s Department of Economic

and Social Affairs

We would like to thank the governmentsthat have shown interest in these proposals. There areno silver bullets here. None of these proposals can beimplemented by business alone. They need to takeroot in each country – and, to succeed – they need theactive participation of your governments.

Business came to Monterrey under themotto “Let’s move from words to action” – and we arecommitted to doing just that, in partnership with youall.

Coordinating Group of Business Interlocutors Business Council for the United Nations International Chamber of Commerce (chair) Money Matters Institute Renaissance Strategy Samuels Associates World Economic Forum

317

Chapter 7 Business Forum


318 Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

t

Chapter 8The Roleof the Regional Development Banks


TheRole of theRegional Development

Banks

1. The Monterrey Consensus identifies severalissues to be considered in confronting the challengesof financing for development. These include:

• The mobilization of domestic financialresources, a crucial task that turns on sustaining sounddomestic policies and fostering solid institutions,including the rule of law, inviolability of contracts, pro-tection of property rights and the elimination of cor-ruption.

• The mobilization of foreign privateresources, which depends on a favourable internationaleconomic situation and an enabling domestic environ-ment.

• The availability of official internationalfinance and technical cooperation for those countriesthat, at best, have limited market access and othersthat sometimes experience great uncertainty or highcost of access.

• The expansion of international trade as anengine for development, which calls for a system ofopen trade backed by adequate finance.

• The imperative to enhance the coherenceand consistency of the international financial architec-ture in support of development.

2. Appropriate domestic policies and institu-tions are the fundamental requirement for acceleratingeconomic growth and achieving the internationaldevelopment goals, especially the halving of extremepoverty by 2015. Experience shows that there are sev-eral essential ingredients for sustainable growth, includ-ing macroeconomic stability, international trade open-ness, a well-educated and healthy labour force, finan-cial depth, adequate infrastructure, environmental safe-guards, and good governance. We also know thatpoverty reduction requires high rates of growth, specif-ic policies to improve access to health, education,credit and other assets by the poor, and depends oninstitutions that cater for their increased participation

in society. Special efforts are also necessary to offsetthe economic dislocation that often hits the poor hard-est, leaving many permanently below the poverty linewhen the economy recovers.

3. The FfD agenda stresses the importance ofaccess to external markets and private financing. Inthis connection, there are obstacles that need to beaddressed at the international level. For example,developing countries often face trade barriers in thoseproducts where they have a comparative advantage.The terms of trade is highly volatile for many develop-ing countries that do not have the means to compen-sate for income losses nor adequate external financingduring downturns. While having expanded significant-ly, private capital flows tend to be selective, volatileand pro-cyclical, that is, collapsing in bad times whenthey are most needed. Additionally, because the inter-national financial system is not well equipped to pro-mote fast recovery from financial crises, multilateraldevelopment banks (MDBs) have been called to join inthe effort although they are not designed for deliveringsubstantial emergency financing.

4. In short, confronting the challenge offinancing for development calls for international coop-eration, including more effort at the regional level. Asthe Monterrey Consensus puts it: “Each country hasprimary responsibility for its own economic and socialdevelopment, and the role of national policies anddevelopment strategies cannot be overemphasized. Atthe same time, domestic economies are now interwov-en with the global economic system and, inter alia, theeffective use of trade and investment opportunities canhelp countries fight poverty. National developmentefforts need to be supported by an enabling interna-tional economic environment. We encourage and support development frameworks initiated at theregional level”.


320

Financing for Development:The Role of the Regional Development Banks

A joint paper submitted by the African Development Bank, Asian Development Bank, European Bank for Reconstruction andDevelopment, and the Inter-American Development Bank.

The Partnership between Countries andRegional Development Banks

5. Regional Development Banks (RDBs) arekey players in ensuring the flow of financing for devel-opment for their borrowing member countries in therespective regions, and in providing regional publicgoods. Their ownership, governance and regional spe-cialization make it possible for them to adopt priori-ties that reflect the immediate demand on the ground.The special relationship they have with their borrow-ing countries enables them to influence decision-mak-ing in key development (or transition) areas, bringingto bear both international experience and a regionalperspective. In sum, the two main channels throughwhich the partnership is strengthened are: financialservices and policy dialogue.

Financial Services

6. The RDBs have become important sourcesof financing for development in their respectiveregions. For example, in Latin America and theCaribbean IDB lends more than the World Bank, par-ticularly in the smaller countries where it usually lendstwice as much. Accordingly, together with the globalinstitutions, they play an important role in adding toavailable public and private financing through bothpolicy-based lending and project finance. In recentyears, both AsDB and IDB acted in concert with theWorld Bank and IMF to provide resources geared toprotecting social expenditure programmes when finan-cial crises struck major countries in their regions. Inthe case of the poorer countries in their sphere ofoperation, RDBs are also a channel for substantialconcessional resources, except for EBRD with itsunique mandate of transition to market economies andits focus on the private sector.

7. RDBs have demonstrated their capacity toenhance the availability of private financing for devel-opment. For example, EBRD and IDB have acted ascatalysts for private financing by mitigating regulatoryand political risk for investors undertaking privateinvestment projects, including in infrastructure servic-es. Similarly, they have succeeded in stretching the tenor of private financing and improving the finan-cial viability of projects by providing extended maturi-ties and, in the case of EBRD, by making equityinvestments.

Policy dialogue

8. RDBs provide knowledge tailored to theirregions’ needs, in the form of research and dissemina-tion of best practices. They combine internationalexperience and knowledge of the relevant issues witha regional viewpoint rooted in local social and politicalcircumstances. Their closeness to borrowers makethem highly effective advisors and important vehiclesfor spreading ideas throughout the regions. The train-ing institutions of AfDB, AsDB and IDB are centralactors in building capacity in the public sector in thethree regions, while EBRD’s activities in the transitionecomies focus on dissemination of sound business andcorporate governance practices.

9. The increasing interdependence of regionaland subregional economies creates a strong role forRDBs in policy coordination and regional integrationsince most of them have either a Charter or policymandate to foster the collective development of theirborrowing member countries. From its inception, IDBhas actively implemented a range of activities fromcross-border infrastructure through research to capaci-ty-building for hemispheric and global free-trade nego-tiations. EBRD, with 13 of its 27 countries of opera-tion landlocked, has a special interest in stimulatingregional cooperation in trade and transit, thus improv-ing prospects for a higher standard of living from tak-ing part in the regional and global division of labour.AsDB provides technical assistance in the GreaterMekong Subregion covering environmental issues,cross-border movement of goods and people andhealth and is also pursuing initiatives with the ultimateobjective of developing a road map for monetary andfinancial cooperation of the ASEAN + 3 countries.AfDB is a significant partner in the New EconomicPartnership for Africa (NEPAD).

Conclusion

10. Regional Development Banks are activelyengaged in seeking to enhance the availability offinancing for development. They add value by leverag-ing their close relationship with borrowers to advancethe process of development in several areas identifiedin the Monterrey Consensus. In doing so, theyenhance their effectiveness as agents of changethrough close cooperation with UN and bilateral agen-cies and with the IMF and World Bank which have theadvantage of global reach.

321

Chapter 8 The Role of the Regional Development Banks


322

Parliam


Chapter 9Parliamentarian Forum16 March 2002

entarianForum


324

Parliamentarian ForumStatements on the International Conference onFinancing for Development

The Mexican Congress Inter-Parliamentary Union convened the ParliamentarianForum prior to the International Conference on Financing for Development inMonterrey, Mexico, with the objective of defining a common position ofParliamentarians from around the world on issues related to financing for devel-opment. The Forum met in the Mexican Senate in Mexico City on 16 March2002 and formed two working groups that discussed 1) Domestic Needs forEquitable and Just Development, and 2) International Financial Architecture forEquitable and Just Development. Statements were made on behalf of the Forumduring the plenary sessions of the Conference on 18th and 22nd March 2002.

Representatives of the following Parliamentary groups were invited tothe Forum: Inter-Parliamentarian Union, Latin American Parliament, CentralAmerican Parliament, Andean Parliament, Amazonian Parliament, Inter-Parliamentarian Forum of the Americas, Parliamentarian Confederation of theAmericas, Indigenous Parliament, Parliamentarian Forum of Asia-Pacific,Parliamentarian Conference Asia-Pacific on Environment and Development,World Group of Parliamentarians for Habitat, African Parliamentarian Union,European Parliament, Parliamentarian Assembly of the European Council,Parliaments of countries that participated in the First Plenary Meeting of theInter-Parliamentarian Forum of the Americas, and Parliamentarians attendingthe International Conference on Financing for Development.

Statement by

Mr. Natividad Gonzales ParasSenator of Mexico*18 March 2002

The African Interparliamentary Union and theInternational Interparliamentary Union met to discussand approve a special declaration to be presented onthis occasion. I shall therefore give you the highlightsof this declaration.

We international parliamentarians considerthat the great objective of nations is to eradicatepoverty, create a world economic system that is moreinclusive, balanced and equitable and reverse theincreasing gap that separates industrialized countriesfrom developing countries or economies in transition.The structural reforms, which have increased in recentdecades through legislative authorities, have helpedimprove the macroeconomic variables, in many casesreducing the indices of inflation and public debt.

But they have not led to an increase in thestandards of living of the population, or greater gener-ation of work, and competitive or productive systems.On the contrary, in many countries the gap in incomedistribution has become more polarized and publicdebt has increased, which endangers political and eco-nomic stability in the future.

The processes of globalization and thegradual opening of borders have meant that develop-ing countries and national groups have lost their lead-ership in strategic sectors of national life owing to,among other reasons, problems in gaining access tocompetitive financing given the capital of transnationalcorporations. For these reasons and others – whichare expressed in a document that we parliamentarians,democratically elected representatives, have prepared– we advocate the adoption of the following measures:

In the national framework, we advocate theestablishment of efficient and equitable fiscal systemsthat contribute to a fairer distribution of income andthe strengthening of internal consumption and capaci-ty and accessible regimes for credit that support smalland medium-size enterprises. Public policies that takeinto account diversity and gender and support vulnera-ble groups should be established. We support the


promotion of national participation and national inter-ests in productive investment and economic policies toincrease social productivity and efficiency and combatcorruption. We also support the proper channelling ofresources for training.

Within the international framework, we arefor equitable access for developing countries or coun-tries with economic problems to internationalresources, which would allow industrialized countriesto increase their official development assistance to 0.7per cent. Secondly, granting education as a way ofcombating poverty, broadening opportunities and pro-moting economic growth should be one of the highestpriorities. Thirdly, we advocate the establishment offinancial support that would make it possible to admin-ister and reduce the external debt of developing coun-tries, and more transparent criteria and practices forrenegotiating debt. Fourthly, we favour the develop-ment of regulatory frameworks and transparent proce-dures, which would contribute, as the chairman of theLatin American parliament pointed out, to preventingthe volatility of private capital flows and risk as well asinformation systems on international resources forfinancial aid that all countries can have equal accessto. Fifthly, international economic and financial bodiesshould be adapted to the needs of an increasinglyunequal and interdependent world. Sixthly, interna-tional trade should be transformed into a true enginefor development, which, through proper laws and poli-cies, would avoid protectionist practices and preventcrises and distortions that limit the equitable develop-ment of countries and the international community.

The representatives of the parliamentaryforums of the world – at which legislators take part inbuilding the constitutional reforms or frameworks inour countries, determining public budgets and approv-ing international treaties and conventions, amongother important duties – are making a commitment toundertake concerted action in order to provide a fol-low-up to the Monterrey Consensus and promote withour framework the implementation of the conferenceresolutions, which coincide with the viewpoints wehave expressed. This proposal will also be made publicin the plenary meeting of Heads of State.

But we know that the ministers and theinstitutions represented here play a key role in nation-al Governments and in the international community.Therefore, we urge you to consider our concerns andproposals. With the same spirit, we feel it is fitting toreaffirm our conviction that in the beginning of thisnew century and millennium, we must all make a com-mitment to proceed to the reform of the UnitedNations system with a new international architecture

325

Chapter 9 Parliamentarian Forum

that is more efficient, democratic and just. Let thespirit of freedom, pluralism and international solidarity– which has protected our city of Monterrey, with its history, its people and its mountains – move ournations and humanity towards a better era.

Statement by

Mr. Diego Fernández de CevallosPresidente de la Mesa Directiva del Senado deMéxico*22 March 2002

As President of the Senate of the Congress of theUnited Mexican States and a representative of theInterparliamentarian Union as well as interparliamen-tarian forums of other regions in the world, I come tothis Conference with the following purpose: Firstly, Iwould like to express to you the solidarity of my lead-ers with the objectives that bring us and the mostimportant leaders of our time here. I would also like to express our gratitude to the United Nations and the Governments and peoples of Nueva León andMexico for the magnificent organization of this event.

I have come to say to you that theParliamentarians I represent want to go to the trench-es, which is their own area, to serve the followingobjectives: The legislators of the world can and mustparticipate with you within the sphere of our compe-tence in the absolutely worthy task of doing away withthe physical and moral poverty afflicting humanity.They must effectively combat hunger, indifference,inequality and violence in all their expressions. This isan immediate task for Governments, parliaments,judges, magistrates, teachers, intellectuals, journalistsand intermediary organizations. In sum, it is theresponsibility of all. We the Parliamentarians are herefor this reason.

Let us not forget that parliaments are theproper spaces for the creation of laws and institutionsthat make possible a true social rule of law. Thus, andonly thus, can we, once and for all, reach Justice,Peace and Progress.


We sincerely hope that this meeting will bea summit in the full sense of the word. It will be asummit insofar as we reach here and now specific andverifiable commitments that give rise to genuinely con-solidated world policies. This will be a summit if weadopt agreements capable of overcoming the oft-repeated vicious circle in history whereby abusing thefreedom of the market and competition, the strongdespoil the weak so that it can then prevail.

Let us agree that there are no poor coun-tries. There are only people who have been pillaged.Hence, assistance is often of a compensatory nature.It has been demonstrated, moreover, that the financialresources that flow to the benefit of the poor willnever be enough if domestic global corruption goesunchecked.

So it is imperative to have the commitmentof the international community to undertake a greateducational and cultural crusade that reclaims the fun-damental values of the human being and equality ofmen and women and stops the destruction of nature.This compels us to ensure that the statements madehere, which have been reasonable, compassionate andfull of good will, are followed up with resources thatare applied ethically, generously and reasonably.

I will convey to the Heads of State andGovernment the declaration of the ParliamentarianForum that I represent. There will be specific propos-als there and our manifest wish to participate in theconfiguration of a true world economic order ensuringdemocratic governance of the financial system in aglobalized world.

I have one final point. As the physicalpoverty of some stems to a large extent from themoral poverty of others, the quandary is inevitable.Either we distribute the goods or we share the evil.


326

Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

t

Chapter 10Retreat for Headsof Stateand Government22 March2002

Briefing by the President of Mexico

Briefing

Retreat for Heads of Stateand Government,Monterrey, Mexico

Press Briefing by

His Excellency Mr. Vicente FoxPresident of MexicoFriday, 22 March 2002

Today we, 40 Heads of State or Government, alongwith the Secretary-General of the United Nations andthe President of the European Commission, met toconsider in a frank and informal manner the contentof a new integral agenda for development. At the endof this meeting, we had a working lunch with theheads of the Bretton Woods institutions.

This meeting helped to promote the spiritof Monterrey, and marks the beginning of a new com-mon approach to fostering growth, development andequity, both between nations and within them.

As the host of the Retreat, I undertook toprepare this general summary of the main ideas whichwere discussed, for the sole purpose of giving thenews media a broad view of the exchanges which tookplace. The Heads of State or Government took a posi-tive view of the Retreat and considered it to have beena useful exercise to facilitate communication amongthem and take up in greater depth some topics whichthe Conference had only been able to consider inmore general terms.

We discussed the following two general areas:

I. The New Integral Agenda for Development

• First, we analyzed how the changes in theworld require a new agenda for development, differingfrom the agenda which has been in force for half acentury. For this reason, institutions and mechanismsmust be updated. Partial approaches are no longersufficient; an integral and broad vision is needed inorder to support sustained development. We identifiedthe need to define a new integral agenda for develop-ment, based on shared responsibility. It was stressedthat global instruments are needed to achieve globalobjectives.


328

His Excellency President Vicente Fox of Mexico briefs the press

following the Retreat for Heads of State and Government

• Some participants pointed out thatalthough globalization is not a panacea and embodiescontradictions, it is the development modality which atpresent offers the greatest potential for promotingglobal well-being. Even so, it was recognized that with-in the framework of globalization, the local character-istics of the problems of each country must be takeninto account in order to be able to adopt appropriatemeasures.

• As a corollary to globalization, some partic-ipants emphasized the shared responsibility inherent ininterdependence and stressed that partnership givesrise to consequences, namely: the need to accept thatthere is equality within diversity, to respect differences,and to avoid the loss of identity.

• There was consensus on the need forgreater opening of markets and increased private capi-tal flows. However, many of my colleagues indicatedthat it was not sufficient to eliminate trade barriers,and that what was required was the integral promotionof development, since that was the only way for theless developed countries, while improving their livingstandards and income levels, to become better part-ners, creating virtuous circles for global development.We therefore discussed the importance of adoptinginnovative schemes to take advantage of private capi-tal flows and the need to lessen their cyclical nature.

• At the same time, many of my colleaguesstressed that the less developed countries will have toimprove their government and corporate institutionsand practices and adopt solid economic policies inorder to create a favourable climate for the promotionof investment. In this respect, it was emphasized thatno country which creates adequate conditions isdeprived of financing for development. Some partici-pants also recommended that civil society should par-ticipate in monitoring international cooperation andofficial assistance in order to ensure their optimal uti-lization.

• The importance of migration and labourmobility in global economic growth was stressed, aswell as the central role played in many economies byremittances of financial transfers from migrants.

• Several Heads of State or Government rec-ognized that although the decisions of some industrial-ized countries to promote the allocation of moreresources to assist the less developed countries areimportant, much more needs to be done. In this con-text, it is not only bilateral aid that is important, butalso the need for multilateral bodies to allocate a pro-portion of grants, not loans, to the less developedcountries.

• It was stressed that in order to guaranteeglobal peace and security, financial stability, universalhealth, preservation of the environment and the dis-semination of scientific knowledge, the necessaryresources must be obtained to make these benefitsaccessible to the populations of all countries. It wassuggested that part of the resources for this purposecould be obtained from the sustainable use of theEarth’s resources which belong to all mankind,through existing trusts in the international financialbodies. Several of my colleagues stressed that theseideas should undergo analysis by expert groups.

• Lastly, several participants referred to thetopic of terrorism and its potential links with poverty.It was strongly reaffirmed that nothing justifies terror-ism and that terrorism must be countered in an uncon-ditional and direct manner. It is necessary to persevereboth in overcoming poverty, and in combating terror-ism, violence and transnational organized crime, with-out considering them as related phenomena.

II. The role of multilateral bodies and institutions

• We discussed the role which the multilateralbodies will need to play in the formulation and promo-tion of a new kind of development in global society. Itwas recognized that these institutions should continueto play a fundamental role in correcting the deep-seat-ed imbalances among economies at different stages ofdevelopment, to which end it is desirable that thereshould be greater participation of the developing coun-tries in the decision-making of these institutions.

• Many of my colleagues stressed that ade-quate financing for a new concept of developmentrequires new instruments to support those economiesthat have adopted solid economic policies but still lackaccess to capital markets. Also, instruments are need-ed to facilitate a more efficient and equitable distribu-tion of global macroeconomic risk, and to finance theglobal commons. To this end, and in support of devel-opment, it was suggested that allocations of specialdrawing rights could constitute an adequate instru-ment.

• The issue of harmonizing development andthe environment was taken up, and the importance ofthe forthcoming international summit meeting on thetopic to be held in Johannesburg towards the end ofthis year was endorsed. In this respect, the idea ofestablishing a global environmental organization wassuggested. There was discussion of creating a bridgebetween Monterrey and Johannesburg, between sus-tainable development and its financing.

329

Chapter10 Retreat for Heads of State and Government

Lastly, and although we did not all agreeon the same points, we agreed on the need to makeperiodic assessments of progress in the directionsmentioned.

I believe that the Retreat of Heads of Stateor Government was an unprecedented event in inter-national conferences because of the large number ofparticipants from all regions of the world and repre-sentatives of a great diversity of nations. The spirit ofMonterrey represents a change in the direction of thedebate. It is a turning point in the integral agenda fordevelopment.

Today’s Retreat has a crucial virtue. Wediscussed a broad range of topics; some of them are amatter of broad consensus; others are barely emergingin forums like the one that is ending here inMonterrey today. However, the debate that we, Headsof State or Government, held today, leads me to pre-dict that many of these topics will move from con-tention to the agenda, and from the agenda to con-sensus. That is the virtue of the work which we havecarried out over these days.

I am confident that the discussions in thisRetreat will help spread and promote the spirit ofMonterrey and, as Secretary-General Kofi Annanpointed out, move from Agreement to Action.


330 Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

t

Annex Press Conferences

The press room at the Cintermex complex in Monterrey, Mexico,

providing media coverage during the International Conference on

Financing for Development.

Pre-Conference Press Briefing By

Co-Chairs of the Preparatory Committee for the International Conference on Financing for Development, United Nations Under-Secretary-General for Economic and Social Affairs and Executive Coordinator of the Financing for Development Secretariat17 March, 2002

After weeks of intensive negotiating, countries hadreached agreement on a wide range of issues that putdevelopment at the centre of global financial reformsand paved the way for the International Conferenceon Financing for Development, Mr. Nitin Desai,Under-Secretary-General for Economic and SocialAffairs, said at a press conference this afternoon.

The press conference, in advance of theopening of the international Conference in Monterrey,Mexico, was also addressed by the co-Chairs of thePreparatory Committee, Ambassador Ruth Jacoby(Sweden) and Ambassador Shamshad Ahmad(Pakistan). Also present was the Executive Coordinatorof the International Conference on Financing forDevelopment, Mr. Oscar de Rojas. They emphasizedthat Monterrey was not to be viewed as a stand-aloneevent, but the first building block in a long and contin-uing process.

Asked his opinion of the key achievementsof the Monterrey Consensus, Mr. Desai said the mostimportant was the inclusion of language which recog-nized that official development assistance must beincreased. The only remaining questions on that mat-ter were by how much and by whom. Other keyachievements included recognition of the need formanaging debt relief, for raising the voice of develop-ing countries, and for eliminating corruption.

Ms. Jacoby pointed out that official devel-opment assistance was one of the key elements ofdevelopment. A few countries in Europe had endeav-oured to meet the 0.7 per cent gross domestic prod-uct (GDP) target set for the developed countries. Somecountries had already promised to increase their con-tribution. She emphasized that Monterrey was not justanother United Nations conference. It would be a veryhigh-level event that included the world’s major eco-nomic and financial actors and institutions. The con-ference was not only about aid, but also about ensur-ing that the entire international economic system func-tioned properly in eliminating debt, and building thecapacity of developing countries to benefit from grow-ing trade.

Mr. Ahmad added that Monterrey was ablueprint for joint efforts on the part of the developingand developed countries in pursuing development in aholistic manner. Asked about demands in the UnitedStates for an end to corruption, Mr. Ahmad repliedthat the South had recognized the need for good gov-ernance and the rule of law. However, elements indeveloped countries encouraged corruption by payingkickbacks. It was not a simple matter, he added. Ms.Jacoby said that the fact that discussion of corruptionhad increased over the last decade or so was in itself asign of progress. Previously, there had been a reluc-tance to mention corruption for fear of giving offence.

Asked what had ended that taboo, Mr.Desai replied that there was no question of a taboo. Itwas the people of the country concerned who paidthe price of corrupt practices. He stressed that theconsensus document raised the question of repatria-tion of corruptly acquired funds.

Asked about the risk of violence by ele-ments of civil society if no changes were made to theoutcome document, Mr. Ahmad said that no violencewas anticipated. Non-governmental organizations(NGOs) had been on board throughout the preparato-ry process and had not been alienated. However, ifthey did raise angry voices, they must be heard, asthey were part of the globalizing world.

Mr. Desai pointed out that NGOs would beparticipating in the Conference, including the Summit,where they could address Heads of State.


332

The co-Chairs of the Preparatory Committee of the International

Conference on Financing for Development, Ambassador Ruth

Jacoby of Sweden (second from right) and Ambassador Shamshad

Ahmad of Pakistan (extreme right) brief the press along with

Under-Secretary-General for Economic and Social Affairs, Mr. Nitin

Desai (second from left), and Executive Coordinator of the FfD

Secretariat, Mr. Oscar de Rojas (extreme left). Ms. Susan Markham,

spokeswoman of the Conference, is at the centre

Answering a question about support for theConsensus by multinational corporations, Mr. Ahmadsaid the aggrandizement of corporate wealth at theexpense of the world’s poor was a very serious issue.Pharmaceutical companies were profiting from diseaseand death. They must spend some of the vast wealththey accumulated on HIV/AIDS research, educationand other issues. He added that three quarters of glob-al wealth was in the hands of one quarter or theworld’s population. Transnational corporations wereplaying a huge role in helping to accumulate thatwealth. It was only just and appropriate to require thatthey enhance the fight against poverty by returningpart of that wealth to the countries where they hadtheir biggest operations.

Press Conference by

United Nations Secretary-General, World Bank President, IMF Managing Director, and WTO Director-General21 March 2002

The International Conference on Financing forDevelopment was unprecedented not only in bringingfinance and development ministers together with busi-nessmen, but also in the way the United Nations, theInternational Monetary Fund (IMF), the World Bank and the World Trade Organization(WTO) had worked together in preparing it, Secretary-General Kofi Annan told correspondents this afternoon.

At a press conference held jointly withWorld Bank President James Wolfensohn, IMFManaging Director Horst Köhler, and WTO Director-General Mike Moore, Mr. Annan said: “I have madeclear this morning that we can no longer continue togive with one hand and take away with the other. Wemust work together, in a coherent fashion, if we want to achieve our goal.”

In response to a correspondent who askedwhat was known about development today that wasnot known a week ago, Mr. Wolfensohn said therewas now a unity of purpose between the leaders ofthe developed and the developing countries. What wascoming out in the consensus was that the partnershipwas not only recognized, but also that they would acton it in the areas of capacity-building, trade andincreased development assistance, with each side bear-ing its responsibilities. While that had been knownbefore, it had now been acknowledged by consensusand it was possible to move forward.

Mr. Köhler added that what was new wasthe uniqueness of the joint press conference. Thatshould send a strong message.

Another journalist said that while the focuswas on financing for development, Argentina neededfinance for survival. Would the international communi-ty watch the meltdown in that country or could it helpArgentina solve the crisis?

Responding, Mr. Köhler acknowledged dif-ficulty of the situation and the social dislocationinvolved. The IMF and the Argentine authorities wereworking hard to find a way out of the crisis. However,there was no quick fix for that very complex situationand, clearly, Argentina itself had the primary responsi-bility to find a way out.

The Secretary-General added that theArgentine situation was not merely a financial crisis,but had an impact on real people. “We will have thechance of speaking to the President here, but there isquite a lot of sympathy and support for the people ofArgentina”, he said. However, Argentina would haveto take the key steps with the support of the interna-tional community.

Mr. Moore said that the Doha developmentround must be concluded on time, in January 2005.He said the Argentines had stated that agricultural sub-sidies were costing them about $5 billion a year. If thatfigure could be reduced within the three-year time-frame, that would return to developing countries $54billion – up to five times more than all official develop-ment assistance (ODA) and eight times more than thedebt relief granted so far.

333


IMF Managing Director Horst Köhler, World Bank President

James Wolfensohn, and WTO Director-General Mike Moore join

United Nations Secretary-General Kofi Annan at a press conference

in Monterrey, Mexico, following the opening of the Summit session

of the International Conference on Financing for Development.

There was still a large gap between thepledges by the United States and the European Unionand the money required, another correspondent said.How would the rest be obtained? What substantialchange had taken place in the international communi-ty’s handling of the problems?

Mr. Annan replied that, apart from themoney given, the acceptance that aid was necessary,and the realization by the public that it was in thecommon interest to help the poor, would maintainpressure on politicians to keep assisting the developingnations. In addition, there were many business leaderswith whom he had discussed not only foreign directinvestment (FDI), but also ways to accelerate develop-ment and, in some cases, to leverage developmentassistance to encourage investment by the private sector.

Mr. Wolfensohn added that the first chequethat one wrote was always the best one. The pledgeswere indications by the United States and Europe thatthey were prepared to write cheques. They had set outa basis on which they would do so that was rationaland agreed between the developed and developingcountries. Two weeks ago, there had been no thoughtof the increase and now there is a significant increaseand a basis to move forward.

In another reply, Mr. Köhler said theConference was a further milestone to understandingODA as an investment in a better future for all. Therewas growing awareness of the interconnectedness ofpoor and rich countries. A policy concept was neededto define policy content, particularly on a global level,and to define a concept of global governance thattook care of global public goods.

Mr. Moore pointed out that at the launchof the first development round at Doha, developingcountries had stated their need to build their institu-tions and capacity so they could negotiate, participateand implement the results. Donor countries werekeeping their word in trade; the resources were flow-ing and, unless that happened, the development roundwould not succeed.

Asked how the United States could be con-vinced that poverty was a priority after 11 September,the Secretary-General replied that the internationalcommunity’s presence in Monterrey was enough indi-cation that the entire focus was not on terrorism.None of the problems that existed on 10 Septemberhad gone away. It was even more urgent to tackle theissues of poverty and conflict. “In five months’ time,we will go to Johannesburg and continue”, he added.

Another correspondent, noting that theinsistence on good governance was sometimes per-ceived as political pressure, asked how a country likeLebanon could fulfil tough conditions required by theIMF.

Mr. Köhler stressed the importance of crisisprevention. Member countries should avoid the build-up of macroeconomic instability through unsustainabledebt or high inflation rates or disregard for a competi-tive economy. If there was a need to correct a situa-tion, there was no other way out but to face the choic-es. The IMF could give up its combining of fundingwith conditionality, but it could learn through pastexperience. The Fund may have demanded too muchin the past and was in the process of reviewing theconcept of conditionality. But the primary responsibili-ty lay with the country itself, which should be proud ofthat sovereign right.

The Secretary-General added that goodgovernance should not be seen as being imposed bythe IMF or other outside forces. It was in the interestof all, especially the poor. Strong institutions and regu-latory systems created an environment that liberatedthe energies of the people. That was the foundationon which sustainable development was built.

Asked what standards a country needed toadhere to receive assistance, Mr. Wolfensohn said thatboth the donor and recipient countries had agreed onthe standards. They included working legal and finan-cial systems, elimination of corruption, benefits for thepoor such as education, health and proper infrastruc-ture, and acceptance of the responsibility to get thejob done. From the developed countries must comerecognition that nothing would work unless there weremarkets open for trade and ODA.


334

Press Conference by

Foreign Minister of Mexico and UNDP Administrator18 March 2002

The International Conference on Financing forDevelopment was the critical middle act in a three-conference storyline that had begun with theMillennium Summit of 2000, United NationsDevelopment Programme (UNDP) Administrator MarkMalloch Brown said in Monterrey, Mexico, this morn-ing.

At a press conference ahead of the open-ing plenary session, he said that the MillenniumSummit had laid out the goal of halving poverty by2015 by reversing AIDS, malaria and environmentaldegradation, among other goals, and securing Westerndevelopment support. The Monterrey event aimed toseek the commitment of developed countries and tocreate momentum for the World Summit onSustainable Development in Johannesburg, whereaction plans would be presented.

He said that, while the goal of achieving a0.7 per cent contribution of gross national product(GNP) from developed countries was important, theMonterrey Conference was much more interested ingetting the kind of political will and commitmentshown by United States President George W. Bushand the European Union.

The Conference wanted developing coun-tries to commit to giving a higher priority to socialspending – on education, health and the environment– and much higher levels of democratic governance,he said. In return, developed countries would supportthem with more trade, market access, investment andfresh external development support.

Also present was Jorge Castañeda, ForeignMinister of Mexico, who said the Government’s firstaim had been to achieve the broadest possible atten-dance for the Conference. At the governmental level,it had already met with huge success with 50 Heads ofState already present.

He said a second goal was the largest pos-sible number of civil society participants from the pri-vate sector, non-governmental organizations and aca-demia. The Government looked forward to seeingdemonstrations and protests by Mexicans, as well asforeigners. While there would be complete freedom todemonstrate, it was hoped that protestors would avoidthe violence seen during similar events in other cities.

A journalist asked how the American andEuropean promises on official development assistance(ODA) could be considered achievements when theydid not amount to even half the 0.7 per cent target.Mr. Castañeda replied that it was necessary to strikethe right balance between the solidity of the MonterreyConsensus, on the one hand, and ideas emergingfrom the side events, on the other. The new ideascould be added to the outcome document. He stressedthat there was obviously a difference between theConsensus and the documents from the preparatoryprocess. It had been crucial to come to Monterreywith a consensus in order to avoid the confrontationsseen at previous conferences.

Mr. Malloch Brown added that theMonterrey Consensus would help avoid battles overminor details. Within its dry United Nations prose wasa big new global deal, he added. Responding to anoth-er question about the low profile of the ODA goalssought by the Conference, Mr. Malloch Brown repliedthat, while the European Union commitment and theBush pledge fell far short of the needs of the millenni-um goals in monetary terms, they reversed in politicalterms a decades-long decline in development assis-tance.

Asked if there had been progress in achiev-ing the Millennium Development Goals set for 2015,he said that progress being made by two thirds of theworld population living in Asia were on track.However, the Latin America growth model had notdelivered the successes seen in Asia, while Africa wasfalling further and further behind. In Eastern Europe,where the social safety net of the past had disap-

335


Mr. Jorge Castañeda, Foreign Minister of Mexico (right), and

Mr. Mark Malloch Brown, UNDP Administrator, address the press in

Monterrey, Mexico

peared, there had been some success, but also smallareas of significant poverty.

Another journalist asked how civil societywould be convinced that they were part of the consen-sus when they claimed that the document had beenwatered down. Mr. Malloch Brown replied that theconsensus was a baseline platform on which all seg-ments could build. Civil society participants were notthe only ones disappointed by certain parts. Theyshould see it as a glass half full, rather than halfempty. Mr. Castañeda added that some of theMexican Government’s ideas had also been left out, ashad been those of others. That was the nature of con-sensus.

Asked what concrete steps could convincedonors that corruption was being reduced, Mr. MallochBrown said the drive for good governance mustinclude attacks on corruption. Democratic institutionsmust be accountable to the people. Donors would notrisk the wrath of their own public opinion by puttingfunds in the hands of corrupt leaders.

Press Conference by

Special Advisor to Secretary-General and UNDPAdministrator19 March 2002

“Given sufficient help and political will, it was possibleto achieve the Millennium Development Goals every-where, Harvard professor Jeffrey Sachs, SpecialAdviser to the Secretary-General on the MillenniumGoals, told correspondents at a press conference inMonterrey this morning.

[ The Millennium Development Goals areeight key development objectives set out in theMillennium Declaration that was endorsed by over160 world leaders at the historic United NationsMillennium Summit in September 2000. The goalscomprise time-bound global targets to improve health,education and the environment across the world, withthe overarching goal of halving extreme poverty by2015.]

Mr. Sachs said consensus had beenreached on the need to spend vastly more money($27 billion) on health. Secretary-General KofiAnnan’s new Global Fund against HIV/AIDS wouldprove to be one of the most innovative mechanisms,he predicted. Hopefully, global communities wouldform consensus on other development goals, such asreducing hunger, providing access to clean water,resettling slum dwellers and protecting the environ-ment.

He said there would be many keys to suc-cess, particularly political will, financial backing, goodblueprints and effective implementation. The power ofinternational debate and analysis had become appar-ent in formulating new approaches to internationaldevelopment assistance, and the rich countries, includ-ing the United States, were stepping up in a way thatmany had not done for a long time.

Mark Malloch Brown, Administrator of theUnited Nations Development Programme (UNDP),reiterated the vital importance of the bargain behindthe dry prose of the Monterrey Consensus. TheMillennium campaign was trying to inspire a sense ofurgency between now and 2015, to assess countryperformance on each Millennium goal and to ensurethat developing, as well as donor, countries receivedthat information.

He said that while there would be a hugerole in that campaign for the United Nations, WorldBank and other institutions, the real energy wouldcome from civil society. The Millennium Goals mustbe at the heart of politics in each country, and devel-opment assistance must become a cause on whichgovernments in donor countries were either elected orremoved. The aim was to form national coalitions todrive change, he added.

People in different countries were measur-ing progress and development teams were compilingreports on performance, he said. There were alreadyreports out on Cambodia, Cameroon, Chad and VietNam. Regionally, Asia was on track to achieve theMillennium Goals; Latin America was falling slightlybehind; and Africa and the Arab regions were declining.


336

UNDP Administrator Mark Malloch Brown (left) and Prof. Jeffrey Sachs,

Special Adviser to the Secretary-General on the Millennium

Development Goals at a press conference.

Asked how the American people could beconvinced that development assistance was importantwhen the United States Congress was spending somuch on defence, Mr. Sachs said every survey showedthere was no resistance among the American people.They thought their Government had been doing a lotwhile, in fact, it had not been doing anything. But lastweek, he said, President George W. Bush had toldAmericans clearly that the country’s security and thatof their children depended on development assistance.He had said that infectious diseases and ill healthaffected everybody on the planet and that, althoughpoverty did not make murderers out of people, it pro-vided the breeding ground.

Asked about the absence from the Summitsegment of the Conference of key Asian leaders,including those of Japan, China, Singapore andAustralia, Mr. Malloch Brown said the Conference hadnot been planned as a Summit and mainly financeministers had been expected. However, contacts madeby President Vicente Fox had resulted in a largeturnout of Heads of State and Government.

How would Americans and Europeans beconvinced that the elimination of farm and textile sub-sidies was important to the developing world, anothercorrespondent asked. Mr. Sachs replied that theshame about the subsidies was their incredible waste-fulness. Asked what would be done about medium-income countries like Brazil and others in LatinAmerica harmed by protectionism, Mr. Sachs said theUnited States policy had not been fully formulated. Itwas important for the country to engage with partnersthat were willing to adopt internal policies that madeexternal aid effective.

Press Conference by

Soros Fund Management Chairman and UNDPAdministrator19 March 2002

Developed countries should use the special drawingrights (SDR) allocated to them as a novel form ofinternational assistance to developing countries, SorosFund Management President and Chairman GeorgeSoros proposed at a press conference this morning.Mr. Soros said that such usage of SDR would be very helpful to poor countries in financing develop-ment. It would allow them to retain credibility, func-tioning as a sort of credit line when they did businessinternationally.

[The SDR is an interest-bearing interna-tional instrument created by the InternationalMonetary Fund (IMF) and distributed among its mem-bers to supplement their existing reserve assets – offi-cial holdings in gold, foreign exchange and reservepositions in the IMF.]

He said his proposal would ensure thatinternational assistance was properly spent because itcould be directed at specific projects. An impartial juryof experts would ensure the quality of the project, andthe donors could then select which particular one tosupport. In that way, the interests of the recipientcountries would be ensured before those of the donorsinstead of the reverse.

337


Mr. George Soros at a press conference in Monterrey, Mexico.

Earlier, United Nations Development Fund(UNDP) Administrator Mark Malloch Brown stressedthat, between Monterrey and the World Summit onSustainable Development in Johannesburg, thereshould be an effort to convert the focus of the officialdevelopment assistance (ODA) debate from whatshould be spent to what concrete goals the spendingwould achieve.

Asked how developing countries wouldbenefit from the use of SDR in financing for develop-ment, Mr. Soros replied that they would benefit direct-ly by having additional monetary reserves and indirect-ly through “global public goods”.

Another correspondent asked whetherthere was a risk of reserves being allocated to the bestchoice of the donor countries. Mr. Soros said thechoice would be in the hands of experts and, there-fore, removed from political pressure. In the UnitedStates, there was strong public support for internation-al assistance for education and health, he added.

Referring to countries where there was badgovernance, another correspondent asked how assis-tance could be most effectively spent in the poorestcountries while still respecting the recipients’ sover-eignty. Mr. Soros replied that the donor countriesmust cooperate and agree on joint action. If eachcountry were guided by its own national interest, themore general interest of promoting good governancewould be lost. That could create the danger of a returnto the days when donor countries funded their strate-gic allies irrespective of good or bad governance.

Why would governments contribute largesums to SDR while they had been unwilling to con-tribute to official development assistance, asked a jour-nalist. Mr. Soros said they would do so because theywere democratic and responded to the wishes of theirelectorates.

Asked if it would it be possible to giveassistance directly and without conditions to peoplesuffering under bad governments, Mr. Malloch Brownreplied that the traditional criteria for assistance hadbeen historic friendships or strategic considerations.The United Nations must provide humanitarian assis-tance to ensure such people were not penalizedbecause of their bad governments. Mr. Soros’ OpenSociety Institute and other such foundations could pro-vide a second funding source, while a third was techni-cal assistance such as that provided by the UNDP.Such assistance could not be diverted to defenceexpenditures and luxury items. There must be a strate-gy to help people living under bad governments.

Press Conference by

FAO, IFAD, WFP18 March 2002

The underfunding of sectors from which the poorderived their livelihoods was among the major reasonsfor world hunger, Hartwig de Hean, Assistant Director-General of the Food and Agriculture Organization(FAO), said this morning. At a press conference on‘The Role of Rural Development: Food andAgriculture in Making Aid More Effective’, he saidhunger was not only a consequence of poverty, butalso one of its major causes. World hunger had beenreduced at a rate of 6 million people a year in the1990s, whereas a reduction rate of 32 million wasrequired.

Holding a joint press conference with theInternational Fund for Agricultural Development(IFAD) and the World Food Programme (WFP), Mr. deHean said the common position of the three Rome-based agencies should send a strong signal to theConference, which should give top priority to hungerreduction as agreed at the 1996 World Food Summit.General agreement on the need to reduce hunger wasnot enough.

While the Conference was not expected tohave a sectoral emphasis, he stressed that agriculturewas not just another sector. It was the backbone of theeconomy in most developing countries, especiallythose with the greatest levels of hunger. The threeagencies called for a twin-track approach to hungerreduction by combining food-production support withinvestments to raise productivity.

Lennart Bage, President of IFAD, said itwas clear that not enough had been done either tomobilize the political will required to achieve theMillennium Summit goals or to channel resourceswhere they could be most effectively spent to eradicatepoverty by 2015.

Noting that the great majority of the 1.2billion poor living on less than a dollar a day lived inrural areas, he said that, with a greater focus on socialdevelopment, the rural poor were neglected. Thefocus must be not only on health and education, butalso on increasing food production and the purchasingpower of the poor, as well as on boosting the produc-tive base to generate the resources needed to over-come the imbalance.


338

Jean-Jacques Graisse, Deputy ExecutiveDirector of the WFP, said the agency had been verysuccessful in fighting highly visible cases of starvation,spending close to $1.5 billion. But there was nomoney for hundreds of millions of starving people whowere not in the limelight. They faced slow and invisi-ble starvation. The world should not be satisfied withsaving the victims of war, drought and floods, but mustalso spend on school feeding and nutrition pro-grammes for school children and pregnant and nursingmothers.

Asked to describe the impact of the currentemphasis on military spending for the war inAfghanistan and a possible attack on Iraq, Mr. Bagesaid there was a growing realization of the necessitynot only to fight terrorism, but also the causes of suchbreeding grounds as poverty and failed States. Theremust be a short-term and longer-term approach to theanti-terrorism war. Without a commitment to develop-ment, there would be growing instability.

Asked whether the Monterrey Consensusstrengthened the momentum for trade negotiations,Mr. Bage replied that the document was an agreedplatform, which must now create momentum to gofurther. Farmers in developing countries faced not onlytariff and other barriers, but also export-subsidizedcompetition from developed countries. That was oneof the foremost areas for trade negotiations. Making astart to improving that situation was an extremelyimportant priority.

On the question whether there was anyevidence that the countries of the Organization forEconomic Cooperation and Development (OECD)were willing to open their markets to the developingcountries, Mr. Bage noted two positive signs: theEuropean Union’s so-called ‘Everything-but-Arms’decision giving access to the least developed countries,and the growing debate on the effects of the presentsystem. Those factors could lead to change andimprovements, but that would not happen automati-cally, he added.

Mr. Graisse said that another positive signwas the outcome of the Doha World TradeOrganization Summit, which had recognized thatdeveloping countries must have a greater say. Thewealthy countries must not only give market access,but also help to build capacity in the developing worldas part of a necessary pro-poor financing effort.

Press Conference by

Executive Director of UNICEF19 March 2002

Economic development must go hand in hand withhuman development, Carol Bellamy, ExecutiveDirector of the United Nations Children’s Fund(UNICEF), told correspondents at a press briefing thisafternoon.

Ms. Bellamy, who presented a report enti-tled ‘Finance Development: Invest in Children’, saidno country had ever sustained rapid growth with highlevels of infant mortality or illiteracy. The majority ofpeople who lived below the poverty line in the worldwere women and children, she noted. She wasattempting to infuse into the debate the importance ofinvestment in health and education if sustainable devel-opment was to be achieved.

Asked about the education of children inthe Financing for Development context, Ms. Bellamysaid that, while enrolment rates had increased aroundthe world, 120 million to 130 million children of pri-mary school age were not in school – 60 per cent ofthem girls. Girls who received an education were morelikely to grow to be an adult, she noted. There was adirect link between economic vitality and investment inhealth and education, she continued. The upcomingUN General Assembly special session on childrenwould be a bridge between the current Conferenceand the upcoming Johannesburg Summit on sustain-able development.

Another correspondent asked what theExecutive Director hoped to bring back from theConference. Ms. Bellamy said she hoped there wouldbe more discussion of investment in human resourcesas key to achieving economic vitality. Other aspects ofdevelopment were important, but finance ministersmust see that their economies would grow throughsupport of education and health.

339


Press Conference by

UN-HABITAT Executive Director and the Mayor of Monterrey, Mexico19 March 2002

Some 1.2 billion people in the world lived withoutadequate shelter, Anna Kajumulo Tibajuka, ExecutiveDirector of the United Nations Human SettlementsProgramme (UN-Habitat), told correspondents thisafternoon.

Speaking at a press conference, Ms.Tibajuka welcomed recognition in the MonterreyConsensus that provision of adequate housing must beaddressed. In that context, she noted that paragraphs16, 18 and 19 of the Consensus dealt specifically withsettlement issues.

Felipe de Jesus Contu, Mayor ofMonterrey, who was also present at the press confer-ence, said that inequality existed in the city ofMonterrey especially on the fringes. There must be aneconomic impetus to deal with the lack of housing –this was one of the main aspects UN-Habitat was pro-moting. He hoped that the relevant paragraphs of theMonterrey Consensus would meet with agreement toaid those living in poverty to have a decent standardof living.

Responding to a question, Ms. Tibajukasaid that a key challenge to be faced was to giveeveryone a home. Sometimes this was forgotten. Shehoped that the Conference would lead to agreementon programme of housing finance. International coop-eration was needed to reach that goal.

To another question, she said Mexicancities had grown very rapidly. Latin America had beenurbanized up to 80 per cent. People were moving, shenoted. Cities were centres of economic growth andcultural liberation, and people were drawn to them.“We cannot lose site of this reality”, she said. UnderUN-Habitat, the United Nations was trying to confrontthe resultant problems of development.

Taking up another question, the Mayorsaid the north-west part of the city was its lowestincome area. It had unplanned sections where therewere irregular settlements that had had a negativeenvironmental impact. He had wanted Ms. Tibajuka,who had accompanied him on a visit of the city thatmorning, to see the different aspects of Monterrey.

“What was the United Nations doing to help Mexico with its settlement problems?” a correspondent asked. Ms. Tibajuka said that theOrganization was doing a lot both practically and interms of policy. Delivering a home for everyone wasone of the challenges of the time – this issue afflicted

even the rich countries, which meant that both theNorth and the South were involved. The starting pointfor the Habitat Agenda was political will, she said.Leaders of the world must reject homelessness. TheAgenda involved both social and economic aspects.She was here to galvanize resources to solve settle-ment problems and help encourage political will. Thepoor must be empowered and their situation eased.She said UN-Habitat had benefited from support fromthe European Union, in particular, from the UnitedKingdom. She also cited Sweden, United States,Belgium and Norway as having provided key support.

Answering another question, she salutedthe transparency demonstrated by the Mayor in show-ing her the problems facing Monterrey. The city hadmade commendable progress in building infrastructurein the face of rapid urbanization.

Queried about the financing of UN-Habitatprogrammes. Ms. Tibajuka said the international com-munity, through this Conference, was taking the prob-lem of poverty on itself. The poor, especially women,must be empowered with land and property rights.

Press Conference by

World Health Organization20 March 2002

The Director-General of the World Health Organiza-tion (WHO), Gro Harlem Brundtland, said at a pressconference in Monterrey today that there was no reason not to do what was necessary to deal with


340

Ms. Gro Harlem Brundtland, Director-General of the World Health

Organization addresses the press in Monterrey, Mexico, along with

Minister of Health of Mexico, Mr. Julio Frenk, and Special Adviser to

the United Nations Secretary-General on Millennium Development

Goals, Prof. Jeffrey Sachs.

urgent humanitarian needs and spur economic growth in poor countries. Joining Dr. Brundtland were theMinister of Health of Mexico, Julio Frenk, and SpecialAdviser to the United Nations Secretary-General onMillennium Development Goals, Jeffrey Sachs.

Professor Sachs insisted he would be“rationing” lives unless the rich countries stepped upand put money into the new Global Fund to fight HIV-AIDS, tuberculosis and malaria. There was no time fordelay – millions of children would grow up withouttheir parents unless “we begin to act and act now”.He assured donors, “we are going to be good stew-ards of the money but we can’t ration life and deathlike this any more”.

Dr. Brundtland said the focus of theConference should be on the role that health played indevelopment. There had to be an investment in peo-ple and a decent human approach in order to see pos-itive economic growth. Investing in people was crucialand would yield enormous benefits and allow millionsof people to emerge from poverty.

In 1999, she said she had asked leadingeconomists and Professor Sachs and an expert groupto look at the links between health and development.That commission produced its report last December. Itshowed how disease drained economies and howinvestment in health spurred economic growth.Improving people’s health could be the single mostimportant determinant of economic growth in Africa.The proposals in the report showed how to invest in health and save eight million lives per year in doing so.

“We know what needs to be done”, shesaid. The survival and destiny of children was crucialto the future. Any serious attempt to stimulate globaleconomic and social development and promotehuman security had to address that enormous burden.Several health goals had been implied in the keyMillennium Development Goals. That required a con-siderable scaling up of investment in poor countriesand poor peoples. The comprehensive global strate-gies were in place, she said, adding that it was just aquestion of having sufficient resources. Of course,trade was essential, but in order for trade to work,people had to be able to produce and be healthyenough to do so. It was not a question of choosingbetween trade and aid; it was a question of doingboth.

Professor Sachs said Monterrey could be aturning point in terms of the division between the richand the extreme poor. Nothing was more important inmaking that turn than to help the poor stay alive andbecome viable members of society. Health was at thecentre of the Monterrey agenda. It was not possible totalk about a partnership between the rich and poor ifthe rich were standing by while poor were dying as aresult of poverty.

Mr. Sachs said that millions each year inimpoverished countries were dying of AIDS, malaria,tuberculosis, and other diseases that could be prevent-ed by a single vaccination. WHO knows how to helpsave those people, but to reach those life-saving inter-ventions to everyone who needed them, a lot morehelp was needed from the rich countries, he said.While the Conference dealt with important issues liketrade and foreign investment, without development aidfor health, the goals set for a civilized world in whichpeople did not die because they were too poor to stayalive would not be met.

The Millennium Development Goals wereclear and centred on health. The real test was whetherthe rich countries stepped forward now to help, hestressed. The test was not for future years, but in thecoming weeks. The new Global Fund to fight AIDS,tuberculosis and malaria had received more than 300proposals for funding that could keep people alive inmore than 50 countries. But, there was not enoughmoney now to fund them.

The turning point was going to come inMexico where there was not only a wonderful processof democracy under way and tremendous developmentaims, but also representation by leaders of global pub-lic health. “Let’s give them the tools to do what theyhave to do. Then, we will see a historic turn that willstart here”, Mr. Sachs said.

Asked to expand on the eight-week dead-line for raising money for the Global Fund, ProfessorSachs said that proposals were made to the Fund on19 March, and the Board would decide on fundingthem at the end of April. There was not enoughmoney. He hoped the Board, therefore, would turnback to the donors and say there were bonafide publichealth proposals on the table, for which more moneywas needed.

Replying to a question asked in Spanish,Dr. Brundtland said that there was a need to inspireand promote good governance, democracy, and insti-tution-building, leading to sustainable development andcountries’ ownership of their own destiny. On theother hand, there were failed States, where peoplelived in refugee camps and there was no democracy

341


or sound institutions. Good governance was essential,including fighting corruption. Also crucial was to seriously care for people in humanitarian catastrophesand other difficult situations. Donors had to respond to both situations.

How could the panel be sure thatMonterrey would be a turning point, another corre-spondent asked. Professor Sachs said he was aware ofthe many commitments made over the decades,including health for all by 2000. What was differentnow, for one thing, was that the United States hadmanaged not to give much help to the poorest coun-tries for the last generation. But 11 September was atremendous wake-up call in the United States, as wasthe United Nations Millennium Summit for the wholeworld.

So, for the first time in a generation, theUnited States was now talking about increasing aid.That was a sign that something was different now.Also, the AIDS pandemic, having affected some 65million people, had also shocked the world and madeit a more dangerous place. There was a historicchance now. It was not sure by any means, but it wasa chance. The statements by the United States andthe European Union committing to aid were ‘break-through’ speeches. He was optimistic, but by nomeans complacent.

Press Conference by

UNFPA20 March 2002

With illiteracy and ill health still the norm for half theworld, one sure way of dealing with those problemswas investing in women – that was an investment withguaranteed high returns, said the Executive Director ofthe United Nations Population Fund (UNFPA) at apress conference this morning in Monterrey.

Ms. Thoraya Ahmed Obaid said thattoday’s paradoxical world was defined by the fact thatthe 10 richest nations individually were richer than theten poorest nations combined. That must be resolved.Today, women and men lived and suffered the conse-quences of poverty, malnutrition, chronic ill health,exposure to communicable diseases, and maternalmortally, and 40 million were living with HIV/AIDS.She said it was possible to end poverty, at least,extreme poverty. “We all knew what needed to bedone and, to a large extent, how to do it.” And the

root causes were beginning to be understood. Forexample, it was clear that economic poverty had social roots. Achieving the desired goals would lay afoundation for eradicating poverty, but resources were needed.

Throughout the Fund’s decades of work,certain lessons had been learned, including that whenwomen were empowered and educated, and in goodhealth, the benefits derived did not go to them alone,but also to their families, communities and nations,she said. The UNFPA had had some success in termsof deciding the number and spacing of children, themain aim of the 1994 International Conference onPopulation and Development in Cairo.

Ms. Obaid said that $17 billion was to havebeen mobilized in 2000 for population activities, but,so far, only $11 billion had been raised. And, whilethe developed countries had not reached 50 per centof their share, the developing countries had attained80 per cent from domestic resources to meet theircommitments.

Turning to official development assistance(ODA), she said the decline must be reversed, sincefailure to meet the agreed target would set backachievements and increase the gap between poor andrich. In Monterrey, leaders should pledge more sup-port to women and free them from poor health andlack of education. “Investing in women is investing inchange and in the future”, she said.

Asked how the gender issue fared in thecontext of the Monterrey Consensus, Ms. Obaid saidthe outcome text had reflected the issue of women’srights in some three or four places, so there was someattention being given to those issues. It should also beremembered that the Millennium Summit goals, suchas decreasing maternal mortality and preventingHIV/AIDS, including minimizing the effect on women,must be implemented. She added that, in someAfrican countries, for every man who was infectedwith HIV/AIDS, six to eight girls were infected. Ingeneral, resources should be mobilized so that women,in real terms, were not excluded from the agenda,whether in terms of education, health or HIV/AIDSprevention.


342

Press Conference by

President of Venezuela and Chairman of Group of 77 and China21 March 2002

Venezuela proposed to form an international humani-tarian fund into which developing countries could pay10 per cent of their external debt and 10 per cent oftheir military expenditure to save the lives of childrendying of disease and hunger around the world, HugoChávez Frías, President of Venezuela, said at a pressconference this afternoon.

Responding to correspondents’ questions,he stressed the need to raise international awarenessof the inequality in the world, saying that such a fundwas important for the common global fate. Nobodycould doubt that, for many countries, servicing exter-nal debt meant that their people would starve todeath. Debt cancellation would be a highly humanegesture, he added. As Chairman of the ‘Group of 77’developing countries and China, which representedfour fifths of the world’s peoples, he said he had criti-cized some of the elements that were the principalfocus of the International Conference on Financing forDevelopment, including debt and official developmentassistance (ODA). Although countries had committedthemselves more than 30 years ago to contribute 0.7per cent of their gross national product (GNP) toODA, most of them contributed barely 0.2 per cent.

Referring to the Conference outcome doc-ument, President Chávez said a consensus was relativeand did not mean turning a blind eye to those whowere starving. “We must ensure that the consensusturns into achievements and is not a dead letter”, headded.

In response to a question, he said CubanPresident Fidel Castro’s statement to the summit was acall for the world to think. He had cited figures thathad been corroborated and that showed that threepeople in the world had greater wealth than the grossdomestic product (GDP) of 40 developing countries. “Iagree with Fidel’s vision because he is awake to theworld situation. The world must begin to change theterrible phase in which it finds itself”, PresidentChávez said.

Asked why President Castro was leavingMonterrey early and whether his departure was aresult of United States’ pressure, he said the Cubanleader had said what he had to say in his usualresounding manner and now he was leaving the dele-gation in the hands of Ricardo Alarcon, Speaker ofthe National Assembly. He said he did not know whyPresident Castro was leaving. “I am also about toleave today because I have matters to deal with inVenezuela”, he added. President Castro’s departurewould not diminish the importance of the Summit.

President Chávez told another journalistthat he had read that President George W. Bush ofthe United States was concerned about Venezuela. “Iam thankful for that and I, too, am concerned aboutthe United States – the Towers, the terrorism and theenergy. We have seven refineries on United States ter-ritory and 13 fuel stations providing fuel fromVenezuela”, he said, adding, “We are also concernedwhen we meet here in Monterrey to discuss the prob-lems of the world – Latin America, Africa and Asia.”

Press Conference by

European Union19 March 2002

Poul Nielson, European Commissioner forDevelopment and Humanitarian Aid, European Union(EU), announced an increase in EU official develop-ment assistance (ODA) to 0.39 per cent of grossnational product (GNP) – from the current 0.33 level –which would translate into an extra $7 billion in aidper year from EU member States by 2006. The newEU level of 0.39 per cent was not the end of thestory, he stressed, as the 0.7 per cent target was stillthe goal to which the Union was committed. Therecent decision meant that those Union members thatwere presently below the average level of 0.33 percent of GNP would reach that level by 2006, at the latest.

343


His Excellency Mr. Hugo Chávez Frías, President of Venezuela,

meets the press in Monterrey, Mexico.

On the most modest assumption, that newfigure would mean that aid from EU member Stateswould increase by an extra $7 billion per year by2006. When that amount was accumulated for theperiod between now and 2006, some extra $20 bil-lion would be made available from the Union. He wel-comed the Monterrey Consensus, which he felt was abalanced platform from which new ideas could belaunched. It was necessary to have real and tangibleresults in Monterrey, which would lead the way toJohannesburg. A progressive outcome in Monterreyconfirming global cooperation was the best way tocreate a basis for success in Johannesburg. “If wedon’t deliver now this week, we risk an unproductiveand unclear focus in Johannesburg.”

He hoped the current week would be aturning point in the effort to fight poverty. Neverbefore had there been such a broadly agreed consen-sus on what constituted good development policy. Asit was felt that there was more to be gained from anin-depth analysis of global public goods, CommissionerNielson also proposed, from the European side, theestablishment of a task force to study its implicationsfor financing for development.

Responding to a question, he noted thatthe total level of aid from the 15 member States ofthe European Union amounted to around $25 billioncompared to $9.6 billion from the United States.There was room for contributions from everyone andthere was no need for comparisons, he said. Everycountry could improve in the area of developmentassistance. “That is why we are here this week.”

Asked if giving grants versus loans would“break the World Bank”, he replied that it dependedon the shareholders of the Bank. It was clear that thelimiting factor at any replenishment negotiations hadbeen the level of contribution available from theUnited States. The shareholders of the Bank wouldhave to discuss that issue. It was evident that, withoutadditional funding, a change in the direction of grantswould lead to dire consequences for the Bank.

On whether the European Union was plan-ning to increase its foreign direct investment in LatinAmerica, he said that the issue was one to be decidedon by businesses and not governments. In 1998, theEU share of all private flows to developing countrieswas 56 per cent. In 2000, that figure was 69 percent. The problem was that only a very small share ofglobal foreign direct investment went to the poorestcountries. Something had to be done about that, hestressed.

Press Conference by

European Commission20 March 2002

The European Union had never before had a commonposition on official development assistance (ODA), andthe organization’s agreement to define the issue was,therefore, timely, Poul Nielson, EuropeanCommissioner for Development and HumanitarianAid, European Commission, said at an afternoonpress conference today.

Noting that there was a link between ODAand foreign direct investment (FDI), he said they diddifferent things, and more money was poured into thelatter. However, only 3 per cent of FDI went to sub-Saharan Africa, and that was where ODA becameimportant. Describing development assistance as anorganized handshake, he said that giving it in anorganized and predictable fashion meant that therecipient countries could count on it. He also called formoney to be made available as a peace dividend in SriLanka, the Democratic Republic of the Congo, andother countries emerging from conflict. Pointing outthat ODA had never been as thoroughly discussed,organized and coordinated as it was today, he stressedthe need for the Conference to set new targets.Hopefully, the remaining days would inspire an effortto define those new goals.

Also present at today’s press conferencewas José Piqué, Foreign Minister of Spain, who reaf-firmed, on behalf of the European Union, the organi-zation’s commitment to increase ODA from 0.33 percent to 0.39 per cent. He reiterated its commitmentto the agreements reached at Doha, as well as to con-tinue working towards the Johannesburg WorldSummit on Sustainable Development.

Responding to a correspondent who askedwhat the European Union, on one hand, and Spain,on the other, thought about progress in coordinatingdevelopment assistance, Mr. Piqué said the policies ofthe different European countries should complementeach other and generate synergy to become morethan the sum of their parts. The European Union hadmade more of an effort in providing ODA, in absolute,as well as relative, terms, and was ready to continuedoing so.

Asked why there was such a large gapbetween big contributors like the Netherlands orSweden, and others like Germany, which gave only0.06 per cent, Mr. Nielson said tradition was part ofthe answer. It took time for a country to reach thehigher levels. The gap also reflected the slow impreg-


344

nation of a country’s culture over many years. Officialdevelopment assistance had only been discussed multi-laterally in the Organization for EconomicCooperation and Development (OECD) and at theUnited Nations. It was the first time European Unionmember States had reached a common position.

Mr. Piqué told another journalist that itwould be a mistake to see the European Union’svision as being opposed to that of the United States.The two were coherent and complementary.

Press Conference by

President of the Government of Spainon behalf of the European Union22 March 2002

The International Conference on Financing forDevelopment had been a huge success from the per-spective of the European Union, Mr. José María AznarPresident of the Government of Spain told correspon-dents this morning.

At a joint press conference with EuropeanCommission President Romano Prodi, Mr. Aznar saidthe Conference had achieved consensus on three lev-els: an internal consensus within the European Unionon official development assistance (ODA), a EuropeanUnion consensus with the United States on ODA, anda consensus between donor and recipient countries.

President Aznar, whose country holds therotating European Union presidency, said theEuropean Union contribution to development wentslightly further than the Monterrey Consensus, but wasfully in line with it. Those countries that had alreadyachieved the agreed 0.37 per cent average ODA levelshould maintain it, and those that had not should aimfor 0.39 per cent.

He said discussions had reached consensuson the rule of law, equality of opportunity for men andwomen, openness to investment, greater liberalizationof trade, as well as improvement in trade quantity andquality, and monitoring of results on the ground.Combating poverty and achieving development shouldnot be aimed only at those who needed it mostbecause that would exclude some countries, he added.

Mr. Prodi said the consensus had not start-ed with the Monterrey Conference and would continueat the Johannesburg World Summit on SustainableDevelopment. Monterrey must be seen as a step inthe direction of more sustainable development. Thereal question was how to gain the maximum develop-ment for the greatest number possible. Noting thatAfrica was not only Europe’s neighbour, but also thecontinent most in need of development, he said theCommission would push education initiatives in thatregion.

Asked his reaction to the summit statementby United States President George W. Bush, Mr.Aznar said he had approached the ODA issue fromthe right perspective, stating his concern to maintainthe effectiveness of aid to the least developed coun-tries.

Mr. Prodi said the United States was head-ing in the right direction. Only a strong engagementbetween Europe, the United States and Japan couldbring about a change in the effectiveness of ODA.Pointing out the contradiction between the EuropeanUnion’s stated commitment to opening its marketsand its raising of barriers to steel, cereals and fruitjuice, another correspondent asked whether thataction would not hurt Brazil and other developingcountries. Mr. Prodi replied that the action had noth-ing to do with developing countries, but was a purelybilateral decision. “We need to protect ourselves fromthe consequences of United States steel measures. Itwill last only as long as the United States measurelasts”, he said.

The President of Spain said the Europeanapproach would be made clear at the Madrid Summitto be held in May between the Union and the LatinAmerican and Caribbean countries. Asked if it wasreasonable for poor countries to ask the wealthy

345


President José María Aznar of Spain (right) and European Commission

President Romano Prodi address the press

nations to eliminate subsidies in exchange for anopening of markets, Mr. Aznar said it was not possibleto take a fragmented view. You could not have devel-opment with closed markets, State intervention andlack of education. He noted that some countries hadmajor natural and energy resources, but their develop-ment depended on other factors. “Spain was receivingODA in 1981 and now we are among the top 10donor countries, due, to a large extent, to institutionalconsolidation, democracy, education, Union member-ship and other factors”, he added.

Another journalist asked which developingcountries were included in the European Union’s‘Everything-but-Arms’ initiative. Would tariffs beremoved for their goods? Mr. Prodi replied that theinitiative involved the 49 poorest countries in theworld, which would be exempt from tariffs on sugar,rice and bananas.

Press Conference by

United States of America19 March 2002

Mr. Alan Larson, United States Under-Secretary forEconomic, Business and Agricultural Affairs, outlinedhis country’s position regarding development assis-tance, trade and investment, at a press conference thisafternoon.

He highlighted the announcement madelast week that the United States would increase itsinternational assistance by $5 billion over the nextthree budget years. That initiative would achieve, inthe third year, an annual level of assistance that was50 per cent larger than current levels. The Presidenthad stressed the need for accountability on the part ofboth developed and developing nations, as well as theneed for good governance and an economic policyframework that promoted entrepreneurship.

On trade and investment issues, Mr. Larsonsaid that the exports of developing countries had dou-bled over the last decade and were expected to doubleagain in the next decade. Imports to the United Statesfrom sub-Saharan Africa had increased by 17 per cent last year. There would also be a high premium onmoving ahead with implementation of the Doha agenda.

He said there was now widespread agree-ment on the crucial role of private investment for promoting development. Mexico, for example, wasattracting a lot of investment. A number of othercountries, such as Uganda and Honduras, hadincreased their foreign direct investment (FDI) flowsover the last decade. There was an important role forpartnerships between the governments of developingcountries and private businesses.

Asked how the United States compared to“our brothers in Europe” with regard to internationalassistance, Mr. Larson replied that the United Stateswas very engaged in the development process in sev-eral ways. The first was through its market. TheUnited States was importing $450 billion from devel-oping countries. FDI flows were an important contri-bution – even larger than overall official developmentassistance (ODA) levels – as were remittances and pri-vate philanthropy. On ODA numbers, he continued,the United States had a positive record. The Presidenthad outlined a proposal, which would bring the UnitedStates, to a point in three years, where it would becontributing $5 billion more than had been projected.

With regard to his country’s position onthe use of special drawing rights (SDRs), he said thatthe SDR approach to development assistance was nota promising path. The idea was to try turning SDRsinto a development tool. Some had advocated thatidea because it was a shortcut and would involveavoiding parliaments and congresses. He believed itwas necessary to go to parliaments and congresses.

A correspondent asked whether the UnitedStates had anything to do with the removal of the callfor doubling ODA, which had appeared in earlier ver-sions of the Consensus. Mr. Larson said that his dele-gation had worked hard to reach agreement on astrong commitment. In the past, some countries weretalking about a 0.7 per cent ODA target even thoughassistance levels were moving in the opposite direc-tion. The approach in the consensus represented acredible commitment. The United States believed thatwhen it committed itself to a process, it should take itvery seriously.

As to where the extra $5 billion wouldcome from, he said that it would be necessary to go toCongress and the American people and show themthat it would be a sound investment and which wouldbe targeted on achieving the desired development out-comes. Every American had a stake in seeing thatdevelopment succeeded. It was an opportunity,through investment and trade, to have growth outsidethe United States contribute to growth inside theUnited States.


346

Press Conference by

United States of America Secretary of the Treasury20 March 2002

At a press conference today in Monterrey, UnitedStates Treasury Secretary Paul O’Neill laid out in fullPresident Bush's ‘Millennium Challenge’, which wouldincrease aid by $5 billion to the developing world,reflecting his determination to play a useful and signifi-cant role in world economic development, while hold-ing both receiving and donating nations accountablefor real results.

[ A paper distributed by the TreasurySecretary at the press conference shows the newMillennium Fund figures, as follows: 2004, $1.66 bil-lion; 2005, $3.33 billion; 2006, $5 billion; and 2007and beyond, $5 billion.]

Clarifying a report by two newspapers that,in addition to the announced $5 billion increase inUnited States foreign aid, there would be an additionalincrease, he said, that President Bush had said hewanted to provide a substantial increase in aid – look-ing towards raising the current level, which was atabout $10 billion per year, up to a running rate in fis-cal year 2006 of $15 billion per year. That represent-ed a 50 per cent increase. The process would work itsway up beginning in fiscal year 2004.

He said that that was a very substantialincrease in assistance, but importantly tied to the ideaof seeing “real results” in terms of an improving levelof living standards in developing countries around theworld. That was a very big demonstration of commit-

ment by President Bush and the American people thatthey were determined to play a useful and significantrole in world economic development and hold bothreceiving and donating nations accountable for realresults.

Asked why the United States, to whichpeople were looking to set the pace for increasedassistance, was still spending one fourth of what theEuropean Union was spending on development aidand could not do better, Mr. O’Neill said, “we need todemonstrate that we know what we’re doing” and thathad not meant spending more money, but gettingresults from money spent. Charitable giving inAmerica in 1998 was $175 billion, he continued.Americans did not lack compassion or a charitablespirit. Getting results was the issue – meaning, sub-stantial increases in the earned income level of theworld’s people. “If we can show that we can causethat to happen, plenty of funds will flow”, he added.He said that if there was going to be real economicdevelopment globally, most of that development wasgoing to come from capital coming into countries tocreate private enterprise that, in turn, created jobs andhigher levels of living. “We’re not going to do it withwelfare”, he added.

Before turning to a series of other ques-tions, the Treasury Secretary provided brief openingremarks. Earlier today, he said, he had had bilateralmeetings with four countries to discuss topics of theConference and other issues of significance to theworld, including President Bush’s ‘MillenniumChallenge’, aimed at producing “real results” anddoing that more quickly than had been the practiceover the past decade.

Also discussed today had been the terroristfinance problem, on which all civilized nations of theworld were working, he said. Ideas about converting asubstantial part of financial assistance from loans togrants, among other issues, were also taken up.

Asked about a report of the World Bankbeing launched today, he said he had not seen thefinal version. He still believed there was work to bedone to sharpen understanding of past lessons. Hewas looking forward to the final version of that report.

Replying to a question about whether theUnited States economic slowdown was over, he saidhe thought the country was on the road to substantialrecovery. Everyday seemed to bring new figures,which confirmed the strength of that recovery.Housing numbers released for last month had showncontinuing strength in new housing starts and anincrease in the number of permits granted. That was

347


Treasury Secretary of the United States of America, Mr. Paul O'Neill,

speaks to the press

on top of a very impressive set of figures on productiv-ity growth in the fourth quarter, of 5.2 per cent, andthat appeared to look good for the first quarter. All ofthat was good news for the United States economyand the rest of the world.

Asked further about the aid conditions andwhether the United States was willing to forgive anydebt, he said President Bush had indicated that hewould create a set of measures for that purpose. Hehad instructed the Treasury Secretary and Secretary ofState Colin Powell to work together with other nationsand international institutes to come to a conclusionabout what the right measurement standard should be.That was aimed at assuring that the receiving coun-tries were moving or had arrived at a condition wherethe rule of law worked, where contracts were con-tracts, and where the leadership was taking measuresto root out corruption, he said.

The Administration was looking at how tothink about outcomes rather than inputs, he added. Ineducation, for example, rather than use the numbersof children enrolled as a measure, the standard couldbe whether a child aged 10 could read or write. “Wewant to see success as measured by an improvementin the living conditions and income levels of people indeveloping nations around the world, and we think theformulation of these measures is a critical part ofdoing this”, he said.

With many countries in Africa down totheir last few assets, what steps were being taken tohelp ensure that those countries were not left withnothing, another correspondent asked. Even beforethe new initiative, Mr. O’Neill said, substantial fundshad been allocated for helping countries worldwide.And President Bush had indicated his own high levelof interest in the specific subject of African develop-ment.

Asked to elaborate on reports that he haddisagreed with President Bush on the decision toimpose tariffs on imported steel, he said that thatquestion had come from hearsay. When the corre-spondent said she believed it had been written in TheNew York Times, he responded that yes, that waswhat he had said, “Your story comes from hearsay.”

He said that President Bush’s value systemwas deep and positive. When the President had askedhim to join the Government, he had not asked him toleave his brain in the private sector. So, when thePresident asked for his counsel prior to a decision, hespoke from knowledge and experience and told himwhat he thought. When the President told him whathe thought was the right answer for the country, “I am always behind him.”

To a question about what the United Stateswas doing about the situation in Argentina, he saidthat in November 2000, under President Clinton, itwas decided that the Argentine situation was critical,and a programme was supported for Argentinathrough the International Monetary Fund (IMF) thatwould provide $43 billion in public and private funds.Then, in April 2001, Argentina was out of moneyagain.

So, he continued, the IMF was presentedwith a proposition stating that Argentina neededanother $20 plus billion. As much as the UnitedStates Government was concerned about the sustain-ability of yet another big allocation of money forArgentina, it agreed to go along. By August, that wasall gone, as well. So, it agreed to another programmethat was never fully drawn.

“How much was enough and could anyonelook at the social disorder on the television and findanything but sorrow over what is taking place inArgentina”, he asked journalists. The question thathad been asked of him suggested that it was an act ofwillfulness to, in effect, say “too bad” to people. Infact, no one cared more about Argentina returning toa sustainable economic condition than President Bushand others in his Administration.

He added that the Government detestedthe social dislocation going on there and had beenworking daily behind scenes to try to help, as theArgentine Government struggled with those difficultissues. Tomorrow, he would have a bilateral meetingwith Argentina’s Finance Minister.

On the flow of private money to directinvestments, another correspondent had heard fromambassadors of small countries with good governancethat no money was reaching them. How could it beensured that direct investments went in those direc-tions, as well? Also, the world had heard so manyUnited States promises, but fulfilling them sometimesbecame deadlocked in Congress. Was he safe with the$5 billion?

Mr. O’Neill said there had been a positiveresponse so far from members of Congress to thePresident’s “suggestion”. The criteria used would be ademonstration of movement towards the underlyingprinciples that could create successful economic development as a device for deciding where moneyshould flow.


348

Press Conference by

Former United States President Jimmy Carter19 March, 2002

“I wished I had known then what I know now aboutthe Third World”, former United States PresidentJimmy Carter said today at a press conference inMonterrey, referring to how little Americans under-stood about how little they gave and how desperatelyaid was needed.

The Monterrey Conference could serve toeducate the American people, he said. Also, theConference might well stimulate the rich countries tobe more generous and encourage the developingworld to vastly decrease the corruption and waste intheir countries. At the same time, waste and corrup-tion decreased on their own when aid touched peopleon a personal level.

He said the greatest challenge was bridgingthe divide between those nations that had everythingand those whose citizens were living in abject poverty.During a recent trip to Africa, where he had visitedsome ten nations with Bill Gates, Sr., he had seenfirst-hand the lack of investment in the treatment ofHIV/AIDS, for example. That had been “a real eyeopener in the field of health”.

The United States gave one-thousandth ofits gross national product (GNP) to overseas develop-ment, while Europe and Japan gave approximatelythree times that much, he continued. “We were allshocked obviously by the tragedy that occurred in NewYork on September 11th in that savage terroristattack”, but in Africa alone, that many people died

every 12 hours of AIDS. And, much of that could beprevented. Development assistance was criticallyimportant if it was spent wisely and effectively.

Allocating funds for health for a particulardisease, whether malaria, river blindness or AIDS,however, was a different story, he said. If a top officialbegan to steal that money, he or she was more likelyto get caught because people would rise up anddemand that that waste be stopped. Improving thequality of someone’s life meant development assis-tance was less likely to be wasted or subjected to cor-ruption.

Asked about United States PresidentGeorge Bush’s proposal for increased aid to develop-ing countries, he said he was pleased at his statementand commitment. That had been a long-awaited anddramatic statement, but it should be put in perspec-tive. However, the effective date would be in fiscalyear 2004, while the needs were urgent now. Also,part of President Bush’s statement concerned theneed to meet certain criteria before that aid becameavailable to a particular country. It was important to be“generous and not just demanding”, he added.

Just 10 days ago, he said, he had visitedthe only clinic in the Central African Republic, where267 people were suffering from advanced AIDS, mostof them women with small children. There was “zeromedicine, zero treatment, zero programmes” for AIDSprevention. The women had just come for a morsel offood to tide them and their babies over for the nextday.

He said that 90 per cent of the beds in thelocal hospital in the capital city of the Central AfricanRepublic were filled with AIDS victims. Now, if thatcountry could not receive aid until it proved it was effi-cient, it would never get the help it needed. “We can’texpect a country to fulfil criteria in advance that mightbe beyond its reach”, Mr. Carter said.

A correspondent said that, notwithstandingPresident Bush’s promise of $5 billion, it seemed thatthe dominant United States’ position was that tradewas better than aid, and an unseen, but all-seeing,hand of the market would cure all ills. What did hethink about that?

Mr. Carter replied that the developed richnations had imposed trade restrictions on the poorestnations that far exceeded any total aid that they gave.For instance, in agricultural protection alone, “We costthe developing world three times as much as all theoverseas development assistance that they receivedfrom all sources.”

349


Former President of the United States of America, Mr. Jimmy Carter,

at a press conference in Monterrey, Mexico.

He added that when anyone talked aboutincreased trade as a substitute for supplementing aid,they should look at how those countries were prevent-ed from trading. So, in addition to giving foreign aid,the trade barriers that prevented countries from mar-keting their only attractive natural resources or pro-duced goods should be reduced.

Replying to a question about whether theUnited States should pledge to give 0.7 per cent of itsGNP to official development assistance (ODA), hesaid, yes, but that was an unlikely prospect now. Yet,the Europeans had pledged 0.39 per cent of theirGNP compared to the United States’ one-tenth of oneper cent.

Asked whether Mexico’s President VicenteFox was a model leader for the developing world, Mr.Carter said that President Fox had done a good job,and his positive relationship with President Bushwould be helpful to his country. He added thatMexicans and others should be given amnesty or anopportunity to remain in the United States legally andcontinue to do their vital work.

Responding to a question about farm subsi-dies, he said that agricultural barriers had beenreduced or eliminated with Canada and Mexico andthat had not hurt the American farmers. The next stepwas to turn the hemisphere into a free-trade zone.Compensatory efforts should be made when theexport potential of the truly poor nations was hurt.

When he was President, he said replying toanother question, foreign aid had been between two-and three-tenths of 1 per cent. As President, he hadhad a constant annual battle with Congress to increasethat aid, pointing out that each dollar invested by theUnited States benefited it to the tune of about $6.During the cold war, he added, one purpose of givingassistance to an African nation, for example, was tokeep the Soviet Union from coming in and buyingtheir friendship with a higher level of assistance. Atthat time, Congress was more receptive to foreign aidprogrammes. In terms of agricultural subsidies duringhis Administration, those were probably about thesame as now.

Responding to a question about the recentUnited States’ decision to stop contributing to theUnited Nations Population Fund (UNPFA), PresidentCarter said he was not familiar with that decision, butone factor in the White House and Congress that seri-ously damaged health programmes around the worldwas the preoccupation with the abortion issue.

Under Presidents Clinton, and GeorgeBush, Sr. and Jr., there had been a very tight restrainton allocation by Congress of funding for any pro-gramme involving family planning, if that could possi-bly encompass abortion. Now, as a leader of a non-governmental organization that invested half its effortsin the health field, he saw the adverse effect of thoserestraints on public health. That debate was still in itsformative stage and had not yet been resolved.

Press Briefing on

Ministerial Round Table: Partnerships in Financing for Development19 March 2002

“Ministerial Round Table A2 had discussed the need tochange the terms of international investment, a com-plex undertaking requiring rules to govern disorderlycapital and financial flows”, Co-Chair Didier Opertti-Badan told correspondents at today’s evening pressbriefing.

Mr. Opertti-Badan, Minister for ForeignAffairs of Uruguay, said that, according to figures, 75per cent of investment was carried out in the industri-alized countries, creating a circuit that had frozen thedevelopment process. If that continued, the investmentshare of underdeveloped and developing countrieswould never be enough to attain higher levels of devel-opment.

Regarding international debt, he said theround table had heard a proposal by the head of theEconomic Commission for Latin America and theCaribbean (ECLAC) to create a regional inter-banknetwork among central banks works, establishing amassive, manageable fund. A decision to use suchresources would not be a mere discretionary act, butrather a conscious decision taken in light of the possi-bility of the countries concerned to repay them.

That idea had financial, as well as political,value, he said. Politically, it would remove the influ-ence of alien financial institutions that were out of stepwith the countries of the region. The Bretton Woodsagreements should be revised, he added, but they hadbecome, like the United Nations Charter, almostuntouchable.

Paa Kwesi Nduom, Co-Chair of MinisterialRound Table A1 and Minister for Finance of Ghana,said the meeting had expressed concern that, despitetheir calls for market liberalization, developed coun-tries themselves had not liberalized. “Let’s practisewhat we preach”, he said. The round table had also


350

concluded that aid should not be tied to the purchaseof goods from the donor countries. Official develop-ment assistance (ODA) should benefit the recipientcountries and not the donors, he added.

The Co-Chair said concern had also beenexpressed that, despite their best efforts, most devel-oping countries would be unable to meet theMillennium Goals on their own without a significantincrease in ODA. Pointing out that more than half ofAfrica’s population existed on less than a dollar a day,he said domestic tax revenues would never be enoughto generate development, no matter what reviews andstructural adjustments were carried out.

Shaukat Aziz, Co-Chair of Round Table A3and Finance Minister of Pakistan, said his meeting hadreached consensus on the need to build greater owner-ship of partnerships between donors and recipients.

The meeting had also discussed the effec-tiveness of donors and of aid, he said, adding thatthere was also a need to monitor the donors, as wellas the recipients. He also stressed the need to buildabsorptive capacity in developing countries; otherwise,throwing money at them would be futile. Aid shouldnot be seen as a permanent crutch, but only as a vehi-cle to make them recipients self-reliant.

Mugur Isarescu, Co-Chair of Round TableA4 and Governor of the National Bank of Romania,said his meeting had discussed the need for domesticand international reform. On the domestic level, thatwould include good governance, sound macroeconom-ic policies, a better environment for private investmentand capacity building.

Internationally, it would involve increasedmarket access, debt relief and stabilization of interna-tional financial markets.

The round table had also proposed the cre-ation of a forum for business entities from the Northand South; an international task force focusing onglobal public goods; a permanent consultative forumon financial and debt issues; and greater participationby developing countries in resolving international eco-nomic and financial issues.

Asked to expound on the proposed region-al inter-bank network, Mr. Opertti-Badan said it wouldinvolve a high level of decentralization, perhaps result-ing in an overall review of the international financialsystem.

Responding to a question on the closing of the round tables to the media, Susan Markham,Spokeswoman for the International Conference on Financing for Development, said the PreparatoryCommittee had made that decision. However, theBureau of the Conference was meeting to discuss the issue.

Press Briefing on

Ministerial Round Table B2: Coherence for Development20 March 2002

“Coherence” was the main subject discussed today inMinisterial Round Table B2, Co-Chair EvelineHerfkens, Minister for Development Cooperation ofthe Netherlands, told correspondents at today’sevening press briefing.

She said the round table had examined thatissue in terms of both the domestic and internationalfinancial systems. At home, it was necessary to ensurethat, while a minister in charge of agriculture washelping to boost production, his colleague was ensur-ing a proper market for the increased production.Internationally, financial institutions must actually beworking together rather than fighting turf wars.

Co-Chair Trevor Manuel, Minister forFinance of South Africa, emphasized the need forgreater openness so that the public would know aboutany contradictions within the system. Also importantwas the need for a single contact person, as there wastoo much insistence on talking with different ministersor on interacting with States or Governments. Equallyimportant was the need for the people in both thedonor and recipient countries to know how resourceswere being spent.

Regarding the issue of selectivity, a corre-spondent asked how practical it was to expect theWorld Bank and donors to know which countries werecleaning up their acts. How could politics be kept outof it and what would happen to those countries thatfailed to clean up? Ms. Herfkens replied that imposingconditionality often did not work, stressing that home-grown programmes were the best bet. There was nopoint in outsiders trying to get countries to do whatthey did not want to do. She said some countries inAfrica met the good governance and transparency cri-teria, but still suffered from serious underfunding oftheir programmes. If that continued, there would be afunding disaster when more countries got their acttogether, she warned. There was real risk that by2015 the cheque would still be in the mail.

So, while the pledges to reverse officialdevelopment assistance (ODA) were good news, thebad news was that the amount of money pledged wastoo little. There was a need to support countries withgood policies, linking that support to their own budg-ets and their own accountability systems. On the otherhand, it was important to build the capacity of coun-

351


tries lacking good governance owing to poverty.However, there were those that lacked political will toimprove governance because the elites wished to con-tinue stealing from the poor.

Another journalist asked whether theUnited States pledge to increase ODA meant it hadaccepted the idea of supporting countries with home-grown programmes, since previous administrationshad been reluctant to do so. Ms. Herfkens replied thatWashington appeared quite open-minded about it. Theproblem was its very low financial effort.

Mr. Manuel added that it was necessary to remove political cynicism from the equation. Donoraid was higher during the cold war than it was now,whereas globalization required greater catch-up funding.

Of what concern was the question ofZimbabwe in the context of good governance and ofthe New Partnership for African Development(NEPAD), another correspondent asked. Mr. Manuelsaid a country could decide to be part of NEPAD ornot. He urged the journalist to take up the matter withSouth African President Thabo Mbeki. Mr. Mbeki wasexpected in Monterrey tonight from London, wherehe, President Olusegun Obasanjo of Nigeria andAustralian Prime Minister John Howard had decidedon Zimbabwe’s suspension from the Commonwealth.President Mbeki had also been closely involved withthe NEPAD initiative, he added.

NGO Press Conference on

Round Tables21 March 2002

The need to reform the international financial systemwas the main theme underlying the non-governmentalorganizations’ (NGOs) evaluation of the MinisterialRound Table discussions, at a press conference moder-ated by Jocelyn Dow of Red Thread/Women’sEnvironment and Development Organization (WEDO).

Martha Arias, of Intermom Oxfam, whospoke about the Round Table discussion on the themeCoherence in Financing for Development, said thatthe NGOs, recognizing the incoherence of internation-al trade goals, had called for reform of the internation-al financial architecture. They had proposed thatgreater transparency would make it possible to addressthat incoherence by harmonizing policies. In terms ofcontent, developing countries were generally on thesame page as the NGOs, she added.

Regarding the Round Table onPartnerships in Financing for Development, PaulNehru Tennassee, of the World Confederation ofLabour, said that the discussion had also focused onthe issues of participation and ownership. The NGOposition was that a partnership already existedbetween the international financial institutions, themultilateral organizations and the Group of 8 industri-alized nations. The multilateral agencies had usurpedthe development agenda of the developing countries,whose interests coincided with those of the NGOs.

Roberto Bissio, of the Instituto del TercerMundo/Social Watch, said the issue of reforming theWorld Bank and the International Monetary Fund(IMF) was repeatedly raised during the Round Table onLooking Ahead. The configuration of world powerremained the same as it was 50 years ago. Ratherthan “Looking Ahead”, the theme should have been“Moving Ahead” because the Millennium DevelopmentGoals had already been established and everybodyknew what they wanted.

Asked how they evaluated the summit seg-ment of the Conference so far, Ms. Dow said thatPresident Fidel Castro of Cuba was the only Head ofState to address the central contradiction of the exist-ing international system. Mr. Tennassee said thatPresident Castro and President Hugo Chávez ofVenezuela had been impressive, whether one agreedwith their politics or not. Ms. Arias said the MonterreyConsensus, the Conference outcome document,reflected a prior positioning of the parties involved andseemed to contain many grey areas.

Regarding the conditionality required byfunding agencies and other donors, Ms. Arias toldanother correspondent that, in many cases, aid wasused as a tool for wielding influence over developingcountries. The insistence on good governance, whiledesirable, was tied to conditions that were notfavourable to those states.

Mr. Tennassee said NGOs intended topress for negotiations with the World Bank, IMF andthe multilateral institutions for more space so that theycould have greater input in the United Nations confer-ences. Otherwise, such meetings seemed like publicrelations exercises. Ms. Dow emphasized the need toensure that the Johannesburg World Summit onSustainable Development had the capacity to over-come the mistakes made at the MonterreyConference. Ms. Arias said that, while NGOs had gen-erally supported United Nations conferences, therewas no more time for summits. It was time to moveforward.


352

Press Briefing by

NGO Caucus of Least Developed Countries20 March 2002

Members of the NGO Caucus of the Least DevelopedCountries this afternoon described the MonterreyConsensus as a step backwards from all the commit-ments made over the years to help alleviate poverty inleast developed countries.

At a press conference on the sidelines ofthe International Conference on Financing forDevelopment, they said the Monterrey Consensusshould be about mobilizing resources to finance allthose commitments. Instead, it failed to mention theissues that were of vital interest to the world’s poorestcountries, particularly debt cancellation and marketaccess for least developed country goods.

Arjun Karki, of Rural ReconstructionNepal, said that more than 37 per cent of his coun-try’s expenditure went into debt servicing. Since the1950s, Nepal had been borrowing funds in the nameof poverty alleviation. The World Bank, InternationalMonetary Fund (IMF) and bilateral agencies had dictat-ed the terms for those loans, as well as the develop-ment agenda. And while they demanded good gover-nance, they should also take responsibility for corrup-tion, he said, stressing the need to reform the interna-tional financial architecture.

Jean-Pierre Ouedraogo from Burkina Fasosaid that, as far as the least developed countries wereconcerned, there had been a consensus at the 2001Brussels Conference on Least Developed Countries.The Monterrey outcome document added nothing toit. “What did the Brussels commitments mean andhow would they be financed?” he asked.

Huguette Bokpe Gnacadja from Benin saidthe NGO Caucus was tired of unfulfilled commitments.They had been made at the Rio United NationsConference on Environment and Development (theEarth Summit), the Copenhagen Summit on SocialDevelopment, the Beijing Conference on Women, andat the Millennium Summit. Monterrey should be aboutimmediate and concrete mobilization of resourcesbecause people were starving now, she emphasized.

Elizabeth Eilor from Uganda welcomed theUnited States and European Union pledges to increaseofficial development assistance (ODA), but that wassimply not enough. Poverty still reigned in the leastdeveloped countries, children were still out of schools,people were still dying from preventable diseases, and

communities were unable to feed themselves.Increased ODA was all very well, but other steps, suchas debt cancellation, were needed to allow the leastdeveloped countries to pull themselves out of poverty,she stressed.

Press Conference by

United States and European NGOS20 March 2002

Caucuses of non-governmental organizations (NGOs)from the United States and the European Union helda joint press conference today in Monterrey entitled‘Official Development Assistance Offers of theEuropean Union and the United States’.

Lotta Valtonen, of the Service Centre forDevelopment Cooperation, said that, although theConference was broad in scope, discussions in thepast few days in the European Union and the UnitedStates had focused largely on official developmentassistance (ODA). In the Monterrey Consensus, gov-ernments said that ODA played an essential role andwas critical to achieving the Millennium DevelopmentGoals.

Also in that Consensus text, countries rec-ognized that a substantial increase in ODA was neededto achieve the MDGs, yet no concrete commitment toincrease ODA levels had been made in the document,she said. The absence of concrete commitments forachieving poverty eradication had undermined the rel-evance of the whole consensus. Now, the EuropeanUnion announced that it would raise ODA from 0.33per cent to 0.39 per cent in 2006, and the UnitedStates announced that it would raise its ODA by $5billion during three years, although that was somewhatunclear, she said.

Speaking on behalf of the European NGOcaucus, Novib-Oxfam, Caroline Wildeman said that theODA commitment made by the European Union was“face saving and inadequate” at a time when therewas agreement on the Millennium Development Goalsto halve extreme poverty by 2015, achieve universalprimary education, and attain a two-thirds reduction inchild mortality rates, among other things. Her caucusregarded the Union’s decision as a “last minute” exer-cise to avoid coming “empty handed” to theConference. The problem was that that underminedthe United Nations process.

353


Time-bound targets to reach the 0.7 percent gross domestic product (GDP) for poverty reduc-tion should have been part of the MonterreyConsensus, she said. Monterrey was not a donor con-ference, but a United Nations conference. Althoughwelcome, the extra aid money could not hide theweakness of the Monterrey Consensus. Indeed, theresources necessary to reach the MillenniumDevelopment Goals went far beyond the extra moneythat would eventually be available in 2006.

She said that was far too late to be able toreach the goals set by the United Nations by 2015.Indeed, if current spending trends continued, 56 mil-lion more children would have died by 2015 thatwould have otherwise survived had the MillenniumGoals been reached, and 5 million children would stillbe out of school.

Aldo Clieri, from the Centre of Concern inWashington, D.C., said he was concerned about theunilateral United States proposal to raise ODA levels,and he also shared the concern about the unilateralEuropean Union approach. If those and other coun-tries had been committed to their goals, it should havebeen stated in the Monterrey Consensus, instead ofcoming with those announced at the last minute. Inthe case of the United States, he said, the proposal toraise ODA levels starting in 2004 and beyond couldbe terminated by a mere change in Administration orCongress. He was also concerned about the size ofthe proposed increase. Even with today’s announce-ment that there would be a 50 per cent increase inODA over the current amount, it was still a smallshare of GDP that still fell far short of the amountneeded to achieve the Millennium Development Goals.

He said he also had concerns about theconditions attached to the money provided by theUnited States. Those had related to good governance,human rights and the rule of law. His concern wasthat the criteria were so subjective they could be usedfor political purposes. Regarding the global campaignagainst terrorism, aid could be used for geo-politicalmilitary goals rather than for development goals. Theremaining condition, Mr. Clieri said, were tied to coun-tries putting in place sound economic policies – a codeword calling for free market reforms or integrationinto the current world trading system. There was nosense yet about how some new agreements of theWorld Trade Organization (WTO) would affect theeconomies of developing countries.

Asked whether civil society had reallyfound its place in the Monterrey Consensus, Ms.Wildeman said that civil society had an importantmonitoring role. If it did not hold governmentsaccountable to the promises they made at the interna-tional level, the Monterrey Consensus could remain a‘paper’ document.

June Zeitlin, Women’s Environment andDevelopment Organization, New York, shared thatconcern, and added that, in terms of civil society’sparticipation at Monterrey and during the preparatoryprocess, representatives had made their views known,but that was not exactly effective participation orinsurance that their voices had been heard.

Ms. Wildeman said it was very difficult toget their voices heard because the key negotiationswere being held behind closed doors. There was noofficial space where governments were negotiating atext, since that was already completed, and the plena-ry was no place to get their issues on the table. “Wehad no access at all,” she added.

To a question about whether 11Septemberhad influenced ODA, she agreed there was a linkbetween poverty and terrorism, but insisted that that was not one-dimensional. Poverty did create insta-bility and a domestic unevenness that could lead to terrorism. So, from that aspect, it could be expected that the rich countries would contribute to povertyeradication.

Invited to speak from the floor, FlorenceDeacon of Franciscans International, a United States-based NGO, said that there was a very clear connec-tion. September 11th had been a wake-up call tothose folks who had not had a broad world vision.Although people might say that poverty did not causeterrorism or crime, hopelessness set up a series ofconditions, which bred those tendencies.


354

Press Briefing by

NGO Caucus22 March 2002

The NGO Caucus was not part of the MonterreyConsensus, even though its statement would be readout at the final plenary session of the InternationalConference on Financing for Development, Caucusrepresentatives said this afternoon.

At a press conference sponsored by thedelegation of Mexico, Laura Frade, of Women’s Eyeson the Multilaterals, said the Caucus did not considerthe Consensus to be a basis for combating poverty oradvancing economic, social and cultural rights. Shesaid the fact that the Consensus did not reflect a statedcommitment to reform the World Bank and theInternational Monetary Fund (IMF) undermined itscredibility. Many countries agreed with the non-gov-ernmental organization (NGO) position, but could notsay so. While appreciating the inclusion of civil societyin the round tables, the Caucus considered it anattempt to legitimize the Consensus. The NGOs hadbeen repeating their demands for decades, throughoutthe financing for development process, at the plenaryand at the round tables.

Gemma Adaba, of the InternationalConfederation of Free Trade Unions (ICFTU), saidNGOs were disappointed that the Consensus offeredno concrete mechanisms in the critical area ofresource mobilization to combat poverty or createemployment. The financing for development agendamust be fleshed out and the weak parts of theConsensus strengthened. Emphasizing the need toexamine the role of the International LabourOrganization (ILO) in global governance, she said theagency had the same status as the IMF under theUnited Nations Charter, though it was less visible. TheMonterrey Consensus must be fully integrated into theinternational financial architecture, as well as thehuman rights framework and social dialogue.

John Foster, of North/South Institute, saidNGO participants in the round tables had expressedreservations about the limited nature of the Consensusor announced their separation from it. It was clear thatthe NGO position had been excluded when discussionfocused on democratization of the system or systemicchange, and when NGOs questioned the developmentmodel.

355


Ms. Laura Frade (right), Ms. Gemma Adaba (left) and Mr. John Foster

address the press on behalf of the NGO Caucus.

Final Briefing by

Executive Coordinator of the InternationalConference on Financing for Development andConference Spokeswoman22 March 2002

The Monterrey Consensus was adopted by acclama-tion at 10:25 this morning, capping an already suc-cessful conference that had become a pivotal globalevent, Susan Markham, Spokeswoman for theInternational Conference on Financing forDevelopment, said at today’s final press briefing atnoon. She said that the Conference, which hadrevived international interest in global economic issuesand commitment to provide the means to attackpoverty worldwide, had achieved an unprecedentedlevel of international cooperation by bringing together51 presidents and prime ministers, as well as financeand foreign ministers, business and civil society leaders.

Even before the Conference opened onMonday, an intergovernmental consensus had beenreached on issues that had divided the North andSouth for decades, the Spokeswoman said. And theMonterrey spirit was strengthened just days before theopening by pledges to increase official developmentassistance (ODA) by tens of billions of dollars from theUnited States and the European Union.

Ms. Markham said the pledges would buildconfidence that commitment was genuine on the otherfive areas of the Monterrey Consensus – trade, debt,investment, national resource mobilization, and inter-national systemic coordination. She said that manyspeakers during the Conference pointed to the linkwith terrorism, which could not be fought withweapons alone. Poverty and inequalities could lead todespair and provide a breeding ground for violence,crime, corruption and terrorism. There were veryfrank exchanges, especially at the round tables, sideevents, and the NGO Forum that moved the discus-sions forward. It was the first United Nations confer-ence to have the active collaboration and participationof the World Bank, the International Monetary Fund(IMF) and the World Trade Organization (WTO), shesaid.

Mr. Oscar de Rojas, Executive Coordinatorof the Financing for Development Secretariat, invitedjournalists to read the last chapter of the MonterreyConsensus document on international systemic coordi-nation, which had not received much media attention.It called for more participation by the developingcountries to close the gaps in the world economic gov-ernance system.

He said the document concluded with acommitment to strengthen the United Nations as themain organization to revamp the international finan-cial system, working with the World Bank, the IMFand the WTO. The call for the United Nations to carrythe process forward was very clear. The UnitedNations Economic and Social Council, the GeneralAssembly and multilateralism, in general, would alsobe strengthened.

Responding to a journalist’s question, Ms.Markham said no country had refused to sign theConsensus as it had been adopted by acclamation, andrequired no signature.


356

Executive Coordinator of the Financing for Development Coordinating

Secretariat, Mr. Oscar de Rojas, along with Conference Spokeswoman

Ms. Susan Markham, briefs the press on the adoption of the Monterrey

Consensus.

In response to a question on how far theConsensus committed a Head of State orGovernment, Mr. de Rojas said it was a political ratherthan a legal document such as a treaty and, therefore,did not require signature. It carried huge political andmoral weight. The Consensus had been agreed byacclamation without amendment.

Asked for a reaction to President GeorgeW. Bush’s statement that he would set up a team toselect aid recipients, Mr. de Rojas said the UnitedStates President was entirely entitled to carry throughwhatever initiatives he had announced.

He told another correspondent that norevisions had been or would be made to theMonterrey Consensus document. States had commit-ted to go beyond the Consensus. Monterrey was apoint of departure, not arrival. It was a catalyst formany further actions.

Asked why the summit had adopted theConsensus this morning instead this evening as earlierannounced, Mr. de Rojas said that even though theConsensus had been adopted, the report of theConference and those of the round tables would notbe adopted until tonight. The round tables wereimportant because it was the first time they had beenheld in a format that included civil society.

Mr. de Rojas told another journalist thatthe plenary was scheduled to end at 8 p.m. Asked ifthe fact that not all countries were in the plenarywhen the Consensus document was adopted meantthat some were opposed, he said that any delegationwith reservations would have let the Secretariat know.

What was the implementation procedurefor the Consensus and who would monitor it, anothercorrespondent asked. Mr. de Rojas replied that theConference had given the Secretary-General thatresponsibility, together with the World Bank, IMF andWTO, as well as the United Nations Conference onTrade and Development (UNCTAD), the UnitedNations Development Programme (UNDP), and oth-ers. The issues would be taken up at the next meetingof the Economic and Social Council in April.

357


Build

ing

onM

onte

rrey

Fina

ncin

g fo

r Dev

elop

men

t


358


360

The Albatross

by Charles Baudelaire(translated by George Dillon)

Sometimes to entertain themselves, the men of the crewLure upon the deck an unlucky albatross, one of those vastBirds of the sea that follow unwearied the voyage through,Flying in slow and elegant circles above the mast.

No sooner have they disentangled him from their netsThan this aerial colossus, shorn of his pride,Goes hobbling pitiably across the planks and letsHis great wings hang like heavy, useless oars at his side.

How droll is the poor floundering creature, how limp and weak,He, but a moment past so lordly, flying in state!They tease him; One of them tries to stick a pipe in his beak;Another mimics with laughter his odd, lurching gait.

The poet is like that wild inheritor of the cloud,A rider of storms above the range of arrows and slings;Exiled on earth, at bay amid the jeering crowd,He cannot walk for his unmanageable wings.

361

The albatross on the back cover of this bookand on the masthead of the accompanyingCD-Rom has appeared somewhat mysteri-ously but unobtrusively in other publicationsrelated to the International Conference onFinancing for Development as well as the FfD website. This graceful bird of the Andesand the southern seas has soared serenelyover the hours of painstaking deliberationsthat resulted in the Monterrey Consensus and the historic gathering of world leaders at Monterrey, Mexico, 18-22 March 2002.It’s an image that has stayed with the FfDprocess; it has become its mascot.

The majestic albatross was invokedat a particularly difficult time during the nego-tiations to urge delegates, many of them ini-tially sceptical, to support the Financing forDevelopment process, unafraid to be utopianin their thinking. In a moving speech at theUnited Nations, this great sea bird with itslarge wingspan, soaring majestically abovemountains and oceans, was eloquently paint-ed as a truly awe-inspiring sight. Yet, when itis confined to the ground, the delegates weretold, the albatross is ungainly, clumsy and‘floundering’. It was suggested that the UN ingeneral, and the FfD project in particular,should be seen as the albatross inBaudelaire’s poem.

The proposition was made that itwould go against the nature of the UN andits great ideals of human solidarity and inter-national cooperation to discuss the issues ofhow to improve financing for developmentonly with arguments of an utilitarian charac-ter, or with excessive regard to narrownational interests, and to get locked intounproductive and unnecessary procedural dis-cussions that could prevent the realization ofthe Conference. In the best traditions of the

United Nations, it was emphatically de-clared, we should stand first and foremost for the highest values of human progress,justice and cooperation, and for promotingthe essential dignity of all people.

The analogy was also made of the tale in Coleridge’s Rime of the AncientMariner, of a disaster at sea related by its sole survivor. The mariner, while sailing to the Antarctic, killed an innocent but hapless albatross, the bird of good omen that follows ships sailing in the South Seas.The albatross was avenged; a devastatingstorm wrecked the ship, killing all the crewexcept this ancient mariner whose fate it was to go around the world, life-in-death, the dead albatross – and his enormous guilt – hanging around his neck.

It was suggested that failure to deal with the pressing needs of develop-ment would entail carrying the burden of that responsibility. If, on the other hand, the world could arrive at solid, broad and implementable consensus on financing for development and international economic cooperation, the highest ideals of the United Nations would rise inex-orably like the magnificent albatross, ‘thatwild inheritor of the cloud’.

In March 2002, fifty Heads of State and Government, over two hundredMinisters of Finance, Foreign Affairs, Tradeand Development, all the major stakeholdersin the process including the heads of theWorld Bank, IMF, WTO, as well as membersof civil society and business, came togetherunder the auspices of the United Nations to adopt the Monterrey Consensus, commit-ting themselves to build on Financing forDevelopment and take the process forward.The albatross soared surely and triumphantly,in elegant circles, high in the blue skiesabove.


362

Litho in United Nations, New York United Nations publication02-41571—September 2002—4,700 Sales No.E.02.II.A.5 ISBN 92-2-104515-0

financing for development buildingonmonterrey development monterrey

Documents