SECOND COMMITTEE TAKES UP HIGH-LEVEL INTERNATIONAL INTERGOVERNMENTAL CONSIDERATION OF FINANCING FOR DEVELOPMENT
Press Release
GA/EF/2945
SECOND COMMITTEE TAKES UP HIGH-LEVEL INTERNATIONAL INTERGOVERNMENTAL CONSIDERATION OF FINANCING FOR DEVELOPMENT
20001129Also Approves Texts on International Financial Architecture; Convention on Biological Diversity; and UN Staff College in Turin
Against the backdrop of globalization and the renewed willingness to discuss a new development architecture, the time had come for a fresh and undogmatic common effort to address financing for development, the representative of Norway told the Second Committee (Economic and Financial) this morning, as it began its discussion of the high-level international intergovernmental consideration of financing for development.
Without increasing the volume of the financial flow to developing countries, the goals of reducing poverty and improving nutrition and health in developing countries could not be reached, he said. Increasing official development assistance should be an important goal for the High-level International Intergovernmental Event on Financing for Development. Another important goal was to improve coordination between various United Nations and related processes where financing for development issues were on the agenda.
The Event should be viewed as the beginning of a process built on a unique and collaborative agenda aimed at enhancing capacity and growth opportunities for developing countries, stated the representative of Thailand, speaking on behalf of the Association of South-East Asian Nations (ASEAN). The final Event should be an international conference at the highest possible level, preferably in a developing country, to address national, international and systemic issues relating to financing for development in a holistic manner.
The process did not involve simply "financing" but also "development", he added. Those two concepts needed to be properly understood in harmony with each other. The financing for development process would greatly contribute to the financial mobilization for sustainable development, as well as help ensure coherence of fragmented policies of all actors concerned.
The representative of France, speaking on behalf of the European Union and associated States, agreed that the Event should contribute to greater consistency of policies and better mobilization of resources for development. Cooperation between all relevant actors, including the Bretton Woods institutions, the private sector and civil society, was necessary to meet the objectives of the Event. The Union was pleased by the participation of the World Bank and encouraged the International Monetary Fund and the World Trade Organization to contribute as well.
Speaking on behalf of the Rio Group, Colombia's representative said that the Event should consolidate a broad agenda in order to address national, international and systemic issues relating to financing for development in a holistic manner in the context of globalization and interdependence. That global agenda should be action-oriented, raising international cooperation for development to a higher political platform.
The Event, he continued, should address, on a comprehensive basis, the interrelated issues involved in mobilizing financial resources for development. Those resources would go to achieving a number of goals, including making foreign direct investment and other private flows for development more participatory; enhancing the role of trade in financing for development; increasing international financial cooperation for development through the reactivation of levels of official development assistance; and finding an enduring solution for the external debt problem.
Also this morning, the Committee approved, without a vote, three draft resolutions on the following subjects: towards a strengthened and stable international financial architecture responsive to the priorities of growth and development, especially in developing countries, and to the promotion of economic and social equity; Convention on Biological Diversity; and the United Nations Staff College in Turin, Italy.
In addition, Committee Chairman Alexandru Niculescu (Romania) announced that the Republic of Korea had joined as a co-sponsor to the draft resolution on the United Nations University (document A/C.2/55/L.24).
Statements were also made by the representatives of Bangladesh, Morocco, Pakistan, India, Guatemala, Trinidad and Tobago and Japan. Also, introductory remarks were made by Oscar de Rojas, Executive Coordinator of the Secretariat for Financing for Development.
The Committee will meet again at 3 p.m. today to conclude its consideration of financing for development.
Committee Work Programme
The Second Committee (Economic and Financial) met this morning to take action on several draft resolutions and to begin its consideration of high-level international intergovernmental consideration of financing for development.
The Committee had before it a draft resolution submitted by Vice-Chairman Mauricio Escanero (Mexico), on the basis of informal consultations on draft resolution A/C.2/55/L.2, entitled towards a strengthened and stable international financial architecture responsive to the priorities of growth and development, especially in developing countries, and to the promotion of economic and social equity (document A/C.2/55/L.41). The text would have the Assembly call on the international community, particularly the World Bank and the regional development banks, and other relevant international and regional institutions, including the regional commissions, working with the private sector, to support the promotion of long-term private financial flows, especially foreign direct investment to all developing countries.
Also by the text, the Assembly would underline the utmost importance of implementing the resolve in the Millennium Declaration to create an environment -- at the national and global levels -- conducive to development and the elimination of poverty. It would also underline the utmost importance of implementing the commitment in the Declaration to an open, equitable, rule-based, predictable and non-discriminatory multilateral trading and financial system.
In addition, the Assembly would underline the continued importance of providing the international institutions, particularly the International Monetary Fund (IMF), with adequate resources to provide emergency financing in a timely and accessible manner to countries affected by financial crisis, and note the regional and subregional efforts to facilitate emergency financing in time of crisis.
Next, the Committee had before it a draft resolution submitted by Vice- Chairman Navid Hanif (Pakistan), on the basis of informal consultations held draft resolution A/C.2/55/L.20, on the Convention on Biological Diversity (document A/C.2/55/L.44). By its terms, the Assembly would decide to proclaim 22 May, the date of the adoption of the text of the Convention, as the International Day for Biological Diversity. The Assembly would call on Member States that are parties to the Convention to sign and ratify the Cartagena Protocol on Biosafety as soon as possible. It would also call on States parties to the Convention to settle urgently any arrears and to pay their contributions in full and in a timely manner so as to ensure continuity in the cash flows required to finance the ongoing work of the Conference of the Parties, the subsidiary bodies and the Convention secretariat.
In addition, the Assembly would urge developed countries to facilitate the transfer of environmentally sound biotechnology for the effective implementation of the Cartagena Protocol.
Also before the Committee was a draft resolution on the United Nations Staff College in Turin, Italy (document A/C.2/55/L.25/Rev.1). It would have the Assembly decide to establish the United Nations System Staff College, as of 1 January 2002, after the approval of its statute as an institution for system- wide knowledge management, training and learning for the staff of the United Nations system, aimed, in particular, at the areas of economic and social development, peace and security and internal management of the United Nations system.
By further terms of the draft, the Assembly would also decide that, after the establishment of the Staff College, a biennial report should be submitted to the Assembly on the work, activities and accomplishments of the College, including on collaboration with other relevant United Nations institutions.
Further, the Assembly would request the Secretary-General to continue consultations on an urgent basis with the Administrative Committee on Coordination and relevant United Nations organizations and to submit, as early as possible, a final draft of the statute for the College, reflecting the outcome of those consultations on functions, governance and funding for review and approval by the Assembly, preferably at its fifty-fifth session.
The text is sponsored by Albania, Algeria, Andorra, Argentina, Armenia, Austria, Azerbaijan, Bahrain, Barbados, Belarus, Belgium, Bolivia, Bosnia and Herzegovina, Bulgaria, Burundi, Cameroon, Chile, Colombia, Comoros, Costa Rica, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Djibouti, Dominican Republic, Ecuador, Estonia, Ethiopia, Fiji, Finland, France, Georgia, Germany, Greece, Guatemala, Guyana, Honduras, Hungary, Iceland, Indonesia, Iran, Ireland, Israel, Italy, Jordan, Kazakhstan, Kenya, Kyrgyzstan, Latvia, Lebanon, Libya, Liechtenstein, Lithuania, Luxembourg, Maldives, Mali, Malta, Mexico, Monaco, Morocco, Nauru, Netherlands, Nigeria, Norway, Pakistan, Paraguay, Peru, Poland, Portugal, Republic of Moldova, Romania, Saint Lucia, San Marino, Slovenia, Solomon Islands, Spain, Sudan, Suriname, Sweden, Syria, Tajikistan, The former Yugoslav Republic of Macedonia, Togo, Tunisia, Turkey, United Kingdom, United Republic of Tanzania, Uruguay, Uzbekistan and Venezuela.
The Secretary-General's report on high-level international intergovernmental consideration of financing for development (document A/55/315), focuses on secretariat activities, specifically the status of secretariat cooperation with stakeholders, the preparation of the regional consultations, the preparations for the hearings, and arrangements for the secretariat support for the preparatory process, including the establishment of an extrabudgetary trust fund.
According to the report, the Secretariat has taken a number of initiatives to implement the mandates emanating from the General Assembly to encourage the participation of relevant stakeholders in both the preparatory process and the Event itself. The Secretary-General initiated with the secretariats of the World Bank, the IMF and the World Trade Organization (WTO) preliminary consultations on potential modalities for their participation in the preparatory process and the Event. All three organizations are actively participating in inter-secretariat working groups that are developing proposals for possible inclusion in the policy report of the Secretary-General to the Preparatory Committee.
Also, the report continues, the Secretariat has worked in several ways to engage civil society and private sector organizations in the preparatory process. An open invitation by letter and e-mail had been extended in August/September to a wide range of organizations to submit requests for accreditation, to consider participating in the public hearings and the Preparatory Committee, and provide inputs in the development of substantive proposals. The Preparatory Committee decided to hold a two-day set of "hearings" with representatives of civil society (scheduled for 6 and 7 November) and a separate set of hearings with the business community (scheduled for 11 and 12 December).
Action on Draft Resolutions
Committee Vice-Chairman MAURICIO ESCANERO (Mexico) introduced the draft resolution entitled "towards a strengthened and stable international financial architecture responsive to the priorities of growth and development, especially in developing countries, and to the promotion of economic and social equity". He noted some editorial changes in the text. First, the phrase "and landlocked and transit developing countries" in operative paragraph 19 should be deleted. Secondly, in operative paragraph 27, the phrase "to transmit the present resolution" should be replaced by "to present this resolution".
The Committee approved the text, without a vote, as orally revised.
The representative of Chile paid tribute to the representative of Indonesia, who had been the facilitator for that text. Since the text had been voted on in previous years, he was pleased that this year it had enjoyed general agreement. Since he would not be working at the United Nations next year, he expressed his gratitude to the developing countries for the confidence placed in his country as well as in himself.
Committee Chairman ALEXANDRU NICULESCU (Romania) paid special tribute to Mr. Galvez for his contributions to the work of the Committee.
The representative of the Lao People's Democratic Republic, speaking on behalf of the group of landlocked developing countries, which met before the meeting, said that the group had taken the difficult decision to drop the mention of those countries in the text just approved. While those countries, due to their high transport costs, did require special treatment from the international community, especially in the field of investment, the decision had been taken because there was not enough time to reach a middle ground on the issue.
The representative of Indonesia expressed his deep appreciation to all who had worked for agreement on the draft resolution.
Committee Vice-Chairman NAVID HANIF (Pakistan) then introduced the draft resolution on the Convention on Biological Diversity, which was also approved without a vote.
Next, DANIEL LE GARGASSON (France), speaking on behalf of the European Union, introduced the revised draft resolution on the United Nations Staff College in Turin, Italy. He said that India, Marshall Islands, Micronesia, Haiti and Gabon had also joined as co-sponsors to the text.
Acting without a vote, the Committee approved that text.
Consideration of Financing for Development
OSCAR DE ROJAS, Executive Coordinator of the Secretariat for Financing for Development, said that his office had been working very hard on the report of the Secretariat for the past few months. It had worked in conjunction with the World Bank, the United Nations Development Programme (UNDP), the United Nations Conference on Trade and Development (UNCTAD) and the IMF, all of which had provided officials to work with the Secretariat to ensure a high-quality report on the High-Level Intergovernmental Event on Financing for Development. This was especially useful considering the current budget restraints of the Secretariat. The report would carry with it the weight of having a broad base of input.
The Preparatory Committee, he said, would have before it the report of the Secretary-General and other inputs, such as the results of the regional consultations. Those consultations were an important part of the Event, and it was for that reason that the five regional consultations had been organized. Four of the regional meetings had already taken place and the fifth would take place next week. He hoped that these meetings would provide valuable input.
The hearings with civil society had been held earlier this month, he said. Many delegations had found the hearings useful, and factual summaries were being prepared for easy reference for delegations. Similarly, the hearings with the business community would be held in a few days time and they would be modeled after the format of the civil society hearings. He hoped to hear some interesting views and, again, factual summaries would be made available for delegations.
The Secretariat, he said, had tried to maintain an outreach programme so as to keep the public informed of what was happening with the Financing for Development process. There was also a Web page that he hoped delegations would make use of. Several countries had already contributed to the Trust Fund. Considering the budgetary restraints of the Secretariat, he asked delegations to consider making a contribution to the Fund.
KULKUMUT SINGHARA NA AYUDHAYA (Thailand), speaking on behalf of the Association of South-East Asian Nations (ASEAN), said that the final Event should be an international conference at the highest possible level, preferably in a developing country, to address national, international and systemic issues relating to financing for development in a holistic manner. The process would greatly contribute to the financial mobilization for sustainable development, as well as help ensure coherence of fragmented policies of all actors concerned. The Event should be viewed as the beginning of a process built on a unique and collaborative agenda, with the ultimate aim of enhancing capacity and growth opportunities for developing countries.
To ensure the sanctity of the outcome, he said that its format must be considered -- whether it should be in the form of a political declaration, programme of action or establishment of a working forum for financing for development. The process did not involve simply "financing" but also "development". Those two concepts needed to be properly understood in harmony with each other. Also, the special needs of least developed countries, small island developing States and landlocked developing countries must be taken into account.
Various international institutions had played an indispensable role in the financing for development of the developing world, he said. Therefore, he urged those institutions, particularly the World Bank, the IMF and the WTO, to actively participate in the process at all levels. In addition, participation by the business sector and non-governmental organizations (NGOs) should not be one-time hearing activities. They should join the substantive preparatory process and the final Event in an appropriate way.
OLE PETER KOLBY (Norway) said that his delegation attached great importance to the Financing for Development preparatory process and the Event itself. Against the backdrop of globalization and the renewed willingness to discuss a new development architecture, the time had come for a fresh and undogmatic common effort to address the need and possibilities for financing for development from all relevant resources and through all relevant means. In the Secretary-General's report, he gave a reassuring picture of the Secretariat preparations, which were crucial in securing a successful outcome. For a process of this kind, documentation was not enough. Important stakeholders must be engaged.
He noted that there was growing attention being paid to the Event among important Norwegian NGOs. Regarding the business community, his delegation would be advised by leading investment experts on how private investments in developing countries, from national as well as foreign capital, could be boosted. The regional hearings should both provide important policy inputs, as well as engage stakeholders, not the least important of which were the regional development banks. The regional stakeholders were both the foremost experts on their own development problems.
Without increasing the volume of the financial flow to developing countries, the goals of reducing poverty and improving nutrition and health in developing countries could not be reached, he said. Increased focus on the need to make substantial efforts to reach the targets for official development assistance should be an important goal for the Event. Private investment, from domestic and foreign sources, was indispensable. Another important goal was to improve coordination between various United Nations and related processes where financing for development issues were on the agenda. DURGADAS BHATTACHARJEE, Vice-Chancellor of the National University of Bangladesh, said that, as his country had pointed out before, serious imbalances existed in trade between developed and developing States. In some cases, the imposition of quotas and import duties hampered trade. Therefore, all those considerations must be taken into account in the final Event.
He urged developed countries to come forward with open minds on the issue of debt relief. Otherwise, it would be difficult for developing countries to enjoy the fruits of globalization. The successful translation of financing for development was crucial for achieving the agreed objectives. The United Nations earned respect as a prime global forum for all international issues. The effective and experienced contribution of the United Nations would enhance the chances for success of the financing for development process.
He welcomed the hearings with the business and NGO communities, he said. However, more representatives from the developing countries would further enrich the deliberations. The success of financing for development would help reduce the possibilities of future financial crises. He supported the preparations for the high-level international intergovernmental Event and looked forward to a positive outcome.
YVES DOUTRIAUX (France), speaking on behalf of the European Union, Bulgaria, Hungary, Latvia, Lithuania, Poland, Check Republic, Romania, Slovakia, Slovenia, Cyprus, and Malta, said that the Union attached great important to this Event and would contribute active and constructive support to its preparation. The Event should contribute to greater consistency of policies and better mobilization of resources for development. The Union felt that cooperation between all relevant actors, including the Bretton Woods institutions, the private sector and civil society, was necessary to meet the objectives of the Event. The Union was pleased by the participation of the World Bank and encouraged the IMF and the WTO to contribute as well.
The first session of the Preparatory Committee had just completed its work, and the preparations were on the right track, he said. It was now clear that the Financing for Development Event would take place in the beginning of 2002. The Union believed that the venue and formation of the agenda should be determined in the near future. The five regional consultations and the hearing of civil society would provide interesting input for the preparatory process of the Financing for Development Event.
In respect to the Event, the Union would act to gain recognition for the campaign against poverty, the needs of all developing countries, and the importance of establishing a favorable environment for the mobilization of resources. The Union would also stress the importance of establishing new partnerships with the private sector and civil society in the area of development financing, the essential role of official development assistance in mobilizing resources, and the need for the excelerated implementation of the Heavily Indebted Poor Countries (HIPC) Debt Initiative. The Union reiterated its commitment to financing for development and its availability for consultations with all parties involved.
ANDRES FRANCO (Colombia), speaking on behalf of the Rio Group, said that representatives of the Latin American and Caribbean countries had met in Bogota on 9 and 10 November for their regional consultations on financing for development. They had adopted a contribution for the final Event and the preparatory process entitled "Towards the International Conference on Financing for Development: A Latin American and Caribbean Perspective".
The Event should consolidate a broad agenda in order to address national, international and systemic issues relating to financing for development in a holistic manner in the context of globalization and interdependence, he said. That global agenda should be action-oriented, raising international cooperation for development to a higher political platform.
He said the Event should address, on a comprehensive basis, the interrelated issues involved in mobilizing financial resources for development. Those resources would go to achieving a number of goals, including: making foreign direct investment and other private flows for development more participatory, especially for those countries that were currently marginalized from their benefits; enhancing the role of trade in financing for development, thus guaranteeing the full participation of all developing countries in international trade and access to international markets for their exports; increasing international financial cooperation for development through the reactivation of levels of official development assistance and the fulfilment of the commitment to provide 0.7 per cent of gross domestic product (GDP); and meeting the challenge of finding an enduring solution for the external debt problem.
He added that the Event should also address systemic issues, and seek to increase the coherence and consistency of international financial and trading systems in order to support development.
AHMED AMAZIANE (Morocco) thanked the Department of Economic and Social Affairs for the efforts it had made for the Event. The regional consultations, the hearings of civil society, and the consultations with the relevant parties, were proof of the importance that had been accorded to the preparatory process. His delegation thanked the donors that had made a contribution to the Trust Fund and urged others to contribute as well.
It had been more than a decade that the "Group of 77" developing countries and China had been pursuing the objective of convening such an Event. The international community must now adopt consistent and bold measures to ensure adequate financing. Developing countries had the main responsibility for implementing an economic environment based on respect of the rule of law and economic policies guaranteeing an optimal distribution of resources. The majority of developing countries were doing this both out of conviction and out of necessity. However, the problems inherited from the past had placed a great and adverse effect on the efforts of these developing countries.
The cancellation of debt and the liberalization of trade would be significant for absorbing the current financial crises, he said. The scope of the current projectionist policies represented a hundred billions dollars in lost profit for developing countries. The international financial system must be reformed so that it was more sensitive to developing countries. It was deplorable to see official development assistance stagnate at such a low percentage of national income. The attainment of the objectives set could not be left up to the market machinery. The international community had to engage in action at the national and international levels on the basis of common responsibility. His delegation hoped that all parties would pool their efforts to make the Event a success.
SHAMSHAD AHMAD (Pakistan) said that despite the wish of almost all the members of the Preparatory Committee, it was difficult to reach an agreement on the form and format of the final Event. Pakistan had maintained since the inception of the process that the Event should be a Summit on Financing for Development. That would ensure that the issue of financing was given as high a profile as was given to other conferences held in the 1990s. An early decision on those aspects would not curtail the capacity of States to maintain flexibility in the process and the Event itself. Owing to the lack of agreement on organizational issues and delay in substantive preparations, the decision to move the Summit to the first quarter of 2002 was a prudent one.
Deliberations in February in the Preparatory Committee might primarily be guided by two considerations, he said. First, the Summit on Financing for Development was not just about official development assistance. Nor was it solely focused on financial flows. It was a Summit driven by concerns about equity, social justice, prosperity and welfare. Its comprehensive agenda should be approached in a holistic manner. Second, in a globalizing world economy, everything was deeply interlinked. The Summit should address all dimensions of that issue. No aspect should be sacrificed at the altar of efficiency, effectiveness, mandates and practicalities. The United Nations had the comparative advantage that was necessary for adopting such an approach to the question of financing development.
KAMALESH SHARMA (India) said that financing for development was the core requirement for developing countries in their search for growth. His delegation believed that the preparations for the Event should be comprehensive so that the outcome was productive and contributed to the various integral components of financing for development. It was encouraging that the Preparatory Committee had begun its work and that the first substantive session in May had been successful in working out a comprehensive agenda. His delegation was disappointed that the Event had been postponed until 2002 and hoped that the additional time would be utilized.
The momentum and the focus of the regional meetings in connection with the financing for development process were encouraging, he said. The Asian regional consultations in August had been productive and had addressed the various issues in detail. His delegation was confident that the regional inputs would bring invaluable perspectives to the preparatory process. It also welcomed the participation of the various stakeholders in the process. The contribution of the World Bank had been constructive and his delegation looked forward to similar contributions with the IMF and the WTO. The hearings with civil society and the private sector were also welcomed. It was important to maintain the momentum of the preparatory process, he said. All parties shared the responsibility to make the Event a watershed for sustained economic advancement in all societies. The additional time available should be used for constructive engagement. His delegation looked forward to working in the spirit of mutual partnership and cooperation.
GERT ROSENTHAL (Guatemala) said that the Event would offer an opportunity to revisit a broad range of development issues and explore how to address them in the contemporary context. Some of the events of the last year had demonstrated that financing could have perverse consequences. The United Nations was well placed to clarify the scope of those phenomena. There seemed to be a general acceptance on the need to forge partnership with other institutions, particularly the Bretton Woods institutions, so as to assure the success of the Event. That success would not be reflected in some political declaration or plan of action, but rather in the effect it could have on the development environment.
It Event should have a high profile, he said. This was consistent with the idea that the most important output of the Event fell in the realm of clarification, public awareness and guidance for action. This offered another reason for the imperative of linking up with the Bretton Woods institutions. His delegation fully shared the decision of the Preparatory Committee to hold the Event during the first semester of 2002. It also supported holding the Event in the capital of a developing country.
ROSLYN KHAN-CUMMINGS (Trinidad and Tobago) said that resource mobilization at the national, regional and international levels was central to the development of small islands. Small island States could be grouped into four categories in terms of their export trade orientation -- agriculture and fisheries, petroleum and minerals, tourism and services. Trade remained one of the essential elements for their economic growth. Developed countries should provide fiscal incentives to their large multinational corporations to establish enterprises which would encourage flows of foreign direct investment to small States. Also, development partners and the international financial institutions should establish special regional development funds to small States to identify emerging trade opportunities for goods and services. The United Nations and the international community must also develop innovative and creative ways of procuring financial resources for special development needs.
The need to reform the decision-making system in the international financial institutions and to broaden participation of developing countries was central to the issue of financing for development, she said. That matter had been exhaustively addressed by the recent South Summit, where it was agreed that developing countries should participate in all policy decisions taking place at an international level of a social, economic or political nature which affected them. Success in holding an international conference, which charted a partnership with the North for an agenda on clearly defined goals and concrete proposals to meet the challenges of the new millennium, was within the reach of the United Nations. HIDEAKI KOBAYASHI (Japan) said that, since its establishment, the Preparatory Committee had made considerable progress in the preparation of the Event. There remained a number of decisions to be taken. Japan believed that it was crucial to reach decisions on the fundamental organization matters -- especially, the name, timing, and venue of the Event -- as soon as possible.
Japan would be flexible on the naming of the Event, he said. A concrete decision should be taken by the end of the second substantive session of the Preparatory Committee, scheduled for next February, to allow the Secretariat to properly complete the necessary preparations. Japan was of the view that if no Member State offered to serve as host of the Event by that time, the Committee should decide without further delay to hold it at United Nations Headquarters. The Committee should also consider the form and format of the Event, the nature of the outcome, and the method of preparation.
Japan believed that the Event should include round tables, in which Member States and stakeholders discuss specific items on the agenda in order to promote a free exchange of views, he said. There should also be a short intergovernmental session to adopt an outcome document. The document should take the form of a short political declaration that the ministers would be likely to read. There should also be a chairman's summary that would reflect the range of opinions expressed at the Event. Japan could not support the idea of preparing a long negotiated text such as those adopted at major United Nations conferences and summits.
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